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Friday 18 Aug 2017 | 15:55 | SYDNEY
Friday 18 Aug 2017 | 15:55 | SYDNEY

Getting migration right when government is no longer in sole control

Migrants departing Italy for Australia 1953 (Photo: Australian National Maritime Museum on The Commons)

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COMMENTS

8 June 2017 08:52

This is the first post in a series that follows an Expert Workshop in Digitisation, Skills and Migration hosted by the Lowy Institute earlier this week in collaboration with the Department of Immigration and Border Protection.

 

Migration policy, what drives immigration trends, and the impact of migration are all poorly understood in Australia. In an era when questions of migration are becoming more difficult due to a confluence of economic, cultural and security events and trends, greater engagement from government and others is required to promote better public understanding.

The election of Donald Trump and Brexit due in part to anti-migrant sentiment, the 7-Eleven scandal, the backpacker tax, the abolition and replacement of the 457 visa, the Lindt siege and broader conversations about jobs and housing; these have all contributed to an increased public interest in migration. Transforming this into more substantial political engagement will be difficult.

The most obvious barrier is the disjuncture between public opinion and governments on the power to regulate migration flows. It is a commonly held belief in Australia that the government strictly controls the number and type of immigrants allowed into the country. Indeed, governments of both persuasions have promoted this understanding, with John Howard’s ‘we will decide’ election statement being the most visceral piece of evidence.

The reality, however, is quite different. There is no switch to flip in terms of stopping immigration. While governments before the mid-1990s were able to exercise quite precise control over the number of migrants entering Australia, this power has been softened by the deregulation of immigration flows. As Peter Mares outlines in his recent book, Not Quite Australian, the advent of structural temporary migration programs shifted the impetus away from government setting quotas and selecting migrants towards a much larger role for non-government actors: business; universities; and migrants themselves.

While governments promote their capacity to vet future immigrants via security and character checks, the issue of asymmetric information is almost impossible to overcome. A person may receive a student visa with no intention of studying but instead seek work and permanent residency. An increasingly common requirement – the ‘genuine temporary entrant’ – is, at best, a box-ticking mechanism. No bureaucrat processing a visa application can ascertain the true intentions of a potential migrant. In addition, a large and growing population of temporary migrants places pressure on the government to allow a generous allocation of permanent residency visas each year.

It is understandable that successive governments have been reluctant to explain these big changes. There is real short-term political risk that could be easily framed by political opponents for their own advantage. The link between immigration, government control and sovereignty in the public debate is laden with strong opinions and biases.

Further, governments should not wear all of the blame here. Multinational businesses, universities and the science community have all failed to properly explain the role skilled migrants play in their organisations today. The importance of human capital in 2017 relative to 20 years ago is immeasurable. Yet it is difficult to think of concrete examples instead of clichés to illustrate this magnitude of this change. Why don’t we know more about the role of migrants in training Australians, generating innovation, integrating global supply chains or importing new management techniques?

Some industries are almost completely reliant on migrant labour. One example is the horticultural industry. Backpackers and Pacific seasonal workers now account for anywhere north of 90% of seasonal horticultural workers in Australia. This is not necessarily a negative trend. But the concerning feature is the lack of formal consideration by government and other actors in developing migration policy. In the case of horticulture, this could be seen in the 2005 introduction of a second working holiday visa. All of a sudden backpackers were working for residency outcomes and not wage incentives. This has had a profound effect on the shape and structure of the horticultural labour market. Recent exposes and research on the industry show the dangers of this approach.

Governments still have an important role to play but what was once absolute control has been replaced by oversight and management of a complex web of regulation. And while businesses and others have sought the benefits of migration over the past decades, they have failed to demonstrate its importance.

We need a better understanding of what drives migration flows and the economic, social and security effects of migration. Simple government calculations will no longer suffice to support migration policy. Constant reaction to events instead of proactive consideration of the broader environment will result in awkward and costly policies. Looking to the future, there are at least two big long-term migration trends Australia will have to grapple with that need a proactive approach.

One is demand-based. As Australia’s population ages, labour demand from employers will shift, based on changing consumption habits. Occupations associated with aged care and personal health services will rise as a share of the labour market. Many of these jobs will not be highly skilled. One response could be dramatically higher wages to attract workers into these positions. However, this will have fiscal costs - given the role of government in aged care - and productivity costs. It is more likely a combination of slightly higher wages and more opportunities for immigration will be required to meet increased demand from employers in these sectors. At the moment, there is very little consideration of how this will affect Australia’s migration framework. Better understanding of consumer preferences, labour needs, and qualification requirements are needed to ensure migration doesn’t become a default, reactive response.

Another massive change will be the composition of migrant flows, what we might term a supply shift. For example, China’s worker to population ratio is set to shift rapidly – from 8:1 today to 2:1 by 2050. This will have a massive impact on its emigration profile and, given China has been one of the top two citizenship countries for new Australian immigrants since 2000, for us too. For example, higher education is Australia’s premier service-based export worth $20 billion annually. But just how competitive and sustainable is this export – in terms of cost and quality – when the largest single country consuming the product is facing such a dramatic shift in the profile of its younger population? Understanding and engagement into other markets, as well as consideration of what role migration incentives can play – such as the link to permanent residency – require better analysis and research.

Among many other questions, both of these will require a hands-on policy response by governments and other actors now central to Australia’s migration framework. We need to consider what tools might be necessary to inform future decisions and whether what has worked in the past will continue to be effective in the future.

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