The Important Contribution Migrants Make to the Australian Economy
In a world that feels like it is contracting and closing its gates on immigration, especially in the aftermath of events such as Brexit and tightening US immigration policies, this article goes against the grain and highlights the important contribution migrants make to the Australian economy. This is not just a warm and fuzzy statement, it is backed up by new research on migrant-owned businesses, carried out by EY Sweeney on behalf of CGU.
For those of you familiar with the second verse of the Australian National Anthem, you will know that it describes how we encourage migrants to come to Australia:
“For those who’ve come across the seas
We’ve boundless plains to share;
With courage let us all combine
To Advance Australia Fair.”
It seems that this attitude is certainly encouraging migrants to ‘have a go’ and to contribute not only to our small business sector, but also to Australia’s GDP and employment.
The Facts about Migrant Business Owners
Nine out of ten Australian businesses are small businesses and they account for 33% of Australia’s GDP, and they employ over 40% of Australia’s workforce.¹
One third of these small businesses are owned by migrants, which equates to 620,000 migrant businesses.²
Based on ABS employment data, 1.41 million people are employed by migrant business owners across Australia. According to the Organisation for Ecomonic Cooperation and Development (OECD) migration contributes to increasing innovative and economic growth by filling important niches in fast-growing and declining sectors of the economy. In fact you may be surprised to know that they contribute more in taxes than they receive in benefits and government goods and services.³
The most popular sectors they contribute to are property and business services (22%), retail and hospitality (15%) and community services and education (14%). According to the CGU research, one third of these migrant owners plan on hiring new people to grow their business, potentially creating 200,000 new jobs in the next 5-10 years. By 2050 it is predicted that Australia’s population will reach 38 million and migration will contribute $1.6 trillion to Australia’s GDP.4
This report by CGU shows that migrants are not taking non-migrant jobs and are in fact creating jobs for non-migrants.
Migrants are Self-Starters & Generate More Revenue
For those that argue if migrants didn’t come here in the first place the non-migrant Australians would have started these businesses, please look at the research which shows that migrants are 23% more likely to start a business and ‘try out an innovative idea’ compared to only 16% of non-migrant business owners.
Migrant businesses are more likely to create jobs because, on average, they generate 53% higher annual revenue than non-migrant businesses and 13% of migrant businesses surveyed reported earning more than $3 million per year, compared to 8% of non-migrant businesses.
It appears that migrant businesses are more ambitious with 47% (versus 38% of non-migrant businesses) planning on generating higher revenue and 24% (versus 17%) aiming to expand into new markets.
Challenges Facing Migrant Businesses
The top 3 challenges facing migrant business owners are similar to most businesses:
- Attracting /retaining cusomers (46%)
- Cash flow (43%)
- Competition (42%)
These challenges may be more of a problem among migrant business owners due to language barriers, broader cultural obstacles such as integrating into the community, networking and gaining local knowledge. In addition to this, migrant business owners tend not to be aware of, or fully understand legal requirements such as business regulations and insurance requirements.
We Need to Support Migrant Business Owners
If Australia is to continue to thrive we need to make sure we are supporting and valuing those migrants with a ‘have a go’ mentality and who, as a result, have created jobs and strengthened the Australian economy.
Let’s continue to be the most successful immigration nation!
If you are a migrant business owner, or if you are a migrant planning on starting your own business and need advice on insurance requirements for your business, please don’t hesitate to contact one of our expert insurance brokers at Coverforce Leed Insurance Brokers.
¹Small Business Counts ASBFEO, 2016.
²Based on 2016 ASBFEO data.
³Fact Sheet – More than 65 Years of Post-War Migration, Department of Immigration and Border Protection, August 2015.
4The Economic Impacts of Migration, Migration Institute of Australia, June 2016.