Immigration plunges states deep into debt

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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.

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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.