South Australian Premier Peter Malinauskas has likened the idea of cutting immigration to stem the rise of One Nation as “appeasement” — picking a fight with his Federal Labor colleagues.

“The correct response to Australia’s present economic challenges and the realisation of tomorrow’s economic opportunities is this: preserve our strong migration program,” Mr Malinauskas told the Sydney Institute’s annual dinner on Wednesday night.

“The correct political response to anti-immigration politics and populists is not appeasement.”

With One Nation outpolling the major parties in some polls, Mr Malinauskas used the word “appeasement” — often associated with 1930s UK Conservative prime minister Neville Chamberlain’s failed attempt to avoid war with Nazi Germany.

“More troubling is the prospect of mainstream parties entering a race to the bottom for who can cut migration numbers the most,” he said.

“This is not unfortunate, this is madness. If politics becomes the principal determinant of migration policy and a numerical race to the bottom ensues, it is going to hurt every Australian economically.”

The popular SA Labor leader and former union state secretary was on a unity ticket with the Australian Chamber of Commerce and Industry, Australia’s biggest employer group, six months after staring down One Nation’s strong showing in the State election.

He made the appeal to Prime Minister Anthony Albanese, with the Federal Government aiming to trim net overseas migration from 301,000 last year to 245,000 this financial year and 225,000 in 2027-28.

Pauline Hanson’s One Nation wants net overseas migration to fall to 130,000 while Coalition frontbencher Andrew Bragg has nominated 180,000.

With Labor under pressure politically to cut immigration levels to at least pre-pandemic levels, Mr Malinauskas cited a 2021 Treasury calculation of the average, Australian-born resident being a net cost of $85,000 to public budgets compared with the average, skilled migrant delivering a $198,000 net benefit to public budgets over a lifetime in Australia.

“Skilled visa recipients arrive in their prime working age, immediately able to support themselves in well-paid work,” he said.

“Not only is migration not a drain on our public services, migration is part of the reason governments can afford to provide those services. Skilled migrants are big net taxpayers.”

The Commonwealth Treasury is expecting personal income tax receipts to grow from 50.5 per cent of total tax receipts in 2022–23 to 58.4 per cent in 2062–63. Personal income taxes are projected to make up 51.9 per cent of all tax revenue this financial year.

Following a crackdown on student visas during a rental crisis, Mr Malinauskas warned scaling back the number of international students would lead to cuts to research funding, noting education is Australia’s fourth biggest export after iron ore, coal and liquefied natural gas.

“International student cuts amount to an export restriction,” he said.

“Imagine if we did this to the mining industry. There would be an ad on every television station and mobile phone about how we’re killing the goose that lays the golden egg. It is crazy.”

He also dismissed the idea of high overseas migration levels pushing up house prices, with real estate values in Adelaide growing by 8.6 per cent over the year to August to a touch under $1 million.

“Populists do have at least one advantage in their anti-migration campaign: a simple story,” Mr Malinauskas said.

“Houses too expensive? Cut immigration. Stuck in traffic? Cut immigration. Hospital ED too full? Cut immigration.

“Neighbour’s dog barking too much? Cut immigration. This anti-immigration story cuts through because it is simple and easy to remember.”

Home Affairs Minister Tony Burke insisted the Federal Government remained committed to cutting immigration levels.

“The government’s forecasts on net overseas migration were published in the Budget and have not changed,” he told The Nightly.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar on Thursday condemned moves to cut immigration levels.

“We don’t have a migration problem in Australia. We have a housing crisis and we have skill shortages,” he told reporters in Canberra.

“Those are the problems that we’ve got to address. We won’t address that through shortsighted approaches that just cause more damage to the Australian economy.

“So, for us, we think that there needs to be a reset in the migration debate. This can’t be about an arbitrary number.”

With the Federal Government last month slowing the processing of working holiday maker visas, the Australian Chamber of Commerce and Industry, Tourism and Transport Forum, National Farmers Federation and Accommodation Australia on Thursday made a joint call to restore access to these visas, associated with fruit picking in regional areas.

“These are high-value international visitors who are not just filling workforce gaps but are booking accommodation, eating out, taking tours and travelling around the country,” TTF chief executive Margy Osmond said.

Mr Albanese last month ruled out making UK backpackers on a tourist working visa spend time in regional areas, with a 2023 free trade deal allowing them to stay in Australia for three years without having to work outside a capital city.

The Regional Australia Institute has this week called for more overseas migrants to move to regional areas, arguing areas outside the capital cities could accommodate 6.2 million people by 2050 and account for up to 40 per cent of the national population, up from 27 per cent now.

“With a more ambitious nation-building approach, that could rise to 45 per cent,” chief executive Liz Ritchie said.

“That is millions more people living, working and investing in regional communities, while taking pressure off housing, infrastructure and services in our stretched capital cities.”