Co-authored with Alan Gamlen, I have written a blog post for the COMPAS migration centre, based at Oxford University. The intended audience is British.
The ‘Australian-style points-based system’ has attracted a huge amount of attention in the UK debate on post-Brexit immigration policy. But how does the Australian system really work and is it something that could be easily replicated in the UK?
How do points-tested visas work in Australia?
Emerging first in Canada, points-tested visas select immigrants based on factors such as age, education, language ability, and work experience. Adopted in Australia in the 1970s, points-tested visas do not require an employer. Instead, people apply for the Skilled Independent visa or they can seek the approval of a state government and apply for one of a number of State nominated visas.
Points-tested visas in Australia work alongside occupation lists. This is how the Australian Government maintains their policy objective of selecting people with particular skills. Among the top occupations in recent years have been Software Programmers, Accountants, Registered Nurses, and Civil Engineers.
The minimum number of points for a visa is 65. It used to be the case that if someone had the minimum number of points, they would gain a visa. However a surge of demand in the mid-2000s created a lengthy application queue, with people waiting years to gain their visa.
This provoked a substantial administrative change and selection is now conducted via a ranked ordering process. The more points someone has, the more likely she is to gain a visa. At the moment, someone needs at least 80 points to gain a Skilled Independent visa. This has become a critical administrative tool to manage demand for points-tested visas.
A potential profile of someone who gains a points-tested visa is as follows: a 30 year old (30 points) Civil Engineer (eligible occupation), who has a ‘superior’ level of English (20 points), has four years of engineering work experience (5 points), has a Bachelor degree in engineering (15 points), and has no spouse (10 points). There are a number of other factors to gain points.
If invited to apply for a visa, people must pay an AUD$4,045 fee.
Are all Australian visas subject to a points-test?
No. Points-tested visas make up 63 per cent of permanent skilled visas and 43 per cent of all permanent visas granted each year in Australia (excluding humanitarian visas).
In 2019-20, there will be 68,000 points-tested visas available, out of approximately 108,000 permanent skilled visas. The remaining 40,000 permanent skilled visas require an employer and do not use the points-test. About half of those who gain a points-tested visa already live in Australia, mostly as international students or people holding temporary work permits.
In recent years, points-tested visas have been declining as a share of the overall visa mix. In 2018-19 for the first time in over two decades, the Australian Government substantially reduced the number of permanent visas available, from 190,000 to 160,000. Alongside spouse visas, points-tested visa categories were subject to the largest proportional cuts.
What are the pros and cons of points-tested visas?
The points-tested visas in Australia, Canada and New Zealand all replaced colonial-era systems that explicitly discriminated between applicants based on race and ethnicity. Points based systems are considered more fair and objective by comparison.
Points-tested visas are often thought to select ‘the best’ immigrants. By capping the number the number of points-tested visa invitations, the Australian Government creates competition in an attempt to improve the ‘quality’ of immigrants. However, critics note this is a narrow view of what constitutes a valuable contribution to a society.
The greatest challenge for policy makers regarding non-employer points-tested visas is managing both short- and long-term labour market demand from employers.
By selecting migrants based on age, language, and skills, points-tested visas are thought to promote the long-term health of a labour market by incrementally increasing the average skill level of workers. Labour market outcomes for people with points-tested visa are generally positive 18 months after gaining their visa.
However points-tested visas are difficult to administer and create unintended consequences. Policy makers can struggle with assigning points, what factors to include, and what occupations to select.
In Australia, before the system was changed to an invitation-based system, there was a widespread practice of gaining education qualifications aligning with eligible occupations. In the mid-2000s, this led to an explosion of people gaining hairdresser and accountant qualifications specifically to gain a points-tested visa without any associated employer demand. In an employer-based context, this would not have occurred.
How difficult would it be to introduce Australian-styled points-tested visas in the UK?
Introducing Australia’s points-tested visa categories would be a major change to the United Kingdom’s immigration policy system, both in terms of policy outcomes and culture.
A strong majority of non-EU immigrants to the United Kingdom currently require an employer to sponsor them. This is the case even if they are subject to an existing points-tested visa, such as the Tier 2 category. This is a major difference to Australia, where employer sponsorship and points-test visas are mutually exclusive.
In Australia, scale allows a diversity of skills to be selected. Over the decade to 2017-18, the top 10 occupations for points-tested visas accounted for fewer than half of associated visa grants. Yet in per capita terms, 68,000 permanent points-tested visas in Australia is equivalent to about 180,000 visas in the United Kingdom. This would likely lead to an immediate and sharp increase in the rate of net migration.
Finally, points-tested visa categories in Australia are one part of a broader migration-management system, including policy institutions like long-term data collection procedures, research and consultation protocols, and mechanisms for coordination across different but related policy areas. Many of these systems and habits are deeply ingrained and inseparable from culture. For example, because the media play a key role in shaping public attitudes to immigration, the outcomes of migration policy partly depend on what kinds of media reporting on immigration topics are / are not considered acceptable. Such norms are different in Australia and the UK.
Such norms are different in Australia and the UK, meaning it is difficult to simply transplant one bit of the system from one country to another. Australia has crafted the institutions above in part because it is a country of immigrants. The UK does not have the same institutional mix given its history as a major sender of emigrants, and has only relatively recently become a major receiver of immigrants.
For more information see The Migration Observatory’s recent report The Australian points-based system: what is it and what would its impact be in the UK?