our updated state and territory forecasts

Notes and assumptions

The ‘Base’ model

A base model has been prepared to enable comparison to be made with the results of our updated forecasts. This model is primarily based on the States and Territories forecasts that were undertaken internally at .id last year with some changes to reflect our more recent Australia forecast (May 2020).

The main differences between State and Territory forecasts prepared in 2019 are:

  • Updated base assumptions
  • Change to fertility rates (longer-term Total Fertility Rate (TFR) of 1.7 in Australia compared to 1.8 previously. This picks up on more recent fertility trends in Australia)

In this model, the share of overseas migration by state remains the same as the internal States and Territories forecasts prepared in 2019.

States and Territories forecast (August 2020)

The major differences between the Base model and these forecasts are in the following assumptions;

  • New assumptions on Net Overseas Migration (NOM) – incorporating the NOM assumptions from the Australia forecast in May
  • The share of overseas migration by state remains the same as forecasts prepared in 2019
  • Changes to interstate migration arrivals and departures

Assumptions on overseas migration

These States and Territories forecasts are based on the Australia forecasts produced in May. The Australian forecasts assumed net overseas migration will be negligible in 2020/21 (36,000 persons), with a few Australians returning home and some migration between Australia and New Zealand. For financial years 2021/22 through to 2023/24, .id is assuming a stepped return to just below new long-term averages of 200,000 persons per annum. This decline in NOM is the biggest influence on the new States and Territories forecasts. The decrease affects NSW and Victoria most significantly, as these two states have accounted for 70-75% of Australia’s NOM in the last five years. It is assumed that the share of NOM going to each state remains the same as in our previous forecasts. This is a conservative assumption that is open to change as more data is released. The attraction of the major centres of Melbourne and Sydney is expected to remain similar for overseas migrants if these numbers recover as assumed.

Assumptions on interstate migration

Forecasting at the State and Territory level adds the additional layer of interstate migration assumptions. These assumptions are probably the most difficult to make in the current climate of uncertainty. There is no published data so far on interstate migration taking into account the effect of COVID and border closures. The Australian Bureau of Statistics publication Australian Demographic Statistics (3101.0) for June 2020 will not be released until December, and even at this stage we are unlikely to see the full impact of border closures in the figures. While interstate migration assumptions are the most difficult to estimate, they are unlikely to have the same impact on the forecast results as the share of net overseas migration. The closure of borders and the decrease in NOM in the short term will have an impact on interstate movement. In the 2019/20, it is assumed that departures from each state/territory decrease by around one eighth. There is subsequent knock on effects from this reduction for arrivals based on recent shares of departure and arrival by state/territory.

For the period from 2020/21 and beyond it is assumed that the decrease in the level of interstate migration is tied to the level of overseas migration which is used as a proxy for overall population movement.

The base forecasts (pre-Covid) are used as a starting point. Half of the assumed decrease in NOM (for each State/Territory) is then deducted from assumed interstate departures.

This carries through to the end of the forecast period (for example, NSW has a decrease in its assumed net overseas migration (between the base scenario and the Covid scenario) for 2020-21.

Half of this decrease of 67,000 is subtracted from assumed interstate departures. This is unlikely to fully reflect the lack of interstate movement in the 2020 calendar year but serves as a way modelling flows until better information is available from the ABS.

It also reflects the nexus between overseas migration and its impact on interstate migration which is felt most keenly in NSW.