We must fix a few problems before we can increase immigration

In the past week we have seen NSW Premier Dominic Perrottet, federal Treasurer Josh Frydenberg and the Australian Chamber of Commerce and Industry advocate for much higher levels of immigration.

State bureaucrats have pushed Perrottet to lobby for an increase in Australia’s net migration to an unprecedented 400,000 a year for five years. The ACCI is calling for the government to issue 200,000 skilled migrant visas annually. And Frydenberg says Australia needs to rethink its migration targets after losing almost 100,000 people last financial year.

Treasurer Josh Frydenberg in question time on Monday.Credit: Alex Ellinghausen

Only once in our history has net migration been a little more than 300,000 and that was just before the global financial crisis. I am not suggesting immigration had anything to do with that crisis, but net migration fluctuates with economic conditions, particularly the labour market. While the labour market is weak right now, there are predictions it will bounce back next year.

When John Howard was prime minister, I was responsible for firstly managing Australia’s immigration intake down, and then increasing it again from about 2001. Oddly enough, I found increasing numbers was more difficult than cutting them.

One of the challenges was that while the smaller states and regional Australia wanted more immigration, the NSW government insisted Sydney was full and any increase in the intake had to be directed away from Sydney. Presumably, Perrottet does not have the same concerns.

Leaving aside “trivial” questions of whether our infrastructure and services such as health, education, housing and transport can be ramped up quickly enough to accommodate the proposed unprecedented increase in immigration, the immediate question is how the increase would be designed and delivered.

NSW Premier Dominic Perrottet is pushing for more immigration.Credit: Nick Moir

The crucial means by which we increased immigration from 2001 was through an increase in overseas students, with clear pathways to permanent residence. These pathways became far more opaque from about 2008-09, but overseas students still represented more than 44 per cent of net migration in 2018-19.

The decision to make the pathways to permanent residency less clear has left hundreds of thousands of overseas students and graduates who have moved on to temporary visas to develop their skills in immigration limbo.

Despite huge numbers of students completing accounting degrees and accounting firms saying they can’t find qualified accountants, these students are struggling to secure jobs using their qualifications, which makes it harder for them to stay in Australia.

This is the status quo in many occupations. The business sector and education providers must address this problem before we again boost student numbers. Education providers need to encourage students to enrol in courses that meet long-term demand in Australia. And they must ensure they are teaching content and skills employers need. Employers too must be prepared to give students the chance to develop their skills without exploiting them.

Employers need to work with universities to ensure international students have the skills needed to secure jobs in Australia.Credit: Andrew Quilty

Even if these problems are addressed, returning to pre-pandemic international student levels will not be simple given our tensions with China – our largest student source country – and the fact the student visa policy was tightened in 2019 for students from India, Nepal and other major source countries.

Some increase in immigration could be achieved by fixing the problems Peter Dutton created as immigration minister, when he made employer-sponsored visas more expensive, more complex and more restricted, leading to a significant decline in their use. But this will not be nearly enough to deliver the numbers NSW and ACCI want.

To reach these figures, the federal government will need to make it easier for older people and people with more limited English and/or lower skill levels to migrate to Australia. This risks large numbers of new migrants finding it even harder to secure a job using their qualifications, and with no access to social support for four years, many would have to accept very low paying and highly exploitative jobs to avoid becoming destitute.

As a country, we need to ask ourselves if that is a consequence we are willing to accept.