How are skilled migrants doing?

Author:Birrell, Bob

Australia has experienced a boom in job creation in recent years. This has mainly been at the skilled end of the workforce and particularly among those holding professional qualifications. However, as the accompanying article in this issue notes, the level of domestic training has fallen way below that needed to fill these skilled occupations. (1) In response, the Coalition Government turned on the skilled migration tap. It increased the skilled component of the settler migration program from 53,520 in 2001-02 to 102,500 in 2007-08.

Other sources of permanent migrants have also increased, including spouses and New Zealand citizens. This is partly because immigration begets more migration, most obviously when skill-selected migrants return home for a bride or groom or sponsor other family members. The bigger the recent migrant base the larger these flow-on movements become. To take one spectacular example, in 2006-07 some 39,075 spouses arrived in Australia from overseas or were granted visas onshore, up from 33,994 in 2004-05. (2) By comparison there are currently only about 111,000 marriages in Australia a year.

The incoming Labor Government has inherited this situation. The current signs are that it intends to open the immigration tap even further. In February 2008, the new government added a further 6000 skilled visas to the 2007-08 skilled program. These numbers include both the skilled workers and their dependants. To our knowledge the incoming government is not basing its immigration decisions on any systematic review of the merits of the Coalition policy. It seems to be assuming that the migrant influx actually efficiently fills skill vacancies. However, there has been no recent public release of data on migrant employment outcomes that would support such an assumption. This article fills this vacuum. It provides information from the two main sources of data on migrant employment outcomes: the 2006 census and the Longitudinal Survey of Immigrants to Australia (LSIA).

The skilled migration program has expanded on two fronts. The main front is the points-tested skilled visa categories. The other, though not as large, is the state-specific visa categories, the ostensible goal of which is to increase the flow of skilled migrants to regional areas.


Professionals dominate the intake under the points-tested skilled visa categories. These visa categories are the main source of professional migrants coming to Australia. In 2005-06 there were 26,822 permanent arrivals to Australia who indicated a professional occupation out of a total of 48,865 arrivals who indicated that they were skilled, that is, that they were managers, professionals, associate professionals or tradespersons. In addition, during 2005-06, a further 13,698 skilled visas were issued within Australia to former overseas students who had completed their courses in professional fields at Australian universities. (3)

Given the serious shortages of professionals in Australia in the health, accounting and engineering fields (among others) the incoming migrant professionals should be being snapped up by employers. This is the case for the minority coming from the UK, New Zealand, South Africa and North America--countries hereafter referred to as Main-English-Speaking Countries (MESC).

But there is a large body of evidence showing that migrants with professional qualifications from Non-English-Speaking Countries (NESC) have, in the past, struggled to find professional employment in Australia. (4) Various factors appear to be involved, including training and experience which is not relevant to Australian employers' needs. Many of these migrants also have not possessed the English language communication skills required for professional practice in Australia.

Partly because of these concerns, since 1999 the Australian government has privileged skilled migration applications from former overseas students who have completed courses in Australia. From mid-1999 former overseas students have been given an additional five points on the selection test if they possessed Australian qualifications accredited by the relevant Australian accrediting authority. Previously, such people had had to apply for a skilled migration visa from overseas but, from mid- 2001, they were permitted to apply onshore in Australia for permanent residence and were encouraged to do so immediately after graduation. They were only permitted to apply onshore if they did so within six months of completing their Australian course. Finally, former overseas students who applied onshore were exempted from the requirement, which applies to skilled migrants applying from overseas, that they must possess work experience in their nominated occupation.

Former overseas students, almost all of whom come from NESC countries have responded strongly to these rule changes. By 2005-06 nearly half the principal applicants visaed under Australia's points-tested Skilled-Independent migration category came from the ranks of these students.

In a further move to target the selection system to occupations in short supply, the Coalition Government focused its selection on migrants with occupations listed on the Migrant Occupations in Demand List (MODL). The decision to place an occupation on the MODL is made by the Department Immigration and Citizenship (DIAC) on the basis of advice from the Department of Education, Employment and Workplace Relations (DEEWR). To be included, an occupation usually has to be in 'national shortage' as indicated by DEEWR's survey of the employment market. Applicants with occupations on this list received an extra 15 points on the selection grid. (5) These 15 points are currently crucial for selection under the points tested categories.

In the case of professional occupations, health occupations (including medical practitioners, nurses, physiotherapists and pharmacists) have dominated the MODL list since 2004. But accounting was added in September 2004 and civil engineering in May 2005. Almost all the traditional construction, electrical and metal trades were added in September 2004 or April 2005. Hairdressing has been on the MODL since May 2001 and cooking was added in May 2005. The addition of the traditional trades has improved the prospects of selection for tradesperson in these fields who apply from overseas. As we detail later, the addition of cooking has given enormous impetus to this field of study in Australia for overseas students. (6)

On the face of it, these selection rules should have delivered professionals who met employer needs. Yet evidence has been mounting that they have not. The largest single occupational category within the skilled migration program has been accounting. As noted, accounting was added to the MODL in September 2004. In 2005--06, 3471 accountants entered Australia as settlers with permanent residence visas, most of whom would have been visaed under the offshore Skill-Independent (category 136) visa subclass.(7) Another 6,559 former overseas students with Australian accounting degrees gained onshore skilled migration visas in 2005-06. This 11,000 influx was larger than the around 6,500 domestic annual completions in accounting degrees.(8)

Despite this huge migrant intake, the shortage of accountants continues. The message, growing increasingly insistent from within employer ranks, was that migrant accountants (including those trained in Australia) often lacked the communication skills they were looking for. (9)

In September 2007 the Coalition Government did tighten the visa requirements for skilled migrants, especially those who had been trained in Australia. However, it is far too early to decide whether the reforms have improved the employment situation for skilled migrants.


The Coalition Government promoted a suite of state-specific visas over the past decade. This reflected complaints from some state governments (mainly South Australia and Victoria) and from regional areas that their skill needs were being neglected. The distinctive feature of these state-specific visas is that they involve concessional entry, that is, concessional relative to the selection criteria for the Skilled-Independent visa subclasses.

The largest of these state-specific visas, the Skilled Designated Area Sponsored visa subclass, allows relatives in 'designated areas' to sponsor brothers, sisters, uncles, aunts, nieces, even cousins. The sponsored migrant must meet the minimum English standard and have an occupation listed on the Skills Occupation List (SOL). The SOL covers most professional, associate professional, management and trade occupations regardless of whether they are in short supply in Australia. In addition, the sponsored migrant must have his/her credentials recognised by the relevant accrediting authority in Australia. There is no points test, nor any requirement that their occupation be in short supply in Australia.

Since 2007 this visa has only been initially available on a provisional basis. Applicants must first work in a 'designated area' for two of the three provisional years before they will be eligible for permanent residence. One might imagine that 'designated areas' consisted of regional towns and remote areas. In fact Melbourne and Adelaide are 'designated areas', though not Sydney, Brisbane and Perth. Most of the migrants sponsored under this visa category are settling in Melbourne. (10)

It is hard to see the sense of allowing this open-ended visa category to flourish. Why would a Labor government want to continue, let alone expand, a visa category that delivers thousands of people to a city that is already bursting at the seams, unless there was evidence that this visa category was helping to meet skill shortages?


There are two sources of data on the occupational outcomes for migrants recently arrived migrants. One is the...

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