The number of resident migrants compared to Australia’s general population is expected to decrease in the next 40 years as projected by the 2015 Intergenerational Report.
The report, prepared and released by the Treasury Department in March, projected Australia’s overall population to reach 39.7 million by 2054-55 driven by an increase in life expectancy at birth that will give rise to an ageing population.
Net overseas migration, which comprises permanent and temporary migration, is currently at one per cent of the total population.
The report projects this number to fall by half, 40 years down the road.
“Under the central scenario, net overseas migration is projected to fall as a percentage of the resident population over the next 40 years, to just over 0.5 per cent per annum, which would bring it back in line with the average of 0.5 per cent observed between 1973 and 2006,” the report said.
The report noted the importance of migration to the country’s economic performance acknowledging over the years, migrants tended to be younger than the resident population and therefore helped push labour force participation rates.
“While there is some evidence that migrants participate in the labour force more than the Australian average for their age and gender, the projections have not taken this effect into account,” the 145 page report said.
It warned a drop in the net overseas migration would affect productivity and growth rates.
“Lower levels of net overseas migration would lead to lower population growth rates over time and, therefore, lower economic growth,” it said.
Australians are expected to have one of the world’s highest life expectancies in the next 40 years with men living up to 95.1 years and women at 96.6 years.