Department of Immigration - 2010-11 Budget Announcements

By Mark Webster, Acacia Immigration Australia Pty Ltd,
12 May 2010

The Minister for Immigration announced the new planning levels for the migration program as part of the Australian government's 2010-11 Budget last night. The main impacts will be:

  • Reduction in General Skilled Migration and Family Sponsored Migration
  • Increase in Employer Sponsored Program
  • Humanitarian Program to continue at current level, with significant increase in spending on border protection and detention centres.
Remarkably, the total program size is exactly the same as for the 2009-10 financial year.

Skilled Stream

The planning level for the skilled stream (this includes General Skilled Migration, Employer Nomination Scheme, Business Migration and Distinguished Talent), has been increased to 113,850 places (up from 108,000 last year).

Most of this increase was in the Employer Sponsored program - with an increase of 9,150 places to 44,150 places. The Minister for Immigration is of the opinion that this "demand driven" program is more in Australia's economic interests. That is, employers choose migrants who they need as a permanent part of thir business. The person applying for permanent residence has, by definition, a permanent skilled job to go straight into.

The number of places allocated to the General Skilled Migration program is to be reduced by 3,600 places to 61,500. This program, particularly the skilled independent and family sponsored parts, has been increasingly under scrutiny by the government. The introduction of the Critical Skills List, changes to skills assessment criteria and the recent suspension of the offshore General Skilled Migration program are examples of the measures the Government has implemented to limit this program.

There will be a modest increase of 200 places for Business Skills to a total of 8,000 places. Business Migration is in general a 2-stage process. The first stage sees the applicant obtain a 4-year provisional visa. They are expected to establish business interests in Australia before they are eligible to apply for permanent residence. Business Skills is also under review, with a concern about the low percentage of applicants proceeding to the permanent visa stage. Some are also concerned that the provisional visa allows applicants to purchase residential property

Family Stream

The Family Stream includes partners of Australian permanent residents and citizens, children, parents, and "Other Family" (remaining relatives, carers and aged dependent relatives). The Family stream is to be cut by 5,750 places to 54,550 which exactly offsets the increase in the skilled program. This is a significant reduction of close to 10%. At the moment, it is not clear where the cuts will come, but it is unlikely that partner numbers will be affected, with the cuts likely to come in the parent and Other Family categories. This may lead to significantly longer processing times, or perhaps "cap & queue" provisions.

Humanitarian Program

Numbers in the humanitarian program will be fixed at 13,750. It is a little known fact that the numbers of refugee visas granted are limited each year - the more people arriving by boat who are granted refugee visas, the fewer people applying offshore for refugee status are granted.

Also in the budget are significant increases in funding for onshore detention facilities (an additional $151 million for the 2010-11 financial year). Border Protection is also being funded to the tune of an additional $1.2 Billion. Being tough on refugees pays a political dividend, albeit a very costly one in terms of money appropriated from the Australian taxpayer.

Commentary

Unlike the 2009-10 Budget Announcement, there are few details of specific changes to be implemented. However, the Minister has made his vision of how the migration program should work clear - with increased numbers of employer sponsored applicants at the expense of general skilled applicants and family sponsored applicants. Recent trends show a staggering reversal in the relative importance of employer sponsorship versus general skilled in the migration program:



Figures for the above chart are as follows:

CATEGORY 2006 2007 2008 2009 2010 Plan 2011 Plan
Family 45,290 50,080 49,870 56,370 60,300 54,550
Employer Sponsoreed 15,230 16,590 23,760 38,030 35,000 44,150
General Skilled 76,940 75,280 78,000 69,150 65,100 61,500
Business Migration 5,060 5,840 6,570 7,400 7,800 8,000
Other Skilled 110 210 210 200 200 200
Humanitarian 14,144 13,017 13,014 13,507 13,750 13,750
Total 156,774 161,017 171,424 184,657 182,150 182,150

It is interesting to see that the programs cut by the Minister (Family Sponsored and General Skilled Migration) are both ones where people who are not currently in Australia (ie migrants) are predominantly applying. The program increased by the Minister (Employer Sponsored) is one where most applicants are actually already in Australia on visas such as 457 visas. As a result, the affect of these changes is to reduce the effect of the Migration Program on Net Overseas Migration. The Net Overseas Migration figure has been a source of current debate in Australia with concerns over what is an appropriate long-term population level for Australia.

Given that arrivals of temporary residents (eg students, 457 holders, and working holiday makers) make a far greater impact on Net Overseas Migration, it is disappointing that the Department of Immigration has not looked at revising its migration planning process to take such effects into account.

As an example of how out of step the current planning process is, consider the following:

  • New Zealand Citizens make up the single largest group of permanent settlers in Australia. However, this program is unmanaged in terms of numbers and very rarely discussed.
  • The Skilled Regional Sponsored visa is a 3-year provisional visa which is counted in the Migration Program. This visa is very restrictive and only allows people to work in regional areas of Australia. However, the 457 visa, which is not part of the migration program, is a 4-year visa which allows people to live in metropolitan areas and has a far greater impact on property prices and infrastructure requirements in large cities
  • Student numbers are completely unregulated and there is an argument to say that the high growth rates have been to a large extent driven by expected migration outcomes at the end of the course. On the one hand, students make the largest single impact on Net Overseas Migration. On the other hand, education is now Australia's 3rd largest export. Recent changes to General Skilled Migration and student processing may mean that student numbers drop, but there does not seem to be an overall strategy in reconciling the economic benefits of international students with the impact on population.
Finally, the Budget factors in a large decrease in the number of people applying for General Skilled visas and student visas. We expect that this has been based on expected changes to these programs, and we will give an update when these changes are announced.

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