ABUL RIZVI: Government cuts permanent migration program but forecasts net migration to rise (Part 1)

Government has cut the migration program ceiling from 190,000 to 160,000 per annum but at the same time is forecasting net migration to rise from 241,700 in 2017 to 259,600 in 2018 and 271,700 in 2019. This was after it forecast a steady decline in net migration in the 2018 Budget. This is likely the result of changes to temporary skilled entry policy, working holiday makers and a continuing rise in visitors changing status after arrival including record numbers applying for asylum.

It should be noted that the migration program reflects the number of permanent or provisional visas granted while net migration is the number of people arriving in Australia and remaining here for 12 months out of 16 irrespective of visa type or citizenship, less the number of people who had been counted in the resident population and then depart Australia for 12 months out of 16.

Table 1: 2019-20 Migration Program Planning Levels

Visa Category Visas
Employer Sponsored including Regional Sponsored Migration Scheme (RSMS) 30,000
Skilled Independent (including long-term New Zealand citizens accessing expedited permanent residence) 18,652
Skilled Employer Sponsored Regional (new provisional employer sponsored regional visa replacing RSMS) 9,000
Skilled Work Regional (new provisional state/territory nominated visa replacing state/territory nominated sub-class 489) 14,000
State/Territory Nominated (existing permanent residence visa sub-class 190) 24,986
Business Innovation and Investment Program (BIIP) 6,682
Global Talent (new high skill temporary entry visa with relatively open pathway to permanent residence – likely part of new sub-class 482 that replaced former sub-class 457) 5,000
Distinguished Talent 200
Total Skill Stream 108,682
Partner 39,799
Parent 7,371
Other Family 562
Total Family Stream 47,732
Special Eligibility 236
Child (estimate not subject to a ceiling) 3,350
Total Program 160,000

Source: Home Affairs website

The 30,000 places for Employer Sponsored migration is down on the outcome of 35,582 visas in 2017-18. The existing backlog of applications in these categories should make the 2019-20 planning level readily achievable. However, as applications for employer sponsored migration in 2017-18 fell by 27.1 percent compared to 2016-17, and as the RSMS will be closed to new applications, demand in this category can be expected to decline in subsequent years, especially following the changes made in 2017-18 when the sub-class 457 visa was abolished and requirements for employer sponsored permanent migration were tightened significantly. Further tightening of employer sponsored temporary entry as proposed by the ALP would lead to additional fall off in the application rate for permanent employer sponsored migration.

Note over 80 percent of visa grants in permanent employer sponsored categories are to people already in Australia on long-term temporary visas (ie already counted in net migration). Grants of employer sponsored permanent visas thus make relatively little contribution to net migration.

The Skilled Independent allocation of 18,652 will also be readily achieved as it also now includes long-term New Zealand citizens who have an expedited pathway to permanent residence. The New Zealand citizens obtaining this visa make no contribution at that time to net migration having already been counted many years earlier.

If this visa is to be kept to its planning level, the Minister will need to release places slowly and only to applicants scoring very highly on the points test. The proposed minor changes to the points test would assist some applicants reach the pass mark the Minister sets.

Even after including New Zealand citizens, the planning level of 18,652 for this visa category is less than half that in recent years (2017-18 – 39,137; 2016-17 – 42,422; 2015-16 – 43,994; 2014-15 – 43,990; 2013-14 – 44,984). Given these migrants now have a four year wait for access to social welfare, some reduction in this category is sensible to reduce the risk of destitution.

As around half of the migrants entering in this category are offshore at time of visa grant, the reduction in this category will have a greater negative impact on net migration.

The new Skilled Employer Sponsored Regional visa will start from 16 November 2019. While this visa is open to a wider range of occupations than the RSMS which it replaces, potential applicants may be deterred by the fact this visa will be a three year provisional visa with no guarantee of permanent residence if they lose their job during those three years. The 9,000 place planning level for this visa in 2019-20 appears very ambitious, especially given the many extra requirements now in place for all employer sponsored visas.

Note around 80 percent of RSMS visa grants were traditionally to people already in Australia on a long-term temporary visa. If this new visa follows the same pattern, it will have little impact on net migration at time of visa grant.

The 14,000 places for the new Skilled Work Regional visa in 2019-20 also appears ambitious given the significantly increased requirements of the pathway to permanent residence. The key will be whether state/territory governments are prepared to make sufficient use of this new visa and whether sufficient applicants with the requisite skills and experience make an expression of interest for state/territory government nomination. Note the Victorian and ACT Governments made little use of the provisional state/territory nominated visa this new visa replaces. Take up of this visa will be heavily reliant on extra nominations particularly by the NSW and Queensland governments.

The state/territory nominated direct permanent visa planning level of 24,986 and the BIIP planning of 6,682 should both be readily achievable as there is significant excess demand for these places. It should be noted, however, that the combined planning level for the new state/territory provisional visa plus the state/territory permanent skilled visa is well in excess of the rate at which state/territory governments were nominating skilled migrants in 2018-19. The Commonwealth Government is relying on an overall significant boost in state/territory nominations in 2019-20. If the labour market weakens, state/territory governments will be reluctant to do so.

Inclusion of an allocation of 5,000 places for the new Global Talent stream of the existing Temporary Skill Shortage visa (Sub-Class 482) is a new phenomenon. These visas have never before been included in the permanent migration program. By doing so, the Government is effectively cutting the migration program by a further 5,000 places. Given the very slow take up of this new visa stream to date, it is likely the 5,000 places may not be filled.

In the Family Stream, the key will be the intention to maintain the Partner category at 39,799 places against the background of a backlog exceeding 80,000. This is not sustainable either morally or legally, noting that s87 of the Migration Act does not allow Government to cap spouse visas. The legality of the Government’s method of delaying grant of Partner visas by slowing the rate at which processing officers are appointed to cases is also questionable.

Whoever wins government in the May election will need to deal with the excess demand for Partner visas and the likely shortfall in the new regional visas. If the overall planning level is held at 160,000, the balance of the program would shift towards the Family Stream if the Partner visa backlog is accommodated. The shift in the balance is likely to attract criticism from the business community which will want the Skill Stream maintained if not increased.

In part 2 of this article, we will examine implications for net migration and how the Government may have concluded in the 2019 Budget that net migration will rise.

Abul Rizvi was a senior official in the Department of Immigration from the early 1990s to 2007, when he left as deputy secretary. He managed the migration program from 1995 to 2007.

 

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One Response to ABUL RIZVI: Government cuts permanent migration program but forecasts net migration to rise (Part 1)

  1. Kirk YAN says:

    Hi Abul,thanks for your analysis,just little correction:Note the Victorian and ACT Governments made little use of the provisional state/territory nominated visa this new visa replaces.

    ACT is currently not a designated areas for 489 State Nomination,but only for the 489 family sponsored stream which only been allocated 100 quota by the Department.VIC has indicated they are willing to make more use of the 489 or future 491 for regional Victoria

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