New APRI report: Australia’s skilled migration is a con

By Leith van Onselen

Dr Bob Birrell from the Australian Population Research Institute has released a new report, entitled “Australia’s Skilled Migration Program: Scarce Skills Not Required”, which comprehensively debunks the argument that Australia’s immigration system is providing the economy with skills that it desperately needs, and instead finds that most skilled migrants go to areas already in oversupply, with most also employed at levels well below their claimed skills set.

Below are key extracts from this report.

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…  Even better from the Treasury’s perspective, most of the public costs of accommodating the extra people do not accrue to the Commonwealth, but to state and local governments…

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. 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.

The focus of this paper is on whether these claims have any substance. They do not. This conclusion is based on recent unpublished data on the occupations of those visaed in the skill program.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 2).

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). Just (16 per cent) came from MainEnglish-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…

Why is this the case? First of all, there is a huge number of graduates seeking professional employment. That might be OK if the demand was there. But, because of the tough labour market conditions described above, there are currently more applicants than available positions in many professions.

Why are recently arrived migrants from NESC locations doing so poorly?

Employers can take their pick. They are choosing their employees from the MESC and the Australianborn cohorts. They have an enormous advantage because of their English language proficiency and in the case of the Australian-born, their cultural awareness and networking connections.

The outcomes for those with management and commerce qualifications illustrate this point starkly.  As noted, accountants have been in oversupply for several years, yet thousands of accountants are being visaed in Skill Stream every year…

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.

The recent surge in undergraduate commencements, particularly in the STEM disciplines, means that this trend will continue. Table 3 tells this story.

Current migration policy is not about present skill needs, but hypothetically about those skills Australian employers might need in the medium to long-term, were it possible to forecast such needs with accuracy. All the Skill Stream Categories, including the Employer Sponsorship Category after May 2018 will be structured around the MLTSSL. This, as demonstrated, takes no account of current skill needs…

There are already too many graduates in Australia and their number is growing fast from both domestic and migrant sources…

As a result it is unlikely that there is any need to augment the current stock of professionals, at least for the medium term.  This is true even in the STEM disciplines where there has been so much concern about the level of domestic training. As the table indicates, these disciplines have made solid gains in commencements since 2011.

Even if shortages do emerge, migrant recruitment could be rapidly ramped up.  Australia is in high demand as a destination from Asian countries where there has been a huge surge in university training. Furthermore, large numbers could be drawn from the ranks of overseas students being trained in Australia to Australian specifications. Their numbers, too, have expanded sharply over the last few years.

Then there is the 457 program. Though tightened with the 457 Reset, Australian employers still have access to the most generous temporary entry program in the developed world. They can sponsor as many migrants with professional and trade skills as they like. True, they now have to first establish that they have tried to find residents to do the work. They must also pay a tiny training levy for the privilege. This is $1,800 a year for a large business…

Conclusion 

Australia’s high migration policy is defended by the claim that it is delivering the scarce high level skills needed to help maintain economic growth. The reality is quite different. Migration policy has been reformulated precisely to avoid confining the skilled program to occupations that are in shortage.

Instead, the program is directed to delivering professionals who might be needed in the medium to long-term. To the extent that the current program does deliver any scarce skills this is an accidental rather than a planned outcome.

Critically, the three major Categories of the Skill Stream – the Employer Sponsored, Skilled Independent, and State & Territory & Regional Sponsored – are all to be tied to the MLTSSL, despite the fact that listing does not require any current skill shortage.

The Skill Stream could be abolished and employers would hardly notice.

The Skill Stream is really about numbers, the ‘Treasury numbers’ needed to sustain Australia’s rate of economic growth and the Commonwealth’s projected tax revenues.

The Coalition, Labor and Greens effectively have prioritised these ends above the concerns of Australians living in the metropolitan areas. They have been left to put up with the loss of urban amenity, high dwelling prices and the costs of providing the additional infrastructure needed to accommodate population growth in their cities.

This is an excellent report which backs up MB’s thinking on this issue.

The full report can be downloaded here.

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Comments

  1. No no no, Dr Jay Song and John Daley reckons they are all skilled.

    Kudos to Bob Carr for bringing this report up. IMO there will be a round 2 on the ABC if the pressure is on and hopefully we can get LVO and Bob Birrell on. Alternatively, more appearances on Bolt would wedge the fk out of the ABC.

    • Hey – Dr (!) Jay Song said herself that she’d be the first to move into a regional town, she’d be there in a flash, if only there was a job for a migration expert like her!

    • Australia needs more left-wing ideologues calling themselves migration and demographic experts: https://www.findanexpert.unimelb.edu.au/display/person808911

      Consultant for the United Nations Office of the High Commissioner for Human Rights
      Human Rights Officer at the National Human Rights Commission of South Korea

      Author of:
      – The History of Human Rights Society in Singapore
      – Irregular Migration and Human Security in East Asia
      – Human Rights Discourse in North Korea: Post- colonial, Marxist and Confucian Perspectives

  2. the most powerful piece of memetic engineering out there is the idea that immigration is a necessity at all. at best its effects are neutral, and at worst it is a long term net negative. without it, countries would just have smaller populations. big deal.

    • Yep – until this neoliberal scourge is cleared (and I’m afraid nothing short of guillotines in the streets will help) it will keep rearing its heads everywhere you look.

    • Yeah, I think John Daley on Q&A even used the phrase “sharing the pain around” in relation to building apartment blocks equally across all suburbs. Suddenly, an image came into my mind of a bunch of school boys standing around saying: “Well, this dog sh*t has to be eaten one way or another, so the only fair thing is if we all eat an equal share.”

    • DarkMatterMEMBER

      On Q&A the last question (plant?) said the world population was heading to 9.5 bn so what right do we have not to take our share?

      Let’s see, to even make a dent on 9.5Bn that anyone else would notice, we would have to take 5%, and that would barely be noticed. Any less would just be a meaningless gesture. 5% of 9.5bn is 470 million! Assuming 60% go to Sydney and Melbourne – that is 142 million each city.

      On the other hand, suppose we say the maximum size of a city caps at 20 million. That is 24 new 20 million cities we need to build in Australia. Definitely no more hi flow shower heads. Wow talk about vibrancy!

      These people are idiots.

      • Could be a new type of fallacy that shall henceforth be known as “Appeal to millenials”, with a dash of “Hipsteria”

      • and much of that growth is coming from places like africa – it wouldnt take more than a few million residents from the dark continent to turn this place into an inhospitable, unlivable third world hell hole.

      • Firstly, we have zero obligation to take ANY share (apart from perhaps a moral obligation to take some humanitarian cases). If we lived in a true democracy we’d have every right to say “no” to population growth. Israel (for example) has said just this but, curiously, no one has criticised them for this stance.

        Secondly, the 9.5bn figure for population growth is BS. The global population is set to peak around 2025 — much sooner than is widely believed

    • Now now stagmal. That is actually racist about Africa. They and their leaders at least have some national pride, are improving per capita and understand that the resources belong to the people.

  3. Guys, you can focus all this flag waving down to producitivty
    IF the joint was skilled productivity would not be zero or less
    As it is zero or less, means that some are severely dragging the chain.
    any competent manager would sort that issue on day 1,
    unless of course they worked for Myer or RFG etc
    or any FIRE mob.

  4. Kormanator_T800

    For every IT or engineering job, there are currently 31 applicants. But these are still scarce skills, according to the government.

    The bottom line is that it is cheaper to import workers and pay them less than train and employ locals. Even rich companies like Atlassian import much of their cheap labor from Vietnam.

    • 29 of those can’t write a cover letter, the skills shortages are in our masters degree factories.

      • Kormanator_T800

        Actually, in my interviewing experience, 29 of them can write a cover letter, they just cannot do the job.

        They seem to be taught more interview practice and job acquisition skills than the actual skills of the job.

    • Even rich companies like Atlassian import much of their cheap labor from Vietnam.

      No they don’t.

      Atlassian moved 200 jobs from Vietnam to Australia. Something like 40 of them were “taken” by migrants from Vietnam, the rest were new local hires.

      They run recruiting and internship programmes specifically targeting Australian graduates for long-term careers within the company and industry.

      The shit that gets heaped on Atlassian here is ridiculous. This is a company that could – and purely by numbers, probably should – pack up and toss out its entire Australian workforce, yet they put explicit effort into trying to support local workers. Of their whole local workforce, only something like 20% are 457s – and these are high-skill, high-paying jobs as well, not IT cannon fodder.

      If this is not an appropriate usage of skilled immigration, the mind f*cking boggles as to what would be.

    • It’s just a mimic of the US neoliberal labour arbitrage approach. Progressively the locals get de-skilled and replaced by third worlders that earn much less than the locals did. Not going to end well.

  5. Many years ago, when i started work, the firm i worked with did ‘skilled’ migration applications. It was a total scam then, I can’t believe it’s taken this long for it to bubble up to the surface as a national issue. It was almost always backdoor family migration or recently migrated small businesses trying to get backpackers/nationals at cheaper rates or large multi’s shoring up their cheap labour instead of actually training our kids.

    In fact, thinking back, i can’t actually recall ever seeing an application for a genuine skill need – like an engineer or medical specialist or specialist programmer.

    This scheme really needs to be wound up.

  6. This pro-immigration article inadvertently shows that drSmithy is wrong:

    I landed my dream job at a TV station. There were quite a few other immigrants employed there too, due to a skills shortage in media at the time.

    https://www.irishtimes.com/life-and-style/abroad/irishwoman-in-sydney-the-457-visa-changed-my-life-1.3061194?mode=amp

    Because of course Aussies/Kiwis are incapable of working in a television station!

    Rather than being given an Aussie passport, she should have been deported after two years and an Aussie trained up in the meantime.

    Charge $1000/week for each work visa – thereby forcing every TV station to hire an Aussie/Kiwi.

    • We should copy the American system. Employers pay $6000 per year to employ someone on an H-1 visa. After 3 years, they can apply for residency. Skill shortages cannot be determined by a bunch of bureaucrats in Canberra. The true test of whether a skill is genuinely in shortage is that an employer is willing to hire a foreigner into that position, and pay a premium for doing it.

      • $6k/year is nothing. How about a 2-tier system: if the worker has a 3rd world passport, pay $52k/year income tax upfront. If the worker has a British passport, $25k/year income tax upfront.

        The empirical evidence is damning – Caltex is still paying illegal wages to 3rd world passport holders. Even in 2005, I knew that 7-11 pays illegal wages.

  7. +1

    I just about threw something at the TV last night when that Korean lass on Q&A was trying to tell us all how well managed, frequently reviewed and carefully targeted the required skills list is.

    It’s got accountants on it (and horse trainers I think was the other example Scott F used on 4 corners). That tells you all you need to know.