‘We need the workers’: Malinauskas warns migration cuts risk ‘national economic self-harm’

South Australian Premier Peter Malinauskas has mounted a forceful defence of Australia’s migration program, arguing an ageing population, skills shortages, weak productivity and the dependence of universities on international students make deep politically driven cuts a dangerous gamble. He accepts the housing and cost-of-living concerns behind the backlash, but says Australia risks making those problems worse if migration policy becomes an auction over who can cut the hardest.

Peter Malinauskas has delivered one of the clearest arguments from within Labor against allowing Australia’s migration debate to become a competition over ever-lower numbers, warning that cutting the intake for political reasons could “tank the economy” while leaving the country without enough workers to build homes, care for an ageing population or deliver major projects.

The South Australian Premier used an address to the Sydney Institute, which he highlighted again over the weekend, to challenge the increasingly restrictive direction of federal migration politics.

His central argument was blunt.

“The correct policy response to Australia’s present economic challenges and the realisation of tomorrow’s economic opportunities is this: above all else, preserve our strong migration program,” Malinauskas said.

“The correct political response to anti-immigration politics and populists is not appeasement.”

He warned that a contest between the major parties over who could promise the deepest reduction would carry economic consequences.

“More troubling is the prospect of mainstream politics entering a race to the bottom for who can cut migration numbers the most,” he said.

“This isn’t unfortunate. This is madness.”

“There could be no greater act of national economic self harm than to slash migration numbers for political purposes.”

“More troubling is the prospect of mainstream politics entering a race to the bottom for who can cut migration numbers the most”

The intervention has become more relevant since the speech was delivered.

Home Affairs Minister Tony Burke last week unveiled Labor’s migration overhaul, including restrictions on international student family visas, visa hopping and longer stays by working holiday makers, alongside tougher action against unlawful non-citizens. Labor is treating its Budget forecasts of net overseas migration falling to 245,000 this financial year and 225,000 in 2027-28 as targets.

The Coalition is promising to go considerably lower. Opposition Leader Angus Taylor told the NSW Liberal State Council on Saturday that migration would be linked to the number of homes being built, currently about 170,000 a year, and would initially need to sit “significantly below” that level while housing caught up.

One Nation wants a still more dramatic reset, proposing to reduce the temporary migrant population by more than 750,000 over three years and temporarily push net overseas migration below zero.

Malinauskas is arguing against the premise that success should be measured by who produces the smallest number.

Ageing, taxpayers and the workers Australia cannot train quickly enough

The first part of his case is demographic.

Malinauskas said the number of Australians aged over 70 was about to rise rapidly and that Australia was approaching the point where there would be more people aged over 65 than children under 15.

“If the number of people leaving our workforce exceeds the number of people coming into it, our expenses grow, our income falls,” he said.

“We have less and less capacity to be able to generate the resources for the things we need to pay for when we need them.”

The direction of that argument is supported by OECD modelling. For Australia, the OECD projects the number of older dependants relative to working-age people rising substantially by 2060. Without changes to workforce participation and productivity, it expects ageing to drag on Australia’s per-person economic growth. The OECD specifically identifies regular migration, alongside greater participation by older workers and women, as one way of offsetting part of the demographic effect.

Malinauskas then moved to the fiscal ledger.

He cited Treasury modelling showing the average skilled permanent migrant in the 2018-19 cohort produced an estimated positive lifetime fiscal impact of about $198,000, compared with an estimated negative $85,000 for the Australian population as a whole.

That Treasury model is real, although it is important to understand what it measures. It estimates taxes paid against attributable government expenditure over a lifetime for particular migrant categories. It is not a calculation of somebody’s overall value to society, nor does it show every economic cost and benefit of migration.

But it illustrates Malinauskas’ point about age.

A skilled migrant often arrives after another country or family has already borne the cost of childhood, schooling and professional training. Australia receives a working-age taxpayer without first funding two decades of education and health care.

“Skilled visa recipients arrive in their prime working age immediately able to get to work and pay tax,” Malinauskas said.

“Not only is immigration not a drain on our public services, migration is part of the reason governments can afford to pay for those services. Skilled migrants are big net taxpayers.”

His second economic argument was productivity.

Malinauskas pointed to research estimating migration accounted for about 7 per cent of Australia’s average labour productivity growth over an earlier period. Treasury research confirms that skilled migrant labour contributed about 0.17 percentage points of annual labour productivity growth, equivalent to around 7 per cent of the average productivity growth rate over the comparison period.

More recent OECD research has also found an association between highly educated migrants and innovation. A one percentage point increase in the regional employment share of higher-educated migrants was associated with a 4.8 per cent increase in regional patent applications over five years.

Malinauskas used international education to make the argument more tangible.

International education generated $53.6 billion in export income in 2024-25, making it one of Australia’s largest exports.

“If we did this to the mining industry, imagine if we did it to the agricultural industry,” he said of cutting student numbers.

Australian universities spent $16.4 billion on research and development in 2024. General university funds contributed $8.56 billion, while competitive Australian government grants contributed $2.53 billion

“There would be a literal ad on every single television set, on every newspaper, on every phone screen arguing the case that we’re deliberately killing the goose that lays the golden egg.”

“With international education, it seems to be accepted. It’s crazy.”

His concern about university research also has a measurable basis.

Australian universities spent $16.4 billion on research and development in 2024. General university funds contributed $8.56 billion, while competitive Australian government grants contributed $2.53 billion. The ABS said the return of international students had supported the recovery in university revenues and research staffing.

That does not mean every dollar of international student fees flows directly into research, or that student numbers should be unconstrained.

It does mean large cuts to international education would force universities, governments or both to confront the question of who replaces the lost revenue.

For South Australia, Malinauskas cast the issue in even more immediate terms.

He pointed to copper, defence manufacturing, AUKUS submarines, artificial intelligence, data centres and other projects requiring large numbers of skilled workers.

“All of it will be lost if we don’t have enough people to do the work,” he said.

“We need the workers. We need the workers.”

He said training Australians had to come first, pointing to technical colleges, TAFE and university reform, but argued domestic training could not supply enough people quickly enough.

Jobs and Skills Australia’s latest completed national shortage assessment found 26 per cent of occupations remained in shortage in both 2024 and 2025, particularly across health, education, engineering, science and the trades.

The housing argument, and why Malinauskas says voters should not be dismissed

Malinauskas did not pretend public concern about migration was invented.

That was perhaps the most politically pointed part of the speech.

He rejected the argument that the surge in anti-immigration sentiment meant Australia had suddenly become a racist country.

“People are rightly worried about their economic future,” he said.

“They want their kids to enjoy a better standard of living than what they have.”

“That’s not prejudice. It’s a perfectly understandable response to a challenging economic environment.”

Housing gives advocates of lower migration their strongest case.

More people need somewhere to live. When housing construction fails to keep pace with population growth, additional demand can put pressure on rents and prices.

The latest ABS figures show net overseas migration has already fallen to about 292,000 in the year to March, well below the post-Covid peak, but still above Labor’s eventual 225,000 target.

Taylor’s answer is to link migration directly to housing construction.

One Nation argues deeper reductions are necessary to give housing and infrastructure time to catch up.

Malinauskas’ response is that the relationship cannot be looked at from the demand side alone because the people Australia needs to construct more housing are themselves part of the migration system.

His version of the argument was characteristically direct.

“Want more affordable housing? How about some more sparkies, tilers, roofies, concreters and brickies?”

“Want mum and dad to be able to get an aged care bed? How about more ready-to-go, fully trained care workers?”

“Enjoy public education and Medicare, but you’re worried about the debt? Well, migrants help us pay for it.”

That does not settle where the migration number should be.

A poorly calibrated intake can add population faster than homes, roads, hospitals and schools can be supplied. Migrants may eventually increase productive capacity, but they need housing immediately. Infrastructure can take years to arrive.

Malinauskas’ argument is instead that this is a reason to improve the composition and management of migration, rather than select an arbitrary national number and work backwards.

He was equally critical of how both sides of the cultural debate have handled the issue.

The “far left”, he argued, should not answer concerns about housing and living standards by assuming voters are motivated by prejudice.

“Calling them a racist implicitly or explicitly is plain daft,” he said.

But he was just as dismissive of simplistic anti-migration politics.

“Can’t buy a house, cut immigration. Stuck in traffic, cut immigration. Hospital emergency department full. Simple. Cut immigration,” he said, describing the appeal as powerful precisely because it offered an easily understood explanation for complicated problems.

His warning to the major parties was that accepting that premise creates an auction they cannot ultimately win.

“One Nation is never ever going to say to a Labor or Coalition government, well done, you’ve got the balance right on migration,” he said.

“You can concede to the populists, appease the polls, and slash migration numbers. But know this, get it wrong, you tank the economy, divide your democracy, and unleash a vicious cycle of political decline.”

Malinauskas also drew a distinction between Australia and the immigration politics consuming parts of the United States and Europe.

Australia, he said, controls entry to an island continent and has the ability to select migrants through regulated visa programs.

“No sensible person is arguing for reckless, undocumented, unregulated, open door migration,” he said.

“No one is arguing for unlimited numbers of arrivals. No one but no one says migrants shouldn’t share our democratic Australian values.”

What he wants preserved is what he described as a “targeted, calibrated, balanced, skills-based, humanitarian, risk-managed system”.

The word calibrated is important.

Malinauskas has not proposed an unlimited intake, nor supplied a single ideal migration number. His argument is that the number should follow Australia’s labour, demographic and economic requirements rather than precede them.

That places him at odds with an increasingly numerical political debate.

Labor has settled on 225,000.

The Coalition says housing construction should impose the ceiling and promises migration initially below the present rate of about 170,000 homes a year.

One Nation wants a temporary period of negative net migration followed by a ceiling of about 130,000.

Malinauskas is asking a different question: before deciding how many people Australia does not want, work out how many workers it cannot afford to lose.

The speech closed where it began, with migration as something more than an economic calculation.

Malinauskas recalled his grandparents fleeing communism in postwar Europe and his grandfather becoming emotional when showing him the naturalisation certificate he had carefully preserved.

“For me this is like a dream coming true,” Malinauskas recalled his grandfather saying.

His argument to the Sydney Institute was that the opportunity Australia offered migrants such as his grandparents did not simply benefit those who arrived.

“Our nation at its best has always understood that when you give someone a chance, that doesn’t mean you take it away from someone else,” he said.

“It means you create an opportunity.”

That is now one side of a migration argument likely to dominate Australian politics for some time.

The other side points to expensive housing, stretched infrastructure and a population that grew faster than governments planned for after the pandemic.

Malinauskas does not dispute those pressures.

His challenge to Canberra is over the remedy: fix housing, train Australians, enforce the migration system and choose migrants carefully, but do not assume the smallest migration number is automatically the best one.

Because, in his telling, Australia’s problem in the years ahead may not simply be too many people.

It may also be not having enough of the right ones.