Temporary entrants in Australia: Who is left and what is to come

After peaking at 2.41 million in December 2019, the number of temporary entrants in Australia fell to 1.67 million by the end of July 2021, a fall of 30.7%.

The decline contributed to an unprecedented negative net overseas migration of 95,300 in the 12 months to March 2021. This was the largest negative net overseas migration on record with the previous largest negative net overseas migration being negative 12,117 in 1931.

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Chart 1 shows that the biggest decline in temporary entrants in Australia was due to the net departure (or shift to other visa types) of:

Visitors: fell from 635,109 in December 2019 to a low of 28,714 in March 2021. Given visitor visas are generally for only six months, the bulk of this decline took place in the six months from December 2019 to June 2020. Visitor numbers increased to 41,362 in July 2021. This would partly be visitors allowed to enter under the international arrivals cap but mainly onshore applications for visitor visas from temporary entrants already in Australia on other visas;
Students: after rising rapidly since 2012, fell from 567,924 in March 2020 to 367,763 in July 2021, a decline of 35%. Very few students have been allowed entry under the international arrivals cap.
Working holidaymakers: had been falling for 6-7 years (peaked at 170,696 in March 2013). The decline accelerated from March 2020 to a low of 35,325 in July 2021;
Skilled temporary entrants: had also been falling for 6-7 years (peaked at 196,934 in September 2014). The decline accelerated from 2017-18 and then again from March 2020. Skilled temporary visas granted in 2020-21 were down 18.5% compared to 2019-20. The decline has slowed during the latter part of 2021 as more skilled temporary entrants have been permitted under the international arrivals cap; and
Temporary graduates: had been rising steadily over the past 6-7 years peaking at 107,865 in September 2020 before declining to 88,694 in June 2021, a decline of 17.8%. The bulk of the decline is due to temporary graduates moving onto other temporary visas and permanent residence visas associated with the migration program focusing on people already in Australia.

Source: data.gov.au.

The decline in these temporary visa categories was offset by a large increase in the number of bridging visa holders which had been increasing for many years. The rate of increase accelerated from 191,655 in December 2019 to a peak of 359,981 in March 2021. That has subsequently declined to 302,654 in July 2021 as the Department of Home Affairs proceeds to clear various backlogs.

No details are publicly available on the driver for the large increase in bridging visas but are likely to be linked to a mixture of applications for family visas as well as student visas and asylum seekers.

Skilled temporary entrants granted permanent or provisional residence

Skilled temporary entry has long been a key pathway to permanent residence. This also reduces the stock of skilled temporary entrants in Australia.

In 2019-20, 37,900 skilled temporary entrants were granted permanent residence (around 27% of the Migration Program and 38.1% of the skill stream). In 2020-21, the number of skilled temporary entrants securing permanent residence fell to 31,680 of which 28,500 were in the skill stream.

*Source: Skilled Temporary Entry Report, DHA Website.*

Migrant flows from China

Temporary entrants from China peaked in September 2019 at 304,202 and have subsequently declined to 123,454 in July 2021, a fall of 59%, which is substantially higher than the overall decline of 30.7%.

Student visa holders from China peaked at 169,218 in March 2019 associated with the start of the academic year. They have declined subsequently to a low of 53,614 in July 2021, a fall of 68%. Once again a significantly larger fall than the overall student visa holder decline of 35%.

Temporary graduates from China fell from a peak of 17,104 in June 2019 to 9,410 in July 2021, a decline of 45%. That compares to the overall decline in temporary graduates of only 17.8%.

Chinese student and temporary graduate numbers began declining well before the start of the pandemic and the decline has continued at a rapid rate. In future, China may never again be our main source of students.

Skilled temporary entrants from China peaked in March 2016 at 11,945 and have fallen to 4,338 in July 2021, a fall of 63.7%.

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Migrant flows from India

Temporary entrants from India did not peak until March 2020 at 270,707 and have declined to 204,573 in July 2021, a fall of only 24.4%.

Indian student visa holders peaked in June 2020 at 108,203 and fell to 75,103 in July 2021, a decline of 33,100 or 30.6%.

Temporary graduates from India peaked at 34,598 in September 2020 and declined to 29,219 in July 2021, a fall of only 15.5%.

Skilled temporary entrants from India peaked at 40,880 in June 2015 and fell to 16,027 in July 2021, a decline of 60.8%. The decline in skilled temporary entrants reflects not just the impact of the pandemic but also policy tightening in 2017-18.

Bridging visa holders from India continued to increase until March 2021 peaking at an astonishing 78,491 before declining to 67,999 in July 2021.

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The overall consequences

The immediate impact of the decline in temporary entrants has been felt by Australia’s international education and tourism industries. How quickly these industries recover once international borders reopen remains uncertain.

By March 2022, the stock of students in Australia is likely to have fallen to around 300,000 unless measures are implemented to enable more students to enter under the international arrivals cap.

International tourists may be the last group allowed to travel to Australia and the decline in working holidaymaker numbers will also take time to reverse, especially with the creation of new visa categories and conditions that will increase competition for the jobs they usually undertake.

Over the longer term, both international education and tourism will suffer from Australia’s deteriorating relationship with China. It is highly unlikely China will again be Australia’s main source for students and international tourists.

Moreover, the policy tightening for overseas students from India, Nepal and other major student source countries in September 2019 will also limit growth.

The assumption in the '2021 Intergenerational Report' of net overseas migration averaging 235,000 per annum over the long term is looking decidedly doubtful unless the Government is planning to increase the intake through its new commitment to low skill guest worker visas.

That would fundamentally change Australian society.

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.