PBO Warns Lower Migration Could Cost Federal Budget $80 Billion
- Jul 16
- 1 min read
Cutting Australia's annual net overseas migration below 200,000 people could reduce federal government revenue by around $80 billion over the next decade, according to new forecasts from the Parliamentary Budget Office (PBO).
The PBO's latest 2026–27 Medium-Term Budget Outlook says Australia's long-term budget position has improved, with a return to surplus now expected by 2034–35. The improvement is linked to stronger revenue, higher oil prices, reforms to the NDIS, and recent tax changes.
However, the report identifies migration as one of the biggest uncertainties for the nation's finances.
The government expects net overseas migration to fall to 245,000 this financial year, before settling at a long-term level of around 235,000 a year.
The PBO found that reducing migration to about 195,000 people annually would leave the budget around $79 billion worse off over 10 years. In contrast, increasing migration to 275,000 a year could improve the budget by more than $80 billion.
According to the report, migrants generally contribute more in tax revenue than they cost in government spending, helping to boost income tax collections, economic activity and workforce growth.
The PBO also found that higher migration would help lower Australia's debt-to-GDP ratio over time, while significantly lower migration would slow progress in reducing government debt.
The report notes that while migration strengthens the federal budget overall, it can also increase demand for housing, infrastructure, health and education services, creating additional pressures for state and territory governments.
Source : News.com
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