The immigration debate: smoke, mirrors and a dash of xenophobia

May 18, 2024
Grunge blue immigration word square rubber seal stamp on white background

This past Budget week had the most intense focus on immigration levels that I can remember (and I’ve been watching immigration policy in Budget week for over 35 years). It confirms that immigration levels will be a dominant issue at the next Election.

But debates about immigration levels can be a mixture of substance as well as smoke and mirrors (with the usual xenophobia and lots of self-interest thrown in). So how will Australians be able to tell the difference between substance and smoke and mirrors?

The following is my attempt to sort out the two.

How did we get into this?

Firstly, how did we get to a situation where net migration – the difference between permanent and long-term arrivals and departures – blew out to such extraordinary levels after covid, reaching over 520,000 in 2022-23?

Both major parties will point at each other when both are at fault.

The seeds of the blow out were sown in the years leading up to covid when the contribution of overseas students to net migration was rising strongly and education providers as well as Commonwealth and state governments were heavily in promotion mode. In 2018-19, the student contribution to net migration was over 112,000 (or 47 percent).

While covid brought that to a halt, in 2021-22 the Coalition Government introduced extraordinary policies to boost overseas student numbers. Policies such as unlimited work rights, fee free student and working holiday maker applications and the special covid visa.

The message to Industry was to go forth and expand as rapidly as possible and hang the consequences. So it did. Not only did universities go berserk but the private providers also boomed as the regulators were in no position to police quality. It was like a gold rush.

That student numbers were blowing out was clear by late 2022 when I thought the new Labor Government would act to reign things in. But it delayed acting until July 2023 when it started to act in a relatively timid way by reversing some Coalition Government policies. It only got serious about taking firm action later in 2023 and early 2024.

By then, the horse had bolted.

What happened in budget week?

The Government announced it will cut the permanent migration program (ie permanent visas issued) from 190,000 to 185,000. Note this does not include 3,000 places for the new Pacific Engagement Visa. While it’s only 3,000 places, Governments fiddling figures like this sets a dangerous precedent.

The Government also revised its net migration forecasts. Net migration forecast for 2023-24 has been increased from 375,000 to 395,000. But the Government will know that net migration in 2023-24 will likely exceed this, possibly substantially. Was it too afraid to admit net migration in 2023-24 will exceed 400,000?

Net migration forecast for 2024-25 has been increased from 250,000 to 260,000. That is likely a recognition of how difficult it is to get net migration to fall while the labour market is still relatively strong as well as accommodating introduction of some new visa initiatives that will put upwards pressure on net migration. Net migration forecast for 2025-26 remains at 255,000 and 235,000 for 2026-27.

After heavily criticising the level of net migration, as if Coalition Government policies had nothing to do with the boom, in his Budget reply Dutton announced he would cut the migration program to 140,000 and the Humanitarian Program from 20,000 to 13,750. But he made no mention of whether he agreed or disagreed with the Government’s forecast for net migration. This was despite getting the Murdoch press into a lather about how much he would cut net migration.

It’s important to understand that as 70 percent of the migration program is from people in Australia and already counted in net migration, Dutton’s cut will have only a minor impact on net migration. That also means his assertion that this will free up 100,000 homes looks like nonsense.

What it will do is require a large cut to the skill stream – the portion of the program that delivers the greatest economic benefit. Moreover, it will mean the number of people in immigration limbo will grow further – a sure sign of poor policy.

The Dutton plan reminds me of Morrison’s so-called population plan to ‘bust congestion’. In March 2019, Morrison announced he would cut the migration program from 190,000 to 160,000. In the month later, Treasurer Frydenberg would forecast net migration increasing by over 30,000 to support his ‘back in black’ budget. How a 30,000 increase in net migration would ‘bust congestion’ remains a mystery.

In a subsequent interview on Sydney Radio, Dutton seemed to suggest he wants to reduce net migration to 160,000, presumably from 2025-26. Why he didn’t say that in his Budget reply is a mystery – perhaps he didn’t have party agreement to that. Net migration of that level would require both:

  • decimation of the International Education Industry well beyond what is happening now and massive tightening of other visas including working holiday makers, which regional Australia relies on heavily, and skilled temporary entry which Australian employers rely on, including in the health and aged care industries; and
  • a massive weakening of the labour market to encourage large numbers of long standing permanent and temporary residents, Australian and NZ Citizens to depart and/or not return – I am not sure Dutton is intending to engineer that but you can never tell. The Abbott Government accidentally drove down net migration to around 180,000 with its austerity measures and a strong rise in unemployment.

Student capping

Both the Government and the Opposition are now committed to capping student numbers. The Government’s approach is to cap the number of students enrolled at each of the 1,400 providers and perhaps at an even more granular level. That will be a nightmare of a task with every provider disagreeing with its allocation.

Imagine an industry where the number of customers each provider can have is determined by the Government?

Dutton’s approach appears to be even more chaotic. He seems to be proposing an overall national cap where providers compete for customers within the cap. But that will mean that every year, providers, students and agents will rush to try and get their applications through before the cap hits. The huge surge would mean large numbers of applicants miss out and have to queue up for the next year.Management of the queue would soak up massive resources for both the Department, students and providers. The approach is blunt and indiscriminate – perhaps the kind of approach Dutton favours.

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