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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
2020-05-14 Daily Xml
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Economic and Finance Committee: Economic Contribution of Migration to South Australia

Mr COWDREY (Colton) (11:14): I move:

That the sixth report of the committee, entitled Economic Contribution of Migration to South Australia, be noted.

In August 2018, the Economic and Finance Committee resolved to inquire into and report on the economic contribution of migration to South Australia. Through this inquiry, the committee received 40 written submissions and heard from 84 witnesses across 14 public hearings between November 2018 and September 2019.

As part of this inquiry, the committee travelled to the Limestone Coast to hold hearings in Penola on 26 March 2019 and also in Mount Gambier on 27 March 2019. The committee also visited Balnaves of Coonawarra and Holla-Fresh in Tantanoola to discuss the role of migrants in addressing local workforce shortages. Another hearing was held in Murray Bridge on 13 June 2019, followed by a visit to Costa Adelaide Mushrooms at Monarto South.

On 2 October 2019, the committee visited the Osborne Naval Shipyard to hear about the impact of migrants on the defence industry. The aim of this inquiry was to examine the economic contribution of migration to South Australia, including both the economic and social benefits. It also considered South Australia's population and migration performance over the past 30 years compared with other Australian jurisdictions.

As part of the inquiry, the committee reviewed the commonwealth government's migration and visa framework. It examined the key challenges and issues raised by local governments, by businesses and by community groups, as well as the migration issues encountered in regional South Australia. The committee heard that over the past three decades South Australia's population grew at an average annual rate of 0.71 per cent, which is around half the national average of 1.39 per cent, and that the growth rate gap had widened considerably over the past five years due to our ageing population and unacceptable levels of young South Australians moving interstate.

South Australia had the lowest growth rate of all mainland states, at 0.8 per cent, half the national average of 1.6 per cent. Most of our growth occurs here in Adelaide, with a growth rate of 0.8 per cent in 2017-18 compared with a growth rate in regional South Australia of just 0.3 per cent, with several regional areas struggling to maintain their current population. Our low rate of population growth has led to South Australia's share of national population declining from 8.5 per cent in 1987 to 7 per cent in 2017, costing South Australia a seat in the 2018 federal electoral redistribution.

This being said, I am pleased over the last couple of months to have seen considerable positive updates in terms of the net interstate migration loss that South Australia has seen over the last 12 to 24 months. It has been a considerable cornerstone of the Marshall Liberal government's approach since coming to government, and a clear focus for us to start to turn around that brain drain. In an article in The Advertiser on 28 April this year it was noted, and I quote:

…that South Australia's brain drain to other states is starting to slow with the best net interstate migration numbers in five years.

The state lost 3,958 people last financial year compared with 7,212 in 2015-16, so a considerable improvement on what had occurred over the previous number of years, particularly the previous five years. The committee heard that Australia's migration and visa framework is complex and focuses on attracting skilled migrants to address workforce shortages. Over half the skilled migrants arriving in South Australia are sponsored by the state government.

A number of humanitarian migrants have also settled in Adelaide and on the Limestone Coast. The committee heard evidence that supported the finding of recent studies, demonstrating the many economic and social benefits of skilled and humanitarian migration. The committee heard that skilled migrants in South Australia had better employment outcomes than the general population, with higher earnings and labour participation and lower unemployment rates.

Humanitarian migrants also make significant economic contributions to our state, often undertaking lower skilled roles in areas such as agriculture, meat processing and aged care where there were local labour shortages. During our trip to the Limestone Coast, we heard that many of the major employers in the region, like meat producers JBS at Bordertown and Teys at Naracoorte, rely on migrant workers. Mr Ian Lines, the owner and Managing Director of Holla-Fresh at Tantanoola, one of the leading hydroponic growers of fresh herbs in Australia, told the committee that without migrant workers his business would struggle to exist.

The committee also heard of the numerous and significant contributions that both skilled and humanitarian migrants make to communities across our state. In particular, we heard of the positive impacts migrants have had on regional areas, where there are major workforce shortages. For example, in the South-East we heard that humanitarian migrants are bringing new life to towns like Naracoorte, Bordertown and Mount Gambier and are supporting local businesses, schools and communities.

However, the committee was concerned to hear that businesses in our regional areas were still struggling to attract local workers and migrants. For example, at Murray Bridge we heard that a lack of workers was limiting the ability of businesses like Swanport Harvest to grow and expand. Attracting and retaining workers is one of the most important issues for our regions, especially in Murray Bridge, where an expansion of Costa Adelaide Mushrooms and rebuild and expansion of Thomas Foods International is planned.

After considering the issues raised by the inquiry, the committee has made 16 recommendations to better attract and retain migrants and boost population growth in South Australia. Some of these recommendations include:

developing a state population strategy to increase South Australia's growth rate;

reviewing the temporary skilled migration income threshold (TSMIT) to ensure that it meets the needs of regional employers;

improving pathways to work visas, such as exempting students from three-year work experience requirements for skilled migrant visas; and

improving visa frameworks and processes, and providing more support to help settle skilled and humanitarian migrants and their families here in South Australia.

On behalf of the committee, I express my thanks and appreciation to all parties who provided us with written submissions or appeared before the committee to provide oral evidence, many of whom travelled considerable distances to do so. Thanks also to Mr Troy Bell, the member for Mount Gambier, for his assistance in organising the Mount Gambier public hearing, to Mr Nick McBride, the member for MacKillop, and to Mr Adrian Pederick, the member for Hammond, for highlighting the issues that their respective electorates face.

I express my gratitude to the City of Mount Gambier, to Wattle Range Council and the Rural City of Murray Bridge for hosting public hearings in their respective districts, and to Balnaves of Coonawarra, Holla-Fresh, Costa Adelaide Mushrooms and the Department of Defence for providing members with site visits of their various facilities. I thank members past and present on the committee for their contributions to the inquiry. I also highlight the significant work of our secretariat, including Mr Josh Forkert—and I acknowledge his elevation to higher duties here in the chamber—and Mr Adam Marafioti for his work as then research officer, now parliamentary officer. I am sure the role of research officer will be filled in good time.

Given the current situation, I think it is also pertinent that we acknowledge that the recommendations and findings of the committee will obviously need to be considered in a new context moving forward given the current circumstances and the COVID-safe world that we are entering. There are probably many unknowns in terms of when migration, travel and a range of other issues related to this particular area will gain any significant clarity. As one of our recommendations was to review the work that was done in a 24-month period, perhaps that may be something that we may need to wait a little longer to do, but we certainly thank all those who have contributed and I recommend the report to the house.

Mr TEAGUE (Heysen) (11:24): I rise briefly with some words to support the motion and to commend and thank the members of the Economic and Finance Committee, ably assisted by their parliamentary and research officers, for what in my view is a particularly significant committee report early in the work of the Marshall Liberal government. I want to reflect just briefly on two areas of the report. As someone who is not a member of the committee, I am grateful to have had the benefit of this work and note the member for Cowdrey's observation that the committee is planning to—

Members interjecting:

Mr TEAGUE: It is called Colton for the time being, but there is a secret plan, and I think first cab off the rank ought very much to be the member for Colton. The committee, as the member for Colton has adverted, has committed already to going back to this work within a short period of time, and I very much look forward to that occurring.

I just refer to two areas of the committee's work: firstly, in relation to international students and the contribution that they make to our economy, which is the subject of recommendations 8 and 9; and, secondly, and equally importantly, those aspects of the work that relate to the important contribution migrants make to our regions, which is the subject of recommendations 14 and 15. They work towards the uniting goal of ensuring that overseas migration plays a significant part in achieving recommendation 11, that is, to ensure that we have a robust population growth in this state.

Dealing first with the challenge that our regions face and, on the other hand, the great opportunity that overseas migration offers to them, I note that at page 7 of the report not only is South Australia's share of overseas migration lower than it ought to be relative to the rest of the country but the regions in South Australia are experiencing the lowest growth of anywhere in the state. At the same time, as the committee has observed and at some length, having conducted a number of regional case studies, there are these magnificent opportunities throughout the regions for overseas skilled and humanitarian migrants to make a very significant contribution indeed.

I note again the specific observation of the committee, at page 42 of the report, that the relatively low level of overseas migration to South Australia in recent years has impacted negatively on the South Australian economy and in ways that need to be addressed. As has been addressed at some length by the government right from the get-go, programs such as the Designated Area Migration Agreements arrangement, which has been made to encourage more overseas migrants to South Australia, are a concrete example of how this government is going about responding to that challenge. The work that is the subject of chapter 8 of the committee's work here is of particular note. There are significant opportunities for regional benefits if we can, as a state, get this right.

I very much look forward to the committee's further work in monitoring how we go about steadily improving our situation relative to the rest of the country over the period ahead. Of course, we know that ever since the 1970s and the advent of the points-based system in Australia we have led the way globally in terms of our capacity to absorb, appreciate, integrate and then benefit from a thoroughgoing and multicultural migration program throughout Australia. South Australia is naturally suited to leading on this for a whole variety of reasons. We ought to ensure that we restore our place of leadership in South Australia when it comes to our capacity to benefit from overseas migration of all kinds.

That leads me to the second aspect of those observations: the question of the contribution by international students to our economy as students and their contribution to our economy following their time as students in this state. Perhaps this is even more relevant now that we find ourselves in circumstances of a global pandemic. This report was completed late last year, and conducted over an extended period commencing in the very early days of this parliament, but here we are in the middle of a global pandemic and we have found the conditions in South Australia extraordinarily advantageous relative to the rest of the country and, more especially, relative to the world. These conditions leave us in a situation where we ought to be attracting more international students to our state earlier and more readily.

Then, as the committee recommends, we should look for ways to encourage those students to stay here after they complete their studies. That is both general, per recommendation 8, and specific, in terms of recommendation 9. We should say, 'We want to extend the period that you are here ordinarily after you complete your studies.' I would certainly add my voice to the need to capitalise on this great opportunity now to not only secure and enhance our place as a global leader in terms of attracting those international students but, now more than ever, make sure that those high-achieving students who do such great work here in South Australia stay here and contribute to the success of the state for the rest of their working lives.

We should also make sure that, if they do go back—as we have established a legacy for decades going back to those early programs—they maintain their close connections with South Australia and build bridges of investment and human and capital connection between this state and the various countries from which those students come. I wholeheartedly support the motion and thank the committee for their very thoroughgoing work in this area.

Mr PATTERSON (Morphett) (11:33): I also take the opportunity to speak a little bit about the Economic and Finance Committee's inquiry into migration and the benefits of it. As the member for Colton said, we started the inquiry into this matter in August 2018, looking at a number of matters regarding migration around the terms of reference, including the impact of migration and population growth on South Australia's productivity and economic performance, and also South Australia's long-term population growth relative to other states in Australia over the past 30 years. We heard that over those three decades our population grew at an average annual rate of 0.71 per cent, which is around half that of the national average over that time.

There were only very few times in that 30-year period when our population growth was equal to the average Australian population growth: I think in 1989, just after the stock market crash of 1987, and then another period of time in the early 2000s. Other than that, we have really lagged behind and it is quite stark in the community here. We saw where a lot of that population growth in Australia is going. If you compare it with 1996, in the cities of Sydney and Melbourne, Sydney had just under four million in 1996 and is now upwards of five million persons. Similarly, Melbourne at 3.5 million is now going well over 4.5 million, compared with Adelaide, which had a much smaller percentage increase.

Unfortunately, that led to us going back towards a relative population decline. In 1987, we had roughly 8.5 per cent of the population of Australia; in 2017, we were at 7 per cent. That has had ramifications I suppose from a democratic representation point of view where we lost a federal seat at the federal electoral distribution in 2017. It also impacts just on our day-to-day life here in terms of economic growth in the state itself compared with what sort of growth is occurring in the rest of Australia.

The fact that we did have a slower population is also quite marked in terms of where that has been. Adelaide has had growth, whereas in the regions the actual drop-off has been stark. As I said, we had population growth of about 0.71 per cent for South Australia. In Adelaide, it was 0.8 per cent, whereas in the regions it was 0.3 per cent. Certainly, this is something that we need to look at as a state and what the drivers were.

The committee heard that there are a number of factors to a low population rate. One of those is our ageing population, so the natural increase in population is slower than in other states, as well as our net interstate migration. While people leaving the state is similar in percentage terms to other states, where we have failed to balance the ledger is in attracting people from other areas of Australia into South Australia. That comes as a net interstate migration, and unfortunately ours is not in the right direction and has been increasing over time.

That is something the committee was looking at in terms of how we can correct that. We think that will have a positive impact on our state's population growth if it can be turned around. Out of that, what we found as a committee is that a lot of our population growth came from overseas migration. Australia has a skilled migration program, which I think is one of the more successful ones internationally.

There is commentary around migration. If you consider the way we are looking, as a country, we are a large country compared to our population. Really, we are still a young country compared with many others in the world. With a lower population, we need to get greater efficiency in terms of the output of our population. That is where I think the skilled migration program is going to help Australia in the long term. Added to that, there is also humanitarian immigration. We have obviously seen numbers of people wanting to come to our shores because of a very healthy and democratic and also a caring and safe system.

I think the COVID crisis—the health crisis and the economic crisis—has certainly shown, in terms of Australia compared with the world, that our citizens can have great confidence in our institutions and governments to be able to cope with that. Touching on the member for Colton's remarks towards the end, around how the coronavirus will change migration, comparing Australia with the rest of the world, it could well be a positive. If you break down South Australia's performance in terms of how we have handled the health crisis, our health professionals, government, public servants and private citizens have done very well in dealing with this as a community. That is very attractive to people.

I will touch on the benefits of migration. The committee heard some commentary from people who were concerned that migration was causing local jobs to maybe not go to locals. In fact, as the members for Colton and Heysen have said, the committee heard that that is not the case. One finding of the report on how migration can benefit the state was that skilled migrants tend to be of working age—so they are targeted in terms of their age—and have good qualifications and skills that align with the demands of the Australian workforce.

This means that when migrants come to Australia they have high participation characteristics, which are probably even higher than our existing population. This tends to improve productivity and brings more economic benefits to the country because they bring ideas. That is the great thing about people with experience: they have seen what has happened in other countries and can bring that to Australia.

Another finding was that migrants increase capital flow. Quite often when they come over, they have access to capital flow and they bring that into the country. Migrants also consume less in terms of government services than what they contribute in terms of tax revenue. Studies have found that over the first 20 years of migrants coming here, before they tend to blend i to the average Australian population they have a net positive economic impact.

We have also found that migrants who come to South Australia generally have higher annual earnings because of their professionalism, and about a third become significant contributors to the small business sector. There are a lot of small businesses in South Australia so that is very important as well. As the member for Colton remarked, a recent report in The Advertiser highlighted what the Marshall Liberal government is doing to try to correct this net interstate migration. An interstate migration flow of 7,212 in 2015-16 was reduced to 3,958 in the last financial year.

One of the ways in which the Marshall Liberal government is doing this is through new Designated Area Migration Agreements, and one is the Adelaide Technology and Innovation Advancement Agreement, with up to 300 people covering 60 high-tech occupations. The announcements about Lot Fourteen's national Space Agency mean that a lot of international people with space expertise are bringing great ideas into South Australia to build a new advanced industry, so we are reliant on that skilled migration.

The other Designated Area Migration Agreement is the South Australian Regional Workforce Agreement. We heard evidence from Thomas Foods about how that had been pivotal in terms of being able to reboot their operations just out of Murray Bridge and employ 2,000 people. Those are some of the ways that this government is looking to increase migration to South Australia.

Mr COWDREY (Colton) (11:44): I thank the member for Morphett and the member for Teague—I mean, Heysen; although, I am not sure whether it will be Baden or yourself. I am sure we can work something out. On a more serious note, before I commend the report to the house, I think South Australians are overtly positive people. With every set of circumstances, we do always look for opportunity.

We have just broadly discussed the contribution of migrants to our regional communities. It is important to note that just today there has been a call to arms for many South Australians to consider, perhaps for the first time, the opportunity to contribute to some of the seasonal work that is necessary in our regions. That is something that will be incredibly important as we move forward, if we continue in a situation where our borders are more strongly monitored than they have been over previous times.

I think that the member for Heysen made a great point in regard to our opportunity on the other side of COVID-19 to market and sell ourselves if the current situation continues into the future, with an ability to retain the tag as one of the safest places in the world. Certainly, I believe that it would make us a very appealing place to settle, to build a family, to build connections to community and to build one's wealth and future prosperity. As we always have been a popular place for migration, perhaps this opportunity could even extend further into the future.

I think it only right that we close debate on this report by highlighting and acknowledging our state's migrant history and the diversity, economic and social benefits that come from migration to our fantastic state. With that, I commend the report to the house.

Motion carried.

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