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Easing My Migration Hangover

Posted by Myer on July 1, 2022, 2:31 p.m. in Australian immigration

Today is New Year’s day in Australian migration terms. 1 July marks the commencement of a new immigration year and just as we do for the calendar year, we look back on the year that’s been and speculate on the year that lies ahead.

The phrase that best sums up the past year has been “skills shortage.” According to a recent statistic:

1. There are more than 423,000 job vacancies.

2. Unemployment rate is at 3.9% - the lowest it’s been since 1974.

3. One third of businesses are struggling to find workers because of a lack of applicants and a lack of skills, and it affects almost every sector of the economy, acting as a significant constraint on business growth.

The obvious solution is to increase migration. As a hangover from the pandemic we had a net outflow of 88,800 people for the 2020 – 2021 financial year, and the government needs to increase the annual migration quota from 160,000 permanent resident visa places to at least 220,000. Whilst this may appear to be a significant increase, we used to have a migration quota of 190,000 until the previous Coalition government (Liberal and National parties) reduced the quota to 160,000 in March 2019 to reduce the congestion in the three major cities, Sydney, Melbourne and Brisbane.

They didn’t have to do this because Australia already had a regional migration program which encouraged skilled migrants to move to regional parts of Australia (anywhere outside of Metropolitan Sydney, Melbourne and Brisbane) which essentially involved candidates in certain occupations having to move to regional areas to have a pathway to secure permanent residence.

Unfortunately, immigration policy is often drafted and implemented for the purposes of gaining votes, not necessarily what is in Australia’s best interests.

Fortunately we have a new Labor government and Labor governments are traditionally more migrant friendly than Coalition governments. This might seem a bit incongruous because one would normally assume Labor governments to be more closely aligned with trade unions but it’s not the case.

Increasing migrant flows isn’t only about increasing the quota, visas still need to be processed and processing times on the part of the Department of Home Affairs have lengthened quite dramatically. It takes anything from 30 days to 15 months to process a temporary skill shortages visa (temporary Work Visa). It’s the worst I’ve ever seen.

We are expecting processing times to improve now that the problem has received such publicity. Department of Home Affairs and Australian Border Force staff that were previously focused on processing Covid related travel exemptions are now being redirected to visa processing, and accordingly we are expecting faster processing times.

Whilst the annual migration quota hasn’t increased as yet, the proportion of the immigration quota devoted to skilled migration has, reverting back to the pre-pandemic level of two thirds “skilled” versus one third “other”. This will result in significant quota increases for skilled independent visas that are based on a points system and don’t require state nomination, as well as those state nominated visas.

Most of our clients overseas who don’t have offers of employment in Australia tend to rely on these visa classes, and the beginning of the immigration year heralds new lists of occupations to be produced by state and territory governments (there are eight of them).

The severe skill shortages in Australia and the increased quotas will result in a more diverse spread of occupations appearing on state nomination lists with more places available per occupation.

It’s also going to result in increased competition on the part of state and territory governments to secure skill sets that are in worldwide short supply and is going to be interesting to see the competition between states in this regard.

Traditionally state governments have imposed additional requirements to secure state nomination, usually giving preference to those scoring higher points but often introducing other factors such as number of years of skilled work experience in the nominated occupation, English-language scores and whether applicants are living and working onshore (within a particular state) or offshore (overseas).

Preference has often been given to those living and working in a particular state because they have already demonstrated their commitment to that state, but it’s going to be interesting to see how competitive each state is going to be when producing their lists of occupations and the criteria for obtaining a visa.

Because Australia has always been such a desirable migration destination, there hasn’t been a shortage of applicants in the past and state governments have been able to dictate the criteria. But skill shortages are a global issue and not only will states be competing against each other, most Western countries such as United States, Canada, United Kingdom have competitive immigration programs often with less red tape and faster processing times than Australia.

It’s going to be an interesting immigration year and whilst I nurse my hangover from the immigration year that’s been, I am filled with hope and optimism for the year ahead driven largely by the fact that at last we have a government that recognises the need for migration and the contribution that migrants bring to Australia, as well as the recognition on the part of employers and state and federal government officials for the need for skilled migrants to Australia.


Perception is Reality

Posted by Myer on May 20, 2022, 2:58 p.m. in Australian immigration

In the last couple of days I received two emails from clients which prompted me to write this blog. Client A was amazed that the process was so quick. Client B was bemoaning the fact that the visa process was taking an eternity. Client A is likely to recommend to friends and family that Australia operates a very efficient skilled migration program whereas client B would probably be advising friends and family of her dissatisfaction at the long processing times. Surely both can’t be right?

We believe what we experience to be accurate, and that forms the basis of our own realities and although our perceptions feel real, that doesn’t mean they’re necessarily factual. Much depends upon the context in which we have our experience.

Anyone who filed a skilled visa to Australia prior to the Covid pandemic would have experienced at least a two-year delay in processing the visa because of Australia’s closed borders and the fact that Australia didn’t want to process visas for those overseas because that would add pressure on quarantine facilities in Australia during the pandemic.

Now that the pandemic is over, borders are well and truly open and with Australia suffering severe skill shortages, and state governments seemingly fighting over themselves to nominate skilled migrants, we are finding the process much faster. Of course, state governments don’t process visas but obtaining state nomination is an integral part of a general skilled migration visa.

The Department of Home Affairs processes visas and we expect processing times of general skilled migration visas to quickly come back to their historical turnaround times.

In some instances those submitting applications now are obtaining visa approvals ahead of the older applications, a situation that is hard to stomach for those that have been waiting for upwards of three years.

It’s not only general skilled migration visas that have been adversely affected by border closures, anyone applying for a temporary skill shortages visa (work visa) would have experienced lengthy delays. Traditionally these visas are processed within one or two months.

Likewise those already living in Australia while the border was closed who applied for permanent residence under certain streams (eg Business/Investor) also saw their visa processing times worsen, likely due to a pandemic related reduction in processing capacity.

Australia and New Zealand haven’t done themselves any favours over the last 2.5 years with the extended border closures and the length of time it has taken to process visas, and there will no doubt be a number of applicants who filed visas that feel hard done by, but it’s not the first time that government policy has unfairly prejudiced applicants and it certainly won’t be the last. I also don’t believe that Australia and New Zealand are unique in this respect.

I remember in the late 1990s when New Zealand changed its policy and adopted the skilled migrant category it offered refunds to those people who had filed visas under the previous policy. Australia did something similar in approximately 2008 but markets have short memories in my 30 years of experience in the migration industry.

The experience you have shapes your perception of the immigration process and how user-friendly that process is. People applying for residence in Australia now would have a very different experience to those that filed applications three years ago.

Some have commented that Australia and New Zealand have suffered reputational damage through lengthy border closures and lengthy processing times of skilled visas but I don’t think that this perception will be long lasting.

Those applying for visas post pandemic are going to have a completely different experience and we are already noticing increasing numbers of people registering for our online seminars and free preliminary assessments. We are also noticing that the quality of applicants have improved significantly.

I have mentioned in previous blogs that ultimately what Australia offers migrants will win out in the end. The lifestyle, opportunities for career progression, standards of living, child development, education and healthcare are unparalleled amongst developed countries.

No doubt New Zealand and Australia have tarnished their reputations for a cohort of applicants as far as their ability to effectively process visa applications, but ultimately Australia will succeed, not because of any policy settings by bureaucrats or politicians but because of the nature of Australian society and the wealth of opportunities that this country presents.

The term used to describe Australia is the "lucky country". It's generally used favourably, although the origin of the phrase was negative in its origin.

At the time the phrase was first coined, Australia's climb to power and wealth is said to be based almost entirely on luck rather than the strength of its political or economic system, despite the incompetencies of the parliamentary representatives. I would add immigration policy to that list.

I would suggest that one could argue that Australia's skilled migration program will succeed because of Australia and as country and its society. Certainly not because of a brilliant skilled immigration policy.


Honesty in an election year?

Posted by Myer on April 8, 2022, 1:37 p.m. in Australian immigration

The budget announcement regarding migration last week was a welcome boost to the skilled migration program but I doubt it’s going to be sufficient to satisfy Australia’s skill shortages. What were you expecting, honesty in an election year?

In previous blogs we speculated that the total migration program would remain at 160,000 resident visas per annum with the pre-pandemic ratio of two thirds of the program being devoted to skilled migration versus one third to family migration, and this has largely been the case.

It was too much to hope that in an election year the annual migration level would be increased from 160,000 resident visas per annum but there is wide speculation that it will increase to 190,000 in the following year.

The annual quota is significant because it influences how many visas in a particular subcategory can be processed by the Department. For example if a quota of business visas has been reached for a particular immigration year then no other visas would be approved in that class of business visa.

We tend to find that those clients of ours who are in Australia and working for employers on temporary work visas are very dependent upon the annual quota of employer sponsored residence visas as a pathway to securing permanent residence.

Many of our clients overseas don’t have offers of employment in Australia and are dependent upon general skilled migration visas as a means of securing residence. These visas don’t require offers of employment but in recent years have relied upon state governments to nominate applicants and the greater quota of places available means more occupations will appear on state nomination lists when they are produced around 1 July of this year.

Although the increase in skilled migration is welcomed, it's not going to be sufficient to satisfy Australia's insatiable appetite for skilled workers and although the government realises this, it's in a difficult place.

Inflation (largely thanks to increased petrol prices) is currently outstripping wage growth. Whilst worker’s wages rose at the fastest annual pace in more than three years the increase lagged behind the consumer price index. This point has been hammered home to the voting public by the opposition Labor party over the last few months and the date of the election hasn’t even been announced!

The government is trying to relieve cost of living pressures by reducing the petrol tax (fuel excise) by half, from 44.2 cents per litre to 22.1 cents per litre for the next six months and hoping that this will have a follow-on effect by relieving inflationary pressure so that Australians can once again afford to buy broccoli. Whilst children hoping to avoid eating vegetables might be disappointed the government is hoping to win over vegetable eating parents with this tactic.

The government therefore cannot be seen to be openly encouraging migration at this point in time in the election cycle although it knows Australia needs it.

The government’s answer seems to be threefold:

1.       Reallocation of places under the annual migration quota along the line set out in the preceding paragraphs.

2.       Increased incentives for employers to hire apprentices.

3.       Increased working holiday visa schemes.

As far as the billions of dollars it intends to spend on apprenticeships, the government naïvely presupposes that there will be sufficient number of young Australian wanting to enter apprenticeships and even then it’s going to take four years for an apprentice to be a qualified tradesperson – far too long for employers to wait.

As far as working holiday visa schemes are concerned recent announcements have meant that there are now a greater number of countries where young people can qualify for working holiday visas that allow them to come to Australia primarily for the purposes of holidaying but to work as well.

There have been increased age limits under some of these schemes whereby people up to the age of 35 can still apply and new multilateral agreements (most notably with the United Kingdom) will result in many younger people coming to Australia on working holiday visas.

Whilst these people might be satisfying immediate skill shortages in the hospitality industry and in agriculture the nature of the conditions imposed on most of them (you can only work for a particular employer for six months) they are hardly the type of workers to satisfy the severe skill shortages in professional and technical roles.

The increase in skilled migration quota is going to feel like a major migration wave after the extremely small number of migrants granted visas over the last 2.5 years but if the government were to be truly honest about the needs of the Australian economy as opposed to pandering to a voting electorate, it should have been so much bigger. Hopefully next year once the general election is over the government will be more honest in providing the skills it knows the Australian economy needs.


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