Immigration has been in the news a lot of late, with widespread protest (and counter-protest) action around the world. So, I thought it would be timely to unpack the economics of immigration.

Before we get into it, the Australian Bureau of Statistics (ABS) published its latest data on Gross Domestic Product (GDP) this month. Just like your high school English teachers LOVED a metaphor, economists LOVE GDP data. Let me explain why.

Earlier this month, the ABS announced that Australia’s Gross Domestic Product (GDP) grew by 0.6% in the June quarter (i.e. from March to June this year).

What does that mean and why should you care?

GDP is the total value of all the goods and services produced within a country in a given year.

The main way GDP is calculated is by summing up Australia’s consumption, investment, Government spending, and net exports (exports minus imports).

The ABS gets this data from a variety of sources, including household and business surveys and Government spending records.

GDP is the broadest view of economic activity that we have. By tracking GDP, policymakers can see if the economy is growing or shrinking, and make policy decisions based on that information.

For example, the RBA will pay attention to GDP numbers when deciding whether to hike or cut the cash rate.

Correct. It has some important drawbacks as an indicator of economic health:

GDP is a broad way of monitoring economic health, but this data doesn’t tell us about the overall wellbeing of everyone in the economy.

For example, if GDP increased 2%, but the population increased 4%, then GDP per capita (per person) would fall. Also, the extra GDP could have come from working more hours, which is not necessarily welfare-enhancing. 

It’s looking strong, according to the latest ABS figures.

GDP rose 0.6% in the June 2025 quarter and by 1.8% compared to June 2024 — the highest year on year growth in two years. GDP per capita was up 0.2% for the quarter.

Household spending strengthened after an extended slump. Tom Lay, ABS head of national accounts said end of financial year sales, “contributed to rises in discretionary spending on goods including furnishings and household equipment, motor vehicles and recreation and culture goods.”

Productivity has also increased, and trade added to growth. This is more good news. It suggests that the RBA’s rate cuts and the Government’s cost-of-living measures are working, and helping people get out there and spend.

Australian GDP Growth

Changes in GDP don’t typically have an immediate impact on our everyday lives, but they do provide insight into how the economy is faring. Economic performance impacts job opportunities, wage growth, interest rates, and can set the policy agenda for governments and lawmakers.

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Anti-immigration protests have dominated news headlines both here in Australia and overseas in recent weeks.

Hundreds have been arrested while some protests turned violent, as demonstrators clashed with police and counter-protest groups.

The issue continues to divide politicians, including within the Coalition, following comments about Australia’s Indian migrant community by Senator Jacinta Nampijinpa Price.

But what does economics say about immigration? What are its benefits and challenges, and what does Australia’s immigration policy actually look like in 2025?

There are several economic benefits linked to immigration, including: 

While immigration can create short-term adjustment challenges, the overall impact on the economy is positive.

There is strong evidence that immigration boosts economic growth and activity, and in advanced economies, net immigration is one of the few realistic ways to ward off the challenges of ageing populations. There is also evidence that immigration increases innovation and productivity.

On the other hand, evidence suggesting that immigration creates fiscal pressure, lowers wages, or increases house prices is localised. This suggests that local policies (e.g. property investment tax discounts), not immigrants, are the real culprit.

As of 2022, 30% of our workforce was born overseas, the third highest in the OECD. On average, immigrants make a net fiscal contribution to the Australian economy of about 1.5% of GDP each year, the fifth highest in the OECD. That means that if you add up all the taxes paid by immigrants and subtract the value of the government services they received, you get a net contribution of about $30-40 billion per year.

ABS data shows overseas migration added 446,000 people to Australia's population in 2024, down 20% from the previous year. It marked the first annual drop in net overseas migration since 2021, when Covid border closures were walked back.  

Something to keep in mind: Although the peaks in 2023 and 2024 look big (after the pandemic migration drop), if you take the average from 2019-2024, the number is still in line with historical trends. 

The latest figures on arrivals vs departures show migrant arrivals were down 10% in the 2023-24 financial year, compared to 2022-23. Migrant departures rose 8%. Jenny Dobak, ABS head of migration statistics, attributed a decrease in migrant arrivals to temporary visa holders. “It follows a period of multiple record increases in net overseas migration consistent with a catchup in arrivals following almost two years of border restrictions during the COVID-19 pandemic,” Dobak said. 

There’s two types of people in the world: Pokémon card collectors and buy-now-pay-later users. And we have a titbit for both camps.

Pokémon cards have shown better return-on-investment than your average ETF, and even Facebook shares, according to analytics firm Card Ladder. Since 2004, Pokémon card returns have increased 3,821%, beating Facebook over the same period (1844%), and the S&P 500 index (around 483%).

Klarna - the Swedish buy-now-pay-later company - has reached a valuation of $US19 billion after its first day of trading in the U.S. The success of BNPLs has created increased competition for credit card companies and major banks as credit providers.