Research conducted by consulting firm KPMG has revealed the long-term implications of COVID-19 on Australia’s economy, which is heavily reliant on population growth.

KPMG’s forecast is based on two years without a vaccine, with the company stating a best-case scenario where a vaccine is found within 12 months will still see Australia’s population fall by 420,000. 

The annual loss of GDP and national income from reduced immigration is caused by two factors. 

The first is fewer working-age people supporting older Australians, as migrants are typically younger. 

The second is the loss in productivity, since the immigration program is deliberately tilted towards skilled migrants, including university students and graduates.

“Our modelling found that even a modest 40,000 additional skilled working-age migrants would boost GDP by up to $4.7 billion by the end of the decade. Overseas students, if given a clearer pathway to residency, would be a means to achieving that end,” Dr Brendan Rynne, KPMG chief economist, said.

“Extra incentives will be needed to make them choose Australia, as in the post-COVID-19 world, competition for international students will be intense, so we propose an accelerated and targeted intake program.”

KPMG’s global lead for education, Dr Stephen Parker, said Australia’s international migration is vital for the nation's future, with the last decade immigration prospects for international students being left unstated.

“I think Australia should say openly that talented, working-age people must become a higher proportion of our overall population because our natural birth rate is below replacement levels and we have a growing number of retirees.” 

“If international students make the sacrifices to come to study here, supporting our educational institutions and adding to our diversity, then we will look favourably upon them if they wish to stay,” Dr Parker said.