They make headlines, divide communities and define elections. And they are all connected. The thread that links them is arguably the most important, and most sensitive, factor in Australian politics: immigration.

Migration to Australia currently sits at double the long-term average, down from triple during the last years of the mining boom. The bulk of this influx comes from the government's permanent migration program, currently pegged at 190,000 people a year and mostly comprising skilled migrants.

As the natural growth rate from births is low, it's immigration that takes Australia's population growth to 1.5 per cent, higher than the global average. Last year, the natural increase was 155,500 and migration amounted to 193,200.

The advantages, disadvantages and question of whether the intake should be reduced are deeply complex, and they are being discussed publicly and privately ahead of the budget. This is in part thanks to former prime minister Tony Abbott, who said the government should promise to "cut immigration to make housing more affordable".

House prices

The debate over the explosive growth of house prices in urban areas, especially Sydney and Melbourne, rages on. Various federal and state government measures - like changes to stamp duty, raiding super and caps on capital gains tax - are routinely tossed around and sometimes tossed out. But there's always the elephant in the overly-priced room.

"High rates of immigration put upward pressure on land and housing prices in Australia's largest cities," a 2016 Productivity Commission report into the migration intake said, noting that poor urban planning and zoning laws compound this.

"While this is beneficial to property owners," the report said of the demand introduced by migration, "it increases costs and thereby reduces the living standards for those entering the property market."

But even if reducing the migrant would reduce demand for housing, Reserve Bank chief Philip Lowe has called immigration a source of national strength.

"To give that advantage up just so that we can take some pressure off housing prices, I find kind of problematic," he said last year.

However, the pressure does remain and a recent NSW government forecast found Sydney will require 726,000 new dwellings by 2036 to keep up with growth.

Boosting the economy

The Productivity Commission found new migrants boost economic growth through consumption and the supply of labor, particularly jobs that struggle to get filled otherwise.

The valuable increase to gross domestic product has been a crucial ingredient in Australia's 25 years of unbroken economic growth and continues to mask other vulnerabilities in the economy.

At an aggregate level, recent immigrants had a negligible impact on wages, employment and participation of the existing labour force.

Groaning infrastructure

"We do not have the infrastructure capacity to support today's population, far less the population of the future."

That is what the former secretary of the Treasury Ken Henry told the Committee for Economic Development of Australia in February amid ongoing frustration about Australian roads and public transport.

"On the basis of official projections of Australia's population growth, our governments could be calling tenders for the design of a brand new city for two million people every five years" he said.

Both Mr Henry and the Governor of the Reserve Bank Philip Lowe agree: these are growing pains that we are not prepared for.

"This imbalance is compounded by insufficient investment in the transport infrastructure needed to support our growing population," Dr Lowe told a meeting of the Reserve Bank governors this week.

The Committee for Economic Development of Australia has questioned "whether the current settlement patterns of migrants, predominantly into Sydney and Melbourne, can continue indefinitely with these figures."

Environmental pressure

The more people you have, the more pressure is placed on the natural environment. This means that more work is required to protect it, particularly in urban areas.

In Sydney, more than 70 green spaces - the "green grid" considered a crucial part of a liveable city - have been identified as under threat from the booming population. Australia's largest city will pack in another 2.1 million people over the next two decades.

The gravitation of of migrants to urban areas, alongside the natural population growth in these areas, means that effective urban planning and environmental regulations are required to preserve local ecosystems, open spaces, clean air and clean water and minimise the impacts of waste and garbage.

An ageing society

It is one way to sell a migration boom, who is going to pay the taxes to look after an ageing population?

On this the Productivity Commission is clear: "By increasing the proportion of people in the workforce, immigration can reduce the impacts of population ageing," it found.

Accordingly, the government places an emphasis on skilled migrants with an age limit of 50. Last year, these migrants accounted for 128,550 of the 190,000-strong migration program while 57,000 came to join family.

But this "demographic dividend" does not offer a panacea, it delays rather than eliminates population ageing.

Based on the current rate of migration, Australia will still have 25 per cent of the population aged over 65 by 2060 when the population hits 42 million.

The figure is set to become far worse if the the intake is cut, as has been speculated, putting generations at risk of billions of dollars in higher health care costs and the burden of the aged pension.

Anti-immigrant sentiment

There has always been a segment of Australian society opposed to immigration and hostile towards people seen as different.

According to the Scanlon Foundation's Mapping Social Cohesion survey, at least 30 per cent of people consistently feel immigration is too high, including a core that are staunchly opposed to immigrants on ethnic and cultural grounds. Built on top of this is sentiment driven by economic uncertainty and concern about the infrastructure and environmental impacts.

Professor Andrew Markus, author of the Scanlon report, says there has been no demonstrable boost to anti-migration sentiment in recent years. He argues those voices are now just louder and better represented in political discourse.

"If there are problems that are of concern to people that flow from population growth, such as infrastructure or housing, then governments need to deal with that. It's primarily a function of growth, not primarily immigration," Professor Markus says, asserting that government policy needs to keep up.

From the Mapping Social Cohesion survey.