Document summary
Australia’s government initially focused on immigration as the main way of alleviating the effects of an ageing population, but recently there has been voter backlash against the ‘big Australia’ policy. The government’s Plan B will likely centre around boosting productivity, including public infrastructure investment, fostering education & training and research & development. Scaling back immigration though could have implications: exacerbation of skills shortages and wage pressures in a tight labour market; accelerating a structural decline in building activity in the housing market and greater challenges to house prices exacerbating risks to household budgets.