Extending the 485 visa by two years will exacerbate the problems of Australia’s temporary migration program

migration should not simply be about bringing in workers in to fill gaps, it should be about helping people put down roots, to join in the life of our country towns and suburbs. To make a home, to raise a family, to join our Australian family – strengthening our economy and our great multicultural society.”

Prime Minister Anthony Albanese, Jobs and Skills Summit, 2 September 2022

The rise of temporary migration

Thirty years ago Anthony Albanese’s statement would have restated migration orthodoxy. Australia rejected the ‘guest worker’ model of Germany or Singapore or the Gulf states. Most long-term migrants were permanent residents on arrival, with pathways to citizenship. While over time policy moved from assimilation to multiculturalism, the expectation that most ‘join our Australian family’ was a constant.

But from the mid-1990s temporary multi-year visa migration became more common. Major categories included international students, skilled workers and later temporary graduate visas. Working holiday visas and the long-standing open border with New Zealand also increased non-tourist resident numbers. Their total population peaked at 1.7 million in 2019 but fell to 1.2 million during COVID border closures before starting to recover.

Permanent migration is now typically a two step process. In 2018-19, before COVID, 68 per cent of primary applicants for skilled migration were already in Australia; the 85 per cent in 2020-21 will probably come down with reopened borders. Including partner and family migrants 65 per cent of permanent migrants were onshore applicants in 2020-21.

The problems of temporary migration

Temporary migrants freely choose Australia, but life is not easy for them. They are vulnerable to exploitation in the labour market. They pay taxes but are ineligible for most government benefits (although from mid-2021 they did get disaster payments.) Temporary migrants could never vote and have had other political rights reduced.

The possibility of permanent migration through Australia’s two-stage process creates new stresses. Uncapped temporary visas and capped permanent visas mean no guarantee of converting temporary into permanent. People who want permanent visas put major life decisions on hold until they know which country they will be living in.

Both Australia’s old model of permanent migration and guest worker systems overseas offer clarity and certainty, everyone is clearly permanent or clearly temporary, and can make life decisions accordingly. Australia’s new two-stage migration model lacks this clarity and certainty.

So why is the government increasing temporary migration?

The prime minister’s sentiments are sound. But his short-term 35,000 place increase in permanent migration, while great news for 35,000 individuals and their employers, does little to deal with the underlying problem. This requires limiting how many people prolong their stays in Australia beyond their original temporary visa when realistically their chances of achieving permanent residence are low.

From this perspective the temporary graduate 485 visa has always been a problem, easily secured for people who meet an Australian higher education requirement and less easily for people with vocational qualifications. No specific higher education field or occupation is required.

On the same day that the prime minister made his ‘put down roots’ statement Education Minister Jason Clare and Home Affairs Minister Clare O’Neil added two years to the 485 temporary graduate visa for graduates with degrees in areas of ‘verified skills shortage’. The Age reports that IT, engineering and nursing are the target areas. Bachelor degree graduates in these fields will receive four years of work rights in Australia, masters degrees graduates five years, and PhD graduates six years.

According to Jason Clare ‘this will mean they can stay on longer and use the skills they’ve gained in Australia to help fill some of the chronic skills shortages we have right now.’ This is essentially the same logic that led to temporary skilled visas, tapping into the global labour market for Australia’s skills needs while avoiding the long-term mutual commitment of permanent residence.

Numbers of 485 visa applications and residencies

A key issue for the committee working out the 485-extension policy detail will be whether eligibility for the extra two years comes from holding a degree related to a skills shortage occupation or from already having a job in the skills shortage occupation.

If it is the degree then 27 per cent of international student completions in 2020 were in the nominated fields. If it is holding a relevant job the increase will be lower, for reasons discussed below.

Either way the stock of 485 visa holders in Australia will go up by increasing the time spent on the visa. Numbers have already grown significantly in recent years, as the chart below shows, although with a COVID dip.

The decline is likely due to 485 visa holders being stuck outside Australia and visa processing delays, with no drop in applications as the chart below shows. Minus the policy change, 485 numbers should increase in the next couple of years before declining as higher education course completions fall, due to reduced enrolments while borders were closed.

485 visa holders and skilled work

Ly Tran, George Tan and Mark Rahimi found that 485 visa holders often struggle to find work in jobs matching their skills. In their survey more than half were unemployed or working outside their field of study.

The Census provides most detailed data on 485 visa holder occupations. Census 2016 is still the latest available, when there were many fewer 485 visa holders than now. Jon Chew wrote a detailed comparative analysis of the 2016 Census data for this group. Reflecting the lack of a work test on the 485 visa, nearly a quarter did not report an occupation, with no significant difference between bachelor and postgraduate qualification holders. While the expected ICT, engineering and business occupations are among the most common jobs, so are lower skill jobs such as sales and hospitality. This creates additional competition for students seeking jobs in the same industries.

One issue raised in the Tran, Tan and Rahimi work, the length of the 485 visa, is addressed by last week’s announcement. However a more important issue, the fact that many employers prefer workers with PR or citizenship, is not.

485 visa holders and permanent migration

The 70,000-80,000 temporary graduate visa holder population of recent years is not converting into huge numbers of work-related visas, ranging from 14,000 to 17,400 in recent years as seen in the chart below. I note the employer sponsored number separately because the outcomes document of the Jobs and Skills Summit says that the government will ‘expand pathways to permanent residency for temporary skilled sponsored workers’. This works against the points-tested visas in which former international students get extra credit for Australian study, studying regionally, studying in specific areas, age, and English language skills.

In recent years employer-sponsored visas have made up 30 to 38 per cent of the overall skilled migration program, but only 7 to 10 per cent of former 485 visa skilled migration, suggesting that employers aren’t rushing to retain former international students.

Including partner visas boosts the overall PR numbers for former 485 visa holders but the mismatch between the uncapped 485 visa program and the capped PR program inevitably creates problems. This includes the issue described above, people extending their time in Australia in what may be a futile attempt to get PR. The chart below shows that for 2020-21 more former 485 visa holders went on to another temporary visa than secured a permanent visa. Most new temporary visas were student visas, letting the education industry profit again from the migration hopes of international students.

A backlog of former international students interested in permanent residence

According to the Student Experience Survey, about two-thirds of international students say that the possibility of migration is one reason for choosing Australian higher education. This has converted into a large backlog of people claiming Australian study points in their visa application. The data comes from SkillSelect, which lets applicants express interest in a skilled visa at no cost. The Department of Home Affairs conducts regular offer rounds inviting people to lodge a visa application. In this data the applicant has met the Australian study requirement but there is no information on their location or current or former visas.

As the chart shows, in April 2022 there were 30,000 invited or lodged cases. If all succeed it will cause a spike in former international student work visas (there are usually about 7,000 skilled PR spots going to people whose last visa was a student visa, in addition to the visas going to ex-485 visa holders, and other former student visa holders I cannot identify moving from other temporary visas).

However more than 160,000 expressions of interest are yet to receive an invitation. As the same person can apply for more than one visa type it is not clear how many individuals are in the system. It must be at least 66,724, the number with expressions of interest for the state or territory government nominated 190 visa.

Uninvited former international students have skills in demand

SkillSelect also reports on the occupations nominated by the former international student applicants related to the skills assessment test. Since skills needs are already part of the migration system many former international students yet to be invited to apply are qualified for a target job (although ‘verified skills shortage’ sounds like a tougher test than used in some current skills lists). IT and engineering are the first and third most common occupations nominated by the former international students who have put in an expression of interest. The health occupations include 12,400 nursing expression of interest yet to be invited to lodge a PR visa application; the largest single category is aged care state or territory nominated at 2460 EOIs.

Conclusion

I am not a migration expert and I would like to hear the views of people like Ly Tran and George Tan on extending the 485 visa length. But at this point I am far from convinced that a 485 time extension is a good or ethical policy. I worry that it will just lead to ever-larger numbers of people in migration limbo, with low prospects of eventual PR but continuing from one temporary visa to another, delaying restarting their lives back in their home countries.

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