Australia’s skilled migration program is a giant fraud


By Leith van Onselen

Monday’s ABC Q&A Program featured Dr Jay Song, a supposed “migration policy expert” and recent migrant from Korea, who repeatedly spun the lie that Australia’s 130,000 strong skilled migration program is delivering fantastic outcomes for the nation.

Below are some highlights of Dr Song’s testimony:

When you look at the data, 60% of those permanent migrants are actually skilled migrants who are contributing to the economy and society and the diversity in the community…

I mean, Australia has done a fantastic policy on migration management. I mean, it’s a very well-designed policy and also a well-managed one, ‘cause it’s targeting the skills and the qualifications they have, and then they choose very carefully who can contribute, who can come here and contribute to the economy.

…you need to have skills and qualifications in the degrees or other technical capabilities… they also come here and pay huge tax. And the average income among these skilled migrants is actually $5,000 more than the average Australian taxpayer.

…they come in, most of them, 60% of them, as I said, at the beginning of my conversation, are skilled migrants. And they are regularly, the occupation list is regularly updated by the Department of Industry and together with the Department of… used to be Immigration and Border Protection, now it’s the Home Office, so they are doing a good job to keep checking the Australian businesses who need skills shortages in certain industries. We still need those skilled migrants who can contribute to our society…

Not even 24 hours later, Dr Song’s arguments were blown out of the water by Dr Bob Birrell from the Australian Population Research Institute, whose latest report based on 2016 Census data revealed that most recently arrived skilled migrants (i.e. arrived between 2011 and 2016) cannot find professional jobs, with only 24% of skilled migrants from Non-English-Speaking-Countries (who comprise 84% of the total skilled migrant intake) employed as professionals as of 2016, compared with 50% of skilled migrants from Main English-Speaking-Countries and 58% of the same aged Australian-born graduates:


These results accord with a recent survey from the Bankwest Curtin Economics Centre, which found that 53% of skilled migrants in Western Australia said they are working in lower skilled jobs than before they arrived, with underemployment also rife:


The Productivity Commission’s (PC) recent Migrant Intake Australia report also explicitly stated that around half of the skilled steam includes the family members of skilled migrants, with around 70% of Australia’s total permanent migrant intake not actually ‘skilled’:

…within the skill stream, about half of the visas granted were for ‘secondary applicants’ — partners (who may or may not be skilled) and dependent children… Therefore, while the skill stream has increased relative to the family stream, family immigrants from the skill and family stream still make up about 70 per cent of the Migration Programme (figure 2.8)…

Primary applicants tend to have a better fiscal outcome than secondary applicants — the current system does not consider the age or skills of secondary applicants as part of the criteria for granting permanent skill visas…

The PC also showed that while primary skilled migrants have marginally better labour market outcomes than the Australian born population in terms of median incomes, labour force participation, and unemployment rates, secondary skilled visas, and indeed all other forms of migrants, have much worse outcomes:


In a similar vein, the Australian Bureau of Statistics (ABS) latest Characteristics of Recent Migrants report, released in June 2017, revealed that migrants have generally worse labour market outcomes than the Australian born population, with recent migrants and temporary residents having an unemployment rate of 7.4% versus 5.4% for the Australian born population, and lower labour force participation (69.8%) than the Australian born population (70.2%):


Dr Song’s claim that skilled migrants earn more than your typical Australian is superficially correct, and confirmed by the ABS’ Personal Income of Migrants, Australia, 2013-14, which revealed that permanent migrants reported higher average incomes ($48,400) than the median employee income for all Australian taxpayers ($45,700):

The median Employee income of migrant taxpayers in 2013-14 was $48,400. This represented a 1.0% increase in real terms on median Employee income in 2012-13.

The median Employee income of migrant taxpayers was higher than the median Employee income for all Australian taxpayers ($45,700).

However, this is misleading because the “median Employee income for all Australian taxpayers ($45,700)” includes every employee in the country – such as young uni students working at Coles, Kmart or Maccas, mums working part-time, etc – which obviously pulls the national median income down.


It’s fair to assume that most migrants are not granted permanent residency so that they can pack shelves at Coles or work at 7Eleven. Rather, those in the ‘skilled’ stream at least, which makes up the overwhelming majority of permanent migrants, are expected to be working at high capacity. In this regard, I am surprised that their median earnings were only $52,892 in 2013-14, which seems pathetically low.

A fairer ‘like-for-like’ comparison of the productivity of migrants requires them to be compared against local workers of similar composition. Again, as Dr Birrell showed in the first table above, so-called ‘skilled’ migrants have terrible employment outcomes when compared against locals with similar qualifications.

Finally, the below segment from yesterday’s ABC Radio highlights the absurdity of Australia’s ‘skilled’ migration program:


According to this report, skilled migrants have grown increasingly frustrated at not being able to gain work in Australia despite leaving their homelands to fill so-called ‘skills shortages’. Accordingly, they are now demanding that taxpayers provide government-sponsored internships to help skilled migrants gain local experience, and a chance to work in their chosen field.

The below testimony from the CEO of the Multicultural Communities Council of South Australia highlights the absurdity of this situation. She says that despite being well qualified on paper, many skilled migrants get knocked back because they lack local experience:

“I’d say the majority of them [skilled migrants] will find difficulty getting work in their chosen area…

It’s heartbreaking because they pin their hopes and dreams on when they come across to Australia…”


So why do we have a skilled intake again? To lengthen the dole queue? To rob developing nations of their skilled workers? And how exactly is the 130,000 strong skilled migrant program alleviating so-called skills shortages?

Australia’s skilled migration program is one giant fraud that is failing miserably to meet its original intent.

[email protected]

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.