For the sake of maintaining economic growth, Mr Morrison suggested the new intake would still be around 160,000, even if the cap was lowered to the same level.
For several years, the Immigration Department has recommended a cap between 160,000 and 210,000 and Mr Morrison said “I haven’t seen anything since then that would contradict that as a safe range”.
“I’m waiting to see the work that is done and the input we get from the states,” he said.
But population expert Peter McDonald, who Mr Morrison handpicked to address the COAG meeting, said the rate should be closer to 190,000. He argued that cutting it by 30,000 would have little impact on Sydney and Melbourne’s population and could be detrimental to the smaller states, which under the new arrangements, are supposed to receive more immigrants at the expense of the overpopulated states.
Warning of labour crunch
Professor McDonald said there was a “labour supply crunch” in Sydney and Melbourne which would have to be filled by either people on temporary visas or by dragging workers away from the lesser populated states which are meant to increase their populations under the new model.
He said 160,000 permanent migrants was “not that different” to 190,000.
“If you’re talking about a difference of 30,000, and say it was 15,000 less in Sydney and 15,000 fewer in Melbourne, if the labour demand is there in those two big cities its got to come from somewhere else,” he said.
“It may not come from permanent migration but it will come from other states and territories, it will come from New Zealand, it will come from temporary skilled workers.
“I don’t think a shift in the permanent migration program would make very much difference at all to Sydney and Melbourne’s population.”
“That puts pressure on the other states and territories that are actually looking to get more population.”
He predicted a shortfall of 2 million workers over the next decade.
Professor McDonald told the COAG meeting that the best way to manage population growth was through infrastructure, including the development of satellite centres outside the major cities. There needed to be better transport links between these secondary cities and the state capitals.
Mr Morrison said Professor McDonald was “entitled to his view”.
“We’ll listen to all views as we frame the migration intake for next year.”
The government is under pressure to curb population to reduce congestion. It believes rather than cull population growth, the growth needs to be more evenly spread. Some in the Coalition,including Tony Abbott, believe the 1.6 million people in Australia on temporary work visas – including students, tourists and temporary skilled migrants – pose a bigger problem in terms of congestion and house price pressure than permanent migrants.
Under Mr Morrison’s new bottom-up population plan, the states and territories will tell the Commonwealth how many migrants they need. The final number will be based on an aggregate of these requests but with a floor so that the rate was not too low to harm economic growth.
The government will then try and use specific visas to ensure the migrants stay in the jurisdictions to where they are sent. Breaching the visa conditions would jeopardise their chances of attaining Australian citizenship.
Of all those around the table on Wednesday, only NSW Liberal Premier Gladys Berejiklian called for a “breather” on migrants coming to NSW until the state’s infrastructure could catch up.
She told the meeting that federal government’s of either persuasion had to stop coming in over the top of state governments and randomly picking infrastructure projects. Instead, they should be taking their lead from the state governments.
Mr Berejiklian was enthusiastic on expanding “university towns” in regional NSW where international students would be encouraged to go.
She said NSW was spending $90 billion on infrastructure but was still way behind on providing infrastructure required.
“We’re still only playing catch-up,” she said.
Victorian Premier Daniel Andrews reaffirmed his push for a large migrant intake but hinted the federal government had to do more for his state regarding infrastructure..
“We don’t want to be looking at a smaller Victoria or a smaller Australia but we do have to look at investing in the things that make the biggest difference – road and rail, hospitals and schools,” Mr Andrews said.
“And today there was a real sense of agreement that all of those things have to be considered at one set of issues. You can’t really separate any of those. They’re all part of the same challenge.”
Mr Morrison said while he envisaged the current intake staying the same, there would have to be a reallocation of where people were sent.
He said there had been too much of a backward looking approach to population management in the past and there was an urgent need for a “real-time assessment” of where skilled migrants were required.
“It can be a bit of a rear-view mirror,” he said.
“It needs to be a lot more micro than it is.”
Under the plan, the states agreed to submit their ideas and requests at the end of January and then in February, state and federal Treasurers will meet to consider the suggestions on migration settings, better population planing and data sharing to better identify areas of need for skills.
This would feed into the budget process.
The next COAG meeting will not be until July next year, after the federal election.