ABUL RIZVI. What were the drivers of Net Overseas Migration in 2017-18?

Net Overseas Migration (NOM) in 2017-18 fell to 236,733, down from 262,490 in 2016-17. The decline is not as large as might have been expected given cuts to the migration and humanitarian programs and policy changes to employer sponsored temporary and permanent migration. Visitors changing status after arrival now represent a record 24 per cent of NOM – a crucial indicator the visa system is in a bad way.  

Table 1 provides a preliminary estimate of NOM for 2017-18 recently published by the ABS. These estimates are subject to significant revision, especially as NOM is determined by arrivals who spend 12 months out of the last 16 months in Australia and departures of people who had been counted as part of the resident population and then spend 12 months of the past 16 months out of Australia. But let’s look at what has been published to date by the ABS.

Table 1: Estimates of NOM for 2016-17 and 2017-18

Visa Grouping Net Migration 2016-17 NOM Arrivals 2017-18 NOM Departures 2017-18 Net Migration 2017-18
Students 104,000 159,436 54,449 104,987
Temporary Skilled 16,630 26,541 15,200 11,341
Visitor 53,710 78,020 20,628 57,392
WHM 24,190 49,286 22,415 26,827
Temporary Other -13,060 14,067 28,494 -14,427
Permanent Family 24,330 26,516 5,700 20,816
Permanent Skill 37,780 43,014 8,150 34,864
Permanent Humanitarian 23,760 12,082 142 11,940
Other Permanent -610 6,163 7,236 -1.073
NZ Citizen -5,990 30,236 23,543 6,693
Australian Citizen -14,250 76,338 90,742 -14,404
Other 50 4,000 12,269 -8,269
Total 262,490 525,698 288,965 236,733

Source: ABS Cat: 3412 and 3101

While the absolute contribution of Students to NOM increased only slightly, because of an overall decline in NOM, students in 2017-18 represented around 44 per cent of NOM, up from almost 40 percent in 2016-17. The increase in NOM student arrivals was almost entirely due to the higher education sector with other sectors flat or declining in terms of off-shore student visa grants. The increase in student NOM departures was the largest since 2009-10 (when student visa policy was last tightened). The rise in student departures is likely to reflect tightening of pathways to temporary and permanent residence implemented in 2017-18. But the stock of students and former students in Australia remains large at over 600,000 – the students story has a long way to run, especially if state/territory governments nominate relatively few graduate students for permanent residence and the labour market weakens leaving many students stranded.

The ongoing decline in the contribution of skilled temporary residents to NOM reflects abolition of the former sub-class 457 visa and its replacement with the much more limited Temporary Skills Shortage visa. Skilled temporary resident NOM arrivals in 2017-18 were at their lowest since 2009-10 (ie the year after the GFC). A weakening of the labour market would see the contribution of skilled temporary residents to NOM fall further.

The contribution to NOM of visitors changing status after arrival continued its upward climb in 2017-18 increasing to over 24 percent of NOM. This is an unprecedented level and reflects poorly on current administration of the visa system and specially on claims of the benefits of so-called ‘greater scrutiny’ of visa applications (see here). As there was a major increase in onshore asylum applications in 2017-18 to record levels (see here), the contribution of visitors to NOM in 2017-18 may be revised upwards by the ABS.

The increase in WHM contribution to NOM is the combined result of ongoing decline in the demand driven low immigration risk Working Holiday Maker Program (sub-class 417) and an ongoing increase in the generally capped and higher risk Work and Holiday Program (sub-class 462). The size of the overall WHM contribution to NOM is now largely dependent on the level at which caps are set for the higher immigration risk segment (particularly for applicants from China and Chile).

The Other Temporary category is now dominated by the Temporary Graduate visa (sub-class 485). This visa is for overseas students who complete studies in Australia and seek post-study work. The increase in NOM departures on this visa reflects the rising stock of people on this one-time visa (ie primary visa holders cannot apply for a second Temporary Graduate visa), together with the tightening of opportunities for graduate students to obtain further stay.

The reduced contribution to NOM from permanent family, skilled and humanitarian categories reflects the reduction in both the migration and humanitarian programs in 2017-18 – a trend that is likely to continue in 2018-19 despite very large backlogs, particularly for Partner visas.

The contribution of New Zealand citizens to NOM increased slightly but remains at historically low levels due to the relative strength of the New Zealand economy.

The net long-term and permanent movement of Australian citizens remained around negative 14,000 reflecting the large number of Australian citizens taking up work and other opportunities around the world. A global economic slowdown in 2019 would likely see a substantial increase in Australians returning home. An economic slowdown that largely affects Australia only would result in the reverse.

The ‘other’ category at the bottom of Table 1 reflects people movements where the visa category is currently unknown. These numbers may change as the ABS updates its estimates and resolves the number of visa unknown movements.

The key to the level of NOM in 2018-19 and 2019-20 is likely to be:

  • relative economic conditions – an economic slowdown in 2019 or 2020 would see NOM fall very sharply noting that some 2 million people currently in Australia on temporary visas have no social support and that recently visaed permanent migrants now have a four year wait for social security;
  • attitude of state/territory governments to nominating skilled migrants, especially from the stock of overseas students who complete their studies and move to regional Australia and smaller states/territories to acquire the skilled work experience needed to secure nomination for permanent or provisional residence;
  • government’s approach to the unprecedented backlog of Partner visa applications noting that continued use of administrative mechanisms to hold back visa grants to spouses of Australians is contrary to the Migration Act; and
  • whether the government moves to take back control of the visa system in terms of visitors changing status after arrival, particularly those applying for asylum, and the approach government takes to the record number of unresolved asylum seeker applications from people now in Australia (possibly over 100,000 and rising).

Abul Rizvi was a senior official in the Department of Immigration from the early 1990s to 2007 when he left as Deputy Secretary. He was awarded the Public Service Medal and the Centenary Medal for services to development and implementation of immigration policy, including in particular the reshaping of Australia’s intake to focus on skilled migration. He is currently doing a PhD on Australia’s immigration policies.

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