BOB BIRRELL Australia’s Skilled Migration Program is not delivering Scarce Skills

As vexations flowing from record high net overseas migration mount, supporters of the permanent entry program have had to dig deeper to defend it.These supporters include the Treasury and the Reserve Bank as well as business and property interests. They say that any major cut to the migration program would put in jeopardy Australia’s 26 years of unbroken nominal economic growth. The Treasury emphasises that Commonwealth taxation revenue would also diminish, putting further pressure on the budget deficit.

Whatever the truth of these assertions, they do not cut much ice with the majority of voters who now think that immigration levels should be reduced. http://tapri.org.au/wp-content/uploads/2016/04/TAPRI-survey-19-Oct-2017-final-3.pdf The Coalition government has had resort to other justifications. The chief one is that Australia’s permanent entry skill program is delivering scarce skills vital to Australia’s economic health. According to the PM, Malcolm Turnbull, it is ‘state of the art’ in this respect. http://tapri.org.au/wp-content/uploads/2016/04/Final-March-8-Australias-skilled-migration-program.pdf

These claims have no substance. This conclusion is based on recent unpublished data on the occupations of those visaed in the skill program. The key findings are:

  1. The great majority of those visaed in the skill program are professionals, an increasing share of whom hold occupations that are oversupplied. On the other hand, it is delivering a negligible number of construction trade workers. This is despite housing industry claims that continued skilled migration is crucial to supplying the workers needed to provide the housing and infrastructure to accommodate Australia’s booming population.
  2. You might think that a skill program directed at recruiting scarce skills would prioritise the relevant occupations. That is not the case. In 2010 a Skills Occupation List (SOL) was introduced that made selection conditional on the applicant’s occupation being in national shortage. Since that time this condition has been wound back, to be finally abolished in 2016.
  3. The SOL has been replaced by a Medium to Long-Term Strategic Skill List (MLTSSL). This makes selection conditional on whether an occupation might be needed in two to ten years’ time. The MLTSSL includes numerous professions that the government’s own Department of Employment has judged to be oversupplied, including accounting and engineering.

As a consequence, most recently arrived skilled migrants cannot find professional jobs. This statement is based on new findings from the 2016 Census on the employment situation of skilled migrants who arrived in Australian over the years 2011-2016 (Table 1).

A huge number (256,504) of overseas born persons aged 25-34 who held degree or above level qualifications at the time of the Census arrived in Australia over these years. The vast majority, 84 per cent, came from Non-English-Speaking-Countries (NESC).  The rest, just 16 per cent, came from Main-English-Speaking-Countries (MESC).

Only 24 per cent of the NESC group were employed as professionals as of 2016, compared with 50 per cent of the MESCs and 58 per cent of the same aged Australian-born graduates.

Table 1: Employment outcomes, persons aged 25-34 years with bachelor or higher degrees by birthplace and time of arrival, Australia 2016
Field of study of highest qualification Managers Professionals Other Not available^ Not

applic.*

Total Number
NESC

Arrived 2011 – 2016

 

Management and Commerce 7 16 43 1 34 100 65,049
Information Technology 4 41 27 1 27 100 28,068
Engineering & related technologies 5 30 33 1 31 100 32,808
Other 3 23 34 1 38 100 83,690
Not available^ 3 8 39 3 46 100 5,148
Total 5 24 36 1 35 100 214,771
MESC

Arrived 2011 – 2016

 

Management and Commerce 22 42 27 1 7 100 8,925
Information Technology 13 62 17 1 6 100 1,226
Engineering & related technologies 13 60 19 1 8 100 2,824
Other 10 51 26 1 12 100 28,116
Not available 14 30 36 5 15 100 648
Total 13 50 26 1 11 100 41,733
NESC

Arrived before 2011

 

Management and Commerce 13 30 40 1 16 100 104,174
Information Technology 11 42 33 2 12 100 28,648
Engineering & related technologies 11 47 27 1 14 100 25,056
Other 6 51 26 1 16 100 101,504
Not available 8 16 46 5 25 100 5,910
Total 10 41 33 1 16 100 265,295
MESC

Arrived before 2011

 

Management and Commerce 24 40 26 1 8 100 9,961
Information Technology 17 59 17 2 6 100 1,499
Engineering & related technologies 15 63 15 1 6 100 3,188
Other 9 57 22 1 11 100 31,634
Not available 15 32 33 4 15 100 864
Total 13 54 23 1 10 100 47,142
Australia-born
Management and Commerce 22 43 27 1 7 100 114,641
Information Technology 14 58 19 1 7 100 17,892
Engineering & related technologies 13 66 15 1 6 100 34,478
Other 7 62 21 1 10 100 413,197
Not available 12 33 36 5 14 100 11,281
Total 10 58 22 1 9 100 591,488
Source: ABS 2016, TableBuilder data set

NESC – Non English speaking countries

MESC – Main English speaking countries (New Zealand, UK, Ireland, USA, Canada and South Africa)

^ Not available includes inadequately described and not stated

* Not applicable relates to those who are unemployed or not in work force

Table excludes around 20,000 degree-qualified persons in the age group who could not be classified by birthplace and/or year of arrival.

 

 

 

 

 

Implications

Australia is awash with graduates – as a consequence of past migration and growth in domestic university completions. By 2017, 38.5 per cent of Australian residents aged 25-29 held degree level qualifications and 40.3 per cent of those aged 30-34. This is high by international standards.

These findings mean that it is unlikely Australia will need any augmentation of its stock of professionals from migrant sources in the medium term.

The Skill Stream program is deeply flawed. The full report explores its deficiencies. They go far beyond the absence of any mechanism to select skills in short supply. The bottom line, however, is that it is not needed for its proclaimed purpose, that is, to provide employers with scarce skilled workers.

Australia’s employers would hardly notice if it was abolished.

Bob Birrell is the head of The Australian Population Research Institute. The full report, by Bob Birrell, Australia’s Skilled Migration Program: Scarce Skills Not Required (March 2018) is available on the TAPRI website.   http://tapri.org.au/wp-content/uploads/2016/04/Final-March-8-Australias-skilled-migration-program.pdf


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