As an Australian I'd say the single largest issue here is the cost of living. It is a massive problem. Housing is expensive (and scarce), public infrastructure is shocking (Roads are bad our public transport is terrible), utilities like electricity and gas are quite expensive, common goods like groceries are expensive.

Don't get me wrong the standard of living in this country is very good, we have a great public health system, our education system is good and crime rate is generally low but it comes at a cost.

Cities like Sydney and Melbourne regularly rank highly as some of the most expensive places in the world to live. It is really not affordable to have children, especially at a young age. As a result most of my friends, work colleagues etc. have waited until their 30's to start a family.

Immigration has not done a lot to bring down the cost of things. Personally I think if they want people to have more children they need to make life in general more affordable.

Didn't work well for the native people though

It doesn't. These societies are permanently changed because of immigrations. This of course works fine for the immigrants (like myself!) but if I was a Canadian in the 70s I would be greatly opposed to this movement.

I'm not Japanese, but in objectively thinking about what's best for Japan, "immigration" is not on the list. In fact it's on the list of things to never ever do. I don't mean it as in "do not accept foreigners". I mean do not adopt the policy of mass immigration to offset the shrinking population.