After letting net migration blow out to around 518,000 in 2022-23, the Albanese Government has announced it wants to bring net migration down to 375,000 in 23-24 and 250,000 in 24-25
Home Affairs Minister O’Neil insists these are ‘estimates’ rather than ‘targets’ – presumably trying to avoid criticism of the blow out in net migration in 2022-23 and the possibility net migration may turn out to be well above the Treasury ‘estimates’ in 2023-24 and 2024-25.
Irrespective of the word games, there will be severe political consequences if the Albanese Government doesn’t get net migration near or below its net migration ‘estimates’. Peter Dutton will use his exceptional dog whistling skills to full effect if net migration is not falling significantly during 2024 and early 2025 ahead of the next Election.
So after announcing its new migration strategy earlier this month, is the Albanese Government on track to bring net migration down to the kinds of levels in the migration strategy?
Net Permanent and Long-Term Movements
The first four months data on net permanent and long-term movements in 23-24 suggests the Government faces a major uphill task, at least for 23-24 (see Table 1). Note that net permanent and long-term movements are the best early approximation of net migration that the ABS publishes.
Historically, net permanent and long-term movements are generally higher than net migration. But that wasn’t the case in 2022 when a larger than usual portion of short-term arrivals extended stay and a larger portion of permanent and long-term arrivals did not depart (possibly due to the strong labour market).
As a result, net permanent and long-term movements were 173,180 while net migration was 422,231. This trend appears to have been repeated in 2022-23 when net permanent and long-term movements were 353,670 while net migration was 518,000.
In the March quarter of 2023, net permanent and long-term movements were 154,890 compared to net migration of 157,684. As a result, I was under the impression the relationship between net permanent and long-term movements and net migration was returning to normality.
In the June quarter of 2023, however, net permanent and long-term movements was 90,140 and net migration was 121,788. A possible explanation for this is that a significant portion of short-term arrivals extend stay, possibly using the fee free covid visa stream, applying for asylum or applying for other longer-term visas. The Department of Home Affairs would have the data to know better.
If net permanent and long-term movements are going to continue to be less than net migration in 2023-24, the fact these were 86,630 higher in just the first four months of 2023-24 compared to 2022-23 will be worrying the Government.
Students
Overall student movements (both long-term and short-term) indicate a possible turning point in November 2023 (see Table 2).
But the bulk of the November negative movement may be short-term and hence may not reduce net migration by much. On the other hand, the very large number of net arrivals in July 2023 compared to July 2022 are likely to be longer-term arrivals for a new semester after a number of months of record offshore student visa applications and grants.
The key to reducing student numbers is to reduce the offshore application rate and for that to be more focused on high performing students.
The offshore application rate, other than in September 2023, has set new monthly records in every month since February 2022 (see Chart 1). If that continues in November 2023 and December 2023, it is inevitable that the March Quarter of 2024 will see another massive surge in student arrivals and a high net migration quarter. Students are by far the biggest component of net migration.
The Government estimates that the stricter English language test will deter about 41,000 undergraduates and 38,000 graduates who would have otherwise applied. And while it is good the Government is introducing stricter English language requirements, this could have been done at the start of 2023 rather than in early 2024. The other issue will be how many of those initially deterred will improve their English and then apply?
Either way, this change will have no impact on the large surge in offshore student applications in November and December 2023 that will arrive in the March quarter of 2024.
Student visa policy should aim to select high performing students who will do well in their studies, secure well-paying jobs and go onto becoming Australian citizens if they wish. Fee revenue for universities should be a secondary objective only.
If the offshore student visa application rate does not decline and the Government relies mainly on high refusal rates using subjective criteria and slow visa processing, net migration will not fall nearly as quickly as the Government wants. That approach is enormously resource intensive and will only make everyone involved angry.
A possible objective tool is to use national university or vocational college entrance exam results used in most of our source countries. There is no reason why it should be easier for an overseas student to get into a university or vocational college in Australia than it is to get into a top university or vocational college in their home country. Another advantage of using national entrance exam results is that the Australian Government can dial exam result requirements up or down as needed to give the Government greater control over net migration.
Working Holiday Makers
Working holiday makers in 2022 represented over 10 percent of net migration.
For working holiday makers, the Government proposes to issue a discussion paper in early 2024. In the September quarter of 2023, there were 61,564 working holiday maker visas granted compared to 54,792 in the September quarter of 2022. That would have contributed to the current surge in working holiday makers (an additional net 15,000 just in October) will continue in November and December.
The new migration strategy indicates that in early 2024, the Government will issue a new discussion paper. If it wanted to tighten working holiday maker policy to limit the net migration boom, the Government should have started the review of working holiday maker policy as soon as Parkinson recommended it at the start of 2023 not the start of 2024. There was no reason for the 12 month delay in issuing a discussion paper.
Other measures
The migration strategy includes other measures to marginally tighten policy on employer sponsored temporary entry (some of the measures will increase demand for this type of temporary entry) and the number of people on the special covid visa should gradually decline although what they will do when their visas expire remains uncertain. For many, lodging an asylum application to further delay departure may be their only remaining option.
The Government recently announced a $160 million package to start addressing the massive backlog of asylum applications that started under Peter Dutton. But as it had known of this problem since well before the 2022 Election, why did it take so long to act?
It is notable the migration strategy makes no mention of the contribution to net migration of visitors extending stay. In 2022, around 18 percent of net migration was visitors extending stay. This is something the Government may be intending to address but has not yet made public. Given this cohort’s contribution to net migration, it is an area the Government cannot ignore.
A framework for managing net migration
The past 18 months has again highlighted how desperately governments need a framework for managing net migration, not just the permanent migration program. That framework needs to put discipline on all ministers wanting to use the visa system for whatever purpose.
The framework, which should be made public to give Australians greater assurance governments are managing net migration in the national interest, needs to be supported by detailed and robust analysis that supports the migration strategy objective of getting net migration down to pre-pandemic levels by 2024-25. Without that, the Albanese Government may continue to fly blind on this issue – a high risk approach given how keen the Opposition will be to use high net migration as an Election issue.
Abul Rizvi PhD 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 the reshaping of Australia's intake to focus on skilled migration, slow Australia's rate of population ageing and boost Australia's international education and tourism industries.
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