Immigration plunges states deep into debt


There are two primary reasons why the federal government loves high immigration.

First, immigration boosts the economy, as measured by GDP. Running a high immigration strategy allows the government to claim that it is a competent economic manager, even when per capita GDP growth is negative (as it is currently) and individual living standards are declining.


Second, immigration benefits the federal budget by increasing the labour force, personal income tax receipts, and corporate tax receipts (via the larger economy).

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.