Politics Analysis

Immigration to Australia still short of pre-pandemic levels

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Immigration Minister Andrew Giles (image by Dan Jensen)

Since late 2021, both the former Coalition Government and the new Labor Government have been seeking to boost immigration levels. 

This was mainly to address labour shortages but also to assist the international education and tourism industries.

By the end of August 2022, the overall volume of arrivals and departures had returned to over half of pre-pandemic levels (see Chart 1).

Source: ABS overseas arrivals and departures.

Long-term and permanent movements, for which we only have data to the end of July, has returned gradually driven mainly by overseas students. Net long-term and permanent arrivals from November 2021 to July 2022 exceeded departures by 115,580 (see Chart 2). For the same period in 2018-19, long-term and permanent movements were 236,270 and for the same period in 2017-18, long-term and permanent movements were 226,670.

Source: ABS overseas arrivals and departures.

From a nationality perspective, international movements, and in particular net movements, have returned most quickly for India (see Chart 3). Total arrivals of Indian nationals since November 2021 exceeded departures by 124,940.

Source: ABS overseas arrivals and departures.

Given seasonality factors (UK citizen arrivals during the Australian winter is generally low), the movement of UK citizens is returning gradually (see Chart 4). Arrivals of UK citizens since November 2021 have exceeded departures by only 7,640.

Source: ABS overseas arrivals and departures.

The movement of NZ citizens is also returning gradually (see Chart 5). Since November 2021, arrivals of NZ citizens exceeded departures by 13,220.

Source: ABS overseas arrivals and departures.

The movement of Chinese nationals has been the slowest to return and remains well below pre-pandemic levels. This may partly be due to ongoing COVID-19 lockdowns in China as well as geopolitical factors (see Chart 6). Nevertheless, arrivals of Chinese nationals since November 2021 have exceeded departures by 65,480. This mainly relates to students.

Source: ABS overseas arrivals and departures.

The most significant change has been the movement of Australian citizens which in volume terms is around three-quarters of pre-pandemic levels (see Chart 7).

Source: ABS overseas arrivals and departures.

Since November 2021, departures of Australian citizens have exceeded arrivals by an extraordinary 312,660. In the period from November 2017 to August 2018, the net movement of Australian citizens was only negative 173,370 while for the period November 2018 to August 2019, the net movement of Australian citizens was negative 138,300.

While the large excess of departures over arrivals is most likely Australians taking a northern hemisphere holiday, there would also be a component that is Australians taking up longer-term job and career opportunities overseas. The extent of this may be revealed in the next few months but is likely to be contributing to labour shortages in Australia as well as having a negative impact on net migration in 2022.

Movement by visa category: Permanent residence

The ABS publishes data on the movement of permanent residence visa holders split into three groups. The first group is family migration visa holders (Chart 8).

Source: ABS overseas arrivals and departures.

While the volume of movement is rapidly approaching pre-pandemic levels, departures have exceeded arrivals since November 2021 by 5,250. This is likely to reflect family stream migrants visiting family and friends overseas.

The second group of permanent visa holders are humanitarian and other visa holders, mainly people on Resident Return Visas (RRVs).

The largest of this group are RRV holders who tend to mainly leave Australia before Christmas and return in the new year. Aside from those peaks, the volume of movement of this group is not significantly below pre-pandemic levels (see Chart 9). Since November 2021, departures from this group have exceeded arrivals by 8,000.

Source: ABS overseas arrivals and departures.

The final permanent migration group are skill stream visa holders.

While the movement of this group has also reached around 50% of pre-pandemic levels, arrivals since November 2021 have exceeded departures by 8,700. That is very small for a nine-month period and likely reflects the fact the bulk of skill stream permanent visas since November 2021 have been granted to people already in Australia.

This is likely to change during 2022-23 as state governments increasingly nominate skilled migrants from overseas to meet their skill needs.

Source: ABS overseas arrivals and departures.

Movement by visa category: Temporary residence

As always, students will be the key to the return of net migration to pre-pandemic levels. When international borders re-opened at the end of 2021, students returned rapidly over the period November 2021 to March 2022 (see Chart 11).

There wasn’t the usual large net departure of students in June 2022 and the surge in student arrivals in July and August 2022 was not as large as had been the case prior to the pandemic. There were, however, record numbers of offshore student applications in June, July and August 2022. Arrivals in July and August 2022 were partially held back by a tightening of student visa policy associated with a rising incidence of fraud. This is likely associated with the unlimited work rights that now come with Australia’s student visa.

Source: ABS overseas arrivals and departures.

Since November 2021, there has been an excess of student arrivals over departures of 123,250. This compares to 52,670 in the same period in 2018-19 and 71,120 in the same period in 2017-18.

Students will undoubtedly be the single biggest contributor to net migration in 2022. At some stage, the Government will need to tighten the policy on student visa work rights if we are to return to promoting our student visas on the basis of education quality.

The movement of skilled temporary entrants fluctuates significantly with the state of the labour market (see Chart 12). While the volume of movements of these visa holders is approaching pre-pandemic levels, the current state of the labour market would suggest these should have increased more rapidly. The bureaucratic nature of these visas appears to be holding back take-up.  

Source: ABS overseas arrivals and departures.

Nevertheless, the net movement of temporary skilled visa holders was significantly higher in 2021-22 at 16,390 compared to negative 650 in 2018-19 and negative 1,660 in 2017-18.

Overall net movement: November to August

We can get an indication of how rapidly immigration is coming back by comparing net movements in the November 2021 to August 2022 period with the same periods in the two years prior to the pandemic. Table 1 provides net movement data for these three periods.

Table 1: Net movement from November to August

 

2017-18

2018-19

2021-22

Permanent Family

7,750

5,230

-5,250

Perm. Humanitarian and Other

-1,350

9,820

-8,000

Permanent Skill

26,050

14,930

8,700

Total Permanent

32,450

29,980

-4,550

Students

71,120

52,670

123,250

Skilled Temporary

-1,660

-650

16,390

Visitors

45,550

66,360

259,200

Temporary Work

-3,690

-8,470

36,280

Temporary Other

-9,760

-19,210

-26,630

NZ Citizens

9,900

7,700

13,220

Australian Citizens

-173,370

-138,300

-312,610

Total

-35,860

-9,920

104,500

Source: ABS overseas arrivals and departures.

Table 1 highlights that the pattern of movements in the November 2021 to August 2022 period has been significantly different to the pattern in the same periods in the two years prior to the pandemic.

The key areas of uncertainty are:

  • Australian citizens who may make a very large negative contribution to net migration in 2022 unless there is a surge in Australian citizens returning over the next few months; and
  • Visitors changing visa status after arrival may make a large positive contribution to net migration unless there is a significant increase in visitors departing over the next few months.

Using long-term and permanent movement data as a guide, net migration in 2022 will be well below levels prior to the pandemic.

However, the overall movement data suggests a comparatively high level of net migration in 2022.

It may take some time to resolve this uncertainty.

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.

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