Unsung heroes: temporary migrants and international students drive Australia
Migration has long been a key driver of Australia’s population growth, but its economic significance goes far beyond just numbers.
According to Australian Bureau of Statistics’ national, state and territory data released in September, the Australian population officially surpassed 27 million in March; in the 2023-2024 fiscal year, Australia’s population grew by about 615,300 people.
A staggering 83 per cent of Australia’s population growth in this period was driven by overseas migration, in a clear indication of the vital role migrants play in shaping our nation.
When looking at data from 1981, on average, about 50 per cent of the overall population growth could be attributed to migration, demonstrating its central role in sustaining our economic development.
However, there’s a nuance that often gets overlooked in discussions about migration: while most of us tend to perceive this as permanent migration, the reality is that about 80 per cent of migrants are temporary residents.
ABS Overseas Migration data shows that in June 2023, of all the people with visas in Australia, about 80 per cent of the visas were temporary. These visa-holders include international students (38 per cent), skilled migrants, working holiday visa-holders, visitors (37 per cent), and New Zealand citizens (6 per cent).
By contrast, permanent residents accounted for only 11 per cent of the intake, while Australian expats made up about 8 per cent.
Revenue boost from international students
| Year | Number of international students | Revenue | Revenue per student |
| 2002 | 228,194 | $6.3bn | $27,529 |
| 2003 | 256,465 | $7.4bn | $28,729 |
| 2004 | 271,260 | $8.3bn | $30,605 |
| 2005 | 288,408 | $8.7bn | $30,138 |
| 2006 | 317,008 | $10.1bn | $31,734 |
| 2007 | 370,350 | $12.4bn | $33,530 |
| 2008 | 434,258 | $15.9bn | $36,697 |
| 2009 | 491,335 | $18.5bn | $37,657 |
| 2010 | 468,719 | $18.7bn | $39,858 |
| 2011 | 425,600 | $17.7bn | $41,574 |
Source: ABS and Department of Education, Skills & Employment
These temporary residents form the backbone of Australia’s population and economic growth, yet their contributions often go unrecognised or under-appreciated.
International students, for example, bring billions of dollars into our economy, not only through tuition fees but also through spending on accommodation, food, transport, and tourism. In fact, international education is one of Australia’s largest export industries.
When examining Australia’s top five exports of goods and services, education-related exports rank fourth. According to ABS International Trade data, international education generated $48bn in 2023.
According to the Department of Education, there were 784,400 international students in Australia in 2023. This figure surpassed the 2019 peak of 756,700 students. In 2019, the revenue from international education was $40bn.
Furthermore, in 2023, the average revenue generated per international student reached an all-time high of $61,000 – nearly double the $29,000 recorded in 2003.
While many might believe that international students drive up prices and exacerbate cost-of-living pressures, data shows that this is not the case. In fact, international students are often facing the same challenges as residents, including rising rents, higher costs for basic goods, and significant increase in tuition fees.
According to studies, the impact of international students on housing markets is concentrated in specific areas near universities, and even in these locations, their contribution to rent inflation is marginal compared to broader market forces like housing shortages, interest rates, and slow construction rates.
According to the Australian Chamber of Commerce and Industry, for every one dollar a university collects in tuition fees, there is another two dollars generated through other activities associated with international students.
Austrade noted at a public hearing in May 2023 that international education generates 69 per cent of international tourism spend in Australia. They elaborated that “without international education, we effectively have an international tourism sector one-third its current size – or its regular size”.
Beyond their direct financial contributions, international students also help plug critical labour gaps by working part-time in essential sectors like hospitality and healthcare.
ACCI shared that in 2018, international education supported about 250,000 jobs in Australia and stressed the importance of international students as consumers, especially in regional Australia.
According to census data, the top occupations for non-Australian citizens enrolled in full-time studies at universities were sales assistants (6500), waiters (4200), and aged and disabled carers (4000).
Seasonal workers during tomato planting operations in northern Victoria.
Similarly, skilled migrants and working holiday visa-holders provide much-needed labour in industries facing chronic shortages. Sectors like agriculture, hospitality, construction, and IT rely heavily on temporary workers to meet workforce demands.
These workers help keep the economy running smoothly, especially in regional areas where local labour can be scarce. And yet, despite their significant contributions, temporary residents receive little in the way of social benefits.
They pay taxes, contribute to the economy, and even help support Australia’s ageing population, but they often lack access to the same tax benefits, healthcare subsidies, and welfare programs as permanent residents and citizens.
This disparity creates an unbalanced yet critical arrangement, where temporary migrants give far more to the system than they take out. It’s essential to recognise that their presence in Australia is not only economically beneficial but also socially enriching.
International students, for example, contribute to the cultural diversity of our campuses and communities, creating cross-cultural connections that enhance Australia’s global reputation.
Migrants and international students also play an indirect but essential role in Australia’s future workforce. Many temporary residents, particularly skilled migrants and international students, eventually transition to permanent residency. They bring valuable skills, global perspectives, and innovation to the Australian economy.
Given the demographic challenges of an ageing population, Australia needs to ensure it can attract and retain young, skilled workers. Temporary migration pathways serve as crucial stepping stones for these individuals, who often become permanent residents and long-term contributors to the nation’s growth.
Despite these clear benefits, there are persistent concerns around Australia’s migration intake, particularly in relation to housing availability, cost-of-living pressures and unemployment. Many argue that reducing migration will ease pressure on the housing market and job competition, but a closer look at the data suggests otherwise.
According to the Australian Bureau of Statistics, the housing crisis is driven primarily by a mismatch between housing supply and demand, as well as broader economic factors such as interest rates and construction bottlenecks.
Cost-of-living pressures are being driven by broader economic factors such as inflation, wage stagnation, and supply chain disruptions, which affect everyone – international students included.
While migrants, like all residents, need housing, reducing migration would not solve the core issue: Australia’s construction rates have been lagging far behind population growth for years. A significant reduction in migration would risk labour shortages in the construction industry, further delaying housing developments.
Migrants contribute to sectors, including the construction industry, that a key to addressing Australia’s housing shortage, demographer Hari Hara Priya Kannan writes.
ABS data shows that migrants, especially skilled workers, are key contributors to the very sectors that are critical for addressing the housing shortage. Migrants in the construction and engineering fields, for instance, play an essential role in increasing housing supply, particularly in major cities where demand is highest.
Limiting the intake of these workers would exacerbate the housing problem by slowing down building projects and infrastructure developments, worsening the very crisis critics are seeking to solve.
As for unemployment, ABS figures from recent years show that migration has little to no long-term impact on overall unemployment rates. In fact, migrants tend to complement, rather than compete with, the local workforce. They often fill gaps in industries with high demand for labour that Australians are either unable or unwilling to fill.
Skilled migrants bring specialised expertise in fields like healthcare, IT, and education – sectors where labour shortages have been persistent and where the domestic workforce is unable to meet demand.
International students, who also work part-time during their studies, contribute to Australia’s labour force without displacing local workers. They typically work in roles that are essential but often difficult to fill, such as in hospitality and retail. Without them, many businesses would struggle to stay open or operate efficiently.
Ultimately, we must acknowledge that these groups – though temporary in their visa status – are not temporary in their impact. They form an essential part of the fabric of our economy and society.
Rather than being a source of inflationary pressure, international migrants are an integral part of Australia’s economic fabric, facing the same financial challenges as domestic residents while contributing billions to the economy.
Moving forward, it is imperative that policies around migration reflect not only the long-term contributions of permanent residents, but also the immense value brought by temporary migrants and international students.
As we navigate future challenges, including labour shortages and economic shifts, it will be these populations who continue to help steer Australia towards sustained prosperity.
Hari Hara Priya Kannan is data scientist at The Demographics Group
