Transcription
It's just about time for our regular check-in on big trends and their economic consequences. The segment's called the Dismal Science, and we've got a fresh brand spanking new intro. Are you sitting down?
>> Yes, Dismal Science.
>> According to an Australian Bureau of Statistics report released earlier this year, those from India now form the largest group of people born overseas residing in Australia. Now, this was the first time Indians in Aussie land have topped that specific list. Previously, it was those born in the United Kingdom who formed the largest immigrant block. But, as that UK cohort shrinks in new migrant numbers, as well as gets older in overall age, it looks like India will be Australia's primary source of immigration for the foreseeable future. And so, with the latest census soon to get underway, it's a pretty good time to consider one of the biggest demographic shifts in Australia's recent history. Leith van Onselen is a self-described unconventional economist who takes in big societal shifts, crunches the numbers, and considers what it might mean for Australia's bottom line. Good morning, Mr. van Onselen.
>> Good day, Sean. How's things?
>> Yeah, going well. So, according to the ABS this year, there are now nearly 1 million people who were born in India, but now permanently reside in Australia. When did these numbers start to tick up?
>> Yeah, so it's really been a phenomenon in the last 20 years. So, just in the last decade, or talking about the 10 years to 2025, which is the latest data we've got. Uh we Australia's received 535,000 net migrants from India. And in the last 20 years, we've received 867,000 net migrants from India in the last over the last two decades. So, India is by far our biggest cohort for incoming migrants, and it has been that way really for the last 20 years. And uh it completely dwarfs other nations now.
>> Leith van Onselen, in the mid-20th century, the Australian government consciously lowered the cost for British immigrants to move here. And of course, so the phrase that followed, "£10 poms". More recently, has the Australian government done anything equivalent for those from India?
>> Not exactly, but they have signed three uh migration-related agreements with India in the last 6 years to actually boost um migration between Australia and India. So, the dying days of the former coalition government just before they lost office, so they actually signed a free trade agreement with India which actually offered some more generous migration clauses for for Indians. And the Albanese government's actually signed two migration-related pacts. But well, one of them's a mutual recognitions for qualifications pact, and another one's the Australia-India Migration Mobility Partnership Agreement. And both of these agreements try to make it easier for for uh Indians to travel and also work and live in Australia.
>> You're hearing from Leith van Onselen, a self-described unconventional economist. And with the census soon to come once again, we're considering the size and impact of a significant migrant group in Australia, those from India. So, Mr. van Onselen, for a lot of us here in the regions, I think it might be fair to say that Indian migration is closely attached to essential services or or services that are are widely appreciated. In my own little world, I can think of family doctors, um the people who run uh local service stations, as well as a news agency, as well as of course uh things like the local Indian restaurant. But, zooming out and taking a wider lens, are there any notable economic impacts specific to this boom?
>> Yeah, so so one thing that that that is pretty relevant with the Indian diaspora which lives overseas. And to be fair, it's not just Australia that's that that has received large numbers of Indian migrants. Also, other places like Canada, uh the the United Kingdom, etc. But, actual the the latest World Bank data shows that India is by far the biggest recipient of remittances from migrants living in other countries. So, what that means is that when Indians go to other nations, whether it be Australia, Canada, United Kingdom, etc., they tend to send large volumes of money back home to their families in India. And according to the World Bank, Indian migrants sent home 126 billion dollars, US dollars, billion US dollars in remittances from other nations back to India in 2024 alone, which is the latest data. Now, that is obviously an enormous sum. 126 billion US dollars is a lot of money, obviously. But, it it turns out that migrant remittances are actually India's biggest export, effectively, because that that volume of migrant remittances was worth 3.2% of India's GDP in 2024. [clears throat]
>> Are remittances something thing that are subject to tax as they head out of the country?
>> No, no, they're not. They're They're just basically financial flows, and they're actually very hard to tax because they can occur through a whole bunch of different channels, whether it's money transfers, bank transfers, etc. You know, using Western Union, all those sorts of things. So, uh you know, it's actually quite hard to track, and they're not actually subject to tax. But, yeah, it's certainly a very large amount of money. And in Australia's case, Australia uh lost about 22 billion Australian dollars in remittances in 2024 according to the World Bank data. Now, that's obviously not all from India uh Indian migrants, but the Indian migrants could be the largest share of that because A, they're the largest migrant group in the country, and B, they're the migrant group that tends to send home remittances more than other migrant groups.
>> Is there something Australian governments could or should do to to capture some of this value?
>> Uh look, it's pretty hard. It's it is very hard to to capture remittances and and also uh you know, money is fairly fungible. So so if they try to put a tax on remittances, um there are other ways to get the money out of the country, but again, it is an economic cost that I think policy makers in general should attribute to migration. You know, we often hear for example that this claim that international education is the nation's biggest export, accounts for 50 billion dollars worth of exports, etc. Those figures don't net out remittance outflows from students, from migrants, etc. that are then sent back countries, which really should be considered.
>> Lee Fan Anselen, thanks for your time and insight this morning.
>> Yeah, thanks Sean, anytime.
>> Lee Fan Anselen is an unconventional economist and founder at MacroBusiness.