Is Australia Blaming Migrants for a Productivity Problem? A Clear Look at the Debate

News · 2026-09-21 · 4 min read

Many politicians in Australia now point at migrants as the cause of the country's problems. Three parties are competing to promise the lowest net overseas migration (NOM) number. They talk as if a cap on arrivals were an economic plan by itself. Critics say it is not. In their view, the real issue is a productivity slump. This slump started before the recent rise in migration, and cutting migration will not fix it.

Hoping to work in Australia from Indonesia? Here are the facts, one by one.

What the population figures say

In the year to March, net overseas migration was roughly 392,700. Migrants made up about 292,100 of that growth. This is well above the average from after the GFC until before COVID. It is also much faster than in earlier decades. Over the last four years, Australia added around 400,000 people a year on average. That is roughly 1,100 new people every day.

Housing costs rose at the same time. National median prices went up by close to a quarter in that period. Traffic in the cities has also clearly become worse.

Few dispute these facts. The argument is about the cause.

The plans from each party

Labor now calls its own Treasury forecast a target. That means 245,000 this financial year, then 225,000 the next year.
The Coalition links its number to housing completions. This gives about 170,000, which it describes as "one migrant, one new home."
One Nation wants negative net migration for three years. After that, it wants a hard cap of around 130,000.

Critics say none of these is a real plan. They see them as reactions to anger measured in focus groups. Voters can see full trains and higher rents. They cannot see weak capital investment or flat productivity. So they vote against what they can see. That is an understandable reaction to missing information. But politicians use this gap instead of closing it.

Skilled workers are not the main target

Here is an important detail. All three parties still want to keep skilled migration, or even increase it. The cuts would mostly hit temporary and unskilled arrivals. This includes farm labour that Australians will not do. It also includes international students, who help keep universities running after governments starved them of public funding. Critics warn that cutting these groups without fixing the gaps behind them will cause new shortages in agriculture and higher education.

A different idea from Canada

Canada faced similar political pressure. Two days before Australia's migration announcement, Ottawa chose another path. It did not start with a cap on arrivals. Instead, it announced a package to lift productivity.

The main part is the "Productivity Mega Deduction." It lets businesses write off a much bigger share of qualifying capital investment in year one. The share goes up from 15 per cent to 65 per cent. Eligible spending includes software, data infrastructure, roads, rail, pipelines, aircraft and R&D assets. The government says this cuts the effective tax rate on new investment roughly in half, from about 13 per cent to 6.4 per cent.

Canada also set a "one project, one review, one year" standard for approving major projects. This means one joint assessment instead of repeated federal processes, with a firm deadline for the decision.

To be fair, a damaged trade relationship with the US and steep tariffs pushed Canada to act. Australia has no similar shock from outside. It only has a slow productivity problem that is easy to ignore.

Productivity is the bigger issue

The main argument is simple. Weak productivity, not the size of the population, is what is lowering living standards per person. Since 2010, GDP has grown by around 2.4 per cent each year. But GDP per person has grown by only 0.5 per cent. Real disposable income has hardly moved, and in some years it went negative. Migration numbers are easy to blame because people can see and count them. Business investment decisions made in boardrooms are hidden from view.

If Canada's experiment works, supporters say it offers a model Australian leaders have so far avoided: cheaper investment and faster approvals, not harder migration. A country that wants both growth and better incomes for each person needs this much more than a smaller migration number.

What Indonesian job seekers can take from this

Headlines about caps will keep changing. But every major party still supports skilled migration. If you are looking for jobs in Australia for Indonesians, keep improving your skills, prepare an English CV that shows your experience, and follow official announcements instead of rumours.

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