The mineral boom and immigration policy: skills Australia debunks the myths.

Author:Birrell, Bob

The Australian Labor Government has pursued a high migration policy since it came to office in late 2007. This has been justified by claims that it is needed to provide scarce skills for the resources industries. Modelling of employment demand by industry by Access Economics for Skills Australia shows that this justification is based on myths.


The recent announcements on population policy by the new Prime Minister, Julia Gillard, have invigorated the population debate. Gillard's insistence that population policy must reflect sustainability objectives appears to be in conflict with the policy prevailing during the Rudd Prime Ministership. Confusion now reigns as to what sustainability considerations may mean for the scale and composition of Australia's immigration program. Do they imply that the previous policy commitment to high migration was mistaken and that immigration should be reduced? There are now even conflicting messages among government and media commentators, as to whether Labor ever was committed to a target figure of 35.9 million persons by 2050 (which was the middle range projection published by the Treasury in the Third Intergenerational Report (IGR3) in February 2010). Journalist Josh Gordon, in The Sunday Age, exemplifies the view that the Labor government had not committed to such a target:

Australia has never had a specific population 'target'. This is exactly why Rudd appointed Agriculture Minister Tony Burke as Australia's first population minister. It was Burke's job to examine the question of how big we want to become, balancing competing environmental, planning and economic imperatives. (1) Until we see firm indications that Labor will reduce immigration, Labor's talk about sustainability is mere window dressing. Since the Rudd Government came to power in late 2007, it has pursued a record-high migration policy. The government has also stated a long-term commitment to net overseas migration (NOM) of around 180,000 per year. This would deliver at least the 35.9 million population projected by the Treasury in IGR3. Furthermore, as indicated below, the Department of Immigration and Citizenship (DIAC) has repeatedly affirmed that the government's immigration policy is designed to deliver the required level of NOM and that it believes this policy to be in the national interest.

Nevertheless, Prime Minister Gillard is correct in highlighting the Labor government's previous failure to consider sustainability issues in its framing of immigration policy. The continued neglect of these issues was recently acknowledged by Labor's Immigration Minister, Senator Evans. During the 2010 Senate Estimates hearings, he stated that: 'There were no mechanisms when we came to government for dealing with how we set migration program numbers and what the impacts were of those numbers'. (2) Admitting that no serious account had been taken of sustainability issues, he went on:

... as you know, the permanent migration program in this country is run largely on the basis of demand for labour, and that is obviously linked to our economy. What we do need to do is [to] discuss ... the sustainability issues that go with population growth. I, for one, am very interested in us making progress on that, because I think it has been a neglected area of public policy. (3) This article examines the rationale behind the Labor Government's and DIAC's stance of privileging the delivery of migrant skills over all other factors in setting immigration policy. The core of this rationale is the skill needs of the resource industries. We then examine this rationale in the context of recent research commissioned by the Labor Government's new advisory body on skill training, Skills Australia. This research makes a strong case that Australia's migration program is about meeting the skill needs of the city-building and people-servicing industries in the major cities. It has little to do with Australia's resource industries.


The drive to recruit skilled, blue-collar workers

Shortly after gaining office, in February 2008, the Rudd Government added 6,000 places to the skilled migration program for 2007-08. At the time of the May 2008 Budget there was a further increase to the skilled program to 135,300 for 2008-09. (4) This was 33,500 higher than the original 2007-08 skilled program set by the former Coalition Government. The stated reason was that increases were needed to pre-empt skill shortages, particularly in the resource industries.

The incoming Rudd Government feared that these shortages might lead to a wages break-out or perhaps to bottlenecks in the construction phase of major resource projects. The resource industries were most worried about shortages of skilled trades-persons. According to our informants, (5) all government departments, including DIAC, were instructed by the Prime Minister's Department to prioritise their activities in order to meet this challenge. In DIAC's case, the instruction was to maximise its efforts to recruit skilled migrants.

The influence of concerns about shortages of skilled tradespersons and other blue-collar workers can also be seen in the government's early priorities for domestic training. The incoming government announced that it intended to massively increase the number of vocational training places. In April 2008, the new Productivity Places Program was introduced to fund 711,000 additional training places over the period 2007-08 to 2011-12. All these places were to be at the vocational certificate II, III, and IV levels and, to a lesser extent, at the diploma level. (6) By contrast, since it came to power, the Rudd Government has promised to fund only 50,000 additional university places. (7)

This was an extraordinary decision given that, at the time, most of the job growth in the Australian economy was at the management, professional and higher technical levels where a degree is normally the minimum entry requirement. (8) Partly as a consequence, most of the skilled migrants attracted to Australia in recent years have held professional qualifications. (9) There were some shortages in the trades area in 2007 and 2008, particularly amongst persons willing to work in remote mining locations. But overall, the rate of growth of employment in trade occupations has been about half that of growth in employment in the professions. (10) Yet, the notion that present and likely future skill shortages are primarily in the trades and operative area persist to this day. Here is the Minister for Immigration, Senator Chris Evans, again speaking to the Senate Estimates hearings in February 2010. Evans stated that:

... we are more likely to see shortages in the next little while in key engineering, construction and trades areas as the economy picks up and because of the investment in infrastructure we are starting to see some shortages in those areas. Skills Australia and others will make assessments as to which trades may be in short supply. For instance, in my own state of Western Australia a number of very large projects are likely to take off in the next year or two--oil and gas and mining with Rio, BHP et cetera. Construction workforces are going to be required in their thousands. Already we are starting to hear concerns about skills shortages in some of those construction and mining trades areas. I am just signalling clearly that that is...

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