How Australia risks losing global talent

At a weekend visit to my local Optus store, I met an IT consultant from India – a talented Melbourne graduate juggling two jobs just to cover rent. By day, he works full-time for Origin Energy. By night and weekend, he clocks in at Optus.

Despite his hopes to settle permanently in Australia, he admitted prospects are “not looking good.” Meanwhile, his friends overseas are whispering about greener pastures – places where opportunity doesn’t come with a side of burnout.

This story is all too familiar, and it’s not just about the soaring cost of essentials. Australia’s migration policies are becoming a masterclass in self-sabotage, repelling the very skilled workers the country says we need. In its bid to tackle the housing crisis and ease cost-of-living pressures, I can’t shake the image of the Albanese government stuck in a trolley problem of its own making: on one track, housing stress for everyone; on the other, stricter migration rules that barely dent the crisis but worsen our skills shortages.

Here’s the worry. With high living costs and unfriendly migration policies, Australia risks losing its edge as a destination of choice.

Recent years have seen a tightening of migration programs, including student visas, working visas, and even humanitarian ones. While the rationale is simple – fewer people mean less demand, and thus lower prices – it’s also deeply flawed. Blaming migrants for housing stress is like blaming cyclists for traffic jams.

Take international students. They make up just about 4% of the rental market. They’re not snatching up mansions, they’re crammed into overpriced flats or, worse, exploitative living situations. But they’re easy scapegoats. No voting rights, no backlash.

Instead of sufficiently investing in affordable housing or public infrastructure and addressing supply-side issues affecting the housing market, both major parties seem hellbent on outdoing each other in a contest of unfriendliness. Labor’s existing strict visa rules have already caused a 32% drop in visa approvals, bleeding billions from the economy. Not to be outdone, the Coalition promises “deeper cuts” if elected, claiming it will alleviate housing pressure. I wonder if they’ve considered that international students, who contributed $29 billion to the economy in 2022, might take their talents elsewhere.

And they are. Migrants are voting with their feet. In 2022–23, a staggering 22,100 permanent visa holders left Australia, marking the third-highest exodus in a decade.

Meanwhile, global competitors are laying out the red carpet. Canada’s population grew by 3.2% last year to March 2024, a deliberate move to boost the post-pandemic labour market and dodge recession – so much so that even Prime Minister Justin Trudeau worries they may have swung too far the other way. Even Brexit-era Britain is bouncing back, with international migration nearly doubling its pre-pandemic levels.

Elsewhere, incentives abound, with lower living costs, and, sometimes, just a better quality of life. Singapore is actively courting skilled workers, becoming the envy of the Asia-Pacific region. South Korea and Indonesia are up-and-coming talent movers. For some, Bali isn’t just a holiday destination – it’s a viable alternative where you could get by a month with one week’s rent in Melbourne. Plus, there, the rise of digital nomadism is just another reminder of how easily talent can flow to where it’s valued.

Australia may rank a respectable eighth on the 2023 Global Talent Competitiveness Index, but among OECD nations, it trails New Zealand, Sweden, and Switzerland in drawing highly educated workers, and falls behind the United States, Germany, the United Kingdom, and Norway in attracting international students.

Worse still, among our biggest sources of international students – China and India – our reputation is tanking, tarnished by stories of unaffordable rents, subtle racism, and a housing market that feels rigged against newcomers.

While migrants in Australia are pretty well-educated, they face steeper barriers to property ownership. Without the intergenerational wealth and liquid assets that underpin much of Australia’s housing market, they’re left navigating an increasingly inaccessible system.

And, there is little evidence that migrants are the ones driving up housing prices.

In fact, as living costs continue to rise across all Australian households, migrant communities are feeling the financial strain even more acutely than the broader population. Immigrant families face particular challenges that amplify this burden. Many lack extended family support, such as grandparents, to provide informal childcare. Living in outer suburbs often means higher transport costs and fewer opportunities to shop for bargains. Additionally, many struggle to secure rentals in desirable areas due to a lack of Australian rental and financial history. Employment barriers further compound their difficulties, with many working in low-skilled jobs or roles that do not offer the flexibility of working from home.

So, it’s no shock some are deciding to leave.

The economic costs of this exodus have been staggering. Research warns if the currently debated international student cap bill passes, it may jeopardise 20,000 jobs annually. With an ageing population and critical workforce shortages, these policies are not just short-sighted, they’re self-defeating.

And with an election on the horizon, both the major parties are locked in a race to the bottom.

The costs aren’t merely economic. Modern Australia is a country built on overseas migration, with a “fair go” ethos. Yet the present approach is creating different classes, treating migrants as convenient scapegoats, while sidelining them in policy conversations. The migration debate has taken a distinctly divisive tone, with both sides of politics exploiting fears while neglecting solutions.

To remain competitive, Australia needs to forego punitive migration caps and instead focus on increasing public housing, infrastructure, and policies that treat migrants as partners in prosperity rather than temporary inconveniences.