Government control and Australia’s population

I’ve just finished one of the best books I’ve ever read. David Halberstam’s The Best and The Brightest is a torrid tale of public administration on how the Kennedy and Johnson Administration’s undertook policy towards Vietnam.

My biggest takeaway was thinking about the concept of control. Again and again, Halberstam references how the principle figures involved – Johnson, Maxwell Taylor and Robert McNamara – sought to control events and their environment. Time after time, small failures led to larger and more costly failures because those making the decisions believed they were in control. Bad decisions compounded as the illusion of control proved impossible to shatter.

What struck me was how this relates to contemporary public policy and administration. I think it’s common many people believe the government of the day can and should control particular events such as interest rates, petrol prices and carbon emissions to name a few. Yet there are a myriad of external factors which make this harder than it used to be and, perhaps, harder than the government lead us to believe.

I was drawn to considering how this intersects with regard to Australia’s migration policies.

For the numerically substantive part of Australian migration – skilled workers, students, family members, amongst others – I think the Australian government has a decent degree of control over both the number and type of migrants who arrive. We are after all a large, isolated island, making this task easier for us than other countries who attempt the same thing (see the United Kingdom as the primary counter example). But while the government can dictate policy decisions, it is also dictated to by economic and social factors outside its control. No government can simply turn the tap on or off when it comes to migration.

This has been poorly explained by each government over the last three decades, particularly as some control of migration has been ceded – willingly – to external economic and social forces. This has a number of consequences (positive and negative) but in the public domain, none captures the imagination quite like the impact on population.

This debate is about to rear its head again. The Abbott government will release the fourth Intergenerational Report in early 2015 (date to be determined). IGR4 will show that Australia is adding between 220,000 and 240,000 people each year through migration. This means that by 2050, Australia’s population is on track for approximately 38-39 million people. This is slightly higher than Kevin Rudd’s “Big Australia” of 36 million from 2010.

There will be lots of commentary on this topic. But unfortunately much of it will likely miss a foundational question: does the government control the population of Australia? You can argue for a bigger or small population but outlining how this is achieved is more difficult.

This is because significant sections of Australia’s migration program are not capped by government. There is no cap on the number of international students who can attend higher education institutions. Employers can theoretically sponsor an unlimited number of skilled migrants. Millions of young people across the globe have the opportunity to live and work in Australia as backpackers without queuing for the right to do so.

Instead of caps, migration is regulated with other policy tools. Barriers such as age, work experience, qualifications and language are used to determine who is eligible to migrate as opposed to the number of migrants. This naturally limits the number of people who are eligible while allowing others to determine the level of migration.

I like to think of this as a soft cap (shout out to any NBA salary cap nerds). As an example, the government could regulate the minimum salary for a 457 visa holder as $1,000,000 and watch as employers stopped hiring new migrants. Technically, no cap on the number would have been imposed but the program would be impossible to use. This is primarily why most business advocates argue for lower barriers while unions argue for higher requirements.

Under this framework, the actual number of people who come to Australia under each visa category is impacted a variety of factors but not directly controlled by the government.

Economic forces play a primary role. The number of Irish immigrants to Australia skyrocketed as Irish unemployment rose from 2009 as the Australian economy was relatively excellent compared to Ireland. International students will likely increasingly choose Australia – relative to other countries – because of the cheaper Australian dollar. For a generation, New Zealand citizens came in great numbers to Australia yet over the past two years, New Zealand is experiencing a net inflow of people from Australia given it’s improving economy.

Social factors also play a strong role. Social networks formed by diaspora communities act as links to other countries and encourage future migration. This occurs through family migration channels but also through economic migration channels as existing connections reduce the cost of migration. In Australia, a growing Chinese community is laying the groundwork for future Chinese migrants. The same is likely true of the Indian community and new humanitarian communities, such as the Karen and Sudanese. Even if economic forces were completely neutral, these social links would dictate migration trends regardless of government regulations.

While the government could take measures to directly cap the number of migrants, this would have flow on effects. Universities would have to accept less funding or require an increase in public money. Businesses would go without filling skills shortages. Opportunities for Australians to travel overseas would be restricted. Existing migrants would experience frustration. Instead, both the ALP and the Coalition prefer to use regulation to shape the number and type of migrants who come to Australia.

This is radically different from what used to occur but three decades ago. I also find that not many people are aware this is how migration now works. This explains why our population debate is seriously uninformed.

There is one thing the government has strict control over: the number and allocation of permanent residency visas. Each year in the Budget, a number of permanent residency visas is chosen. For 2013-14, this number was 190,000 for skilled and family visas.

In the past, this number accurately reflected the number of likely immigrant arrivals. A new migrant would arrive with a permanent visa, with the vast majority making Australia their new home. Yet today, the majority of people who receive a permanent residency already live in Australia and hold a temporary visa when they arrive. This means the government’s primary tool in historically controlling immigration has been lost.

Therefore the current policy framework is less effective, less controlling, at determining the number of people who arrive as immigrants in Australia. You can argue whether this type of temporary migration is good or bad but its akin to arguing whether we should return to a fixed exchange rate. The world has changed and Australia has changed with it. With it, the fundamentals of the population debate have also changed.

So when you see a hot take in the coming months about Australia’s population, remember to think about why this has happened and what the ramifications might be of sudden, knee-jerk reactions to a toxic debate.

Book Review: Tim Soutphommasane’s “Don’t Go Back to Where You Came From”

In “Don’t Go Back To Where You Came From“, Tim Soutphommasane has written the new benchmark on Australian multiculturalism, with one major caveat.

His ability to clearly define Australian multiculturalism is the centrepiece of the book, “If there’s an essence that defines multiculturalism, is it liberal citizenship” (p.49).

Multiculturalism emerged as a reaction against an ideal of cultural homogeneity which has defined nationhood across most Western nation-states. Those who didn’t belong to the domination national group within a state were either to be assimilated into it or excluded from it altogether. A multicultural state is based on a different idea. Rather than assimilate or exclude differences, the state should recognise and accommodate cultural diversity. What this means in practice will vary, depending on the minority cultural group in question. For indigenous minority peoples, multicultural rights may mean the recognition of land rights or self-government rights; for immigrant groups, it may mean, amongst other things, the introduction of discrimination laws or greater sensitively to diversity in public institutions. Either way, a multicultural state involves some set of ‘group-differentiated’ rights or policies targeted at minority groups who have been traditionally excluded from the nation-state.

Soutphommasane is particularly good on why Australia has succeeded where others have failed. Compared to the U.S. and Canada, multiculturalism in Australia is “straightforward”. Integration of migrants has been “an overwhelming success”. He serves up litany of facts concerning education, language and employment to show why this has been the case. His case is strong, particular as a response to those attracted to the idea multiculturalism has failed, the forceful claim argued by David Cameron, Angela Merkel and Nicolas Sarkosy.

Nothing illustrates this better than the attraction of multiculturalism as ‘nation building’. “Many of those sympathetic to cultural diversity regard the very idea of nation-building as anathema”, writes Soutphommasane. Incorporating nation-building into the multicultural story, jingoistic exclusion is severed away.

This flows into the guts of what the future holds for Australian multiculturalism, particularly the discussion on population, a bigger Australia.

Reading this chapter, I sensed something close to sadness from Soutphommasane. Up until this point, the book is a celebration. The unique ability of Australia to overcome past wrongs and triumph over the difficulty of diversity is lauded. Yet on population, a shadow clouds the future.

He opens with a description of Julia Gillard’s first major speech as Prime Minister, one where she repudiated Kevin Rudd’s call for a big Australia and toughened government asylum policy.

“What she actually said seemed to jar with the nation-building history of Australia’s immigration experience”

Soutphommasane says Gillard needlessly conflated the issues of multiculturalism, immigration and population. He argues this is wrong, as these concepts in Australia require thoughtfulness to “clarify the relationship between them”.

I agree with this insight as well as his call for a ‘bigger’ Australia of between 30 and 36 million people (since publication, the ABS projections are nudging 40m by 2050).

However our views diverge on one major point of difference: temporary migration.

Soutphommasane is wary of how a population of temporary migrants (primarily 457 visas, international students and working holiday makers) has increased over the past decade. This growth “hasn’t been an entirely positive development”. His major concern – migrants beholden to their employers, removed from citizenship – creates the risk Australians will regard immigrants as simply guest workers instead of citizens. He approvingly quotes Michael Walzer;

Democratic citizens’ have a choice: if they want to bring in new workers, they must be prepared to enlarge their own membership; if they are unwilling to accept new members, they must find ways within the limits of the domestic labour market to get socially necessarily work done. And those are their only choices.

The chapter ends with, “If we have learned anything from the experience of guest workers in democracies such as Germany, that is one addiction Australia would be better off without”.

This is a provocative argument. After spending the first half of the book extolling why Australian multiculturalism is different from other settler countries such as Canada and the U.S., as well as why we should reject the European argument that multiculturalism is dead, Soutphommasane now asks us to recall the social debacle which accompanied guest workers in post-war Europe. Is this fair? If Australian multiculturalism is different, perhaps Australian temporary migrant is also different?

I believe this to be the case. Unlike Germany, where Turkish and other eastern European workers were fundamentally excluded from German citizenship over generations, Australia has an immigration framework which has adjusted as temporary migration has increased.

In 2012-13, a total of 190,000 people become Australian permanent residents via the family and skilled pathways. Of these, a full 50 per cent did so from within Australia. In the skilled pathway, this number approached 70 per cent. These people are temporary migrants becoming permanent migrants. Becoming citizens. This is not immigration policy designed to exclude. This is the modern iteration of a great Australian tradition.

Of course, the fact many people acquire permanent residency does not not excuse those employers who exploit temporary migrants. Nor does it stop exploitation. But to frame a conversation about hundreds of thousands of people around a very particular set of employers is not conducive to improving the immigration and population debate in Australia.

Yearning for the past, where permanent visas were granted on arrival and worked in regional Australia, is not a solution grounded in a modern understanding of labour, student and cultural migration. Instead, we should seek to ensure temporary migration policy finds the sweet spot, allowing large numbers of people to share in Australia without undermining social cohesion by creating a tiered society.

The right policy mix can achieve this. Limiting the time spent on temporary visas can substantially reduce the risk of exploitation and create direct connections to citizenship for those who desire such. This is particularly relevant for working holiday makers and international students, where work experience and an understanding of Australian labour market norms for employees may not exist. As just one example, there is no reason for instance why these migrants should hold Australian Business Numbers instead of being more regular employees. This leads to underpayment and aversion of migration regulations by employers.

However it is important to recognise the benefits of temporary migration in Australia in its own right. Australia as a country – as a nation – gains much from temporary migration. Cultural links with international students are building a connection with Asia for the next generation. My own education was enhanced hearing about the Beijing housing market and the Japanese approach to climate change. Working holiday programs allow young people the world over to experience Australia and return to their home countries. In addition, young Australians are also provided the opportunity to explore countries the world over, as this is a reciprocal arrangement. While 457 visas appear to now be simply associated with exploitation, the unrecognised story is how international labour is perhaps the key import of ideas to Australian business and industry. Soutphommasane does not shy away from some of this, citing one estimate placing 30 per cent of all Silicon Valley firms being founded between 1992-1999 by the U.S. equivalent of a 457 visa, the H1B visa. But he mostly laments what temporary migration means for the future of Australian multiculturalism given the bridge to citizenship for many.

On closer examination, this pessimism is unwarranted. In 2011, I was told less than 1 per cent of temporary migrants (excluding New Zealand citizens) have been in Australia for longer than ten years. This is important context for programs that are increasing seen as poor public policy. It is vital to keep striving for such a low percentage, as this signals temporary migration and a citizenship-based multicultural Australia can coexist (this statistic should be published and tracked, creating accountability for temporary migration policy in Australia). I agree with Soutphommasane the existence of ‘permanent temporary’ migrants would be a poor outcome for Australian multiculturalism and social cohesion. Yet it is unwise to make comparisons to guest worker programs when this is clearly not the case in Australia.

Tim Soutphommasane has produced a book unlike any other I have read – a coherent understanding of what Australian multiculturalism means. He provides the important historical underpinnings yet paints a picture for the future, one where cohesion is strongly based on liberal citizenship. While I disagree on his conceptualisation of temporary migration, it is a great positive for Australian society he is now ensconced in the Human Rights Commission, leading from the front on this most important public good.

What can Indian IT workers on H1B visas teach Australian immigration policy makers?

IT specialists, very often from India, make up one of the larger groups of temporary migrants, both in Australia under the 457 visa program and in the U.S. under the H1B program.

Unfortunately in Australia we have a lack of empirical insight into labour mobility for 457 visas. However in the U.S. new research suggests temporary migration programs are complex, with a degree of labour mobility.

This paper on the H1B visa program and Indian IT workers – Inter-Firm Mobility and Return Migration Patterns for Skilled Guest Workers by Peter  Norlander, Briggs Depew and Todd A. Sørensen – presents some evidence to suggest low wages for temporary migrants act as the same incentive for domestic workers, namely they seek other, higher paying jobs or return home:

Our results cast doubt on the claim that these workers face severe mobility restrictions outside of the Great Recession. They reveal that during periods of full employment, inter-firm mobility of these workers is comparable to other estimates in the literature obtained from presumably more mobile workers in other labour markets, suggesting that competitive market forces provide some check against firms dramatically underpaying these workers.

There is a fair amount to unpack here from a policy perspective.

First, is this research applicable in Australia? The study analysed six large India IT firms many of which operate in Australia. The type of employees are also similar. The visa costs are similar also. One major difference may be the visa programs in Australia have a more strict method to match migrant wages to domestic wages than the U.S. As highlighted in the research, one study found as soon as H1B visa holders received permanent residency, they experienced a 20-25% pay increase. I don’t believe this occurs here however there is a lack of research to suggest one way or another. Obviously there are inherent differences in the broader labour market between Australia and the U.S. however the particulars discussed – temporary migration and labour mobility – seem a decent, but imperfect, match.

Two main policy considerations jump out. What is the difference of labour mobility compared to other workers? What happens to labour mobility in a weaker labour market?

The research finds “that a 10% increase in salary yields a 3.32% decrease in the probability of quitting”. The authors claim the “fact these results are not zero suggests that these workers have some degree of mobility and that lower paid workers are able to relocate to other employment”. However, I would also note that “This is slightly smaller than previous results in the literature that study other groups of workers”.

The fact there is labour mobility in temporary migration programs is important and positive. This means market forces are still having an effect on employees moving firms despite the more restrictive regulations governing a temporary migrant’s relationship to their employer. I know in the 457 visa program, there are always more business nominations than visa grants. The difference in these two numbers is likely to be a good proxy for a degree of mobility in Australia. Unfortunately this information is not currently publicly available.

However the authors conclusions are heavily caveated when they say “outside the Great Recession”. This indicates in periods of weak labour markets, lower mobility may be more consequential for temporary migrants than domestic workers.

When the unemployment rate is 4%, then a 10% increase in the wage is associated with a 14% decrease in the quit rate. When unemployment is 6% the 10% increase in wage corresponds to a 6% decrease in quits. At an unemployment rate of 8% we see that the quit elasticity is not significantly different from zero.

The difference in ‘quit rates’ (a proxy for labour mobility) between 4% and 6% is quite large while at 8% there is no mobility. This points to how temporary migration programs should be understood very differently in ‘full-employment’ labour markets and weak labour markets. Of course, this is similar to how other employees operate in labour markets. However the key difference is that unemployment benefits and the right to stay in Australia have a radically different impact on domestic workers than migrant workers. The worst situation for governments who manage temporary migration programs is one where there is no labour mobility, with many employees taking below market wages, increasing worker exploitation and undercutting wages and conditions. This is particularly true for progressive governments such as Democrats and the Australian Labor Party.

There are lessons here for Australia. With the unemployment rate going from under 5% to over 6% in recent years, we should assume the labour mobility rate of temporary migrants has decreased (but remained positive), at least for Indian IT workers but probably more generally. Policy makers should be aware of this when considering changes to regulations, especially those which would further restrict mobility.

Further, it is positive to see research which finds the lowest paid temporary migrant Indian IT workers have the highest propensity to quit their jobs. This counters some of the claims around the severity of labour mobility restrictions however does not remove the concerns completely. In addition, the authors find lower paid workers are more likely to return to their origin countries. We can debate whether a ‘return home’ option is preferable to the option to stay in either the U.S. or Australia, but what this does indicate is how temporary migrants react to changes in the business cycle and these programs are dynamic. Understanding temporary migration programs as simply as a static, one-size-fits-all concept, underestimates the various migrant incentives which can be accentuated under different labour market conditions.

Immigration Senate Estimates: What we need to know (Part B)

Yesterday I outlined topics relating to Operation Sovereign Borders which should be covered in the upcoming Senate Estimates session for the department of immigration. Today I’ll cover other policy areas in the immigration portfolio.

The Migration Program

Every year the government, through the budget process, conducts some “stakeholder consultation” on the make up of the migration program for the following year. The migration program is the number of permanent migration visas made available. This year, the Australian Industry Group’s submission to the consultation raised a few eyebrows by advocating a raise in the number of permanent visas available to 220,000 (an increase of 30,000).

The problem with this consultation process is the lack of transparency. Unlike many submission processes, there is no publicly available list of submissions. The public is unable to see who lobbies government and on what basis their arguments are made. Senators should seek to highlight this process. Enquire exactly the numbers are chosen.

These numbers mean a lot less than they used to given the growth of temporary migration. However they are still an important policy decision regarding population levels. Transparency would go a long way given the strong public interest in relation to population. Immigration contributes about 60 per cent of Australia’s population growth and these type of technocratic processes should be more closely examined.

The Humanitarian Program

The humanitarian program is the number of refugees who are screened by the United Nations and chosen by Australia for resettlement. The policy relates to refugees, people typically in large camps overseas or protracted conflict areas, as opposed to asylum seekers.

This program is perhaps the starkest difference between the government and the ALP in terms of immigration policy. The ALP increased the humanitarian program to 20,000 places as part of implementing the Houston Panel recommendations in 2012. The Abbott government, in one of its first decisions, reduced the program back to 13,500 as a cost saving measure.

The humanitarian program is well supported by the public. The key line of questioning here is drawing on how successful the program is and providing a constant reminder about the difference between the two parties. This program also has a submission process, one also clouded by secrecy. Information and advocacy in those submissions likely aligns heavily on the ALP policy position. This should be highlighted and uncovered as third-party endorsement is critical to build on long-term support for

457 visas

I’ve attempted to explain this in the past, without great success. Let’s try again.

The ALP introduced Labour Market Testing for 457 visas last year. This means, for certain jobs, an employer must advertise their vacant position, before offering it to a migrant on a 457 visa. The idea is to hire Australian workers first. However, the ALP did not finalise the legislation before losing the election. This meant the Abbott government finished up the process.

Using historic data, the department of immigration believes about 35 per cent of 457 visas would have required labour market testing. This means some occupations are not covered by labour market testing. One left uncovered is called ‘Program or Project Administrator‘ (ANZSCO Code 511112). Over the past two years, this has been the most popular occupations in the 457 visa program. This is the problem as this occupation is likely subject to exploitation and misuse.

I don’t believe labour market testing is effective at actually getting Australians into jobs. But if there was a single occupation required to under labour market testing, it should be this one. The fact this entire process has been introduced and the single most troublesome occupation has escaped the attention of bureaucrats and government is a travesty. Why is this occupation – responsible for about 2.5 per cent of all 457 visas  –  not subject to labour market testing? What criteria were used to determine which occupations were and were not included in labour market testing? These are questions which should be answered, especially by the ALP given the rhetoric of last year.

Additionally, this is an area where the ALP can probably make substantial headway in opposition. There is a latent fear of foreign workers taking jobs in the labour market. I think its a load of baloney, but these do seem to be genuine public concerns. There is a careful policy approach to be had, supporting the 457 visa program, while also ensuring it doesn’t undercut existing wages and conditions. This means ensuring dodgy employers are kept in line but also supporting the program where necessary. One place to start is with Program and Project Administrators. Another is to ensure temporary visa holders have proper pathways to permanent residency (something in government, the ALP was less good at).

Student visas

Of the best pieces of immigration reform by the ALP was reforming the student visa program. Under the Howard government, low quality higher education providers proliferated, acting as a dodgy pathway to a permanent residency. These organisations had something young migrants wanted and sold it at an outrageous price. They promised the world to everyone, often taking money without providing basics services or assistance. While student visas aren’t perfect now, the ALP restricted these providers by de-linking higher education and permanent visas for the most dodgy providers.

One of Christopher Pyne’s early policy thought bubbles is to increase the scope of the higher education market for international students. While there are undoubtedly some providers who are excellent, given the mistakes of the past, it is imperative to tread very carefully in this area. Questions seeking to uncover the government’s intention and the bureaucratic implications behind them are important. An excellent question last Estimates demonstrates the potential market which exists for poor quality providers of higher education:

Q: Can you indicate what percentage of the 1,030 (higher education institutions) are regarded by the Department of Immigration as low risk?

The Department of Education advises that as at 19 November 2013, there are 1083 non-university providers that are registered in the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS).

At the time of determining eligibility to participate in the extended streamlined visa processing arrangements, a total of 97 non-university providers were registered in CRICOS to deliver bachelor, masters or doctoral degree courses to international students.

Of these providers, 22 (22.7 per cent) were determined to meet the low immigration risk criteria to participate in the extended streamlined visa processing arrangements. These criteria included the fact that the education provider must be associated with at least 100 active student visas in the Department of Immigration and Border Protection’s systems.

Only 22 per cent of non-university providers meet the low risk criteria. While I’m sure these risk criteria are a little bit subjective, this shows well over half of non-university bachelor and masters courses are classified as at least some-what risky. Its up to the ALP to keep thee government out of expanding courses to international students simply as an attraction for permanent residency. Pyne is dead keen on doing it despite the horrendous outcomes which occurred last time – see here and here for detailed explanations.

Temporary visas

Finally, the theme of temporary visas as a whole (of which students and 457s are a substantial part) is a long term policy challenge for the ALP. The union movement and the ALP in general are strong supporters of permanent residency as it provides full rights in the labour market, including the choice of employer. Many temporary migrants are restricted in the labour market, either formally or informally.

The ALP did a good job of increasing the number of permanent residency places for temporary visa holders. This is evidenced by the rise of people applying for permanent visas who are already living and working in Australia. It is now time to ensure the Abbott government keeps temporary migration in Australia fair, sustainable and in the interest of migrants and workers, as well as employers. I’m slightly suspicious the Abbott government won’t care particularly much about the nuances of this debate, and this is one battlefield in industrial relations which has a significant impact with hardly a peep in the media.

One of the worst situations to end up in is being a long-term temporary residency with little opportunity for permanent status. Through senate estimates, the ALP needs to find out the number of temporary residents who have been in Australia for more than 10 years. Time periods on temporary visas longer than that are bad for migrants, employers and the labour market in general. Policy for temporary visas as a whole needs to be geared around keeping the proportion of temporary visa holders in Australia for 10 years as low as possible, perhaps even committing to a benchmark. But at the moment, no-one knows what the official figure is. Find out what it was at 31 December 2013 and for the next three years keep an eye on it.

Many of these areas can be asked via written questions. But its important to get the wording right and force the right answers out of the bureaucracy. Too often, sloppy questions lead to repetitive answers and the lack of useful information. Public servants will go out of their way to cover the government of the time as they know what information is politically sensitive and what isn’t.

Be specific, be concise and don’t muddy the water with political grandstanding.

What’s Missing: 457 visas and temporary migration in Australia

Peter Mares has an excellent piece published in Inside Story, ‘457s and temporary migration: the bigger picture‘. Mares is a unique public voice. His nuanced understanding of a broad range of immigration policies – from asylum seekers to students and 457s – leaves him very well placed to provide some much needed context around the recent debate about the 457 visa category. He comes not from a position of privilege, rigid ideology or vested interest but from a background of journalism, a pragmatic approach infused with an egalitarian bent.

Mares carefully unpacks how the 457 program came about. His vignette about Neville Roach and the ‘Roach Report’, recommending the introduction of the original 457 visa, is an Australian public policy story that should be more widely known. The misunderstanding of how and why immigration is more than just asylum policy in Australia would do well to be rectified by the promotion of this history. This dovetails into the crux of the debate. What is it that the 457 program should achieve?  This is a question oft-debated and unsettled after nearly two decades of substantial temporary migration flows. Mares writes;

From today’s perspective, though, what is most striking about the Roach Report is its attempt to ring-fence temporary business migration. According to Roach, the new arrangements were “not meant to apply to the traditional skilled trades or to professions like nursing and teaching.” Yet today, about one-in-every-five 457 visa holders has a trade qualification and nurses are one of the biggest professional groups recruited under the scheme. (Teachers on 457 visas are less common, but university lecturers are high on the list.)

Roach warned that temporary entry must not be seen “as an instrument for overcoming long-term labour market deficiencies.” Immigration minister Brendan O’Connor echoed that view recently when he asserted that the 457 visa program is only intended “to fill temporary skills shortages in some sectors and regions” and should be used “as a last resort.” But he was either misinformed or being disingenuous, for the 457 scheme has become something much bigger and more complex than Roach envisaged.

While Mares is too kind to offer former Minister O’Connor the excuse of misinformation, this points to the very real conflict of original intention and current practice. The ALP and the broader union movement may disapprove, but the 457 program is used increasingly as an the pathway to permanent residency, the first step in a ‘two-step’ migration process while filling long term deficiencies in the labour market. Mares alludes to this debate and it is well worth having. Unfortunately, this debate is brushed aside by the simplistic notion of ‘Australian jobs’. Former Minister O’Connor and former Prime Minister Gillard framed the most recent debate in a manner that meant any complexity was air-brushed away. Should long term deficiencies in the labour market be overcome by temporary and permanent migration? While Neville Roach and former Minister O’Connor may disagree with the proposition, there are both benefits and drawbacks from more fully embracing this policy. Can Australian skills and training alone provide for these deficiencies? Under current policy settings and those of the recent past, this is a very debatable position.

Immigration is not and will not become the main method to train and develop the Australian workforce as a whole. However recent evidence suggests a more nuanced understanding of temporary migration may highlight important contributions. As Mares points out, the recent survey of 457 visa holders demonstrates how about 75 per cent of migrants train or develop Australian workers in their job (disclosure: I helped write the research report released by the Migration Council Australia). This piece of evidence does not fit easily into the narrative of migrants stealing jobs. In niche occupations, this prevalence of on the job development may be a serious contribution. In budding industries, such as online retail and cloud technology, this could be the difference between early successes and failure. The survey does not present any answers, merely highlighting the need for a better understanding of enterprise level labour innovation. This is a complex debate which should be fostered.

The survey also pointed to what I see as a shift in the intention of migrants. Australia’s place in the world has shifted remarkably in the last decade. Currently about 40 per cent of 457 visa holders end up becoming permanent residents yet when asked in 2012, the planned intention to stay in Australia was a whopping 70 per cent. I see this shift directly as an impact of how Australia relative to the rest of the developed world has changed in the aftermath of the GFC. This increasing intention to remain in Australia has yet to be seized upon by the government or policy makers, stemming from the lack of understanding that economic forces play on migration trends, historically and globally. Bureaucrats writing legislation can only do so much to attract people. How can a government talk about being the only country in the developed world with low inflation, high growth, high employment and then not expect people globally to migrate – from 457s, to working holidays, to asylum seekers? To my mind, this is a complete contradiction, one that has yet to picked up in the media or in public discussions about immigration. Migration is driven by economic forces above anything else and Australia, as the government is well aware, is perhaps better placed relative to the rest of the world than at any previous point in our history.

This could be (but may not be) a once in a century opportunity to attract not only the most highly skilled workers in the globe but a generation of young potential from across the world. I believe the invitation of permanent residency should be made swiftly to those wishing to stay, allowing for a smooth transition to a socially cohesive community. While many public policy solutions are promoted in an attempt to induce further growth and prosperity, the influx of people is rarely debated seriously amongst elite opinion makers, at least publicly. Mares does not touch directly on this but obviously has grave concerns about how migrants integrate into society, especially those who are here ‘temporarily’, at least in name. He is right that they are often subject to a more restrictive set of obligations to the state, their employer and Australian citizens.

Mares’ piece is one of the few that has a decent understanding of the empirical side of 457 visas. He rightly calls out the lack of substance to claims of massive increases in particular geographic areas due to the volatility of small samples. Personally, one of the most disappointing features of the public debate since March this year has been the lack of understanding on these facts and figures. While the Department is rightly proud of the data it presents, it is by no means perfect or complete. Mares understands this data however his picture is incomplete.

This is highlighted nowhere better than the discussion on Cooks. Mares rightly points the finger at the poor state of vocational training for the industry and the renumeration provided by employers. Yet this is a more complex situation under the 457 visa program. In the financial year of 2012-13, it is almost certain that Cooks will be the number one occupation for the 457 visa program (the figures are not yet released). As Mares says, former Minister O’Connor repeatedly made reference to how the program has grown by generally lower skilled occupation and industries, such as cooks in the accommodation and food services industry (aka hospitality). Yet these recent figures are misleading if taken purely at face value. While technically the growth of cooks and chefs has been extreme (over 100 per cent growth in 2012-13 from 2011-12), other factors are at play.

None are more important than a series of changes to permanent migration. Prior to these changes, which kicked off in 2009-10, migrant cooks could generally be granted an independent permanent visa. This meant they did not have an employer but had full work rights. They did not show up in the 457 visa statistics either. For example, in 2007-08, a total of over 3,400 cooks were granted a permanent visa. While not all of these were independent, many were. In 2012-13, about 100 cooks will have been granted a permanent independent visa (source: SkillSelect  click reports, then occupation ceilings). I believe these migrants are now coming through the 457 visa program. With the increase in onshore visa grants (migrants already in Australia on temporary visas), migrant cooks are now being employed by Australian businesses, instead of being granted an independent skilled visa. To me, this is a positive development however not something you would have seen in the public discourse to date. These migrants have a job  in the occupation that they are trained to do. The anecdotes about migrants with MBAs driving taxis are a hold over from the period prior to the reforms. So while cooks and hospitality has been growing very strongly under the 457 visas, it is unknown if this has actually changed the real number of migrants working in the industry or if this is a consequence of much needed legislative reform.

This an example of a highly complex set of factors effecting the composition of the labour market and the size of the population amongst a host of others. Australians can understand nominal and real GDP figures and the vagaries of the foreign exchange market because of a sustained public education by public economic discourse. Yet our demographic future ensures that these questions of immigration will soon also become necessary to understand, how the ebb and flow of the economy and the intersection of different migration programs will play an increasing role in the coming decades.

Instead of the false question of migrants taking Australian jobs, public discussion about migration has a long way to come. What do we want our migration programs to achieve? Should migrants be used to fill long term labour market deficiencies? What protections should migrants have under the law? How should temporary migrants be integrated into Australian society, if at all? Should Australia ‘invest’ in a massive influx of migrants while we are in the position to be able to? What associated policies, such as physical and social infrastructure, is required as a complement to Australian immigration? These are the questions of a contemporary, mature immigration debate in Australia. Mares’ article, to his immense credit, underscores how the conversation is still stuck in the past.