Migrant deluge creates a giant wave of problems

Bob Birrell, Migrant deluge creates a giant wave of problems
This article was first published in The Herald Sun, 30 September 202

In 2022-23 Australia’s net overseas migration (NOM) is expected to reach 450,000. This is way above the level before Covid of about 250,000. If there are no policy changes this huge influx will continue. We know this is the case because it is largely based on a sharp increase in the number of overseas students and visitors (more on this category shortly). The number of overseas students already in Australia is a record. So is the number of new student visas issued in 2022-23, most of these were issued offshore and are still to move here.
The recruitment of overseas students has built up a head of steam that, if not capped, will generate massive further increases. Most of these students are in the higher education sector, where universities are actively seeking more because of the financial incentives. However, though from a lower base, the numbers visaed in the cheaper English Language and vocational colleges is exploding. This is because these courses offer a much cheaper entry point into our labour market.
Student visas are crucial because they provide a legal right to work here while studying. Once here students can move from one temporary visa to another, thus prolonging their time in our workforce.
A similar process applies to those arriving on a visitor’s visa. Their numbers, as noted, have also surged. A visitor visa offers an easier and less expensive pathway to Australia. Huge numbers are now using this pathway to stay on, mostly on a student visa which they obtain after they have arrived. In 2022-23, some 75,000 visitors were granted a student visa. This number is  unprecedented.
The migrant deluge was not official Labor Government policy. It is an unplanned outcome. Once Covid period restrictions on visaing temporary entrants and travel restrictions were removed, Labor put no constraints in place. It just let the recruiting process rip. The subsequent influx reflects a monumental failure to anticipate the response.
Worse, Labor facilitated the deluge by throwing financial resources at slashing delays in processing visas. It also left the flimsy academic and language requirements and weak financial capacity regulations in place. As long as students have the funds to pay their up-front first year fees, there are minimal requirements on proof that they have enough funds for their subsequent fees and expenses. Decisions on these standards have been left to the universities, who do not have an interest in taking a tough line.
The Government’s failure to anticipate the subsequent migrant deluge is illustrated in spades by the forecasting record of its Office of Population located within The Treasury. In December 2022 the Office projected that NOM for Australia would be 235,000 in 2022-23. Just five months later at the time of the May Budget, the Office adjusted its forecast to 421,000. In fact, as indicated, it is likely to be around 450,000. The Office projects that NOM will reach 350,000 in 2023-24 and 300,000 in 2024-25. This, too, is likely to be an underestimate unless the Government acts to get the recruitment process under control.
Labor has shown no signs of doing so. Quite the contrary.
The Government has flagged its intention to integrate overseas students into our skilled labour workforce. It will do so by creating an easier pathway to a permanent entry visa for those deemed to have skills in short supply. Such promises just add to the inducements for overseas students to enroll in Australia. Also, from July 2023, overseas students who graduate in all fields of science, IT, engineering and health (including nursing) will be allowed to stay on in Australia for at least another two years. (This is on top of the existing minimum two years that university graduates from overseas can remain in Australia.)
Why worry?
First, the sheer numbers of extra people are adding obvious pressure to Australia’s housing affordability crisis, especially rental accommodation. This at its most serious in Sydney and Melbourne, where most recent migrants on temporary visa are moving to. They do so because that is where the overseas student industry is predominantly located.
Second, Labor’s policies of directing overseas student graduates into Australia’s skilled workforce is having serious consequences for domestic students’ opportunities. It is far more lucrative for universities to enroll overseas students than domestic students. Already, our universities graduate many more overseas students than domestic students in engineering and IT. Labor’s new policy of encouraging even more overseas students to enroll in the sciences will prompt our universities to devote more of their teaching capacity in these fields to overseas students. Nursing is likely to be a growth point, again because it is far more lucrative to devote any extra capacity for nurse training to overseas students. This will be at the expense of opportunities for young Australians.

Bob Birrell is the head of The Australian Population Research Institute

Feds must resist visa push from business

Opinion piece by Bob Birrell, published in  The Herald Sun, 26 April 2021

With the recovery from the Covid recession, employer interests have been pressing the government for more migrants.

This lobbying is coming from representatives of employers such as the Committee for Economic Development of Australia, and from industry associations relying on low skilled workers, including the hospitality and horticulture industries.

Federal Parliament’s Joint Standing on Migration (or at least its Coalition members) has endorsed these concerns.

These lobbyists are responding to the collapse of Australia’s annual net overseas migration intake of around 250,000 since the pandemic began.

All assert the decline in overseas student enrolments is a major contributor to this collapse. All claim it is disrupting their access to both skilled and unskilled migrant workers.

They want the Commonwealth government to accelerate the inflow of students and other temporary migrants. As well, they want the abolition of restrictions on their employment, including removal of labour market testing, and the creation of new temporary visa categories which tie migrants to work within specific industries.

The Joint Standing Committee even recommends that places be reserved on flights to Australia and in quarantine facilities for skilled migrants.

Is this advocacy a prelude to major Coalition immigration initiatives? Let’s hope not, because if implemented the consequences will be ugly.

If Australia legislates to create visa which tie migrants to particular industries it will reverse one of the founding principles of our nation — that all residents should be employed on fair wages and conditions.

Also, do we want the overseas student industry to return to its pre-pandemic state, when universities acted like private corporations, maximising revenue from overseas students with scant regard for their pubic role of educating and training Australian students?

By 2018, overseas students made up 41 percent of all commencing students at Melbourne university. At Monash University it was 44 per cent.

It is true that most of Australia’s previous 250,000 NOM derived from temporary rather than permanent migrants. This is because far more temporary migrants were entering Australia than leaving each year.

The result was that by the beginning of the Covid emergency in March 2020 there were 1.5 million temporary migrants in Australia. About 541,000 of these were students at all education levels.

By late February 2021, the number of temporary migrants in Australia had fallen to the still huge number of 1.1 million, with much of the decline due to students. Their numbers had fallen to 441,000.

Do we really need more?

Let’s start with the claim that overseas students are essential to restore a flow of skilled migrants. This is a myth.

Most of the growth in university enrolments came in the business faculties, particularly accounting. These courses were dumbed down to accommodate overseas students with limited academic and English language skills. Only a minority have been able to secure professional level jobs in Australia.

For many, (especially those from the Indian Subcontinent) the value of an Australian degree was that it provided access to the Australian labour market while studying and, in time, a permanent residency.

The Australian government has facilitated this by granting two-year temporary graduate visas to all those graduating from an Australian university. This visa allows a two-year stay in Australia with full work rights.

By late February 2021 there were 102,765 of these temporary graduate visa holders in Australia, up from 96,819 in March 2020. They are in addition to the 441,000 students in Australia as of February 2021.

It will be good to see a recovery in overseas student enrolments. But if it is to occur, it should be on the basis of the quality of their training rather than the access it gives to the Australian labour market.

As to the lower skilled labour markets, a revival of temporary migrant flows, especially students, will boost the relevant workforce. But in doing so it will reinforce employers’ dependence on migrant labour.

The hospitality and horticulture industries illustrate the point. The working conditions and wages in these industries reflect this dependency. Employers do not need to offer jobs attractive to domestic workers.

The tied visa proposals from these industries will make this situation worse. The Restaurant and Catering Industry Association wants a special visa which will limit employment to the hospitality industry.

The National Farmers Federation has for years advocated a similar visa that restricts recipients to work in horticulture. In other words, both want a conscripted workforce.

Governments and employers need to be reminded how contrary these arrangements are to our labour market traditions.

The focus of government should be to put the onus back on employers to make employment in these industries attractive to locals. If this means that coffee or garlic costs a bit more, or the jobs are automated as with robot baristas, then so be it.

Bob Birrell is the Head of the Australian Population Research Institute

Why Treasury migration forecasts matter – and why they’re unconscionably high

Stephen Saunders

By no means did the 2019 federal election arrest our radical immigration economy. The Coalition was set to crank it higher. Labor and Greens would have gone higher again.

In calendar year 2017, net overseas migration to Australia was nearly 242,000. The preliminary tally for 2018 climbs to 248,000.

Now the Treasury is ‘assuming’ net migration to top 270,000 in 2019 and 2020. Yet permanent migration is dropping by 30,000, to 160,000. This apparent contradiction is partly explained by the liberal use of bridging visas.

The long haul is the biggest story. Once only since federation has Australia surpassed 270,000 in net migration. Before 2007, even 200,000 was unknown. How come the figures have gone so high? Why are they barely remarked? And should we stay the course.

High population growth is at the behest of ‘GDP growth’

Technically, net migration is a mouthful. It’s those arriving in Australia and staying (by whatever visa) for 12 months out of 16, less those (who are resident and) leave for 12/16.

This imperfect measure is the best gauge available for the ongoing ‘mass’ of overseas arrivals. Nowadays, the net student arrivals swamp the net permanent arrivals. Net student arrivals also outnumber the net arrivals of temp-workers plus visitors. But note, about half of each year’s permanent-migrant tally is already onshore, on student or other visas.  

In Treasury estimates, natural increase plus net migration equals population growth. Population is set to grow 1.7 per cent in 2019 and 2020, mostly from net migration.

These estimates appear as Appendix A ‘parameters’ in Budget paper no. 3. Australia’s natural increase, births minus deaths, is fairly low and predictable. The cursory explanation in the appendix is unobjectionable, though some may query the projected rise in fertility.

More problematic is the non-explanation of net migration. This setting has a signal effect on voters’ lives and effectively underwrites our high population growth. The appendix merely notes that the population ‘estimates’ hinge on the net migration ‘assumptions’. 

In another sense, it’s no real surprise, if the appendix is uncommunicative. As above, the three main parties are rusted on to mass migration. The Treasurer and Treasury are under no pressure to explain themselves to the public.

Sure, the Budget migration ‘assumptions’ are roughly related to more recent trends. Even then, they’re higher than any actual outcome recorded ever since 2009. Why would Treasury vault the 2019 and 2020 assumptions another 20,000-30,000 above the large and unsustainable 2017 and 2018 outcomes? The Budget papers make no effort to clarify. Yet the answer can be in no doubt. It’s at the behest of the GDP statistic.

Over this past decade, population growth has underpinned more than half of our real GDP growth. The 2018-19 budget prescribed 1.6 per cent population growth for 3 per cent GDP growth. Budget 2019-20 downgraded the 3 per cent, to 2.25 per cent. It seeks 1.7 per cent population growth. This is for 2.75 per cent GDP growth. Which looks unlikely.

Perennially, Treasury is forecasting resurgent GDP growth. It’s not happening. More reliably, population growth powers whatever GDP growth we do get. That’s why Treasury migration and population estimates are so high. ‘GDP growth’ will have it no other way. 

GDP growth is a tolerable measure to begin with, perhaps, in the advanced OECD nations with stable or slow growing populations. Such nations express little interest in imitating the continuing ‘miracle’ of our mass-migration economy. More appealing is the mystique of our migrant Points Test. Which doesn’t really select for skills in demand. Or the mystique of our Strong Borders. Which shutter the sea-lanes, yes, but not the air-lanes.

Measures like real GDP per capita, real wages per capita, and real wealth per household, begin to paint a more realistic picture of the Australian economy as it is experienced by ordinary people. The rich are getting richer as home ownership craters.

While the Budget cashes in its pro forma GDP gains, the Australian states carry the real-world infrastructure and service burdens of steeply rising population. Budget 2019-20 promised a sweetener of ‘$100 billion’ in infrastructure and ‘congestion busting’ over 10 years. Even if it were to be fully realised, still, it’s not enough.

A dominating lobby demands extremely high migration

New Zealanders measure and discuss migration in terms of net migration. Thus we can gauge readily that Labour isn’t meeting its clear 2017 commitment to cut migration. 

By contrast, Australian politicians contest permanent and temporary migration, especially the relatively small humanitarian (or refugee) intake. Net migration is not on the agenda.

Again, the Budgets set the tone. Usually, Budget papers 1-3 avoid the population issue. Their spotlight is on jobs and growth, and the deficit or surplus. As discussed above, the so-called net migration and population ‘parameters’ tiptoe into their appendix.

Budget 2019-20 changed tack somewhat. Upfront, the Treasurer highlighted the Prime Minister’s new population plan (the Plan) and its permanent migration ‘cap’ of 160,000. But, in postwar terms, even that is an extremely high number 1. While the number that really matters is net migration, topping 270,000 in Appendix A. 

In Budget Reply, Labor could have reasoned, you won’t ever cure congestion, with a mass-migration medicine. Quite the contrary. They were keen to up the dose.

With Greens support, they comprehensively outbid the Coalition on migration, promising virtually open-ended migrant-parent visas. Which could only have led to much higher net migration. As it transpired, voters weren’t buying. Not even in the obvious metro (Labor) seats with higher concentrations of migrant voters.

Reflect on the happy implications for the returned government. Opposition telegraphs to government a very wide discretion on migration and population policy. But the government can likely elicit an opposition response, if mooting changes to refugee and asylum policy.  

An analogous point applies to the mainstream media. They scrutinise refugee policy more diligently than migration policy. When the budget was released, generally, the media recycled the budget highlights and migration cap. Rare was the reporter who would write up the migration blowout lurking beneath the cap.

At a societal level, in advanced OECD nations, so-called left-modernism discourages the open discussion of immigration and population. In Australia, the cross-party cheer squad for high migration unites political parties, state and city governments, developers, media, academics, and unions. The Treasury assumptions sync with this Big Australia lobby.

Less enfranchised parties calling for lower migration and population are the electorate (in repeated surveys) and the environment (in repeated State of the environment reports). 

High population growth is both obsessive yet intentional

The government wouldn’t presume to supervise natural increase. As above, it is in any case fairly low and predictable. But the government does supervise net migration. And thereby supervises our turbo-charged (by OECD norms) population growth.

Let’s look at the current ‘Appendix A’ presentation, which debuted in 2009. Up to 2017, budget-night migration and population estimates (carrying time lags of some months in available data) may be compared with end-of-year outcomes.

Over this period, assumed net migration 2 ranges from 175,000 to 246,000. Actuals 3 seesaw between 169,000 and 264,000.  The average annual error of the estimates is 40,000 plus, or 20 per cent plus. Estimated population growth varies from 1.5 to 1.8 per cent. Actuals 4 range from 1.4 to 2.0 per cent. Average annual error grazes 0.2 per cent. 

Comparing the budget-night estimates to the end-of-following year outcomes, assumed migration varies from 180,000 to 250,000. Average error is under 20 per cent. Estimated population growth runs from 1.4 to 1.8 per cent. The average error just tops 0.2 per cent.   

The Department of Home Affairs, it is to be noted here, carries onerous duties to manage diverse visas and their long queues. It has no control over people’s movements out of Australia. Also, it lacks real-time net migration data.

Despite the daunting logistics, Home Affairs is landing the short-run Treasury migration estimates with quite passable accuracy. Yet the common assessment is that visa processing is reprehensibly ‘chaotic’ or ‘out of control’. To the extent that this is true, wouldn’t you think about lowering migration, to relieve the pressure? Not in Labor or ‘progressive’ circles. 

Turning now to the long term, here also, we manage our population. It’s not an accident.

Sure, at 25 million, already we’ve busted the 1998 ABS population forecast for 2051. But those extras didn’t fall from the clouds like rain. Repeatedly, our sovereign government has accelerated net migration, counting GDP gains and largely discounting collateral costs.

Former Prime Minister John Howard and former Opposition Leader Kim Beazley were me-too high immigration men. The latter, during the mining boom, readily acquiesced to ballooning permanent migration and steeply rising 457 visas.

By way of thanks, the miners gelignited Prime Minister Kevin Rudd’s 2010 tax on super-profits. Their boom damaged our overall competitiveness. In a Coalition phase pre GFC, and Labor-Coalition phase post GFC, we’ve hugely increased overseas student numbers and deregulated visa pathways. At cost to systemic quality and local aspirants.         

So it’s not that ABS couldn’t do the maths. The government decisively upped the population momentum. Our average net migration over 2007-2017 — at 220,000 plus — considerably exceeds two multiples of the quarter-century net migration average up to 2006.

With overseas-student numbers possibly peaking, how could net migration ever top 270,000? One analyst has suggested this would rely on a strengthening economy, plus extra chip-ins from working holiday makers, visitors changing status, and the new temporary parent visa. Once again, so much for the spin, around migration and skills in demand. 

On the other hand, net migration might slump, should the economy weaken. But we’ve trumped 170,000 net, every year since 2006. To bolster migration and ‘jobs and growth’, the government could speed up visa processing, tweak visa rules or categories, intensify student drives in India or other markets, or unleash the migrant-parent visas.

Through to 2018-19, Australia trumpets ‘28 years of uninterrupted economic growth’. Surfing on net migration, the government and the Treasury may yet ballyhoo 30. Ordinary households and wage-earners would be left wondering, did they really ‘burn’ for us?

For the long term, the Treasury Intergenerational report assumes 215,000 annual net migration. Again, this is more than twice the average over 1982-2006.

Similarly, today’s ‘illustrative’ ABS projections will admit of nothing but high migration, at levels of 175,000 (call this, lower high), 225,000 (medium high) or 275,000 (very high).

In effect, the Budget is adopting the ‘very high’ ABS option. The Plan, meanwhile, hews to the ‘medium high’ ABS option. Even under these assumptions, Australia’s population would top 37 million, around 2050. By which time Sydney and Melbourne might hit 8 million.

To complete what is a less-than-virtuous circle, governments (notably their urban and transport planners) like to pretend that these brimming ABS numbers are ‘independent’ projections that will need to be accommodated.

Breaking ranks momentarily, even the NSW Premier briefly espoused a ‘breather’ of halving migration into NSW. She had a point. Once again, if you honestly want to ‘bust congestion’, you wouldn’t start off with full-throttle migration, pouring into Sydney and Melbourne.  

Routinely, governments declare, we’ve got a fix, for these self-inflicted crushes. Behold then the Alan Tudge scheme to channel booming population away from big cities. Finally now, our stressed infrastructure will be able to ‘catch up’. Postwar history undermines such claims. As government itself says, few nations are so urbanised. An unyielding 40 per cent of the population occupies two sprawling and increasingly unequal cities.   

When taken as normal, a 37 million in Australia by 2050 skates around unsustainable land clearing, habitat loss, water consumption, and greenhouse emissions. Yet the official Sydney and Melbourne urban plans both take as read a future 8 million. These ‘vibrant’ mega-city vistas are geared to elite economic interests. Not to the ordinary people.        

Never mind the Canberra bubble. Focus on the population bubble. As government prolongs it, so also they prolong the implausible ‘congestion busting’ and ‘decentralisation’ fixes. Thus might they perpetuate our houses and holes (consumption and extractive) economy and its iron-coal-and-students trade. Net migration would better serve the national interest and the voter preferences, if managed at more like its 1980s-1990s levels.

In conclusion

Net migration, the Treasury population lever, is adjusted with little explanation or scrutiny. 21st century government has more than doubled it. Political parties defend this as normal:

* Though the permanent migration ‘cap’ would eventually bite into the migration ‘net’, the latter remains the best year-on-year measure of our true migration levels.

* The net migration tally renders more visible the habitual boosts to immigration, not for the welfare of residents, but for the sake of ‘GDP growth’ and the Big Australia lobby.

* Treasury’s high-migration assumptions scaffold this GDP growth. Dismissing environmental cautions, ratcheting population continues to prop up sputtering GDP. 

* Net migration is geared to 270,000, a high exceeded once before, with population growth at 1.7 per cent, last observed in 2013. It makes a mockery of ‘congestion busting’.

* The true migration and population plans, despite their importance to voters, are by party consent absent from politics. Thus, they default to the Treasurer and Treasury.

* Post-election, Labor continues to brand as a high-migration party, contesting if anything refugee and asylum policy. Not every commentator can fathom the electoral logic of this.

Stephen Saunders (stephen@saunders.net) is a former APS public servant and consultant. A brief version of this article has appeared on Independent Australia. Thanks to Bob Birrell for the original idea and for the comments on this version.


1 It is like catnip to ‘progressive’ commentators to eagerly accept the spin that 160,000 permanent migrants is a sizeable reduction. Again, it’s net migration that matters. Also, if you’ve just had a decade of record high permanent migration, you don’t have to try very hard, to induce a ‘10 year low’ the following year.

2 Net migration and population estimates to 2017 are from Appendix A (B for 2011) of Budget paper no. 3 in Archive of budgets at https://archive.budget.gov.au. Annual percentage population growth estimates are no longer published, as they ought to be. The reader must compute them, from published population estimates.

3 Net migration for 2018 is available as a preliminary figure. Net migration (final) for the years 2009-2017 is read, from each following December’s ABS 3101.0, Australian demographic statistics. The December 2018 issue, now containing the final migration figure for the year 2017, was only released in June 2019.

4 Annual percentage population growth for the years 2009 through 2017 is read from each December’s ABS 3101.0. The figure for 2011 is adjusted here.