Australian economic growth has been strong for almost fifteen years. With a more flexible economy as a result of reforms and good macro-economic management settings, prognostications are that this situation can continue. This will be subject to continuing strong overseas demand and sustained buyer confidence in the face of the late 2007 and early 2008 financial situation in the United States.

Supply constraints are the major problem that the Australian economy faces at present. Labour shortages and infrastructure bottlenecks in particular have emerged. Moreover, looking ahead, there is increasing recognition that home-grown labour supply growth is in longer-term decline as baby-boomers retire and participation plateaus and growth in numbers of young workers falls. Given this situation, pressure for immigration to rise will increase. It is important to consider positive immigration strategies to respond to this increasing pressure and to ensure that immigration responses are managed well, in the national interest.

About the authors

Peter McDonald FASSA is Director, Australian Demographic and Social Research Institute, Australian National University. He is Vice President (2006-2009) and President-elect (2010-2013) of the International Union for the Scientific Study of Population. He is frequently consulted on the issue of population futures (causes, consequences and policies) by governments around the world, especially in Australia, Europe and East Asia. He is a leading expert on policies, including labour supply policies, for countries facing very low fertility rates. His theoretical work on the causes of very low fertility rates is widely cited.

Glen Withers AO, FASSA is Chief Executive Officer of Universities Australia. Previously he was Professor of Public Policy, Crawford School of Economics and Government at the Australian National University, and was a Professor at the Australian and New Zealand School of Government. Professor Withers also has extensive experience working in Government including as Head of the Economic Planning Advisory Commission (EPAC) and Chair of the National Population Council, and as a consultant and adviser. He was awarded an Order of Australia in 1992 for service to applied economics, including for the development of the Australian immigration points system.