ANDREW MCKELLAR: Migration a scapegoat for inflation and fraying social cohesion

Our migration debate must be more than a blinkered bidding war where the lowest number wins a news cycle, while Australia loses out. It’s time to reset the conversation, and it’s vital that business has a seat at the table.

Yes, Australians want tough action to restore confidence in the migration system. So does business.

The community is rightly angry about fraying social cohesion, strained public infrastructure and sticky inflation pushing up the cost of living. Policymakers must do more to attend to these concerns.

We can’t sustain a healthy migration program if it lacks public confidence.

But Australia can take strong action on immigration and still get the balance right on the level of migration. That starts with having a public debate that is reasonable and informed by the facts.

Australia’s Net Overseas Migration number, or the NOM, as it is known, has become a key focus of the debate, with all the key parties nominating significantly lower numbers, but without providing rationales or reasoning for these levels.

Business does not support an arbitrary NOM, and we regard artificial reductions achieved through go-slows in the visa processing as terrible policy. Anecdotally, delays are already hurting businesses and slowing down critical projects across the country.

A NOM of over and about 200,000 is a normal level in Australia. For context ABS data shows from 2004-05 to 2019-20 Australia’s average NOM was 217,300.

The point is Australia’s economy cannot afford for the migration debate to be diverted by a fight over arbitrary targets. Migration has moved with Australia’s needs and today we need more skilled workers. Skilled migration must meet the needs of the Australian economy and support our quality of life.

Just last week the National Accounts confirmed Australia is hitting its economic speed limit, in second gear. Because of a lack of capacity, our economy cannot grow fast enough to maintain living standards without stoking inflation and interest rates.

The real constraints on Australia’s economy are skills shortages, over-regulation and high taxes. That is what is driving up prices and holding us back. Persistent skills shortages are at the heart of the problem and remain an inconvenient truth for self-styled immigration hawks.

Pubs and tourism operators desperately need chefs and hospitality staff. Aged care homes and hospitals are stretched. Produce is rotting unpicked and our abundant natural resources sit under-exploited. Housing projects are being held up. Major projects in the energy sector are stalling, reports suggest the 2032 Brisbane Olympics is being impacted, and we are not making the most of the AI opportunity.

These skills shortages are inflationary; they push up prices and hold our economy back. Supporting the right skilled workers into our country means we can build more and grow more without overheating.

Australia can turn these challenges into a generational opportunity through a skills revolution. Sadly, despite billions of dollars in “Free TAFE” opening doors for many, fewer Australians are walking through them.

The latest data from the National Centre for Vocational Education Research shows just 282,430 Australians are currently in training in an apprenticeship or traineeship, down from 427,105 in June 2022.

Fewer Australians are starting a trade or a skill. Apprenticeship and traineeship commencements have collapsed from 277,300 in June 2022 to 133,300 in June 2025 — a 52 per cent drop in just three years. Over the same period construction trades apprentices in training fell from 72,770 to 62,555, a 14 per cent drop, and new starts fell from 30,825 to 18,815, an almost 39 per cent drop.

It’s time for Federal and State governments to partner more closely with the private sector, including private training providers, who deliver high-quality training and high completion rates, to skill more Australians.

But it takes years to turn an apprentice into a tradie, and Australia cannot afford to wait. We need urgent and immediate action to fix the housing crisis and win our fair share of the economic upside in the artificial intelligence transformation.

Australia should not have to choose between building homes or data centres; we need to build both. That is why we need to reset the conversation on migration back to being rooted in reality.

It is also time for the lazy hit on international students to end. Education is an important export industry for Australia. Trashing its reputation and erecting barriers to students who see Australia as a land of opportunity is bad for business and our communities. From universities to training colleges across the country, Australia built a global reputation for excellence, and we should not allow that to be traded away in a race to the bottom on migration.

Shrinking Australia’s economic opportunities through knee-jerk cuts to our migration program will do more harm than good. Skilled migration settings must remain a discussion driven by data and economics, not news cycles.

Business is not asking for a free-for-all. We want what Australians want: a rigorous migration system with integrity, that is well managed and trusted. But we can never accept arbitrary caps and economy-damaging cuts.

Australian business wants a reset in the migration debate and is ready to work with governments to get this right.

Andrew McKellar is the CEO of the Australian Chamber of Commerce and Industry