Accepting Immigrants Is a Strategic Asset for Australia

In mid-June the British medical journal The Lancet released a new report forecasting that global population will peak in the 2060s and then begin to rapidly decline. This is consistent with other recent studies that have highlighted declining fertility rates throughout the world. For Australia – as will be the case for all countries – this phenomenon will have a profound effect on almost every policy. As an immigrant-accepting country, Australia should be able to mitigate some of the negative effects, and may even find itself in a relatively advantageous position.

The COVID-19 pandemic has significantly affected Australia’s ability to attract migrants, a vital strategic asset. Australia’s net migration is predicted to fall to just 36,000 people this year, down from 239,600 in the previous year. These figures should start to rebound once a vaccine is developed for the virus, but it may be several years before numbers return to their previous level. It will be in Canberra’s interests to make sure that they do. Being able to grow the country’s domestic consumer base will soon become crucial, as Australia’s trading relationships are headed for difficult times.

Three of Australia’s four largest trading partners are entering into periods of significant demographic decline, which will dramatically affect their demand for Australian goods and services. Japan is currently losing over 400,000 people a year, and will see its population halve by the end of the century. South Korea’s birth rate has fallen to below one child per woman (0.98), well below the replacement rate of 2.1 per woman. And, most significantly, China is about to enter into a period of rapid population decline, with The Lancet predicting the country’s population will almost halve by 2100.

This phenomenon will have a major impact on not only the demand and distribution of goods and services, but the global balance of power. China’s recent assertive behavior can be viewed through the lens of the country having to quickly use what advantages it currently has to reshape the world order before it enters into a period of demographic decline. With Australia presently facing considerable pressures to become submissive to Beijing’s might, there could be good reason for Canberra to believe that simply by being firm and patient these pressures may dissipate, or at least weaken.

However, this patient strategy will also rely on Australia’s primary security partner, the United States, being able to overcome its present insular moment and reestablish its credentials as an open and ambitious country, capable of expanding its own population. If the United States were able to do so, it would mean that the 21st century could still be an American century, an outcome that would maintain the advantageous global conditions that Australia has enjoyed since the end of War World II.

It would not, however, be prudent for Australia to simply rely on this possibility. By seeking to enhance its own capabilities, Australia could limit the influence of external forces, although it won’t remove them entirely, as even with declining populations worldwide, Australia will still lack demographic weight. However, in a world of low fertility, the ability to continually enhance its population should be seen as the country’s principal strategic asset.

Yet Australia is not immune from the parochial forces that have gained traction in the United States. Similar sentiments exist within Australia’s major and minor political parties, and are promoted heavily through the press. The influence of Donald Trump on the political culture in Australia has been significant, and unfortunately the feelings he encourages are disconnected from both the country’s economic imperatives and foreign policy concerns about Australia’s capabilities in relation to other states. This is making it difficult for the Australian state to defend the assets that it has to protect in order to enhance the country’s power and potential.

If Australia is able to overcome these sentiments, maintain public acceptance of its migration program, and demonstrate the confidence and ambition to increase its population, then a world of declining fertility rates could – in many ways – prove highly advantageous. It offers Australia an opportunity to enhance its current domestic capabilities, and either preserve or even increase its current global influence. That’s something a number of other countries unable to enhance their populations may struggle with.