Australia's Falling Migration

[Guest The Pom Queen]

Australia’s population growth is quickly fading, new data reveals, threatening to rob the country of one of its strongest pillars of growth at a time of rising risk of recession.

 

At the height of Australia’s resources boom, foreign workers like Chris Nellist were a hot commodity. Recruitment agencies badgered the British geologist several times a day with offers of high-paying jobs.

 

Now, those calls have stopped. Early last year he was laid off from his 179,000 Australian dollar ($125,300) a year job at an exploration firm based in Perth, the gateway to the remote, mineral-rich soils of Western Australia—and has been seeking steady work ever since. Many of his friends have already returned to the U.K. and he is considering doing the same.

 

“I’m applying for jobs back home. If I get an offer, I’ll take it,” Mr. Nellist said.

 

Australia’s population increase through migration touched a decade low in the year through March, the statistics bureau said on Thursday. About 173,000 more people migrated to this country of nearly 24 million in the past year than left, 45% less than at the peak of the boom in 2008.

 

The latest migration data follows a recent string of gloomy data releases that stoked fears the country is at risk of sliding into recession after avoiding one for 24 years.

 

The slower pace of migration now adds to those risks. Thousands of people are leaving Australia as a decadelong resources boom grinds to a halt, hurt by slowing demand from China and other emerging economies for raw materials used to build skyscrapers, bridges and railways.

 

Australia’s central bank last month downgraded its economic growth forecast in party because it realized that its population predictions had been too rosy.

 

With few industries able to match the hundreds of billions of dollars that were plowed into resources projects in recent years, Australia needs population increases to fuel consumer spending on everything from real estate to flat-screen TVs. Analysts now warn of a demand shock to the economy, which has been driven by what some economists consider “dumb growth”: increasing wealth just by adding more people.

 

When Mr. Nellist arrived from England seven years ago, Australia, along with other resource-rich nations like Canada, faced a severe shortage of workers to help dig out iron ore and other steelmaking ingredients that China was devouring during its rapid industrialization. Global advertising campaigns sought everyone from engineers and geologists to service trades like hairdressers and bakers.

 

Even high school dropouts could earn $200,000 a year running drills in underground mines. At its peak in 2008, Australia’s population growth of 2.2% was one of the fastest in the developed world. More than two thirds of it was driven by migrants.

 

But as large investment projects went into production and commodity prices slumped, many mining companies laid off workers, hurting entire townships and driving unemployment to decade-highs.

 

“Would you move to a country where you can’t get a job?” asked Tim Toohey, chief economist at Goldman Sachs Group Inc. in Melbourne.

 

Australia’s population grew by 1.35% in the year through March, Thursday’s official data published shows. But even that number now looks optimistic to Mr. Toohey. His own calculations suggest that Australia will gain only 165,000 more people than it loses to migration by the end of the year—17% below government predictions. Paired with a birthrate that is declining at its fastest pace on record, population growth will likely slump to a decade-low of 1.2% this year, Mr. Toohey said.

 

To be sure, Australia’s population is still growing faster than the U.S. and many European countries, but the rapid slowdown in the pace of growth now threatens the high living standards Australians got used to during the boom years, said James McIntyre, chief economist at Macquarie Group in Sydney.

 

The commodities boom also had some unintended consequences that have reduced its appeal to migrants, ranging from foreign backpackers to workers from neighboring New Zealand. It pushed up costs—even in east coast cities that didn’t benefit directly from the mining boom—making Australia an expensive place to live. House prices in the country’s biggest city Sydney are among the highest in the world, yet wages nationwide are growing at the slowest pace on record, according to the central bank, as the resources downturn bites.

 

IT sales professionals Susan Thompson and Mark Trotter returned to their native New Zealand from Sydney this month after becoming increasingly fed up with the high cost of living and growing pressure at work. “Sydney is off-the hook expense-wise,” said Mr. Trotter. “New Zealand’s taxes are lower, so you have more money in your pocket.”

 

New Zealanders are spearheading the exodus of temporary workers, particularly from the mining-rich states of Queensland and Western Australia, said Bernard Salt, a demographer at consultancy KPMG in Melbourne. New Zealand’s economy has until recently been buoyed by reconstruction works after a series of earthquakes.

 

“During the boom Australia needed field workers to man the pump, but now New Zealand’s economy has surged ahead, and the vast pool of talent is drawn back,” Mr. Salt said. New Zealand had the highest migration gain from Australia in July in nearly a quarter of a century.

 

Even foreign students, who make up 40% of Australia’s annual immigration flows, are opting not to stay on after finishing their studies. The number of people holding temporary graduate visas—a work permit designed to help overseas students join the labor market—fell by about a fifth to 19,506 in December from a year earlier.

 

Mr. Nellist, the British geologist, has been clinging to casual jobs over the past year: a brief stint in Sweden and, more recently, in the remote gold fields of Western Australia. He said his wife, an administrator, had to take up cleaning work to help pay the bills and hold on to a three-bedroom house the couple built in Perth.

 

“This was our new life,” he said. “But there’s a good chance that we won’t be able to afford it anymore.”

 

http://www.wsj.com/articles/new-risk-to-australias-economy-falling-migration-1443073817

[Que Sera Sera]

Nice to put a face to the name :wink:

[fifi69]

Mmm...so the story as told in the OP.

 

or the one we have read in this and other forums??

 

We too came with nothing, OH has never earned what VS did. We've gone from double income to single, have a new mortgage.

 

its not easy street I grant you....but drama, much!!

[VERYSTORMY]

I will add a bit of background.

 

As the article says, we are generally happy here. My wife loves Australia with a passion that even the most ardent Australian supporters on here would be no where near to.

 

However, last financial year, we made a total of $22k in income.

 

I have casual work at the moment, but that is more likely than not going to end pretty soon and nothing in the pipeline and the outlook even in the medium term for my work in Australia is pretty bleak.

 

We now have no savings left and the day I have no more work, we are not in a position to meet any payments. As a result, I have little choice but to look for work outside of Australia as well as inside.

[fifi69]

I really do feel for you Chris, because I know you have a heart of gold and would help anyone in a sticky situation.

 

and nobody knows what's round the corner.....

 

but, you like us came on a 457, a temp visa, neither of us has had it easy re the work here, but yet being of an older age, we have both managed to become householders here, you building new, me buying established. Where else would we have had, at our age, this opportunity? Without savings?

 

Both of us now live v near the ocean, you more so, you say you don't bother with it, may have just stayed stayed in the north east then!

 

you don't tell about the dining out experiences you've had, when you've thought nothing of paying $ 500 for a meal. Good onya, you were earning great dollars, so why not.

 

me: nah sorry, I'm happy with fish n chips sat on our local beach, enjoying the wonders of Mother Nature ..

 

And so the differences in our migrations are....???

[VERYSTORMY]

I think the big difference for us is that overall, migration has been a financial disaster.

 

We were within a year of paying off the mortgage on the house in the UK. I would probably have sold though and bought something better as we had just completed the renovation. Probably have gone for a barn conversion in one of the villages in Leicestershire or Rutland. We would be mortgage free on that by now.

 

Instead, I now have a $450k mortgage.

 

The main reason for the move was to prevent me working long swings in Africa and places and instead doing the 8 days on 6 off or at worst 2 weeks on 1 off. The reality ended up something different as I have spent about half of my time in Oz doing long international swings in Africa. At the same time, I take a 40% pay cut by being based in Australia while working in Africa as if I was based in the UK I would be tax exempt.

 

I don't regret it though, as we have had an amazing time. But, if I could go back in time and advise my younger self, I would probably advise against it.

 

What our future holds is now uncertain. We really do want to stay, but, that means me finding work. Which is very tough. I have some possibilities, but the next month or two will tell. At the moment, I have to look for jobs where ever they are in the world and where I can legally live. When my current casual role ends, we will have enough money for 1 months mortgage payment then we will default. After only earning $22k last year and building the house - I was made redundant the day the first brick was laid - we have zero savings.

[fifi69]

If I was to look at it like you, then for us the move has been a major step back financially too. We would have have been mortgage free now aswell if we had stayed in the UK.

 

but best not to dwell in the past or the what ifs...

 

Nobody is keeping us prisoners here, we stay because we like it and are willing to do what we do to be able to live here.

 

if it ever gets that hard, then even though I love it here I would move on.

 

i would Imagine you still have the profits from your house sale in the UK to fall back on??

[toOZ2012]

Regarding mortgage payments, see if your bank will give you a holiday for repayments. Some banks will give you a 6 or 12 month holiday on repayments and will just capitalize(add the payments) on to your loan. Work out a plan, don't default. Check if your mortgage came with a re-draw facility. Rent out a room or two in your house if needed to help with the cash flow. When all else fails hit up Centrelink - don't know how that will work as you are a home owner.

 

If you haven't taken up citizenship, now is a good time to sort that out as Australians get E-3 Visas to work in the US. I believe Canada has some opportunities in your line of work. They also have the new Express Entry system where they'll grant you a PR rather quickly.

 

Sad to see dreams shattered. Hope it gets better.

[VERYSTORMY]

If I was to look at it like you, then for us the move has been a major step back financially too. We would have have been mortgage free now aswell if we had stayed in the UK.

 

but best not to dwell in the past or the what ifs...

 

Nobody is keeping us prisoners here, we stay because we like it and are willing to do what we do to be able to live here.

 

if it ever gets that hard, then even though I love it here I would move on.

 

i would Imagine you still have the profits from your house sale in the UK to fall back on??

 

Nope - the profits of the house sale were used to set us up in Oz, then a couple of years later when my daughter died back in the UK, that wiped out are cash. We moved to Oz with only clothes and things, so had to buy everything from scratch. Then, 6 months after landing we had to move from Sydney to Perth - it actually costs more to move from Sydney to WA than UK to WA!

[VERYSTORMY]

Regarding mortgage payments, see if your bank will give you a holiday for repayments. Some banks will give you a 6 or 12 month holiday on repayments and will just capitalize(add the payments) on to your loan. Work out a plan, don't default. Check if your mortgage came with a re-draw facility. Rent out a room or two in your house if needed to help with the cash flow. When all else fails hit up Centrelink - don't know how that will work as you are a home owner.

 

If you haven't taken up citizenship, now is a good time to sort that out as Australians get E-3 Visas to work in the US. I believe Canada has some opportunities in your line of work. They also have the new Express Entry system where they'll grant you a PR rather quickly.

 

Sad to see dreams shattered. Hope it gets better.

 

Unfortunately, for my area - exploration - it is just as bad in Canada and the US at the moment. Though the US is showing some signs of life and I am following the international job boards.

[Bobj]

I wish you well in all your endeavours, VS. Cheers, Bobj.

[starlight7]

Change jobs perhaps? What about teaching geology at a uni? When the big financial crash in the US and Europe came, most of us had the sense that we would get the same only 5 years down the track which is what has happened. Not sure we will recover that quickly though because we don't seem to be producing anything at all.

[flag of convenience]

I don't believe I've ever witnessed such a denial of economy than in Australia. Thankfully, it has become apparent to many in recent times that we are in increasingly dire times but it took a lot of convincing. Still those out there that think the worst is over and its all going to be fine.

[VERYSTORMY]

Thanks everyone. I am looking at other career options as well and am waiting news on retraining as a teacher - high school science

[toOZ2012]

Thanks everyone. I am looking at other career options as well and am waiting news on retraining as a teacher - high school science

Consider working part-time as a lecturer in local uni

[Guest The Pom Queen]

Nope - the profits of the house sale were used to set us up in Oz, then a couple of years later when my daughter died back in the UK, that wiped out are cash. We moved to Oz with only clothes and things, so had to buy everything from scratch. Then, 6 months after landing we had to move from Sydney to Perth - it actually costs more to move from Sydney to WA than UK to WA!

@VERYSTORMY you shouldn't have to explain yourself to anyone Hun.

I wish you all the luck for the future.

[ramot]

Hope things work out for you Stormy. it's tough having to go where the work is, but that's what we had to do, and strangely enough it turned out the best thing we could have done, so hope you have the same luck. xM

[Guest The Pom Queen]

I don't believe I've ever witnessed such a denial of economy than in Australia. Thankfully, it has become apparent to many in recent times that we are in increasingly dire times but it took a lot of convincing. Still those out there that think the worst is over and its all going to be fine.

Unfortunately I've seen lots of families at breaking point and it isn't just expats. The FNQ is dire, we have people standing at the side of the road with signs begging for work, people offering to scrub toilets, others starting up their own business in something they know nothing about. Families not being able to feed their children and going to the food bank.

Yes when we moved over we had a great few years out here financially, but I have to agree that things have progressivly got worse since. I'm at the stage now where I need to go out and work, but no one will employ me because I spend half a year in the damn hospitals or Drs, I'm not medically fit for most types of employment, I can't go back to my old career as I can't stay on my feet anymore.

I think if most of the membership were honest then 80% plus would agree that they have struggled at some stage recently. If not they are in a career that will always be in demand, ie nursing, Drs, etc.

 

Now don't get me wrong, where I am concerned it wouldn't be any better if I was back in the UK and I rather struggle here in a wonderful country than back there.

[Parley]

It is a sad tale. It does seem very hard to believe that someone in such a highly paid profession has not been able to make it succeed.

Do you have any Superannuation or UK Retirement investments at all ? This (Australian Super) can be accessed under financial hardship situations.

[Guest]

Might have to start building a border around Brisbane :wink:

[Jessica Berry]

I think sometimes when people have been earning high salaries for a while, they lose touch with how much other people earn. A few years ago I worked on a project in an admin role and my fulltime annual salary was $46k. We used to have blokes working on the project complaining and moaning about how the work in the mines had dried up and they had to take a pay cut to work on this particular job. Their 'pay cuts' were more than the administrators annual salaries. I know of other people who are being offered redundancy packages of around $300k but they don't know if they will be able to survive if they take the package! If someone offered me (and I am sure many others) $300k it would be the equivalent of winning the lotto. There are many people that make a success of living in Australia on low/average salaries.

[toOZ2012]

Might have to start building a border around Brisbane :wink:

 

Or Maybe WA can just keep all the GST it collects

[starlight7]

Everyone's coming to Melbourne it seems- setting up coffee shops.

[flag of convenience]

Unfortunately I've seen lots of families at breaking point and it isn't just expats. The FNQ is dire, we have people standing at the side of the road with signs begging for work, people offering to scrub toilets, others starting up their own business in something they know nothing about. Families not being able to feed their children and going to the food bank.

Yes when we moved over we had a great few years out here financially, but I have to agree that things have progressivly got worse since. I'm at the stage now where I need to go out and work, but no one will employ me because I spend half a year in the damn hospitals or Drs, I'm not medically fit for most types of employment, I can't go back to my old career as I can't stay on my feet anymore.

I think if most of the membership were honest then 80% plus would agree that they have struggled at some stage recently. If not they are in a career that will always be in demand, ie nursing, Drs, etc.

 

Now don't get me wrong, where I am concerned it wouldn't be any better if I was back in the UK and I rather struggle here in a wonderful country than back there.

 

I've seen it coming for a few years now. I wasn't aware FNQ was so dire, although it was difficult when I lived there in 97 but not to that extent. Such a shame a beautiful part of Australia. So much potential. Even Townsville has improved its appearance as I understand from the last time I was there. (prefer the wet tropics myself)

As I mentioned when we met, I'd likely only move if to take over a business and the way things stand that could be very challenging. (Do hope the health is holding out)

 

I certainly wouldn't return to England. (I wouldn't have a clue where to live outside of London, which I can't afford anymore) I wouldn't rule out Europe though. Germany or Malta the most likely if did make a move out from here. Both for different reasons.

 

It may well get quite messy over here on the West Coast as well. It's just too over priced for what it is. (A declining resource centre, basically) I guess with so much of the population leveraged up to the gills there is not a lot many people can do but go along with whatever is dished out to them. All very sad and needed have turned out as so but we are where we are.

[flag of convenience]

Everyone's coming to Melbourne it seems- setting up coffee shops.

 

Don't knock it. It would appear coffee shops are the saviour of the Australian economy. Three have opened up within four minutes walk of me making a least a dozen within ten minutes walk. Perth has just had the 101st small bar open as well.