With record-sized growth in temporary entrants straining rental and job markets, Home Affairs must do more to help struggling migrants secure skilled work and permanent residency, writes Dr Abul Rizvi.
DESPITE A major increase in the permanent migration program, 2022 will go down as the year of the temporary entrant with the fastest growth in temporary entrants in Australia compared to any previous 12-month period.
By end-December 2021, there were 1.66 million temporary entrants in Australia — numbers having fallen sharply after international borders closed in 2020. By end-December 2022, there were 2.39 million temporary entrants in Australia, an unprecedented increase of 722,110 or 43.4%.
This will have been the major contributor to extraordinary growth in the number of employed people in Australia in 2022. This increased by 469,700 but with only a 100,600 decline in the number of unemployed people.
The increase in temporary entrants will also have been the major contributor to the 72 million hours increase in the number of hours worked — an astonishing increase of around 4% in hours worked in a single year. This will also have contributed to strong economic growth but also a tight housing and rental market.
Composition of temporary entrants in Australia
To better understand what is happening, there is merit in looking at the composition of temporary entrants in Australia. (See table below.)
The major portion of the increase in temporary entrants in 2022 was people on visitor visas. These increased from 66,583 by end-December 2021 to 530,283 by end-December 2022.
While the actual number of visitor movements – that is both arrivals and departures – remained well below pre-pandemic levels during 2022, mostly due to few visitor arrivals from China, it is the 546,940 excess of visitor arrivals over departures in 2022 that is out of the ordinary (see Chart 1).
If even a small portion of the excess of visitor arrivals over departures extend their stay for 12 months or more – say 20% – they are counted in net migration and hence population growth. It is for this reason that net migration in 2022 will also set a new record.
Treasury has significantly underestimated net migration in both 2022 and 2022-23. But we will not know how much net migration has been underestimated for 2022 until the Australian Bureau of Statistics publishes its preliminary estimates of net migration around mid-2023.
Students and temporary graduates
Not surprisingly, student numbers were up 141,021 (44.6%) in 2022 to 456,970. This was driven by offshore student visa applications which in 2022 were around 20% to 30% higher than in any previous year — though, final figures are not yet available. The increase was driven significantly by the provision of unlimited work rights which are due to be restricted again from July 2023.
As a result of the record application rate, overseas student numbers in Australia will rise significantly further in the March quarter of 2023. These may surpass the record number of student visa holders in Australia of 633,816 in September 2019.
The growth in student visa holders in Australia will have been tempered by the number of students moving onto temporary graduate visas (as well as those departing). The number of temporary graduates in Australia in 2022 increased by 49,435 or 51.9%. This would be net of those temporary graduates who moved onto other visas including skilled permanent visas, skilled temporary visas and working holiday maker visas as well as those who departed Australia.
In other words, despite a very strong labour market and a record-sized permanent skill stream, the number of temporary graduates in Australia continued to rise rapidly. The risk is that some temporary graduates are finding it difficult to secure a skilled job to be able to move toward skilled permanent or temporary migration. This leaves them in immigration limbo.
Hopefully, the Parkinson review is working on recommendations to better manage our student visa program and pathways to permanent migration.
Other temporary employment visas
The rapid rise in other temporary employment visas – that is employment-based visas other than skilled temporary visas – will come as a surprise to some. These grew by 63,807 in 2022 — an increase of 119%.
This group of visas includes:
- sub-class 403 – temporary work, international relations which increased from 15,238 to 25,094 in 2022;
- Pacific Australia Labour Mobility (P.A.L.M.) scheme visas which increased from 5,856 to 23,654 in 2022; and
- sub-class 408 – temporary activity which increased from 22,006 to 67,038 during 2022.
While there are major uncertainties about the future of the P.A.L.M. scheme, including the design of pathways for these workers to permanent residence, it is the future of people on the special COVID stream of the temporary activity visa that may require policy consideration. Most of these people are likely to be in low-skill jobs that do not provide a pathway to permanent residence but have been living in Australia for a number of years — another group in immigration limbo.
Bridging visas and the visa system
The Albanese Government has invested significantly in reducing the bridging visa backlog by 129,863 or 39%. While there is much more to be done, a smaller bridging visa backlog is a clear indicator of a visa system that is operating better.
Outside the impact on housing, the underestimation of net migration by Treasury will also not be an issue while the labour market remains strong. But Treasury forecasts a major weakening of the labour market in 2023-24. That is when immigration will again become a hot potato.
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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