Australia has a lot to gain from ramping up its migration intake but the current flow of new arrivals into Sydney and Melbourne will not be sustainable unless policies change, a report says.

Annual permanent migration could be doubled over the next 40 years and deliver “significant per capita economic benefit”, research by lobby group the Committee for Economic Development of Australia (CEDA) shows.

But this can only occur if services and infrastructure in major cities is improved to cater for population growth. The report said 30 per cent of new arrivals to Australia now settle in Sydney and 24 per cent in Melbourne.

“It is questionable as to whether the current settlement patterns of migrants, predominantly into Sydney and Melbourne, can continue indefinitely with these figures,” it said. “It is not possible under current planning and governance arrangements.”