Skilled migration to Australia

Current Issues

Skilled migration to Australia

E-Brief: Online Only issued 5 June 2006

Janet Phillips, Information/E-links, Social Policy Section


Over the last sixty years, Australia s migration program focus has shifted. The original aim of the program was to build up the population for defence purposes. In the 1950s and 1960s, the program aimed to bring in workers to build up Australia s manufacturing industries. By the early 1990s, the aims of the program were more diffuse, encompassing social (family reunification), humanitarian (refugee and humanitarian migration) as well as economic (skilled migration) objectives. Over the last ten years the emphasis of the program has been on skilled migration (both temporary and permanent), particularly to our regional areas.

Today, the Department of Immigration and Multicultural Affairs (DIMA) allocates around 130 000 to 140 000 migration places each year the highest level in twenty years with a firm focus on bringing in migrants with the relevant skills to complement Australia s labour market needs and skill shortages. In 2005-06, 97 500 places have been allocated for skilled migration.

This electronic brief is intended as an overview of Australia s skilled migration program and a guide to the internet resources, research and comment on some of the emerging issues.

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A change in focus

Over the years since Australia s first federal immigration portfolio was created in 1945, the migration program focus and planning numbers have fluctuated according to the economic and political priorities of the day. There have been various peaks in intake numbers, particularly in the late 1960s, and late 1980s. Since the Howard Government came to power in 1996, after an initial dip, there has been a gradual increase in the planned migration intake with another peak of 140 000 for 2005 06.

Migration program planned intake 1995 2006

1995 96

83 000

2001 02

85 000

1996 97

74 000

2002 03

110 000

1997 98

68 000

2003 04

110 000

1998 99

68 000

2004 05

120 000

1999 00

70 000

2005 06

140 000

2000 01

76 000


Source: Ministerial press releases 1996 2005 and DIMA s Overview migration to Australia website.

The government s migration program focus has also moved steadily since the 1980s from encouraging family migration to skilled migration. The latest statistics for settler arrivals, including skilled migrant arrivals, are available on DIMA s statistical publications website.

Migration program settler arrivals 1990 2005

Eligibility category

1990 91

1996 97

2003 04

2004 05


53 934

36 490

29 548

33 182


48 421

19 697

51 528

53 133

Sources: DIMIA Consolidated Statistics 2002 and Immigration Update 2005

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The skilled migration program

Since the 1980s, the government has developed policies designed to target migrants with experience in areas where there is a skill shortfall through its general skilled migration program. In 2004 05 record numbers of skilled migrants were granted visas, accounting for about 60 per cent of the entire migration program.

The current skills in demand are listed in DIMA s Skilled Occupation List (SKOL). Generally an applicant must be under 45, with an occupation listed on the SKOL, with enough points to pass the points test and with a fairly proficient level of English.

Under the skilled or independent migrant selection system, the Migration Occupations in Demand (MODL) List identifies occupations to be allocated extra points under the points test. IT skills featured strongly in the past (they were dropped off the list in 2003), and now health professionals and tradespeople are currently in demand. The current skills points list shows occupations acceptable for permanent migration and the number of points allocated to these occupations.

There are a variety of relevant visas that potential migrants can apply for under the skilled migration program, depending on whether you are applying for an onshore visa, an offshore visa or for a skilled visa as a New Zealand resident. There are also specific requirements to encourage successful business people to settle permanently in Australia and develop new or existing businesses.

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Skilled migration to the regions

In order to encourage skilled migration to the regions where skill shortages are particularly acute, the government has created state and territory specific migration schemes that include the Skilled Independent Regional (Provisional) (SIR) Visa, the Regional Sponsored Migration Scheme and the State and Territory Nominated Independent Scheme. In 2004 05 18 700 visas were granted under the state-specific and regional migration schemes an increase on the 12 720 visas granted the previous financial year (DIMIA Annual Report 2004 05 Part 2, Output 1.1).

Business migrants are encouraged to migrate to the regions and there are various visas available for such migrants. Some business migrants may apply for a Business Talent visa to obtain direct permanent residence if they have high level business attributes and are sponsored by a state or territory government agency.

These schemes mean that it is easier for certain migrants to migrate to regional areas in Australia, and the numbers of regional skilled migrants are certainly rising, but many regional areas are still desperate for skilled workers and tradespeople, and there has been some community debate and discussion on how effective the regional migration schemes actually are.

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Temporary or permanent?

Another change in focus to migration patterns over the last few years has been the change in emphasis from permanent settlement to temporary migration to Australia, particularly by business and skilled migrants.

The granting of both long-term and short-term business visas in Australia has risen markedly. In 2004 05, for example, 339 424 short stay business visas were granted a 13.58 per cent increase on the previous financial year (DIMIA Annual Report 2004 05 Part 2, Output 1.1). In 2004 05 there were also 49 855 long stay business visas granted (40 633 in the previous year), according to an answer to question in February 2006 put to the Senate s Immigration Estimates hearing.

According to DIMA s fact sheet on assisting skilled and business people, the Business (short stay) visa (subclass 456) may be issued for either single entry or for multiple entry. Holders of a multiple entry visa may make any number of journeys to Australia for up to three months on each occasion. Multiple entry visas may be valid for either up to five years, or the life of the passport (to a maximum of 10 years). Applicants must apply for this visa outside Australia.

The Temporary Business (long stay) visa (sub-class 457) allows highly skilled personnel to come to Australia to work for an approved employer for up to four years. The prospective employer must first apply to become a standard business sponsor, which will permit them to sponsor an agreed number of overseas employees over a two-year period. The position nominated to be filled by the overseas employee must meet minimum skill and salary levels.

Many of these temporary migrants go on to settle permanently and add to Australia s brain gain . In fact, there is a growing link between temporary migration and permanent migration, with a temporary visa often being the first step towards permanent migration. In 2004 05, for example, 39 000 permanent visas were granted to people already in Australia on visitor, student or temporary worker visas. The government is encouraging such migration with various measures, including an announcement in 2005 by the Minister, Senator Amanda Vanstone, that from 1 November 2005, overseas students will be able to apply, on completion of their studies in Australia, for an Occupational Trainee Visa to undertake up to 12 months of supervised on-the-job training in their area of expertise. Employers will also be able to offer overseas students practical employment experience on an occupational trainee visa where this leads to registration in their chosen profession in Australia.

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International comparisons

Internationally, most developed countries are experiencing global skill shortages and many are beginning to address the issues with skilled programs or special purpose visas similar to the Australian system. Some are even modelling themselves on the Australian system as, according to international migration expert Professor John Salt, Australia has long been ahead of the game in its skilled migration program and research into immigration policy.

A recent report from the United Nations Department of Economic and Social Affairs/Population Division, World Population Policies 2005, notes that the percentage of developed countries with policies designed to lower immigration fell from 60 per cent in 1996 to only 12 per cent in 2005 and that in general, migration policies in receiving countries are evolving towards greater selectiveness and favouring those who can fill the skills gaps. However, according to this report, while more than 40 per cent of developed countries aim to increase skilled migration to their countries, only 14 per cent are actively pursuing this strategy to date. The US Migration Policy Institute lists competition for skilled workers as being one of the top ten immigration issues for 2005 see the Growing Competition for Skilled Workers web page. This page outlines some of the policies currently pursued by certain developed countries, including Australia, the UK, Germany, New Zealand and Canada.

The UK government plans to introduce a points system favouring skilled migrants similar to the Australian system that is due to be introduced in 2007. The UK s existing Highly Skilled Migrant Program is designed to allow highly skilled people to migrate to the United Kingdom to look for work or self-employment opportunities, but there have been problems verifying skill levels and so the government is keen to more effectively target foreign workers with the skills in demand.

New Zealand maintains both an Immediate Skill Shortage List and a Long Term Skill Shortage List and conducts a regular review of occupational shortages. As part of each review, submissions are sought from industry groups about both the nature and extent of skill shortages in their area.

Canada has a Skilled Worker Visa with a points selection system that assesses the applicant by work experience, language ability and education. This visa allows the successful applicant to migrate as a permanent resident and to apply for jobs available to any resident skilled worker.

The US has been accepting growing numbers of skilled temporary workers, and in November 2005, the United States Senate voted to increase numbers of skilled migrants from 65 000 to 95 000 per year. However, some argue that this is still inadequate and that there is need for a coordinated approach to attracting workers to the US, and a need for more evaluation on how effective the recruitment measures are for meeting employer needs.

A recent report produced for DIMA, Evaluation of the General Skilled Migration Categories 2006, examines contemporary policy approaches to skilled migration in Australia compared to those in Canada, New Zealand and the UK the major current alternative destinations for skilled migrants, along with the US. Ross Garnaut has also compared Australia s and Canada s skilled migration policies and outcomes (see A Comparison of Australian and Canadian Immigration Policies and Labour Market Outcomes).

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The first major review of Australia s skilled migration program since the 1980s, the Review of the independent and skilled Australian Linked categories, was published by DIMA in 1999. The aim of this review was to evaluate the effectiveness of the points test in selecting the relevant skilled migrants able to quickly make a positive contribution to the Australian economy and labour force. The review drew heavily on data from the department s Longitudinal Survey of Immigrants to Australia (LSIA) and led to changes in the government s skilled migration policy.

The follow-up, Evaluation of the General Skilled Migration Categories published in 2006, aimed to further fine-tune skill criteria without reducing the overall intake. This evaluation also drew on data from the LSIA, and has led to further refinement of selection procedures.

The Longitudinal Survey of Immigrants to Australia is surveying migrants who arrived in Australia between September 1993 and August 1995 (LSIA 1) and migrants who arrived in Australia between September 1999 and August 2000 (LSIA 2). The survey is designed to provide the government with reliable data on issues like employment outcomes for migrants, improvements in English language proficiency and the use of settlement services. Results from the survey published to date are listed on the LSIA publications page.

Other government research and inquiries are in progress at present to continue the government s quest to improve immigration and settlement policies, programs and services. The Joint Standing Committee on Migration has conducted several inquiries on skilled migration over the past few years and is currently conducting an inquiry into skills recognition and licensing. Past inquiries have included a Review of skilled migration in 2004.

In January 2006 the Australian Productivity Commission released a report, the Economic impacts of migration and population growth, that argued an expanded skilled migration program would lead to an increase in Australia s productivity. The modelling, conducted on behalf of the Productivity Commission by Monash University s Centre of Policy Studies, found that a 50 per cent increase on current skilled migration places would have a positive effect on living standards and on the labour force.

Major reports released recently on skilled migration include:

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Emerging issues

It is widely acknowledged that there are growing global skill shortages and many countries aware that they must compete with other international markets are attempting to address this with skilled migration programs. Some are concerned that skilled migration movements can create brain drain , but others argue that skilled migration programs lead to brain gain in the long run. For example, Bob Birrell s research (see Immigration in a Time of Domestic Shortages) demonstrates that Australia experiences a brain gain in that it records substantial net migration gains in all high-skill and high-qualification occupational categories. Graeme Hugo s research (see Leaving Australia: a new paradigm of international migration) shows that of the (mainly) young, professional and managerial-level people who leave, many return.

Many developed countries, for example the US, are torn between a desire to bring workers in, and concerns at keeping illegal workers out, even though a great deal of (usually unskilled) work is currently conducted by these unauthorised and unprotected workers in both the US and Europe. Other issues, such as security concerns, can also pose barriers to more open global migration markets. Some argue that there should be far less emphasis on border control and more focus on finding outcomes to the advantage of all parties. Balancing security concerns with economic considerations will most likely be a future challenge for all governments.

Population pressures and economic considerations are also proving to be a delicate balancing act for some Australian state and territory governments. Sydney, for example, has begun to make a shift from its anti-growth policies due to over-crowding, to launching a scheme to attract migrants with skills in the IT, finance, pharmaceutical and biotechnology sectors. Other state and territory governments, in competition for precious skilled workers, are turning to advertising campaigns in an attempt to lure workers from some of the bigger urban centres, such as Sydney, to cities like Canberra.

Internationally, some countries, such as the UK, are reporting that despite increasing net migration figures, job vacancies and skill shortages are continuing to grow, indicating that immigration is helping to fill some unskilled jobs, but having little effect on skills shortages. Some of this is due to the fact that migrant workers often have much higher unemployment rates than the established population. There can also be difficulties with skills recognition for migrants there is an inquiry into skills recognition, upgrading and licensing currently underway by the Australian Parliament s Joint Standing Committee of Migration that will be addressing many of these issues.

There has also been recent concern in Australia that we should be training local workers to fill local jobs. There is particular concern by trade union groups and others that the Trades Skills Training Visa, for example, will undermine any attempt to train apprentices from within the country. The leader of the Opposition, the Hon. Kim Beazley, has also expressed concerns that Australian businesses are favouring skilled migrants over local workers. In reply, the Treasurer, the Hon. Peter Costello, stated that while the government was focused on training locals, we still need to import some skills and skilled migrants can offer an interim solution to many skills shortages. Alternatively, many industry groups are urging the government to bring in more foreign workers as soon as possible to fill skills shortages that they say cannot be filled locally.

While many issues regarding skills shortages and skilled migration programs are continuing to emerge, most would agree that post-war migration has been of benefit to Australia both culturally and economically. In contrast to many European countries in the past, there has been both political (bi-partisan) and community support in Australia for the positive benefits that immigration has brought to the country. As a result, Australia s well-developed skilled migration program is well placed to continue to adapt to the globalisation of the world market place.

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Library publications

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Key references

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Key resources and links

For copyright reasons some linked items are only available to members of Parliament.

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