ABUL RIZVI: Australia’s struggles with skilled temporary migration

May 11, 2020

Kristina Keneally argues that when we come out of the current crisis we should aim for a lower level of temporary migration to make sure “Australians get a fair go and a first go at jobs.” Scott Morrison says cutting skilled temporary migration would hurt the economy. Who should we believe?

Part of the problem is the two of them are talking about different cohorts. Keneally is referring to the 2.1 million temporary entrants who were in Australia at end-March 2019. As Peter Mares points out, this group consists of a vast array of people in Australia under different visa categories and different visa conditions. The largest parts of this group are NZ citizens, overseas students, tourists and working holiday makers.

Working holiday maker numbers have been declining for many years while overseas students had been booming until the second half of 2019 when at last Government moved to tighten policy. It is with overseas students that Government has made the biggest mess and now wishes to wash its hands of the problems it has largely created. This winter, we will see hundreds of thousands of overseas students sleeping rough and reliant on charities.

There are also about 100,000 largely non-genuine asylum seekers in Australia – also due to Government mismanagement. There were a record 280,000 people on bridging visas in Australia at end March – another indicator of mismanagement – as well as about 140,000 skilled temporary entrants.

Scott Morrison was only referring to this last category which represents just over 6 percent of the larger group Keneally was referring to.

The skilled temporary entry category is the former and much maligned (by the union movement) sub-class 457 visa that Peter Dutton abolished and replaced with the new sub-class 482 in 2017-18. And while some criticised Dutton for a simple name change, that was unfair criticism. In his inimitable style, Dutton had taken a ham-fisted sledgehammer to skilled temporary entry that Immigration Minister David Coleman has ever since been trying to get around without upsetting Dutton.

The demand for skilled temporary entry is a reflection of the state of the economy as well as visa design. Chart 1 tracks the contribution of skilled temporary entry to net overseas migration. The number of skilled temporary entrants in Australia peaked in March 2014 at just over 200,000. As a result of Abbott and Hockey’s economy-clobbering 2014 Budget, and unemployment rising to 6 percent in 2014, skilled temporary entry fell sharply with arrivals declining and departures increasing.

Source: ABS Cat: 3412

Morrison is right to point out the importance of skilled temporary entry as a feeder to permanent migration. A highly skilled permanent migration program could not be delivered without a well-designed skilled temporary entry category. Just as it is the case with the equivalent visa to the USA (ie H-1B), skilled temporary entry has been at the fulcrum of Australia’s migration arrangements for over 20 years.

The high technology sector as well as the health sector in the USA have fought Donald Trump tooth and nail to prevent him from killing the equivalent visa category in the USA.

Skilled temporary entry will be critical to economic recovery, as it was after the Global Financial Crisis. The rate at which skilled temporary entry recovered after that crisis (ie in 2010-11 and 2011-12) is quite remarkable. A well designed skilled temporary entry category creates many additional jobs, boosts productivity, funds training of Australians and makes a highly positive contribution to the budget.

For years, however, the Government has resisted setting a much higher minimum salary for skilled temporary entry while the unions have insisted on ‘labour market testing’. The former is crucial to both protecting job opportunities of Australians and limiting the risks of exploitation of temporary entrants. But the latter, while having a laudable objective, is in practice little more than a bureaucratic charade.

Labour market testing requires employers to show they have properly advertised the job they want to fill and were unable to find someone suitable locally. Employers very rarely fail this test as it is impossible for a public servant to second guess an employer as to who is suitable.

Will Morrison and Coleman have the courage to fix the many design problems with Australia’s current skilled temporary visa and risk the wrath of both Dutton and the union movement?

Will Morrison risk the wrath of employer groups and implement genuinely effective measures to deal with wage theft and exploitation, not just of temporary entrants but also young Australians?

And will the Labor Party learn that the issues in this space are far more complex than its ‘temporary bad; permanent good’ mantra?


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