Politics Analysis

State nominations for skilled visas lagging behind expectations

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State and territory governments will be reliant on the boom in student, visitor, working holiday maker and skilled temporary entry arrivals in 2022 to meet their 2022-23 skilled visa allocations.

At the end of December 2022, state and territory government skilled migrant nominations were still running well behind pro-rata against their record allocations for 2022-23. Apart from South Australia, no state or territory was anywhere near pro rata halfway through the program year. Cranking up permanent skilled migration is a slow process.

The state and territory nominations in 2022-23 to the end of December 2022 for visa sub-class 190 are: 

  • ACT: 411 (with 2,025 allocation places available); 
  • NSW: 2,375 (9,108); 
  • NT: 298 (600); 
  • QLD: 712 (3,000); 
  • SA: 1,512 (2,700); 
  • TAS: 931 (2,000); 
  • VIC: 4,105 (11,500); 
  • WA 830 (5,350). 

The state and territory nominations in 2022-23 to the end of December 2022 for visa sub-class 491 are: 

  • ACT: 855 (2,025); 
  • NSW: 871 (6,168); 
  • NT: 297 (1,400); 
  • QLD: 472 (2,000); 
  • SA: 2,846 (5,300); 
  • TAS: 565 (2,250); 
  • VIC: 1,082 (3,400); 
  • WA: 420 (2,790).

Combined with the record invitations in the skilled independent category to date (59,182), the Department of Home Affairs (DHA) will need a massive acceleration in visa grants from January to June 2023 to deliver the 2022-23 migration program. The bulk of this is again likely to be from temporary entrants in Australia in 2022.

Western Australia in particular is a long way behind its allocation. It has been working hard at attracting more skilled migrants and recently announced that it:

... has received an overwhelming amount of applications for the State Nomination Migration Program. To allow adequate time to process the large volume of applications prior to the end of the program year, invitation rounds for the remainder of the 2022-23 State nomination program year will be brought forward, and run in the first week of each month, commencing February 2023.

This surge in interest will have been driven by the boom in students, visitors, working holidaymakers and skilled temporary entrants who arrived in 2022. Nevertheless, Western Australia will need to make its nominations quickly to enable DHA to process the subsequent visa applications before the end of June 2023.

Queensland State Migration’s latest advice suggests concerns that the Commonwealth’s many invitations for the Skilled Independent category will dry up the pool of expressions of Interest in DHA’s skill select system who are interested in migrating to Queensland. It is encouraging agents and lawyers to register clients who are already in Queensland with its migration unit. In other words, it too is relying on temporary entrants already living in Queensland or have recently arrived in Queensland.

The Victorian Government is encouraging potential migrants to move to regional Victoria to secure a SC491 nomination.

The messaging on the NSW Government migration website seems to have changed little despite it too being significantly behind pro rata.

Further Outlook

Apart from a massive increase in skilled migration visas being issued by June 2023, Commonwealth and state governments will also have an eye on how much the labour market may weaken in 2023-24 after a record increase in the number of people employed in 2022.

In 2022, the number of employed people increased by an astonishing 469,700 while the number of unemployed people fell by only 100,600 and the participation rate increased by only 0.4 percentage points. In other words, a very large portion of the increase in employed people and the 72 million hours increase in hours worked was due to new arrivals net of departures.

This will have contributed to a level of net migration in 2022 and 2022-23 well above the 235,000 forecast by Treasury. But Treasury is also forecasting that the labour market in 2023-24 may be very different with only a 0.75 per cent increase in employment and a rise in the unemployment rate.

While business lobby groups will continue to urge a further increase in the migration program (as they always do), the Commonwealth Government is likely to be wary of this. On the one hand, it will have seen a rapid increase in the number of temporary entrants in Australia to whom it will want to provide a pathway to permanent residence.

On the other hand, in a weakening labour market, many temporary and new permanent residents will struggle to secure skilled jobs. Most of these people have no access to social support and hence will have to accept whatever jobs they can get at whatever wage rates.

The already overwhelming workload of the Fair Work Ombudsman will increase sharply.

If unemployment rises significantly, state and territory governments are likely to be cautious about continuing to nominate large numbers of migrants other than in key occupations (in health, education, traditional trades and so on).

How Commonwealth immigration policy responds to a weakening labour market will likely be a hot political issue in 2023-24. We may get some indication of how it may respond when the interim report of the Parkinson Review is released in February ahead of ministers Clare O’Neil and Andrew Giles taking forward their 2023-24 migration program cabinet submission. The outcome of that will be announced with the May Budget, after consideration this April.

As always, the key to the immigration policy response will be overseas students who desperately need a new approach.

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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