Australia's Immigration "Whack-a-Mole": Skills Shortages, Demographic Shifts, and the Myth of Merit-Based Migration, By James Reed

Australia's migration policy is often sold as a pragmatic engine for economic growth — a carefully calibrated intake of the "best and brightest" to fill yawning skills gaps and sustain a booming population. But as Leith van Onselen's analysis lays bare, it's devolved into a futile game of whack-a-mole: hammer down one shortage (say, in housing construction), only for another to pop up elsewhere (healthcare, infrastructure, energy transition). Over the past two decades, net overseas migration has ballooned to world-leading levels — peaking at 428,700 in 2023-24 yet chronic deficits persist across sectors. Why? Because the system isn't truly about importing elite talent. It's a blunt instrument for demographic engineering, quietly reshaping the nation's cultural and ethnic fabric under the guise of economic necessity, often at the expense of targeted skills and traditional Australian identity.

This essay unpacks van Onselen's critique, weaving in the glaring mismatch between policy rhetoric and reality. Far from prioritising "genuine skills," Australia's migration framework has favoured volume over value, skewing toward low-productivity service roles and accelerating demographic diversification. The result? A housing crisis doubled in severity by 2028-29 (per the National Housing Supply and Affordability Council), stagnant productivity, and a growing chorus questioning whether the policy serves economic needs or a deliberate dissolution of the Anglo-Celtic core that defined "traditional Australia."

The Whack-a-Mole Mechanics: Population Boom Without Productive Payoff

Van Onselen charts Australia's explosive growth: an 8.5 million (45%) population surge since 2000, outpacing peers like the U.S. or Germany. The 2021-2025 spike alone — 1.88 million (7.9%) — equates to grafting on entire cities like Adelaide and Hobart. AMP's Shane Oliver attributes the ensuing housing undersupply to a mid-2000s migration doubling, which jacked annual growth by 150,000 without matching infrastructure. Today, a 200,000-home deficit looms, potentially doubling if population exceeds Treasury forecasts by 15%.

Construction epitomises the farce. Master Builders Australia cries for 90,000 more "tradies" to tackle the crisis — yet recent migrants, who should be the fix, comprise just 2.8% of the workforce (versus 4.4% economy-wide), per the Grattan Institute. Build Skills Australia laments that only 3.2% of decade-old arrivals toil in residential building, urging a 40% hike in that intake. The Australian National University's Migration Hub concurs: 2023-24's permanent program delivered a paltry 166 tradespeople, dwarfed by needs, while temporary streams added a mere 5,000. In 2023-24, 428,700 net migrants arrived — but trades? Around 5,000. That's adding demand (needing homes, schools, hospitals) without supply.

This isn't oversight; it's systemic. Critics like the Committee for Economic Development of Australia (CEDA) highlight "skills mismatch": nearly one in four permanent skilled migrants (over 600,000 total) works below qualification — engineers driving Ubers, doctors in retail — costing $9 billion annually in lost productivity. The Australian Council of Trade Unions (ACTU) blasts the process as "expensive, complex, [and] lacking transparency," locking out talent via bureaucratic red tape. Jobs and Skills Australia identifies shortages in nurses (9,000+ vacancies), chefs, carers, and electricians — yet the Skilled Occupation List balloons to absurdities like yoga instructors and goat farmers, per 2024 Reddit-fuelled outrage. Why import flower arrangers when tradies languish unrecruited?

Van Onselen's solution — slash overall intake, laser-focus on tradies — rings true but ignores the elephant: importing 90,000 workers demands 90,000 more homes for them and families, plus nurses and teachers. It's a self-perpetuating loop. If migration fixed shortages, two decades and millions of arrivals should have mended them. Instead, they've worsened, dragging productivity to lows unseen in advanced economies.

The Skills Facade: Not "Best and Brightest," But Demographic Levers

Here's the rub: Australia's policy professes skill primacy, but data screams otherwise. The Grattan Institute warns against tying permanent visas to transient shortages — most resolve via training, not imports—yet low-wage gigs dominate lists, undercutting locals. The Conversation notes employers' reluctance to hire migrants despite "shortages," hinting at bias or wage suppression. Deloitte pegs 45% of permanent arrivals underemployed, with sectors like engineering at 50% mismatch.

This begs: If not skills, what's driving it? Enter demographic engineering. Post-White Australia Policy (scrapped in 1973 under Whitlam, cemented by the 1975 Racial Discrimination Act), migration ostensibly became race-blind. Yet, as a 1995 ScienceDirect study observes, ethnicity lingers "implicitly and unofficially" via overseas postings and demand management — favouring Asian inflows for growth, not just merit. Since the 1960s, non-European shares have skyrocketed: from near-zero to 31.5% foreign-born by 2024 (ABS data), with Asia-Pacific dominating.

Critics on the Right,imply a covert agenda: not "best and finest" for skills, but volume to dilute "traditional Australia" — that Anglo-Irish bedrock of mateship, monarchy loyalty, and suburban homogeneity. X buzzes with claims of "demographic replacement."

Demographic shifts are undeniable: Pre-1970s, migrants were 90% European; now, India's top source (30%+ of intake), followed by China, Philippines. This "Asianization" (per the 1995 study) boosts GDP but strains cohesion — rising anti-migrant rhetoric, per the 2025 Guardian, links migration to housing woes, with critics decrying Labor's "million over two years."

Is it "racial profiling to dissolve traditional Australia"?Yes. Policymakers chase numbers for electoral maths (Labor's base swells with diverse voters; Coalition courts regional Euros), not skills. The Migration Review admits misalignment: temporary streams flood low-skill services (Uber drivers, per van Onselen), while tradies trickle in. CEDA urges better English training and credential recognition for migrants already here—sensible, but it sidesteps why we import mismatches.

Toward Sanity: Shrink, Target, Reclaim

Australia's whack-a-mole ends only with radical reform: a "significantly smaller and better targeted" program, as van Onselen urges. Cap net migration at 100,000 annually, prioritising high-impact trades(tradies via streamlined visas). Ditch low-wage fillers; invest in TAFE upskilling for locals and women (only 4.5% trade-qualified, per Master Builders). Recognize overseas qualifications swiftly — ACTU's call — to unleash the 600,000 underemployed.

On demographics: Reaffirm race-blindness, but audit for biases. Boost family reunions for established communities to stabilise, not upend, cultural anchors. Traditional Australia, multicultural yet rooted in British heritage, needn't dissolve; it can evolve without engineered dilution.

Historians may view this era as peak policy failure: millions imported, shortages unslaked, identity frayed. If Australia as we know it survives.

https://www.macrobusiness.com.au/2025/11/australias-endless-skills-shortage-whack-a-mole/