Policy support offers opportunities for post pandemic

State and Federal government policy support for employment and training initiatives could play a crucial role in boosting SA’s population and recovery from the impact of the COVID-19 pandemic.

Reports published by the University of Adelaide’s SA Centre for Economic Studies (SACES) examine the nexus between population movements and the State’s economic health.

“The detailed insights we gained into the population and economic implications of the COVID-19 pandemic indicate there are a number of policy initiatives that could be adopted by the State and Federal governments to underpin South Australia’s recovery from the pandemic,” said the University of Adelaide’s Associate Professor Michael O’Neil, Executive Director, SACES.

SACES’s analysis identifies:

• Overseas migration is critical to SA’s population growth: Adelaide’s appeal should be actively marketed to potential migrants;
• An opportunity to expand the current turnaround of the historic ‘brain drain’ that has compromised the State’s economic growth; and
• Policy initiatives like paid internships, payroll tax reductions (particularly for businesses in regional SA), and Age Pension incentives could boost the state’s population growth and labour force participation.

“Population growth in South Australia will remain reliant on the resumption of overseas migration which was the largest source of overall population gains in the 15 years prior to the pandemic. This will be amplified in the future as deaths rise and births remain static,” said Professor O’Neil.

“Reversing the brain drain is a key public policy priority that can be partially achieved through much faster job creation in high valued added sectors such as pharmaceutical, artificial intelligence, and space sectors."Associate Professor Michael O'Neil

Net overseas migration to SA reached 16,630 people in 2019 – not far below the all-time peak of 17,630 in 2008. The closure of Australia’s borders to international migrants saw the numbers dive to only 4,410 people in 2020. The ‘brain drain’ – the loss of skilled people from the state – was reversed in the second half of 2020, a reflection, in part, of the impact of COVID-19 on labour mobility.

Associate Professor O’Neil said that it’s important to get the balance right between encouraging overseas migration and supporting local young people.

“Skilled migrants tend to put downward pressure on wages and reduce the responsibility of local businesses to provide training to local staff,” he said.

“Reversing the brain drain is a key public policy priority that can be partially achieved through much faster job creation in high valued added sectors such as pharmaceutical, artificial intelligence, and space sectors. Paid commencement internships and payroll tax support are possible policy measures that could be implemented to achieve this.

“With ongoing population ageing health, aged and disability care and related services are likely to be a driving force in employment growth with an additional 30,000 jobs in these areas by 2030.”

The research, which produced three separate papers, was undertaken on behalf of the SACES Independent Research Fund, a group of key private and public sector individuals which sits under the umbrella of SACES.

Copies of the papers may be downloaded from the Independent Research Fund page of the SACES’s website.