I’ve had some readers query the point made in Capricorn Enterprise’s blurb for the upcoming Major Projects Forum regarding the 600k reduction in Australia’s population (relative to the pre-pandemic trajectory) by 2024 (see my post Upcoming Major Projects Forum in Rockhampton on 28 October 2021). Thanks to Capricorn Enterprise for advising me that figure came from a report by Deloitte in the early days of the pandemic in May 2020. It turns out that the ultimate reduction in population relative to what was expected will be much greater than that, likely over one million people. This was pointed out in the Financial Review following the 2021-22 Budget handed down in May. 

We can illustrate the shortfall by comparing the pre-pandemic population trajectory, based on 2019-20 federal Budget estimates, with the projected trajectory in the 2021-22 Budget (Figure 1). That’s potentially 1.4 million fewer people in Australia at the end of 2024 than we would have expected pre-COVID. Note I extrapolated the 2019-20 Budget projections beyond 2022 based on the 2022 growth rate implied by the Treasury estimates.

The reason Australia’s population is expected to be much lower than previously projected is the big drop in net overseas migration, which was running at 250k per year but turned negative in the pandemic, and was nearly -100k in the twelve months to 31 March. The Treasury is projecting net overseas migration of -77k in 2021-22, 96k in 2022-23, 201k in 2023-24, and 235k in 2024-25 (see Table A.5 in Appendix A: Parameters and further information). That is, net overseas migration isn’t expected to return to pre-pandemic levels until the middle of the decade. 

We can do the same exercise for Queensland. There will potentially be around 170k fewer Queenslanders than we would have previously estimated (Figure 2). I should note the federal Treasury forecasts of state populations in the 2021-22 Budget look like they’re assuming a lower level of net interstate migration to Queensland than we will likely experience based on what we’ve seen to date. For instance, net interstate migration in the twelve months to 31 March was around 31k compared with the 25k assumed in the budget for the 2020-21 financial year. The federal Treasury didn’t appear to anticipate Victoria experiencing negative net interstate migration and a reduction in population.* Queensland will certainly have fewer people than it would have had in the absence of COVID, but the gap may end up being 100-150k rather than 170k.  

*Regarding this population loss for Victoria, see my post Qld population growth and interstate migration gains in perspective).

Please feel free to comment below. Alternatively, you can email comments, questions, suggestions, or hot tips to contact@queenslandeconomywatch.com. I also post from time-to-time on my business website adepteconomics.com.au, so please consider subscribing to updates there (Get in touch). Also please check out my Economics Explored podcast, which has a new episode each week.