SA economic modelling proves regional demand driven migration is key to Australia’s recovery

Australia takes a two-pronged approach to immigration, combining a skills accumulation program with a demand driven program to help address demographic imbalances and labour market needs while also addressing skills shortages. Although Australia’s labour migration system is highly effective at achieving national goals, its singular application across the nation means that some states have found it more fit for purpose than others. There is a mismatch between the semi-and low skill needs of many regional businesses in South Australia and Australia’s focus on bringing in high-skilled labour. Even as some South Australian businesses, particularly in regional areas, become more reliant on migration for addressing chronic skills shortages, the barriers to accessing lower skilled to medium skilled migrant labour have increased, meaning that many South Australian regional businesses simply cannot meet the workforce needs required to grow and thrive. The currently unknown economic cost of these barriers are, anecdotally, significant. This means that understanding the real impacts is important for making appropriate decisions about migration policy settings for the South Australian economy.

Migration Solutions commissioned independent research through BDO Econsearch to explore this mis-match and develop an understanding of the economic opportunity of demand driven migration for South Australia.

Analyses of the impact of different migration policies on Australia tend to conclude that high-skilled, high-paid, young migrants are best for Australia most of the time. This report focuses on the rest of the time. It articulates an economic modelling approach to quantifying the opportunity cost of policy that excludes these exceptions, rather than building in effective ways to handle them, and makes a preliminary estimate of the opportunity cost in the case of South Australia in terms of economic activity.

The objectives of this study was to:

  1. Investigate and make appropriate recommendations for future research regarding the economic impact of migration policy on South Australia.
  2. Produce a preliminary estimate of the economic impact of meeting South Australia’s workforce shortfall through demand driven migration where appropriate, accounting for interregional effects within South Australia.
  3. Produce an economic impact case study based on the horticulture industry.

To read the full report, click here.

BDO Econsearch report into demand driven migration





BDO EconSearch and Migration Solutions acknowledge the crucial role that South Australian businesses and associations have played in this research by participating in the interview process:

… and other organisations who have chosen to remain anonymous.

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