Surpassing economists expectations of a 2.8 percent growth in GDP from a year earlier, Australia has indeed proved be a "wonder from down under", recording a year-end growth of 3.3 percent, its fastest in three years. Stoked by a strong demand of iron-ore from China, Australias resources industry was the main driver for the commendable growth, with exports surging by 5.6 percent in the quarter ending June 2010 over the same period last year.
What this unfolds for prospective immigrants is yet to be seen. While it is generally agreed that an increase in GDP growth is likely to create more opportunities for employment, hence a greater demand for labour, a lot depends on the existing labour growth rate, productivity and unemployment in the country.
Increase in labour productivity, defined as output per hour worked, and labour force growth, both place an upward pressure on the unemployment rate if their combined growth is less than the GDP growth rate. The growth rate of labour productivity in the country is on an upward trajectory, believed to be close to 1.6 percent in 2010, as is the labour force, which grew by 2 percent in June 2010 over the previous year.
Consequently, given the growth in GDP of 3.3 percent in June 2010 over the previous year, the unemployment pressure on the Australian economy has been tight. The unemployment rate increased slightly, rising by 0.2 percentage points to 5.3 percent in July 2010.
On the contrary, labour productivity in 2008 had actually decreased by 0.2 percent while labour force growth was around 2 percent against a GDP growth of 3.6 percent year-end growth in June 2008. This partly explains the immigrant influx in the country in 2008.
But a countrys immigration policy is not a consequence of economic indicators alone; social factors and absorptive capacity of the immigrants into the culture also have to be taken into account. These pressures had been the driving force behind the exuberant immigration rhetoric used in Australias elections that were held late last month, with candidates resolving to bring down the immigration rates. Liberal leader, Tony Abbott pledged to reduce the intake from a hefty 300,000 immigrants in 2008 to nearly half of that in the years to come.
Though the election results revealed the onslaught of a hung parliament in the country, Australian political analysts believe that the coalition government will likely skew towards a tighter immigration policy. The immigration department has rendered the immigration policies stricter for 2010, revising their skilled occupation list (SOL) and limiting the number of preferred occupations.
This sagging demand of immigrants casts a question mark over possible migrations from Pakistan, whose citizens are ravenously looking for alternate avenues to settle in. Though the improvement in the growth rate may be a beam of sunshine for the economy down under, a loosening of the immigration policy may not be close in sight.
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