The coming increase of Temporary Graduate visas

I mentioned briefly in my previous post that the Department of Immigration and Border Protection recently published a prediction for the number of “temporary graduates” over the coming years. From a recent discussion paper (page 26):

The subclass 485 has been credited with the strong growth within the Higher Education sector with internal modelling predicting that subclass 485 visa holders could potentially exceed 200,000 by the 2017-18 programme year.

There are a few caveats in that paragraph. Despite this, it is a nugget of information with significant ramifications for Australia’s migration framework. I’m therefore unsure why this information is in the middle of a paper on deregulation and not more prominently highlighted by any of the Department of Immigration, the Department of Education or the Department of Employment.

Regardless, why is this a big deal?

The subclass 485 visa – Temporary Graduate – is not new. Designed to give international students in Australia work experience in the labour market, the visa used to have a range of complicated eligibility criteria. This kept numbers of temporary graduates low relative to the total number of international students. Here is the last five years:

Screen Shot 2015-04-07 at 10.02.33 pm

(Source: Temporary Entrants and New Zealand Citizens in Australia – Stock – September 2014)

Topping out at just over 40,000 in 2013, the visa has been in decline since then. Compared to the ~350,000 international students currently in Australia, this is not a major visa category.

However all of this is about to rapidly change. Owing to policy change introduced by the Knight Review of 2011 under the Gillard government, the complicated eligibility criteria for a temporary graduate visa have been largely abolished. If your first student visa was granted after November 2011 and you went to a university to complete a two year qualification, you are likely eligible for at least a two year work visa. No strings attached. No employer required.

Given student visa applications since 2013 have been increasing, this change is slowly flowing through the system with the Department of Immigration predicting 200,000 visas by 2017-18 (I’m unsure if this prediction is for the population of visa holders at the time or the number granted per year). As there are currently ~20,000 temporary graduates in Australia, this would be a 10-fold increase in a three year period. When combined with the concurrent increase in student visa holders, it is likely there will be between 650,000 and 750,000 international students or recently qualified international students in Australia by 2017-18. This is not a small number.

I’ll be clear. I support the intention behind this visa. Giving international students an opportunity to gain skills in the labour market is good for the students themselves, the global competitiveness of Australia’s higher education sector and, over the long-term, the Australian labour market and Australian workers. Further, this will become the norm internationally with regard to student visa policy.

However the timing couldn’t be worse. There are two factors. Unemployment is slowly increasing and the number of recent university graduates is climbing rapidly due to the expansion of the sector under the previous government. This environment means the onus is on policy makers to ensure the transition to a larger temporary graduate population is as smooth as possible. Higher education institutions have a major role to play also. The private benefit of increased global competitiveness they obtain for zero cost means they must become more adept at dealing with international students. In particular, pastoral care and a focus on English proficiency should priority areas for improvement.

Those 200,000 people are already in the system and highly likely to materialise. The future trend may be different but the short-term outlook is fixed. The question now is what to do about it.

With any large policy change like this, there needs to be institutional support in place. How will international students make the transition from university to the labour market? Are employers aware of this visa and prepared to employ temporary visa holders without future certainty? What structures are in place to prevent systematic exploitation of a somewhat vulnerable population? What happens to those who want to stay in Australia but fail to receive a visa after their temporary graduate visa expires?

These are not minor questions and the answers will go a long way to either bedding down this new policy direction or threaten a major negative disruption to Australia’s migration framework. I hope someone, somewhere is working hard on these matters. In my opinion, this is the most likely migration policy area to flare up in a deteriorating labour market.

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