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SETTING THE MIGRATION

PROGRAMME FOR 201516


Discussion Paper
October 2014

Table of Contents
Context .................................................................................................................................................... 3
Consultation process ............................................................................................................................... 4
The Migration Programme ...................................................................................................................... 4
The size of the Migration Programme ................................................................................................. 5
The composition of the Migration Programme .................................................................................... 6
Planning the 201516 Migration Programme ...................................................................................... 7
Economic factors and labour market analysis ........................................................................................ 7
Labour market outcome of permanent migrants ................................................................................. 8
Temporary migrants in Australia ............................................................................................................. 8
Transition from temporary to permanent residence ............................................................................ 8
Net impacts of migration ......................................................................................................................... 9
Review of our programmes ................................................................................................................... 11
Skilled Migration Programme review ................................................................................................. 11
Alternative approaches to planning the Migration Programme ......................................................... 11
Conclusion............................................................................................................................................. 11
The Survey ............................................................................................................................................ 12
Attachment A Detailed analysis ......................................................................................................... 13

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Context
Australian immigration policy centres on managed migration, meaning that the government
determines the number and characteristics of people who may enter and stay in Australia.
Migration is managed through both temporary and permanent visa categories, which
together provide a comprehensive range of options for who may enter and stay, and on what
basis.
Skilled migration programmes target high quality migrants who use their skills and attributes
to contribute directly to Australias economic well-being. Family migration programme
addresses an important social objective in enabling Australian residents to reunite with close
family members from overseas. The wider global economic climate, as well as Australias
own economic and social climate, is a crucial consideration when setting the size and
composition of the permanent Migration Programme (the Migration Programme).
Planning the Migration Programme both skilled and family migration is a process that
remains focused on Australias national interest and the longer term benefits of migration.
Key questions include:

How can the department ensure the Migration Programme settings are responsive to
the changing economic environment in Australia and overseas and the future
demand for labour?
How can we ensure migrants make a strong contribution to Australias economic
prosperity?
What key social factors are important to consider when planning the size and
composition of the Migration Programme?
Does the current size and balance of the programme reflect the true economic and
family reunion needs of Australians?
How can the department help states and territories and regions in meeting their skill
needs and other considerations regarding migration?
What considerations are important in planning the Migration Programme with the
increasing number of temporary entrants in Australia?
Can the current approach to planning the Migration Programme be improved?

Temporary migrants are not included in the Migration Programme. Given the growing
number of temporary migrants who subsequently become permanent residents, and the
positive impact they have on Australias economy, temporary migrants are a factor for
consideration when planning the Migration Programme.
Note: Please keep in mind that the resettlement of refugee and humanitarian entrants
is not included in this discussion paper. The size and composition of the
Humanitarian Programme is decided through a separate process.

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Consultation process
We seek your views on the size, balance and composition of the 2015-16 Migration
Programme and the factors taken into consideration in planning Australias future migration
intakes, including longer term indicators.
We hope to stimulate your thoughts around the planning for and management of the
programme to best meet Australias economic and social needs in view of the changing
nature of migration in Australia and overseas.
Your views will be considered in the departments submission to government on the
2015-16 Migration Programme and will inform the size, balance and composition of
Australias future migration intakes.
This discussion paper also includes a link to a survey that seeks your views on the Migration
Programme. We encourage you to take the survey.

Closing date for taking the survey Friday, 5 December 2014


State and territory consultations
As with previous years, the department will conduct a series of round table consultation
meetings with invited stakeholders in each Australian state and territory capital city
commencing in mid-October and concluding by end-November 2014. This year the
department is holding a regional consultation in Port Hedland in the Pilbara region.
Stakeholders will be provided with an opportunity to provide feedback on the Migration
Programme and associated policy settings.

The Migration Programme


The overall objective of the Migration Programme is to contribute to Australias economic,
demographic and social well-being. The Migration Programme is currently planned and
managed on an annual basis, and announced as part of the annual Budget process in May
each year. The size and composition of the programme is determined by a range of factors,
including:

feedback from the Australian community and from industry and business
bodies
short and long-term social, demographic and economic trends and
government policies
expected demand for skilled labour in key occupations and industries
(including in regional Australia) over the medium to long term as well as the
identified need to address critical labour force skill shortages that are unable
to be met by the domestic labour market or training schemes
estimated demand for family migration places
social, economic and labour market advice and analysis from other
government agencies including state and territory governments

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This stream helps to address medium term labour market needs through employer
sponsored migration, where migrants come to specific jobs. The long term labour market
needs are addressed through points tested skilled migration that selects migrants based on
their highly skilled attributes to ensure labour market success on their arrival in Australia.
State/territory and regional nominated migration, which is also a points tested skilled
migration, helps the states and territories respond to varying regional and economic needs
through supplementing the labour force in key industries and regions.
Entrepreneurs, investors and innovators are attracted through the Business Innovation and
Investment Programme, and the Distinguished Talent category facilitates migration of
talented individuals to Australia.
More information on the Skill stream is available in Fact Sheet 24 and on SkillSelect at:
http://www.immi.gov.au/media/fact-sheets/24overview skilled.htm
http://www.immi.gov.au/skills/skillselect/
The Family stream
The Family stream of the Migration Programme facilitates the reunion of Australian citizens,
permanent residents or eligible New Zealand citizens with their immediate family members
overseas.
The Family stream has four main categories; partner, child, parent and other family. While
the primary focus of the Family stream is the social benefit of a united family, there is strong
evidence that there are wider benefits of family migration including contribution to the
Australian economy through employment and to the population through births. For example,
family migration further improves the age demographics of Australia, through younger
migrants entering the country.
The focus of recent changes to family migration has been on the closest family members
partners and children.
Demand for places in the Family stream continues to be higher than the places available.
More information on the Family stream is available in Fact Sheet 29:
http://www.immi.gov.au/media/fact-sheets/29overview family.htm

The composition of the Migration Programme


The balance of the Migration Programme has shifted towards the Skill stream, and the
balance between the various elements of the Skill and Family streams has shifted towards
more targeted skilled migrants within the Skill stream in response to increasing labour
market demands over the past two decades.

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offset somewhat by expansion of varying rates in other areas of private demand (RBA).
Overall, growth is expected to be slightly below trend for the next few quarters.
After a subdued labour market since 2011, some forward indicators of employment have
been firming this year. Employment growth has picked up somewhat, increasing by 1.5 per
cent over the year to August1. Workforce participation has improved marginally, after a
period of significant decline, to stand at 65 per cent in August. Nevertheless, there remains
a degree of spare capacity in the labour market and it will probably be some time before
unemployment declines consistently.
According to the Department of Employment, overall employment is projected to increase by
838,100 (7.2 per cent) reaching 12,442,700 by November 2018. Employment is projected to
increase in all industries except manufacturing, mining and agriculture forestry and fishing,
and health care and social assistance is projected to make the largest contribution to this
growth. This structural change may have implications for the department in planning future
skilled migration programmes.

Labour market outcome of permanent migrants


As migration is essential to the sustained growth of our workforce and a key ingredient in
meeting the challenges of an ageing population, it is important to know how well migrants,
particularly skilled migrants, are faring in the labour market.
The labour market outcome of migrants is one measure that can be used when assessing
the success of the Migration Programme settings. The departments Continuous Survey of
Australias Migrants (CSAM) demonstrates the superior labour market outcome of skilled
migrants as well as the positive labour market outcomes of family migrants compared with
the Australian average. http://www.immi.gov.au/pub-res/Pages/research/continuoussurvey.aspx
Detailed analysis of the economic and labour market indicators is provided at Attachment A.

Temporary migrants in Australia


In addition to permanent migrants, there are a significant and growing number of people in
Australia on temporary visas, including: international students, temporary skilled (457 visa)
workers, bridging visa holders and working holidaymakers. The number of temporary visa
holders in Australia at any point in time is around 1.1 million (around 5.1 per cent of
Australias population). Additionally, there are around 650,000 New Zealanders in Australia
on a special category visa which allows them to stay in Australia indefinitely.

Transition from temporary to permanent residence


Most temporary visa holders, including subclass 457 visa holders and students, are able to
apply for permanent residence while they are (legally) in Australia meaning that
temporary residence can be a pathway to permanent residence. Analysis of these

Note that we have used trend estimates as at August 2014 rather than the more commonly cited seasonally adjusted data,
which have shown significant monthly volatility of late and may not therefore provide a reliable indication of recent
developments.

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temporary entrants and their possible implications to future Migration Programmes is crucial
due to the increasing propensity in recent years of temporary entrants to transition to
permanent residence while in Australia.
Over the last decade, there has been considerable growth in the number of temporary
migrants in Australia. Many of these migrants hold work rights and contribute directly to the
Australian labour market, for example, through the temporary 457 programme. While
pathways to permanent residence are available to temporary migrants while in Australia, it is
not an automatic transition and in order to apply for a permanent visa, prospective migrants
are still required to meet prescribed criteria for qualification, skilled work experience and
English language skills.
The proportion of the Migration Programme places filled by people on a temporary visa in
Australia has increased from around 30 per cent in 200405 to 50 per cent in 201314. This
trend is particularly pronounced in the Skill stream where the proportion of onshore grants
has increased from 35 per cent in 200405 to 57 per cent in 201314. Onshore transition to
family visas has also increased during this time, albeit at a slower rate, from 23 per cent in
200405 to 33 per cent in 201314.
The increasing proportion of the Migration Programme filled by people who previously held a
temporary visa in Australia is a positive trend. These people have been living, studying or
working in Australia prior to making an application for permanent residence, and implies that
they should have skills or qualities that make them valuable to us as well as having a
genuine commitment to and understanding of Australian values.

Net impacts of migration


The impact of migration on Australias population can be measured more accurately through
an aggregate measure net overseas migration (NOM), than by just looking at Migration
Programme numbers. NOM measures the flow of people that remain in Australia for 12
months at a time (over a 16 month period) minus those who leave and tends to align closely
with the size of the Migration Programme.
NOM plays a key role in the overall rate of population growth, and we rely on NOM to ensure
Australias labour market does not shrink. A positive NOM also helps ameliorate the effects
of Australias ageing population.

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Review of our programmes


Skilled Migration Programme review
In the current climate of globalisation, it is vital for Australias long term prosperity to maintain
a competitive advantage in identifying, attracting and retaining highly skilled overseas
workers. The Australian Government has therefore placed great importance on the need for
a clearer, deregulated skilled migration visa framework that will help shape and define
Australias economic future.
The department is undertaking a review of the current skilled migration and temporary
activity visa programmes.
The review is in its early stage, and the department is currently seeking input from
stakeholders through a discussion paper on its website: Reviewing the Skilled Migration and
400 Series Visa Programmes. Most visa subclasses across the skilled migration and
temporary activity visa programmes are currently within the scope of the review and are
listed within the discussion paper.
More information can be found on: http://www.immi.gov.au/pub-res/Pages/discussionpapers/overview.aspx
The department is holding a separate series of consultative forums and meetings to
elaborate on the scope of this review.

Alternative approaches to planning the Migration Programme


The Migration Programme is planned annually. Alternative approaches to planning, with a
longer term planning horizon and an increased flexibility within the programme to respond to
the ongoing and emerging economic needs and family reunion challenges of Australians,
could offer a better way to look at the size and composition of Australias future migration
intakes.
As part of this process, the department may be exploring alternative planning options
including a range-based planning approach and a multi-year planning cycle for future
consideration.

Conclusion
Australia has a dynamic and growing economy where skills are still needed, where
employment is forecast to grow in most industries, and where unemployment is predicted to
remain fairly static. Australia has a social framework that is global and inclusive, and
increasing numbers of temporary migrants are making informed decisions that Australia is
where they would like to live.
The department is aware of the increasing global competitiveness in attracting and retaining
highly skilled migrants from overseas and the need for a clearer, deregulated skilled
migration visa framework that will help shape and define Australias economic future.

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In planning the size, balance and composition of the 201516 Migration Programme, the
department will need to be informed by careful consideration of these factors and trends as
well as the views of the Australian public to ensure the programme delivers on what it is
intended toresponding to Australias longer-term economic and social needs.

The Survey
The Department invites you to take the Migration
Programme 201516 Survey before
Friday 5 December 2014
Click below to continue to the survey
https://www.surveymonkey.com/s/RYWVBKG
Note that all survey responses will be confidential.

Or read on to learn more about the details behind the


paper

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Australia-wide labour market conditions3


Unemployment has edged higher and in trend terms stood at 6.2 per cent in August, its
highest level in more than a decade. Despite the recent improvement in the participation
rate, participation is still around its lowest level in nearly a decade and while forward-looking
indicators of labour demand have recently improved they nonetheless remain at low levels.
With economic growth forecast to be below trend in 201415, it is likely that Australias
unemployment rate will remain elevated for some time, the RBA and Treasury are expecting
that it will not decline in a sustained way until 2016.
Figure 2: Key indicators of recent labour market conditions

Source: ABS Cat No 6202.0

Recent employment growth across industries


Recent employment growth by industry (Figure 3) reflect the changing composition of
economic activity. Employment in the household services sector has continued to exhibit a
strong upward trend with the health and education industries accounting for the bulk of
employment growth in this sector. Business services employment surged ahead for the first
part of this year, the strength in the housing market driving demand for labour in the
professional and real estate industries. It appears, however, that this surge has run its
course, with employment growth in the sector dropping off slightly in recent months. This is
a trend reflected in the other main industries, particularly mining, providing further evidence
of the spare capacity in the labour market.

Note that unless otherwise stated, we have used trend estimates as at August 2014 in this section rather than the more
commonly cited seasonally adjusted data, which have shown significant monthly volatility of late and may not therefore provide
a reliable indication of recent developments.

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Figure 3: Employment growth by industry, cumulative over five years to August 2014

Source: ABS Cat No 6291.0.55.003, E06, original data. *Household services include accommodation and food services,
education and training, health care and social assistance, arts and recreation services and other services. #Business services
includes information media and telecommunications, financial and insurance services, rental hiring and real estate services,
professional, scientific and technical services, and administrative and support services.

Labour market growth across states and territories


The changing composition of economic activity can also be seen in the recent employment
growth across states and territories (Figure 4). While growth has generally picked up across
most states and territories, consistent with the broader trend for Australia as a whole, it has
been particularly strong in the big three eastern states of New South Wales, Victoria and
Queensland. However, in percentage terms, Northern Territory and Western Australias
average growth is above the average growth for the eastern states.

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Figure 4: Employment growth by state, cumulative over five years to August 2014

Source: ABS Cat No 6202.0, tables 4-9, trend data.

Skill Shortages
The Department of Employment has an ongoing skill shortage research programme
involving consultation with employers and recruitment agents on the labour market for more
than 100 occupations. Results from this research programme are regularly published in the
six monthly report Skill Shortages Australia. The latest report, for 2013-14, was recently
published on the departments website. The main findings are noted as follows:4

Skill shortages are currently not a feature of the Australian labour market. Employers
are generally recruiting skilled workers without marked difficulty and the number of
occupations in shortage is at an historical low.

In 2013-14, there were generally large fields of applicants vying for skilled jobs and
employers filled a high proportion of their vacancies.

There is now little disparity between employers recruitment experiences across the
states and territories due, in part, to the slowing activity in the resources states.

Employers in regional locations still have more difficulty recruiting skilled workers
than those in metropolitan areas, but most fill their vacancies readily, and the gap
has narrowed.

Department of Employment, Skill Shortages Australia 2013-14,


http://docs.employment.gov.au/node/31449 .

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Shortages are more evident for trades (with 18 in shortage) than professions (5).

University graduate employment outcomes have weakened in recent years and


labour markets for professionals are generally more than adequately supplied.

While shortages of trades workers have abated in the past few years, this easing has
not been to the same extent as that for professionals.

Vacancy levels have increased more strongly over the past year for technicians and
trades workers than they have for professionals. Vacancies increased by
9.5 per cent for professionals but increased by 17.1 per cent for technicians and
trades workers over the year to June 2014. Nonetheless, employment growth for
professionals continues to outstrip that for technicians and trades workers, rising by
1.1 per cent (or 27,100) over the year to May 2014 compared with an increase of 0.7
per cent (or 12,200) for technicians and trades workers.

A significant proportion of surveyed vacancies remained unfilled and the reasons were
varied.

Many of these vacancies attracted multiple qualified applicants but they did not meet
employers precise requirements.

A number of vacancies attracted applicants who were suitably skilled but employers
opted to defer recruitment until they attracted their ideal candidate.

Some employers and preferred applicants were unable to agree on the terms and
conditions of employment.

Around 4 per cent of employers did not attract any applicants.

Longer Term Outlook


Each year, the Department of Employment prepares five year indicative projections of
employment growth by industry, occupation, skill level and region. The latest projections are
for the five years to November 2018 with key results summarised as follows :5

Australia-wide: Total employment is projected to increase by 838,100 (7.2 per cent)


reaching 12,442,700 by November 2018.

Industry: Employment is projected to increase in all industries except manufacturing,


mining and agriculture forestry and fishing. Health care and social assistance is
projected to make the largest contribution (up by 229,400) followed by education and
training (118,800), retail trade (98,200), professional, scientific and technical services
(88,700) and construction (83,500). Together, these five industries are projected to
provide more than two thirds of the employment growth over the next five years.

Skill Level: While the evolution of the labour market towards higher skilled occupations
looks set to continue, with Skill Level 1 projected to make the largest contribution to
growth (356,900), there is also strong growth in employment projected for Skill Level 4
(225,300) providing lower skilled opportunities for job seekers.

Department of Employment, Employment Outlook to November 2018,


http://lmip.gov.au/default.aspx?LMIP/EmploymentProjections.

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Occupation: Employment is projected to increase in all of the main occupational groups


with the strongest gains for professionals (270,800) and community and personal service
workers (166,200). Specific occupations with the largest projected gains are aged and
disabled carers (40,900), followed by sales assistants (39,400) and registered nurses
(36,900).

States and Territories: Employment is projected to increase in all the states and
territories with the largest gains in New South Wales (241,600), Queensland (215,100),
and Victoria (196,300). While employment growth is expected to remain relatively strong
in Western Australia (119,400), it is projected to slow from the rates of the past five
years, given the predicted falls in mining investment.

Regions: Employment growth is projected to be stronger in metropolitan areas (7.6 per


cent) than in regional Australia (6.7 per cent). The largest projected increases are for the
west, south-east and inner parts of Melbourne (110,200) followed by the north west and
south east of Perth (65,500) and the Gold Coast (32,900).

Labour market outcome of recently arrived migrants


Migrants contribute to the three factors of economic growth population, participation and
productivity. They lower the population age profile, add to the size of the labour force, have
high labour force participation rates and bring innovation and entrepreneurship to Australia
and, through their contacts, help make business and trade connections overseas. They are
selected based on attributes to ensure labour market success on arrival.
The labour market outcomes of migrants are one measure that is used when assessing the
success of the Migration Programme and policy settings. Results from the departments
Continuous Survey of Australias Migrants, run between 2009 and 2011, have proved
instructive in this regard. With the resumption of the survey in 2013, we now have a new,
updated set of results, recently published in a report on the departments website.6 Key
findings include:

Skill stream primary applicants achieved good employment outcomes at the six-month
stage of settlement. This included a moderate unemployment rate of 5.7 per cent, a very
high participation rate of 95.6 per cent, high income levels and high rates of employment
in highly-skilled and full-time work. Skill stream primary applicants outperformed the
general population on most of these measures.

Employment outcomes (particularly the unemployment rate) of partner migrants were


generally not as good. This is not unexpected, given that these migrants were not
selected for migration on the basis of their employment prospects. However, what is
encouraging is a participation rate for these groups that is substantially higher than the
general Australian population, and indicative of an interest in finding work.

Department of Immigration and Border Protection Continuous Survey of Australias Migrants: Cohort 1 ReportAugust 2014,
http://www.immi.gov.au/pub-res/Documents/research/csam-2014-cohort-1.pdf.

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