More evidence Government’s net migration forecast for 2023-24 is too low

Data shows that net migration in 2023-24 is well above the Government's forecasted figure, with further policy tightening required. Dr Abul Rizvi reports.

NET PERMANENT and long-term (NPLT) movements in February 2024 were 105,460, almost 20,000 higher than that for February 2023. At 363,550, NPLT movements for the eight months to February 2024 are already higher than NPLT movements for the whole of 2022-23 (see Table 1).

But what does that mean for the Government’s net migration forecast for 2023-24 of 375,000?

(Data source: ABS Arrivals and Departures)

The high NPLT movements in 2023-24 do not necessarily mean net migration in 2023-24 will be higher than in 2022-23. That will depend on the rate at which NPLT movements are staying in Australia for longer than 12 months out of 16 months than is usual and the extent to which short-term arrivals are extending stay for more than 12 months out of 16 months.

Prior to the pandemic, NPLT movements were traditionally higher than net migration. This was due primarily to NPLT arrivals changing their migration or long-stay intentions and leaving Australia for the long term at a relatively high rate.

The reverse has been the case since the pandemic and was certainly the case in 2022-23 where many more short-term arrivals extended stay for more than 12 months. But this does not necessarily mean that will also be the case in 2023-24.

Let’s look at the major categories of movement (short-term and long-term) to see what these might tell us.

Students

There has been a major tightening of student visa policy from July 2023 but the impact of that inevitably takes time to be reflected in student movements data.

Overall net student movements in February 2024 were revised downwards by around 5,000 (but were still at record levels). March 2024 net student movements were almost 25,000 less than in March 2023 due to both lower arrivals and higher departures.

We also know offshore student applications and grants fell sharply in February 2024 compared to February 2023. There was further tightening of student visa policy in March 2024, which should lead to further weakening of offshore student applications and grants.

The contribution of students to net migration is undoubtedly turning from the records that were set in 2023. At this stage, it has not declined to the extent the Government would have expected. While net student movements in 2023-24 are likely to be less than in 2022-23 (see Table 2), that does not guarantee the student contribution to net migration in 2023-24 will be less than in 2022-23.

The very strong contribution of students to net migration in the September quarter of 2023 will continue to ensure the student contribution to net migration in 2023-24 remains high.

Turning point for student visas and net migration now confirmed

A record number of student visa holders has left the Government with some decisions to be made regarding policy changes.

Other categories

The strong NPLT movements in 2023-24 to date are likely to also be the result of other sub-groups. While details of NPLT movements are not available, it’s worth looking at total net movements (short-term and long-term) for the various sub-groups as this data is available.

Key sub-groups include:

Net movement of Australian citizens (short-term and long-term) for the nine months to end March 2024 was positive 271,280 compared to positive 108,400 for the same period in 2022-23. There will need to be a large net outflow of Australian citizens over the next three months if net migration is to fall, as the Government is expecting a large negative contribution to net migration from Australian citizens.
Net movement of New Zealand citizens for the nine months to end March 2024 was positive 25,310 compared to 20,180 for the same period in 2022-23. The change in policy providing a direct pathway to Australian citizenship for NZ citizens, together with a relatively stronger Australian labour market, is continuing to attract NZ citizens to Australia.
Net movement of permanent visa holders for the nine months to end March 2024 was positive 47,930 compared to positive 42,940 for the same period in 2022-23. This may reflect the larger number of places available to other nationalities now that NZ citizens already in Australia do not need to go through the permanent residence phase. On the other hand, the permanent program is slightly smaller. The figures do not yet include the effects of the new Pacific Engagement Visa, which is a permanent residence visa in addition to the 190,000 permanent migration program.
Net visitor movements for the nine months to end March 2024 were positive 191,110 compared to positive 210,230 for the same period in 2022-23. This may reflect a higher refusal rate for visitors from some countries as well as greater use of the “no further stay” condition on visitor visas from key source countries. It is not possible to say at this stage whether this means a smaller contribution to net migration from visitors in 2023-24, but it is likely.
Net skilled temporary movements for the nine months to March 2024 were positive 27,020 compared to positive 34,880 for the same period in 2022-23. This decline is surprising, given the strength of the labour market.
Net temporary other work visas (these include working holidaymakers) for the nine months to March 2024 were 69,270 compared to 90,140 for the same period in 2022-23. This may reflect the rapid rise in working holidaymakers tempering in 2023-24 and an increase in departures.
Net temporary other visas (these include departures on temporary graduate visas and bridging visas) for the nine months to March 2024 were negative 13,430 compared to positive 12,340 for the same period in 2022-23. This may reflect some of the larger stock of such visa holders in Australia departing.
Net other visas for the nine months to March 2024 were negative 36,860 compared to negative 25,430 for the same period in 2022-23. Once again, this is likely to reflect the larger stock of temporary entrants in Australia departing.

The overall conclusion to draw from this is that net migration in 2023-24 is likely to be well above the forecast of 375,000 but probably less than the 2022-23 outcome of over 500,000. The key uncertainties appear to be the high inflow of Australian citizens and whether the smaller net movement of visitors will mean a smaller visitor contribution to net migration.

The data also suggests that if the Government is to get net migration down in 2024-25 to its forecast of 250,000, it will need to tighten its policy further, noting that it has announced other visa initiatives that will increase net migration.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.