Skilled temporary entrant stocks rising with no place to go
With numbers of skilled temporary entrants on the rise, the Government may be facing a dilemma with fewer places available in the migration program, writes Dr Abul Rizvi.
THE STOCK of skilled temporary entrants (formerly subclass 457 and now subclass 482 after Opposition Leader Peter Dutton abolished the former because of the (largely unfounded) reputation it had attained) is again rising steadily. Should that be a concern now that unemployment is also rising?
The purpose of the skilled temporary entry visa is to enable employers to fill key skill gaps that they cannot readily fill within the Australian labour market. It is the major source of permanent employer skilled migrants as well as a key pathway visa for students, through the temporary graduate visa, to permanent residence.
The number of skilled temporary entrants in Australia fell from a peak of 196,000 at end 2013-14 to around 143,000 in 2018-19 due to the combination of a weak labour market in 2014-16 and policy tightening from 2017-18. It fell further during COVID to around 90,000 as few arrived while others secured onshore permanent residence.
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With a very strong labour market in 2022-23, the number of skilled temporary entrants in Australia increased to 130,004 at end June 2023 and 178,416 at end August 2024. In 2022-23, 34,850 skilled temporary entrants secured permanent residence of which 23,960 were sponsored for permanent residence by an employer. That fell in 2023-24 to 29,840, of which 19,910 were sponsored for permanent residence by an employer.
In 2023-24, there were 52,100 primary applicants granted a skilled temporary visa, up from 51,610 in 2022-23. The major industry groups sponsoring these workers were Health and Social Assistance (8,000); Professional, Scientific and Technical (7,810); Accommodation and Food Services (4,780); Manufacturing (4,520); Construction (4,210); and Information, Media and Telecom (3,140).
The average salary was $104,800. That is the key reason migrants who are sponsored by an employer (temporary or permanent) make by far the biggest economic and budget contribution. Note that from 1 July 2023, the minimum salary for skilled temporary entrants was increased for the first time in a decade from around $53,000 to $70,000 and again to over $73,000 from 1 July 2024.
The main occupations in 2023-24 were Resident Medical Officer (2,410); Chef (2,280); and Software Engineer (1,880). It is surprising neither nurses nor traditional construction occupations are in the top 15 occupations.
Nurses are by far the biggest single occupation group in the migration program. They seem to be going directly to permanent residence while the current regulatory arrangements in terms of skills recognition and overseas students who may want to undertake TAFE courses make it difficult for traditional construction workers to migrate.
The main source countries for primary visa grants were:
- Philippines - 7,100 in 2022-23 to 9,380 in 2023-24;
- India - 12,150 in 2022-23 to 7,770 in 2023-24;
- UK - 6,110 in 2022-23 to 6,720 in 2023-24; and
- Ireland - 1,830 in 2022-23 to 3,180 in 2023-24.
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The decline in skilled temporary visa grants to Indian nationals is surprising given the large volume of Indian nationals on temporary graduate visas. The Government has made it easier for temporary graduates to secure a temporary skilled visa by reducing the skilled work experience requirement from two years to one year. On the other hand, the costs associated with sponsoring a skilled temporary worker remain high, including the contribution to the Skilling Australians Fund.
In addition, the Government has made several changes to reduce the risk of worker exploitation by further increasing the time that a skilled temporary entrant may remain in Australia after leaving their sponsoring employer to six months. The downside of this change is that it increases the risk that those who leave their sponsoring employer may get left in immigration limbo without a job.
What happens now?
The number of skilled temporary entrants in Australia is starting to reach the point where places in the permanent migration program may not be sufficient for all skilled temporary entrants looking for permanent residence. It makes sense for the Government to give this group priority in the skill stream of the migration program but that may not be sufficient, especially if Peter Dutton's policy to reduce the migration program to 140,000 is adopted by a future Coalition government.
The key will be what happens to the labour market. If there is a sharp deterioration in the labour market, fewer employers will sponsor skilled temporary entrants, particularly from the massive and rapidly growing pool of temporary graduates. There are around 245,000 temporary graduates in Australia and this number will grow as the 700,000 to 800,000 students in Australia complete their courses and apply for a temporary graduate visa.
As temporary graduates can no longer return to an onshore student visa, more will need to depart as their temporary graduate visa expires. Having spent a fortune on an Australian qualification as a pathway to permanent residence, many will be reluctant to leave. More and more will turn to the alternative of an asylum application to extend stay in Australia. That may accelerate from early 2025 as large numbers of temporary graduate visas expire.
The massive backlog of asylum applications (there are over 117,000 asylum seekers currently living in Australia; with those refused at both primary and AAT levels and not departed growing by around 1,400 per month) and the associated slow processing (despite the additional funding) will be attractive to those who want to extend stay in Australia but have no other visa option.
As always, the key is the management of the student visa program.
Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.