Fewer migrants, babies: Population shrinks in year of COVID

The biggest three-month drop in Australia’s population since the depths of World War I and signs of a pre-pandemic baby dip in NSW have prompted warnings of a multibillion-dollar hit to the economy over coming years.

Australian Bureau of Statistics data showed the population fell by 4200 in the September quarter to 25,693,059, largely due to an outflow of people. There were 55,400 overseas departures in the period compared to 20,600 international arrivals.

The slowdown in population growth is most acute in Victoria, which had the nation’s highest growth rate ahead of the coronavirus pandemic.

Victoria lost a net 16,022 people in the quarter, compared to falls of 1163 in NSW and 165 in the ACT. Every other state and territory added people, largely through interstate migration.

The closure of Australia’s borders has stopped almost all immigration while COVID outbreaks overseas have made it difficult for prospective migrants to complete paperwork as part of their application to move here.

In the September quarter of 2019, migrants accounted for 63 per cent of Australia’s population growth. A year later they accounted for less than 39 per cent.

This has hit Victoria the hardest, with a net 18,438 Victorians heading to another country. In the same quarter last year, Victoria added 25,930 residents through net overseas migration.

NSW, which like Victoria depends heavily on net overseas migration for population growth, suffered a net loss of almost 7000 people to international destinations. Quarterly net overseas migration to NSW fell the most on record.

Both states also lost thousands of residents to other parts of the country. Queensland continues to attract people from other parts of Australia while for the first time since the height of the mining boom, Western Australia enjoyed an increase in net interstate migrants.

It’s not just international migration, which has driven population growth this century, that is slowing.

Not only has net overseas migration reduced population growth, the number of newborns has fallen to the lowest level in more than 11 years.Credit:iStock

The number of babies born over the past year slumped by 2.2 per cent, or almost 7000, to 299,500. It’s the lowest number of births in more than 11 years and the biggest annual drop in 24 years.

The drop in births pre-dates the impact of the coronavirus pandemic, which many demographers believe will lead to a sharp fall in births in part due to economic uncertainty.

The state hardest hit by the drop in babies is NSW. The number of newborns in NSW through the 12 months to the end of September was 2175 down on the previous 12-month period.

NSW’s population growth rate would have been worse but for a large drop in the number of deaths over the past 12 months.

Just two areas – Tasmania and the Northern Territory – have recorded a lift in births over the past year, with a combined increase of 62 babies.

ABS demography director Phil Browning said the last time Australia’s population fell was in the final three months of 1916 during World War I, when the number of residents dropped by 51,500.

KPMG chief economist Brendan Rynne said net overseas migration was almost 65 per cent down over the past 12 months, largely due to a collapse in the number of international arrivals.

He said KPMG modelling showed that without a smooth international vaccine rollout over the next 18 months, Australia’s population could be 1 million lower by 2030 than had been expected pre-COVID.

“The loss of skilled younger migrants will represent a substantial hit to our GDP given that fewer working-age people would be supporting older Australians, and there would be a loss in productivity since the immigration program is deliberately tilted towards skilled migrants including university students and graduates,” he said.

CommSec senior economist Ryan Felsman said annual population growth could fall to just 0.7 per cent in the December quarter, with Treasury expecting it to edge down to 0.2 per cent through 2021.

“It’s unlikely that migration growth will meaningfully pick up until at least mid-2022 and is highly dependent on the re-opening of borders should COVID-19 vaccines impart herd immunity, enabling greater international mobility,” he said.

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