Australia Resists Immigration Cuts as Fertility Hits Record Low
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
australia-demographicsimmigration-policy
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Australian Prime Minister Anthony Albanese is maintaining current immigration levels despite political pressure from the rising One Nation party and a separate national challenge of a record-low fertility rate. The conflicting pressures create a complex policy environment with direct implications for long-term economic growth, labor supply, and specific equity sectors. Roger Wilkins of the Melbourne Institute outlined the broader challenges on 'Bloomberg: The Asia Trade' on June 16, 2026.
Australia's total fertility rate has declined to a record low, falling below the replacement level of 2.1 births per woman. This continues a multi-decade trend that accelerated following the 2008 Global Financial Crisis. The last time Australia's fertility rate neared replacement level was in 2008, when it registered 1.96 births per woman.
The current macroeconomic backdrop features the S&P/ASX 200 trading near 7,800 points with the Reserve Bank of Australia holding its cash rate target at 4.35%. Persistent inflation has complicated policy responses to slowing growth. The demographic pressures are triggering the event now because the post-pandemic immigration surge has masked underlying structural population weaknesses, creating a political flashpoint.
Rising support for the anti-immigration One Nation party reflects growing voter concerns about housing affordability and infrastructure strain. Prime Minister Albanese's resistance to deeper cuts represents a calculated bet that immigration remains essential for mitigating the economic impacts of an aging population and sustaining GDP growth.
Australia's fertility rate has dropped to approximately 1.59 births per woman, the lowest level since record-keeping began. This marks a 12% decline from the 1.8 rate recorded just five years earlier in 2021. Net overseas migration contributed over 500,000 people to Australia's population in the most recent annual reporting period.
The population growth rate through migration now substantially exceeds natural increase from births minus deaths. Before the pandemic, net migration typically added 200,000-250,000 people annually. The current migration intake represents a 150% increase over those pre-2020 averages. Australia's population aged 65 and over has reached 16% of the total, up from 12% two decades ago.
This aging trend projects to continue, with seniors expected to comprise 22% of the population by 2042. The working-age population (15-64) currently represents 64% of Australians, down from 67% in 2009. These demographic metrics contrast with equity performances including Apple at $296.42, up 0.27% on the day.
Persistently low fertility rates create long-term headwinds for consumer-facing sectors reliant on population growth, particularly retail REITs and discretionary spending companies. The healthcare sector stands to benefit disproportionately from demographic aging, with increased demand for medical services, pharmaceuticals, and aged care facilities.
Labor-intensive industries including construction, agriculture, and hospitality face structural workforce shortages without sustained migration. Companies in these sectors may experience margin compression from rising wage costs. China's NIO traded at $5.20, down 0.57%, reflecting broader Asian market sensitivities to Australian economic conditions.
A counterargument suggests that technological innovation and productivity gains could offset demographic pressures, as seen in Japan and Germany. The construction sector already shows adaptation through increased prefabrication and automation. Institutional investors are positioning long in healthcare infrastructure and automation technologies while reducing exposure to youth-oriented consumer brands.
The next Australian Bureau of Statistics population data release on September 16, 2026, will provide updated migration and fertility figures. The government's Intergenerational Report update in 2027 will revise long-term economic projections based on current demographic trends.
Market participants should monitor the S&P/ASX 200 Health Care Index for sustained outperformance relative to the broader benchmark. The index is approaching resistance at the 48,000 level after gaining 14% year-to-date. Australian 10-year government bond yields at 4.2% may face upward pressure if demographic concerns impact long-term growth expectations.
Political developments around the next federal election, due by 2028, will determine whether immigration policy becomes a central campaign issue. Any significant reduction in migration intake would likely trigger downward revisions to GDP growth forecasts for 2027-2030.
Australia's fertility rate of 1.59 births per woman places it mid-range among OECD nations. The rate remains above South Korea's world-lowest 0.72 and Japan's 1.33, but below replacement level and beneath France's 1.80 and the United States' 1.64. This positioning reflects broader developed-world trends of declining birth rates despite varied family policy approaches.
Healthcare providers, pharmaceutical companies, and aged care facilities represent direct beneficiaries of demographic aging. Financial services firms offering retirement products and wealth management services also stand to gain. Technology companies developing automation solutions and healthcare technologies see increased demand from businesses seeking to offset labor shortages caused by shrinking workforce participation.
The Australian Treasury estimates that each 100,000 reduction in annual net migration would decrease GDP growth by approximately 0.5-0.8 percentage points in the following year. Significant cuts to migration would particularly impact the construction sector, which relies heavily on migrant labor, and reduce demand in the housing market. Universities and the education sector would face revenue declines from reduced international student enrollments.
Australia faces structural economic challenges from record-low fertility that immigration alone cannot solve.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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