My chapter focuses on the rise of temporary migration policy, a brief overview of the numbers involved, and the relationship between temporary and permanent visas, including the effects on population trends.
I agree with the recommendations contained in the report (with a caveat there other things that need to occur, particularly around better enforcing protections against exploitation). The Australian business community need to do much more in relation to actually showing how and why these policy matters are important. With a few exceptions, it is very difficult to understand what role a new worker plays within a large organisation because basically no ASX200 members say anything with any depth about migration. I applaud CEDA (and Gaby d’Souza in particular) for their attempt to move things along.
Before I saw this poll, I’d always assumed being born in Australia would be considered the a critical factor when it comes to understanding what makes someone Australian. Turns out that’s not the case. Language skills and holding citizenship are clear markers over birthplace.
There are other interesting bits here as well. Respect for political institutions and laws is almost universal in terms of what it means to be an Australian. Yet in the same year, the Scanlon Foundation social cohesion survey found just 16 per cent of respondents consider the system of government ‘works find as it is’. Trust in politics, the media, and a raft of other institutions is stuck compared to where it was a generation ago. Clearly trust and respect as not mutually exclusive but the sheer size of the disparity feels important.
We’re four years removed from these results and a fair bit has happened in that period in relation to public debate on migration and citizenship. I imagine there has been some movement on the margins but I’d be surprised if there was wholesale change in the general shape of opinion, given the way these attitudes tend to form and hold over time.
In the last Parliament, the Turnbull Government’s proposed citizenship changes were defeated, primarily due to opposition to a higher English language test and the restrictiveness this would engender. The public debate was a rarity. Not since the introduction of the citizenship test by the Howard Government had the relationship between citizenship and recent migrants made such a splash in politics.
But the debate remained straightforward: imbuing value by generating a more exclusive citizenship, and opposition to this. We never moved past the legislative proposals and into a more substantive discussion. No-one was challenged if they said ‘citizenship is a privilege’. Personally, it strikes me as only half the equation. If we accept we live in a liberal democratic state, we should not ignore the responsibilities of the state to maintain a threshold number of citizens.
Re-reading the results above prompted me to think about what I’d like to see more when it comes to thinking about the settlement journey of recent migrants. A bigger conversation about how governments of all jurisdictions can make learning English easier. A more critical examination of how recent migrants access citizenship and what it means to them. And while I recognise these are not questions that fit neatly into a news cycle, they remain prescient for proactively shaping the society we want to live in instead of simply responding to a more negative alternative.
The main gripe from state governments concerning migration is a lack of agency. Before the 2019 state election, Premier Gladys Berejiklian called for a halving of net migration to NSW. Unhelpfully for the NSW Government, Section 51 of the Australian Constitution means the Premier is unable to do much about this except jawbone. The jurisdictional intersection between state and federal government is basically a one way street. This has real and abiding consequences, particularly for the process of how migrants settle into Australia.
Federal Governments of both persuasions have transformed Australia’s migration policy framework in recent decades without any material input from their state counterparts. While there are visa categories allowing state governments some oversight, in reality, what state governments are able to do is mostly tinkering at the margins.
Recently, it feels like there is an increasing awareness about how migration policy has changed. You can see this in more substantial public debates about how many migrants come to Australia and when various policy debates around temporary visas make a splash, such the English proficiency of international students in higher education.
However this general awareness has yet to seep into a generally agreed set of social norms in relation to how migrants should be treated by the State (governments of all jurisdictions). Perhaps it is simply too contemporary to grasp. But in the meantime, big decisions are being made, that have a myriad of effects, not least the signal we send to new migrants in terms of how they settle into our shared society.
A prominent example is taxation. Migrants pay income tax and GST like everyone else. But increasingly, some migrants are paying more tax than others because of the visa they hold. In the 2016-17 Budget, the same NSW State Government now calling for a large reduction in migration, introduced two revenue measures to be paid by ‘foreign residents’. These measures were:
a four per cent ‘surcharge purchase duty’, for residential real estate, to be paid in addition to stamp duty, and,
a 0.75 per cent ‘surcharge’ residential land tax.
The following Budget in 2017-18 increased the surcharge purchase duty to eight per cent and the residential land tax to two per cent. To give some idea of what this is worth, a quick google uncovered this two bedroom apartment near Blacktown station in Sydney going for $499,950. To purchase this apartment, a “foreign” buyer would need an additional $39,996 for the surcharge purchase duty and then an ongoing two per cent payment on whatever land entitlement is attached to the apartment.
Who pays these surcharges? The definition of ‘foreign resident’ becomes central and as stamp duty is a state government tax, state governments decide. In the past, before Australia’s migration framework was upended from the mid-1990s onwards, this was a relatively straight forward process. Anyone in Australia who was not a citizen or permanent resident was generally classified as a ‘foreign resident’.
Today, this definition largely remains in NSW, with a couple of exceptions for partner visas and New Zealand citizens. But as at 31 March 2019, there were about 1.6 million people who hold a temporary visa in Australia excluding the Kiwis. A strong majority do not intend to settle in Australia long-term. This figure includes tourists, students, backpackers and others. But a minority do intend to settle in Australia and transition to a permanent visa in due course. We can see evidence for this as about one in two people who gain a permanent visa are already in Australia.
Take someone who is sponsored by their employer as a skilled migrant. When my family migrated to Australia in 1989, we gained permanent visas on entry courtesy of an employer sponsorship. Today, we would have almost certainly been offered a temporary visa, the Temporary Skill Shortage visa (formerly the 457 visa). Historically, about 50 per cent of people who gain a temporary skilled work visa have transitioned to some form of permanent residency in the future [recent policy change is likely reducing this proportion].
These people are not ‘foreign residents’ in the traditional sense. All are meant to have permanent, skilled employment with a salary above $53,900 [noting there are clear issues in certain industries for this visa category]. They are not here on tourist visas surveying the investment property landscape. Yet according to the NSW State Government, people who hold temporary skilled visas are ‘foreign residents’ because their visa has a end date.
I assume the introduction of these fees will dissuade people living in Australia as ‘foreign residents’ but who intend to gain a permanent visa in the future from purchasing a house. And while not purchasing a house will not raise any revenue for the NSW Government, there will be effects. There are currently about 70,000 people who hold some form of temporary skilled work visa in NSW at the moment, all of whom are liable for these new surcharges. My family bought a house almost immediately, a decision allowing us to settle in a part of Melbourne which linked me to a school and a broader community. Placing severe financial barriers in place upends this process.
To go along with a more precarious employment situation (being tied to a single employer, with limited ability to move), new migrants who intend to settle in Australia but hold a temporary visa in Australia’s ‘global city’ are now second-class non-citizens in relation to housing.
[A couple of caveats here. (1) I don’t have anything against taxes and levies on housing investment for genuine foreign residents. My personal belief is housing should be for people to live in, not an investment vehicle for speculators to make money from. But the current situation in NSW points towards a jurisdictional intersection that is broken when it comes to new migrants and how they settle into Australia. And (2), this intersection of policy should not tied up with general support or opposition for these types of visa categories. Those decisions need to be focused on employers given they are the source of labour demand generating the visa in the first instance.]
A number of recent policy decisions will exacerbate these types of challenges. The Morrison Government’s introduction of two new regional visas from November 2019 is the most obvious example. Both of these visas, an employer-sponsored and independent skilled, will be provisional. A provisional visa is not a permanent visa but puts the person who holds it on a defined track towards a permanent visa. People who hold these visas will, under the current regulations, be required to pay the eight per cent stamp duty surcharge, despite not being able to settle in Sydney. I imagine it will be difficult for regional NSW towns to hold onto new arrivals if they are precluded from purchasing a house because of their visa status. In addition to additional waiting periods for welfare support and citizenship, a provision visa in NSW will mean an additional waiting period to buy a house.
To me, this relatively small policy issue sums up a central theme emerging across Australian migration policy: migration has changed but everything else hasn’t, driven mostly by self-interest from a range of actors that is harming the social bonds which hold together our community.
I hope to write more about these types of policy quirks in the future, about how migration rules and regulations are not the only, or even the primary, factors influencing how migrants settle and live in Australia today. If you have a suggestion for a topic, please let me know either by email (henry.sherrell[at]gmail.com) or tweet me @henrysherrell.
Published on my last day working for the Parliamentary Library, Hazel Ferguson and I authored a quick guide to overseas students in higher education. The document is a short summary of key figures and legislation covering overseas students who study at Australian higher education providers (this deliberately excludes the VET and ELICOS sectors).
To me, the most interesting figures are those intersecting funding and overseas students. I’ve modified Table 6 from the publication below, by including the last column:
Total revenue ($’000)
Overseas student revenue ($’000)
Overseas student revenue divided by total revenue (%)
Overseas student revenue growth divided by total revenue growth (%)
There is no secret overseas student numbers have been increasing steadily in recent years, resulting in revenue growing from $2.9b to $7.4b over the decade from 2008 to 2017.
Two things stand out to me from these funding figures. The first is the proportion of total revenue generated from overseas students is growing for the higher education sector, particularly from 2014. But the magnitude of the change, from the 16-18 per cent to 23 per cent in 2017, is not astronomical.
The second trend is more important. Total revenue growth is becoming more dependent on overseas student revenue growth. In the period 2015-17, 63 per cent of all total revenue growth for higher education in Australia was accounted by growth in overseas student revenue.
Clearly, the marginal dollar in additional revenue for a university depends more heavily on overseas students today than in the past. I’m no higher education expert so I do not know what this means in terms of teaching and research.
But in relation to overseas student trends, there seems to be a sense in the air Australia could be approaching a peak in terms of growth and aggregate numbers. I don’t share this position (for reasons I’ll document in the future) however it appears pretty clear any future slowdown of revenue growth from overseas students will be considerably more difficult to deal with for universities today than it was in the past (such as the 2012 calendar year).
Lots of people know this topic better than me. But the one point I’d like to make is the myth that the median overseas student wants to study in Australia primarily because they are motivated by permanent residency. Figures from the Department of Home Affairs show about 16 per cent of overseas students (all types, not just higher education) transitioned to permanent residency between 2001 and 2014. This means the vast majority did not. Further, it is becoming more difficult to make the transition given recent government policy change to reduce the number of permanent visas available and tighten eligibility requirements.
People can infer whatever they want from this but to me, it feels like Australian universities are responsible for both the successes and failures when it comes to attracting overseas students. Changes in visa policy are probably only responsible for very marginal effects.
The Morrison Government’s extension of the Working Holiday program, introducing a third 12 month visa, will give licence to unscrupulous employers seeking profit at the expense of young migrant workers, Australian workers, and employers who pay their workers according to the law. The extension of the visa is simply a copycat provision, mimicked from the worst aspects of the Howard Government’s fourth term.
The Migration Amendment (Working Holiday Maker) Regulations 2019 was tabled in the Australian Parliament on Budget day, 2 April 2019. This followed a compromise brokered in November 2018 by the Prime Minister after denying his Coalition partners, the Nationals, the introduction of a standalone agricultural visa. The Amendment will introduce a third 12 month visa for people who already hold either type of working holiday visa, if they complete six months specified work in regional Australia during their second 12 month visa.
Working holiday visas were introduced in the mid-1970s as Australia sought to promote cultural affinity with similar countries: the United Kingdom, Canada and Ireland. Since then, agreements between Australia and other countries have proliferated and there are 42 agreements in place or being negotiated. The visa allows people under an age limit (traditionally 30, now being increased to 35) to work and travel in Australia for 12 months.
Like many facets of temporary migration visa policy, the Howard Government upended the working holiday program by signing agreements with 17 countries and introducing a work-based incentive for people to acquire a second 12 month visa. By working for 88 days in regional Australia, predominantly in the horticultural and broader agricultural industry, people were eligible for a second visa. As Stephen Howes documents, the number of second 12 month working holiday visas granted went from 2,500 in 2005-06 and peaked at 45,950 in 2013-14. There were just over 36,000 second visas granted in 2017-18.
Since 2006, the working holiday program has became a de-facto work visa, without any associated regulatory oversight. The result has been increasing migrant exploitation coupled with the erosion of labour norms in the horticultural sector. Instead of rectifying this situation by promoting regulated alternatives such as the Seasonal Worker Program, the Morrison Government’s third 12 month visa will expand the opportunity for those employers willing to exploit young migrants.
While the Prime Minister, his Home Affairs Minister, Peter Dutton, and the then Foreign Minister, Julie Bishop, are to be applauded for preventing the introduction of an agricultural visa, the addition of the third year visa for people in the working holiday program will exacerbate exploitation and the erosion of labour norms. People will now need to spend six months in regional Australia working on farms and associated packing centres. More people will give up income just to tack on extra days. More people will pay for forged payslips to escape before six months is up. More people will agree to work for below award wage rates.
The incentive to work for time to spend in Australia undermines the very core of any employer-employee relationship. Instead of wages driving the supply of labour, visa rules are inducing work from migrants. Yet because the horticultural industry has plentiful vacancies combined with low barriers to entry in terms of skills, farmers and processing centres essentially have a monopoly over these migrants seeking another year in Australia. It is difficult to think of a more vulnerable position for a worker than one where there is little competition for employees and where the wage rate is relatively divorced from the choice of who to work for. This is a clear example of government policy creating monopsony power in Australian labour markets, with the result being income moving from labour to capital.
If people who hold a working holiday visa care more about a third year in Australia than the wage they are receiving, certain employers will reduce wages to maximise profit. This exploitation in turn hurts existing workers and those seeking to enter the labour market, as they cannot compete given they seek the minimum award wage (or higher). And perhaps most importantly, this behaviour spreads and is then institutionalised as employers who seek to do the right thing are now faced with a higher relative wage share. These employers will face difficulties competing in supply chains, as well as lower overall profits.
Based on current trends, if one in four people eligible for this visa seek to apply by working for six months in regional Australia, an additional 9,000 people will be induced into these labour markets. These people will be among the most vulnerable workers in Australia: relatively isolated in regional and rural areas, working in an industry where employers trade on visa eligibility instead of income. In addition to these 9,000 people, the third visa will induce additional people to Australia in the future on working holiday visas, who would’ve otherwise not arrived.
Ever since August 2015 when the joint ABC-Fairfax investigation into 7/11 was published, exploitation of migrants holding temporary visas in the labour market has become a mainstream political issue. Yet despite this, the Morrison Government’s copycat working holiday provisions will further cement exploitation in the Australian labour market.
There are 14 Parliamentary sitting days left for 39 Senators to vote for a motion to disallow the Amendment and prevent additional exploitation. Labor, the Greens and Centre Alliance makes 37, effectively placing One Nation as the decisive voting bloc to remove the third year visa from the working holiday program. I view this as highly unlikely given the support working holiday visas have from the farming sector and the vocal opposition that would arise if the Senate tried to undo these changes. That said, the Amendment will undoubtedly increase the number of temporary migrants in Australia, something Senator Hanson has spoken against unceasingly since re-entering the Senate in 2016.
If you ask people what it means to be Australian, one answer stands out: the ability to speak English. In this 2015 ANUPoll, 92 per cent of respondents said being able to speak English was important to being Australians.
For those who argue the Turnbull government has no political nous, the proposed changes to Australian citizenship suggest this thesis is at misguided at best. Modifying citizenship, including appealing to “values” but more substantively, by formalising an English language test, will prove to be a popular decision. But what will the broader effects be on migrants?
In his press conference, the Immigration Minister said, “There’s a significant change in relation to the English language requirement which at the moment is basic. We increase that to IELTS Level 6 equivalent, so that is at a competent English language proficiency level and I think there would be wide support for that as well.”
He’s not wrong. This is not just a significant change, it is a fundamental break with established norms. To see why, you have to understand how high a barrier IELTS 6 is for many new migrants.
In 2015, ACIL Allen evaluated the Adult Migrant English Program, or AMEP. Their report is the most up to date assessment for the English literacy of recent migrants. Unfortunately, the AMEP does not use the IELTS system so a clean comparison of new migrants scores isn’t possible. Instead, we need to translate the AMEP system – called ISLPR – into IELTS equivalents:
In a 2006 Senate Estimates question, the Department of Immigration said an “ISLPR 2” is approximately equal to IELTS 4 or 5.
In the ACIL Allen review, an AMEP service provider is quoted saying an “ISLPR 2” is equal to IELTS 4.5.
And finally, Dr. David Ingram, the person who invented these language testing systems, references “Universities that require IELTS 6 for entry to particular courses usually require 3 in all macroskills on the ISLPR” in his submission to the Productivity Commission’s migration intake inquiry.
From this evidence, we can infer IELTS 6, the level of English proposed by the Turnbull government to be eligible for Australian citizenship is equal to ISLPR 3.
What proportion of new migrants get a score of ISLPR 3 after completing their government-allotted 500 hours of English training in the AMEP?
None. Zero per cent.
Based on the enrolments of AMEP from 2004 to 2012 who completed 500 hours of training, 0 per cent of new migrants reached the level required for the new citizenship test.
As per the review, “28 per cent of AMEP clients leave the programme with 0 or 0+ on all four ISLPR elements” and 7 per cent of clients after receiving 500 hours exit at ISLPR 2 (the equivalent of IELTS 4.5).
In 2004-05, about 20,000 new migrants enrolled in AMEP, a number which grew to about 30,000 in 2011-12. 60 per cent of these new migrants in AMEP classes are women and children. Of course, many new migrants do not attend AMEP classes for a variety of reasons. In 2014-15, about 80 per cent of eligible humanitarian migrants attended AMEP, 20 per cent of eligible family migrants and 8 per cent of eligible skilled migrants.
What these figures show is somewhere north of 30,000 people each year will be ineligible for Australian citizenship. While a proportion will increase their English proficiency with time (and outside the classroom), this is a slow and grueling process according to language proficiency literature.
Using conservative estimates of AMEP enrolment trends, the rate of English proficiency improvement over time, and net migration trends, anywhere between 30,000 and 40,000 new migrants each year are highly unlikely to meet the proposed English proficiency level for Australian citizenship in their first decade of settlement.
Over time, this will generate a growing population of people simply excluded from citizenship. It’s impossible to say with any certainty what this will look like over the long-term but available evidence suggests a substantial number of people will never receive Australian citizenship.
Some people might say these new migrants will simply have to learn and this is a good incentive to get it right. A tough love approach. This argument should be called out for what it is: contentment to see people permanently excluded from our society. No voting. No standing for public office. Exclusion from public service employment in many instances. The potential for expulsion from Australia by visa cancellation.
When 35 per cent of humanitarian migrants score the equivalent of an IELTS 2 after their AMEP classes finish, this argument also amounts to specifically refusing citizenship for a proportion of refugee migrants to Australia. This is despite the fact refugees love Australia more than any other group of migrants if you judge this by the number of eligible people who become citizens.
Others might say this means we need to completely tear up English language support and training so people are given the support they need. Perhaps this is true. But we also need to recognise coming to a new country is really difficult. It’s hard enough for rich, English speaking new migrants. Think about a Sudanese single mother with four children who is illiterate in her own language. A formal English language test requiring IELTS 6 is government policy telling this woman she is not welcome as an Australian citizen. And if you think this is a handpicked example on the margins of our migration program, Australia granted 1,277 “Woman at Risk” visas in 2015-16 as part of the annual humanitarian program, for “protection of refugee women who are in particularly vulnerable situations.”
And this doesn’t even get into the issue of married couples separated by an English language test, or children who can easily pass but have to watch their parents excluded.
IELTS Level 6 is by no means perfect English. You can read this practice essay and probably scoff at the simple spelling errors highlighted. The official definition is: “Generally you have an effective command of the language despite some inaccuracies, inappropriate usage and misunderstandings. You can use and understand fairly complex language, particularly in familiar situations.”
But the practical effects are enormous. It amounts to deliberate exclusion of thousands of new migrants from Australian citizenship. Back in 2015, on the same topic, I wrote, “The worst outcome is permanent exclusion from society because barriers to entry are too high. An English language test for citizenship would be such a barrier. This exclusion would occur despite an indefinite right to remain in Australia. A tiered, broken system of residency with little long-term hope.”
While almost all Australians believe speaking English is an important part of what makes someone an Australian, is this the type of society we want to live in?
A quick comment on the ongoing 457 visa policy changes playing out at the moment. As the government has not provided sufficient detail for a rigourous analysis of the changes, I’ll stick to a more conceptual issue.
Many people have said something akin to “Why were Goat Farmers, Judges and Retail buyers (or insert any occupation) on the occupation list in the first place? We have Australians who can do that job.”
This is the wrong question to ask.
At the heart of any sponsored migration program is an employer. Not a migrant. More people will come if demand for workers is high. Conversely, fewer will arrive when demand is softer (such as the period from 2013 to 2017).
The purpose of the 457 visa program is to allow employers to hire from a larger number of people. But the rationale is they will only do so outside Australia when they cannot find someone in Australia. This is why employers are required to pay the same salary to people on a 457 visa, so they cannot undercut Australian workers.
The process of searching for someone overseas is the natural deterrent. It is presumed to be more costly to employers to look all around the world – and then bring that person here via a 457 visa – than hire an Australian. And in most cases, this is true. However with the number of people being hired on 457 visas who are already in Australia, this means the recruitment costs are lower on average than they have been in the past and it is likely increasing numbers of employers now have a much lower cost imperative to look at Australian workers first.
Instead of asking why certain occupations are on a list, we should be asking what will make employers look more closely at the Australian labour market? This means the central policy mechanism should be about employers being pushed to hire Australians via incentives.
What are some examples of these incentives? Fees. Instead of allowing bureaucrats in Canberra to pick and choose what occupations employers can and cannot hire, employers should be able to hire most occupations but be made to pay for it. This will ensure they look to potential Australian workers first.
I have been saying this since about 2012 when I first left the (then) Department of Immigration and Citizenship. In a report in 2013, I called for a $1,000 fee. Today, it appears this fee should be much higher, say anywhere between $4000 to $10,000 depending on the occupation and salary of the occupation.
This means we can leave all the occupation lists alone, instead of trying to imagine and pick what different employers needs are across a labour market of 12 million people and many different geographic areas and industry compositions, and if an employer genuinely needs a Goat Farmer (or any other occupation), they are able to hire people on 457 visas after they have paid a penalty.
Regulating migration in the labour market is really hard. The best solutions are often the most straightforward. Instead, the Turnbull government has opted for a hodge podge of ideas and regulatory tweaks which wouldn’t look out of place in a Politburo meeting to discuss the next five year plan. When was the last time you saw a “conservative” government lean so heavily on a regulatory framework to address this type of issue? Not a single initiative is likely to lead to more Australians working. And I’ve yet to hear a full throated defence from anyone in industry (with the honorable exceptions of KPMG’s Michael Wall and AICD’s Stephen Walters).
The 457 visa changes are about politics and appealing to dissatisfied voters. Picking on foreigners only works for so long until people realise foreigners aren’t really the problem.