Migrants are sending billions overseas. What does it mean for Australia’s economy?

Remittances have become a talking point in Australia’s migration debate.

Some anti-immigration activists argue remittances drain money from the Australian economy, while others say that view ignores migrants’ economic contribution and the support these payments provide to families overseas.

So what’s the real impact — both for the economy and for migrants and their families?

Mrinaal Datt, who moved to Australia from India four years ago and is the founder of Indian Women Abroad, regularly sends money back to India — often a few hundred dollars at a time.

She told SBS Examines that the remittances went towards her partner’s parents’ medical expenses.

“In Indian and a lot of South Asian cultures in general, they have a saying that you don’t just marry a person, you marry the whole family,” she said.

“It’s not just you and your partner. It’s your siblings, your parents, their parents. You can’t think of not supporting your family. It’s just not comprehensible to an average person who comes from India.

“It just feels like it’s your duty as a child to support them through all their medical procedures.”

A Money Transfer Australia report said $35 billion was sent from Australia as remittances in 2024, including nearly $7 billion to India.

“When someone earns that money in Australia, but remits part of that portion overseas, that portion is not being spent here,” political commentator Jaimie Johnstone said in a recent social media post about the report.

“That money is not going to an Australian cafe or restaurant. It’s not being spent with an Australian tradie, it’s not being used to purchase Australian products, not in an Australian shop, not circulating within an Australian household.

“And if we’re going to have a serious national conversation about immigration, surely capital flowing out of our domestic economy should be part of that conversation too.”

But Ryan Edwards, an associate economics professor at the Australian National University, says we should be sceptical of these numbers.

“We don’t really measure money going out very well … those numbers are actually much softer,” he said.

Even if those estimates were correct, “that would still be under 1 per cent of our economy” and tax had already been paid on the income.

He noted the argument against remittances didn’t account for the benefits migrants bring.

“The real counterfactual here is one of a migrant versus no migrant,” he said.

“You take away that person, yes, you’ve stopped the money from flowing out, but you’ve also stopped all the jobs, the wages that they spend here, often on things that Australians are producing, and the tax that they’ve paid.

“We know that most migrants tend to be net positive fiscal contributors.”

Muhammad Omair Ziaee is a technology and healthcare entrepreneur of Pakistani heritage. He sends money to his family and employees back home in Pakistan, but he says most of the money his businesses make is spent in Australia.

“If we compare to the money which we’re sending over … that’s under 20 per cent of what we actually earn and what we spend over here,” he said.

Remittances part of culture

Supriya Singh, an adjunct sociology professor at La Trobe University, said money is “one of the foremost ways” to show care in many cultures.

“If you come from China, you come from Vietnam, you come from any part of the Middle East, you come from the Pacific; sending money home is a way you tell your family that you belong, that you’re thinking of them, that you care for them.”

She said care was expressed differently across cultures.

“Across the world, it’s the people who do not send money home that are in the minority,” she said.

However, Singh said remittances can be used as a tool for financial abuse, noting the issue came up during Victoria’s Royal Commission into Family Violence.

“When a person is using them not for care but for appropriation. If the parents demand too much of the child and the child does not have enough money for his or her own settlement expenses, then remittances can become a medium of abuse,” she said.

Strain on already tight budget

Datt from Indian Women Abroad said remittances are a cultural practice but can strain already tight budgets.

“I think parents have to realise is that your child is not your retirement plan,” she said.

“Everyone who comes abroad knows that it is really really hard when you’re paying for the university fee. So many people are living paycheque to paycheque. It really is like a cultural thing. I actually hope things will change for the next generation.”

She added her contributions to Australia outweighed the remittances back home.

“If you think about all the money that we spent, the flights that we paid, the income tax that we pay, our rentals, our mortgage now, I think we’ve spent hundreds of thousands of dollars in Australia,” she said.

“The $200 or $400 is sent back home. That’s nothing in comparison.”

According to a World Bank estimate, global remittances to low and middle-income countries reached $924 billion in 2023, and continued to be “essential drivers of economic and human development”.

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