Immigration

Budget Review 2018–19 Index

Henry Sherrell

Permanent migration

Planning levels

Recent public and political debate about the appropriate size of Australia’s migration intake has renewed interest in migration policy. Each year in the budget, the Australian Government establishes a planning level outlining how many permanent residency visas to grant. These visas are allocated to the Migration Program (for skilled and family visas) and the Humanitarian Program.[1] This is the Australian Government’s key policy lever to influence the rate of immigration to Australia.

In 2018–19, the planning figure for the Migration Program remains unchanged at 190,000 visas, marking the seventh consecutive year this figure has been used.[2] This was announced in the Regional Australia ministerial budget statement, unlike in past years where the figure was in the Department of Home Affairs Portfolio Budget Statement. This continues the highest planning level on record.[3]

While the headline planning figure has not changed since 2012–13, a number of recent policy decisions are changing the composition and actual size of the Migration Program. The planning level itself has changed from a target to a ceiling, as noted in Minister Dutton’s media release for the 2017–18 Budget.[4] In 2016–17, for the first time, there was a large discrepancy between the planning level and the number of permanent residency visas granted.[5] It may be the case future discrepancies exist for 2017–18 and into the forward estimates period.

A new visa category for New Zealand citizens, announced in February 2016, will see additional long-term Australian residents on temporary visas transition to permanent residency.[6] These people will be counted within the 190,000 visa planning level. The Department of Home Affairs has confirmed over 10,000 visa applications have been submitted under the New Zealand pathway in 2017–18, meaning a greater share of visas in the Migration Program will now be allocated to people already in Australia.[7] This will change the composition of who receives a permanent visa, with fewer people who live overseas directly gaining a permanent visa.  Further, broad policy change to temporary skilled worker visas has resulted in a sharp drop in new visa applications.[8] Over the forward estimates period, both of these policy decisions will place downward pressure on the rate of net overseas migration.

The planning level for the 2018–19 Humanitarian Program will increase to 18,750 places, up from 16,250 in 2017–18. This was announced and funded in the 2015–16 Budget.[9] This will be the second largest Humanitarian Program since the Hawke Government.[10] The Department of Home Affairs Portfolio Budget Statement also introduces the word ‘ceiling’ for the Humanitarian Program.[11] This was previously not the case. In addition, the number of places in the Humanitarian Program is not stated, whereas it was in previous Portfolio Budget Statements.[12]

Retirement category visas

The 2018–19 Budget includes the establishment of a new pathway to permanent residency for holders of retirement category visas, a visa for self-funded retirees who have no dependents.[13] This will be achieved by regulatory amendments. To maintain the overall planning level, people who hold a retirement visa will be allocated a proportion of visas that would have otherwise been granted to people who have applied for parent visas. This will likely increase waiting periods for parent visas, which are currently between six and 30 years.[14] In addition, as people who hold retirement visas already live in Australia, and as most people who gain a parent visa currently live outside of Australia, this change will reduce the number of new migrants to Australia. [15]

Migration, population growth and the Budget

A number of commentators have noted the importance of population growth, and immigration flows, to economic growth and fiscal projections in the Budget.[16] A recent joint Treasury and Department of Home Affairs report concluded the net fiscal impact of the 2014–15 migrant cohort (the Migration Program, the Humanitarian Program and temporary skilled visa program) is $9.7 billion over 50 years.[17] The fiscal effect of new migrants was noted by the Treasurer recently in the context of the debate about the appropriate size of the Migration Program.[18]

It can be difficult to project net overseas migration (NOM) trends. NOM is the net gain or loss of population through people arriving to or departing Australia. For example, in the 2017–18 Budget, the NOM projection for 2017 was 209,018 whereas the actual figure was 242,600, an increase of 16 per cent on the projection.[19]

Table A.2 in Budget Paper No. 3 shows the assumptions for NOM in the 2018–19 Budget. The assumptions show NOM gradually falling from 234,600 in 2018 to 221,400 in 2021.[20] Variations from these assumptions would necessarily flow through to a range of projections in the Budget, including GDP growth and the underlying fiscal conditions.

The NOM budget assumptions over the forward estimates represent a decline from current NOM trends. The most recently available Australian Bureau of Statistics data show in the 12 months to 30 September 2017, the preliminary estimate for NOM was 250,100, a 15.4 per cent increase compared to the previous 12 month period.[21] This level of NOM represents 63 per cent of Australia’s population growth.

Other migration and associated measures

As part of the Stronger Rural Health package, the Australian Government is reducing the number of visas granted to overseas trained doctors to around 2,100 per year. This reduction in visas will redirect $415.5 million over the forward estimates into other health policy priorities. This is the largest saving in the Budget.[22] Australian trained doctors are being encouraged into areas of shortage via a variety of new policies to make up for the reduction in overseas trained doctors.[23]

A new fund for training Australians, the Skilling Australians Fund (SAF), was introduced in the 2017–18 Budget.[24] The SAF imposes a levy on employers who sponsor temporary and permanent skilled migrants. A new measure in the 2018–19 Budget provides for a series of employer refund and exemption provisions. The Australian Government expects to forego $105.1 million over the forward estimates, resulting in an equivalent reduction in payments to state and territory governments via the SAF. The Law Council recommended the Australian Government provide further clarity and consideration for levy refunds in their December 2017 submission on the legislation.[25] This change will require legislation. 

Restrictions on recent humanitarian migrants accessing full jobactive support are being extended from 13 weeks to 26 weeks, generating savings of $68.1 million over the forward estimates. The Australian Government says this is to ‘improve the sequencing of services’ and to promote language services for new humanitarian migrants to Australia. The Minister for Citizenship and Multicultural Affairs, Alan Tudge, recently highlighted the importance of getting new arrivals into work: ‘Our goal should be that people arrive here and immediately have a place to work ...the best place to integrate is in the workplace’. [26] One concern with this measure is that it could impede some new arrivals who are job ready from entering the workforce.

Operation Sovereign Borders and asylum policy

Additional funding for detention, offshore processing and border protection has been a strong focus of recent Budgets. The 2018–19 Budget provides an additional $62.2 million for two years for Operation Sovereign Borders. There are four sub-components of this measure, including offshore resettlement arrangements and regional cooperation initiatives. However the funding breakdown is aggregated into one figure.

The Department of Home Affairs Portfolio Budget Statement notes expenses for Irregular Maritime Arrival Offshore Management is expected to halve from $759.9 million in 2018–19 to $378.4 million in 2019–20.[27] Similarly, expenses associated with regional cooperation are projected to fall from $91.1 million in 2018–19 to $47.3 million in 2019–20.[28] This is likely due to an expected smaller number of people being in offshore management and a draw down on projects facilitating regional cooperation, however an explanation is not provided in departmental budget documents. As the estimated actual expenditure on Irregular Maritime Arrival Offshore Management was double the forecast for 2017–18, these figures may be subject to change.[29]

 


[1].          The budget figures in this brief have been taken from the following document unless otherwise sourced: Australian Government, Budget measures: budget paper no. 2: 2018–19.

[2].          M McCormick (Deputy Prime Minister) and J McVeigh (Minister for Regional Development, Territories and Local Government), Regional Australia–a stronger economy delivering stronger regions 2018–19, ministerial budget statement, 2018, p. 115.

[3].          J Phillips and J Simon-Davies, Migration to Australia: a quick guide to the statistics, Research paper series, 2016–17, Parliamentary Library, Canberra, 2017.

[4].          P Dutton (Minister for Immigration and Border Protection), 2017 Budget–immigration and border protection, media release, 9 May 2017.

[5].          183,608 permanent visas were granted in 2016–17 for a planning level of 190,000. See H Sherrell, ‘Behind the numbers–the 2016–17 Migration Programme’, FlagPost, Parliamentary Library blog, 24 November 2017.

[6].          Department of Home Affairs, ‘An additional pathway to permanent residency for New Zealand citizens’, Fact sheet and Frequently asked questions, Department of Home Affairs website.

[7].          Department of Home Affairs, correspondence with the Parliamentary Library, April 2018.

[8].          H Sherrell, ‘Assessing the effect of recent 457 visa policy changes’, FlagPost, Parliamentary Library blog, 12 January 2018.

[9].          P Dutton (Minister for Immigration and Border Protection), Restoring integrity to refugee intake, media release, 12 May 2015.

[10].       Phillips and Simon-Davies, op. cit.

[11].       Australian Government, Portfolio budget statements 2018–19: budget related paper no. 1.10: Home Affairs Portfolio, p. 51.

[12].       Ibid.

[13].       Australian Government, Budget measures: budget paper no. 2: 2018–19, p. 14.

[14].       Parliamentary Library calculations based on Department of Immigration and Border Protection (DIBP), 2016–17  Migration Programme report, pp. 14–15.

[15].       Ibid., p. 3.

[16].       See M Janda, ‘How the Government’s surplus plan locks in high immigration’, ABC News, 9 May 2018; and J Sloan, ‘Optimistic forecasts crowd out an immigration fix’, The Australian, 9 May 2018, p. 13.

[17].       The Treasury and Department of Home Affairs, Shaping a nation: population growth and immigration over time, , Canberra, 2018, p. 35.

[18].       S Morrison (Treasurer), Interview Neil Mitchell, 3AW, Immigration, corporate tax cuts, petrol prices, transcript, 21 February 2018. 

[19].       Australian Government, Budget measures: budget paper no. 3: 2017–18, p. 88 and Australian Government, Budget measures: budget paper no. 3: 2018–19, p. 84.

[20].       Ibid., p. 84.

[21].       Australian Bureau of Statistics (ABS), Australian Demographic Statistics, Sep 2017, cat. no. 3101.0, ABS, Canberra, 2018.

[22].       Australian Government, Budget 2018–19: budget overview , Appendix D, p. 36.

[23].       For more detail on these policies, see M Biggs, ‘Rural Health Workforce’, Budget review 2018–19, Research paper series, 2017–18, Parliamentary Library, Canberra, 2018.

[24].       For more detail on the Skilling Australians Fund, see H Ferguson, ‘Tertiary education’, Budget review 2018–19, Research paper series, 2017–18, Parliamentary Library, Canberra, 2018.

[25].       Law Council of Australia, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Migration Amendment (Skilling Australians Fund) Bill 2017, and the Migration (Skilling Australians Fund) Charges Bill 2017 [provisions], 22 December 2017, p. 6.

[26].       A Tudge (Minister for Citizenship and Multicultural Affairs), The integration challenge: maintaining successful Australian multiculturalism, speech to the Menzies Research Centre, Canberra, 7 March 2018.

[27].       Australian Government, Portfolio budget statements 2018–19: budget related paper no. 1.10: Home Affairs Portfolio, p. 29.

[28].       Ibid.

[29].       Ibid., and see Australian Government, Portfolio budget statements 2017–18: budget related paper no. 1.11: Home Affairs Portfolio, p. 25.

 

All online articles accessed May 2018.

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