The politics of migration is back in the headlines ahead of the federal budget | 7.30

Key Concepts:

• Pharmaceutical Benefits Scheme (PBS)
• Free Trade Agreement (FTA)
• Defense Spending as % of GDP
• Constitutional Referendum on Citizenship Stripping
• Migration Intake (Permanent & Overall)
• Overseas Students
• Skilled Shortages
• Recognition of Migrant Skills
• Temporary Migration Program

1. Pharmaceutical Benefits Scheme (PBS):

• The PBS is described as a source of pride for Australians and "the envy of the world."
• The government has announced a further reduction in the cost of medicines under the PBS to $25 from 2026.
• The Prime Minister asserts a commitment to defend the PBS against any attempts to undermine its integrity, including by major pharmaceutical companies.
• The PBS is linked to foreign policy and the US through the Free Trade Agreement, highlighting its unexpected role in the election campaign.

2. Election Timing and Political Pressure:

• The expectation is that the Prime Minister will call an election shortly after the Treasurer's budget announcement.
• Opposition Leader Peter Dutton faces increasing internal and external pressure due to a perceived lack of clear policy proposals and confusion surrounding existing ones.

3. Defense Spending:

• The Coalition has suggested lifting defense spending from 2% to 2.5% of GDP, equating to approximately $15 billion a year.
• Angus Taylor reported that the opposition is considering lifting defense spending to at least 2.5% of GDP as early as 2029.
• The Coalition has committed to a fourth F-35 squadron.

4. Citizenship and Referendum Proposals:

• Dutton proposed a referendum for constitutional change to allow ministers, rather than courts, to strip criminals of their citizenship.
• There was also a proposal to include a question on anti-semitism in the citizenship test.

5. Migration Numbers and Policy:

• New data shows net migration figures at 380,000 for the 12 months to September 2024, down from a 2023 peak of over 550,000.
• The inflow of overseas students was over 200,000.
• Labor has implemented measures to cut the number of overseas students.
• Dutton proposes reducing the permanent migration program to 140,000 in the first two years, then increasing it in years three and four.
• Current permanent migration is running at 28,000.

6. Challenges in Cutting Migration:

• It is considered highly unlikely that Dutton will be able to legally and politically reduce permanent migration to 140,000.
• Cutting permanent migration could expose industries like aged care, agriculture, horticulture, and meat/livestock to significant disruption. These industries have built their business models around access to relatively less skilled and cheap labor.

7. Martin Parkinson's Migration Review:

• Former head of treasury and the department of prime minister and cabinet, Martin Parkinson, reviewed the migration system for the Albanese government.
• The review did not focus on the overall level of migration.
• Parkinson believes it is very difficult to cut migration numbers, and the consequences would be significant.
• Parkinson's review found that approximately 2.2-2.3 million people with work rights in Australia were not permanent residents or citizens, highlighting the scale of the temporary migration program.

8. Skilled Shortages and Migrant Skill Recognition:

• Around a third of all occupations in Australia are reporting skilled shortages.
• Approximately 44% of people who came in under the permanent migration program are not working at the skill levels for which they were qualified.
• Around two-thirds of the 620,000 people who came into the skilled program are not working at the skill level that they were brought in for, representing a significant waste of capability.

9. Conclusion:

• Changing migration numbers to address concerns or improve outcomes is a difficult and complex issue.
• The topic of migration is considered challenging to discuss during an election campaign.