Work cut out for Government in managing net migration

The Labor Government is still doing its best to control the visa system mess left by the Coalition, with data indicating there is still much work to do. Dr Abul Rizvi reports.

THERE ARE INDICATIONS that net migration in the 12 months to September 2023 peaked at around 500,000. For net migration in 2023 to be significantly less than 500,000, net long-term and permanent movements for the December quarter will have to be less than 108,000. We will not know that outcome until mid-February and we will not know the Australian Bureau of Statistics (ABS) preliminary estimate of net migration for 2023 until July 2024.

Over the next month, we will get further data that may help confirm that.

By mid-December, the ABS will have released:

net long-term and permanent movements data for October 2023. The Government will be hoping this comes out at less than 15,000; and
net student movements for November 2023. The Government will want this to come out at significantly more than negative 10,000.

Albanese Government will hope net migration has peaked

There are indications that net migration has reached its highs and may begin to trend down, writes Abul Rizvi.

Temporary entry stock data

The latest publicly available data we have on the number of temporary entrants in Australia is for end September 2023 at 2.64 million. During December, the Government may release temporary entrant stock data for October and possibly November.

In terms of the number of temporary entrants in Australia, the key visa groupings to watch for will be:

Bridging visa holders which had again started to grow from 176,856 at end June 2023 to 191,235 at end September. This growth was surprising given how critical the Albanese Government has been of the Coalition Government for allowing massive growth in bridging visa holders to a record 373,109 at end March 2022 — that was a red light for a visa system in a complete mess that former Department of Home Affairs Secretary Mike Pezzullo ignored. Part of the bridging visa group will be onshore applicants for student visas, temporary graduates, COVID visas and asylum seekers. The Albanese Government will want to limit further growth in bridging visa holders but may find that difficult given the likely surge in applications for temporary graduate visas in the next two months.
The number of NZ citizens in Australia should start to decline as the new direct pathway to Australian citizenship takes effect. This will be offset by a rising net number of NZ citizens arriving in Australia as the labour market in NZ has started to deteriorate more quickly than in Australia. At end September 2023, NZ citizens in Australia had grown to 717,718.
Students who had grown rapidly to 664,178 by end September will be watched very closely. They are unlikely to increase significantly until the first three months of 2024. Government officials will be watching that like a hawk, particularly offshore student visa applications.
Visitor numbers will rise very significantly over the next few months. The key will be the portion of these that extend stay long-term. The Government has already started ramping up refusal rates to try and dampen the contribution of visitors to net migration. This will make the tourism industry, various business groups and some migrant communities angry.
After growing to an astonishing 214,585 by end September 2023, the Other Temporary (employment) group that includes holders of the COVID visa (part of sub-class 408) should see slowing growth as the Government has at last closed this to totally new applicants. The group also includes Pacific Australia Labour Mobility (P.A.L.M.) visas (sub-class 403) which may continue to grow. How this group is managed over the next few years will be a major challenge, especially if few of them have completed post-secondary courses that are valued by employers but have been living in Australia for many years and do not wish to leave.
Skilled temporary entrants (old SC 457 and now 482) may continue their slow growth assuming the labour market remains strong. These reached 139,736 at end September 2023. A sizeable portion will secure employer-sponsored permanent residence but those that don’t will need to secure another sponsorship when their current visa expires but with a substantially higher salary. That may be difficult if the labour market weakens.
Temporary graduates fell slightly in the September quarter of 2023 to 193,277 but applications for this visa will rise in the December quarter as students completing their courses apply for this post-study work rights visa. A portion of this group will secure a state-nominated visa or a skilled independent visa during '23-'24.

Both major parties shirk responsibility for migration management

Ever since Kevin Rudd was shouted down for believing in a “big Australia”, no politician has wanted responsibility for long-term migration management.

The two offshore visa application groups the Government will be watching most closely over the next few months are students and working holidaymakers.

Chart 1 shows that September 2023 was the first month since January 2022 that offshore student visa applications did not set a new monthly record. The Government will be hoping offshore student applications in October will be significantly less than 23,000, less than 33,000 in November and less than 42,000 in December. If that does not occur, the Government will continue to use high refusal rates to temper growth in the student contribution to net migration.

However, using subjective criteria to sustain high refusal rates is both poor policy and practice. It is unsustainable.

Working holiday maker applications in the December quarter of 2022 were 56,638. It is highly likely that will be exceeded in the December quarter of 2023. That will be worrying the Government in terms of its contribution to net migration.

The Parkinson Review recommended abolishing second and third-working holidaymaker visas for those who complete a minimum amount of work in regional Australia, particularly farm work. The farming and regional tourism lobby groups will be fighting that idea tooth and nail. The other issue the Government would have to deal with is bilateral agreements with nations on WHM visas. These cannot be renegotiated quickly.

Government between a rock and a hard place on permanent migration program

In its attempt to repair the immigration system chaos caused by the Coalition, the Albanese Government has instead created a new set of challenges to overcome.

Tighter student and temporary graduate policy

The Albanese Government may soon release its migration strategy which will undoubtedly include measures to tighten immigration policy, particularly for student visas.

While that is highly unlikely to include caps on student visas as recommended by some (those would just create chaos), it is possible the strategy will:

increase student visa application fees — governments are always happy with additional revenue but if the objective is to reduce applications from low-performing students and attract high-performing students, higher application fees would be a poor tool; and
increase English language requirements — that would be fine but may have only a marginal impact on overall demand despite concerns of the international education industry. A key would be to extend English language testing to more “pathway” and “foundation courses”. These courses are largely designed for low-performing students with minimal English skills.

A better approach to targeting high-performing students would be to use national university entrance exam results in our major source nations. There may be limited time for changing regulations to put that into effect unless the Government chooses to use a ministerial direction.

The Government will also want to tighten temporary graduate visas. However, it will want to do so without creating the impression it was wrong to make these more generous from 1 July 2023. The international education industry will strongly criticise any tightening of temporary graduate visas as these are a major marketing tool. That industry seems to be living in a fantasy world if it believes the Government won’t tighten student and temporary graduate policy.

Long-term target for net migration

However, the crucial question is whether the forthcoming migration strategy will include a long-term target for net migration and a framework for managing this target (or at least foreshadow a process for developing these). Until now, the Government has insisted Treasury forecasts of net migration are neither targets nor policy. It will be difficult for the Government to stick to this line given the massive blowout in net migration.

Even if the migration strategy avoids talking about net migration, Treasury will publish its updated net migration forecasts in early to mid-December with its Mid-Year Economic and Fiscal Outlook (MYEFO) document.

There really is no running away from the need to better manage net migration for either the Government or the Coalition if it wants to criticise the current blowout in net migration.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.