Immigration reform: It’s a matter of skill

Take two developments in the last 10 days, flowing from different arms of government and ask yourself why one Federal bureaucracy doesn't orchestrate them both.

On 3 May, Skills Australia[1], Australia's independent skills and workforce advisory body, recommended a root and branch overhaul of the country's vocational education and training (VET) system in order to help raise productivity, and address skills challenges that threaten future economic growth and prosperity.

Skills Australia published a comprehensive national review of the Australian VET system covering the last two decades wherein it recommended a series of strategies designed to produce a more flexible and market-oriented education and training system. A system capable of addressing projected skills shortages, rising structural changes in the economy and an ageing population.

The authority's recommendations included:

· Increasing the public subsidy for those undertaking vocational courses;

· Extending scholarships to VET students currently receiving Youth Allowance, Austudy and Abstudy; and

· The creation of an industry-led "Enterprise Skills Investment Fund‟that would aggregate a number of existing funding streams.

It estimated that Australia would need an additional 2.4 million skilled workers by 2015, increasing to 5.2 million by 2025, to meet projected industry demand. Presently, the projected supply of skilled workers is well short of these estimates.

Skills Australia assess the proposed reforms to cost an extra $310 million per year from 2012–13, ballooning to an estimated $12 billion in 2020. This funding will cover the cost of the expansion of VET qualifications by 3 per cent per year. This is the rate the authority argues it needs to secure enough skilled workers to support projected economic activity.

Skills Australia reports to Senator Christopher Evans whose cloakroom stores many hats, including the Minister for Tertiary Education, Minister for Skills as well as the Minister for Jobs and Workplace Relations. The Minister for Immigration (Chris Bowen) and Minister for Employment Participation (Kate Ellis) don't get much of a sneak peek into the authority's activities.

Fast-forward 8 days.

On 11 May, the Federal Treasurer, Wayne Swan, revealed that Australia's migration inflow will swell by 16 000 to make room for skilled migrants whose labour is urgently needed in regional Australia. These much needed folk will be welcomed under the Regional Sponsored Migration Scheme.

Reams and reams of Commonwealth government propaganda, from both sides of politics, remind us that permanent and temporary migration are key contributors to Australia's economic, demographic and social needs.

And the Department of Immigration & Citizenship[2], reminds us that it"will continue to contribute to the national debate on economic and population policy including [devising] a targeted Migration Program that responds to Australia's changing economic and social needs through (amongst other aims):

· Implements strategies to strengthen the economic, budgetary, cultural and social benefits from both permanent and temporary migration;

· Reviews and improve Australia's temporary entry arrangements to better meet the needs of business, education and tourism,and;

· Delivers the permanent Skilled Migration Program, which works effectively in conjunction with the domestic education and training agenda.

These statements regrettably ignore that a good slice of the migration pie, some 35%, is dedicated to non economic, non refugee migrants.

Putting aside the small refugee component, Australia's immigration program is made of two main parts: Cultural & Social Migration and Economic Migration.

Cultural & Social Migration

Bureaucratically speaking, the point of this part of the annual immigration program is to "develop and administer visa arrangements that further Australia's social, cultural and international relations."

Put simply, foreign nationals are invited to Australia to spend their money be they tourists, students or through sporting, community or religious exchanges. That said, the bulk of arrivals under this category were, and remain family reunions. Three out of four 'family' arrivals are partners of Australian citizens or permanent residents. The balance is children, parents, relatives or carers.

The economic benefit of these migrants is never assessed. But their cost isn't that hard to quantify. They can access the spectrum of social welfare programs offered by all levels of government. They are not subjected to determination if they are rich, young, educated, and innovative or if they have skills that are much sought after by Australian industries.

Economic migration

On the other hand, the Commonwealth has often provided compelling economic and budgetary benefits from granting permanent residence visas to skilled and business migrants, as measured by economic models and surveys of recent migrants.Hardly surprising really, that those immigrants who are one or more of the following: mostly under 45, keen, educated or rich, are indeed more of a benefit than a cost to the rest of us.

The Department of Immigration & Citizenship estimated that the migrant contribution in the skilled program at 2009–10 levels was about $716 million in the first year after their arrival. Their cumulative contribution to the Consolidated Revenue increases to over $10 billion after a decade.

The Department has demonstrated that skilled migrants are younger and more likely to be working in a full-time jobs compared to workers in the general population. The participation rate of skilled migrants is 94 per cent compared to 65 per cent for the general Australian population.

The total number of economic migrants is made of three main groupings:

Employer Sponsored, comprised of the Employer Nominated Scheme and the Regional Sponsored Migration Scheme. These are two avenues whereby Australian employers can seek to nominate skilled workers from overseas for permanent residence.

These programs allow employers to recruit skilled workers to fill skilled vacancies in their business and respond effectively to changing economic conditions.As mentioned earlier, the RSMS cap was lifted by 16 000 for the year to June 2012. primarily to allow for the swelling demands in resource rich Western Australia and Queensland.

General Skilled refers to professionals and other skilled migrants who are not sponsored by an employer, but who have skills in particular occupations required in Australia.

Business Skilled comprises business owners or investors who wish to undertake business activities in Australia, which will assist in the economic development of Australia.

A comparison of the 2009-10 immigration statistics (being the last year where comprehensive figures are available) with the 2011-12 is shown below:

2009-10 Migration Program (rounded and excluding refugees)

On Wednesday 11 Mar, Heather Ridout, board member of Skills Australia and Chief Executive of the Australian Industry Group[3], argued convincingly on ABC's Lateline that while Australia currently has 1.7 million people in vocational training of one sort or another, the nation will need another 2.4 million skilled workers by 2015 and many of those will need to be conversant with skills of the future[4].

What's worse, she lamented, is that while at any one time up to 450,000 apprentices and trainees are being taught, in come cases up to 70% quit their courses before completing them. Also we have a workforce where nearly half cannot read the operating manual necessary for the job they're doing in a factory.

In short we have a lack of foundation skills in our existing workforce and an emerging skills gap in areas where the skill content of jobs is rising.

To help address the skills shortages, the Commonwealth has introduced a new category: a resource industry targeted Enterprise Migration Agreement[5], which will allow resource giants to identify much needed workers from overseas and invite them to Australia. Interestingly, there is no limit to the numbers than can be brought here under this scheme.

Over the years, most budgets, from both sides of politics, have revealed what we already all knew. That we simply do not have the right amount of Australians, with the right skill sets, at the right time, in the right places of employment.

And the best our vocational training establishments can do is keep applying band aid solutions in order to stop the gap from widening between the quanta of skills we need at any point in time and those we have.

Why not call the functions of immigration for what they are: on the one hand, a vital tool to address skill shortages and to help with the development of our towns, cities and economy. And on the other, a cynical tool to appease constituents of non-Anglo-Saxon Australian lobby groups.

Wayne Swan's budget was devoid of any meaningful reform. Nothing on income or company taxes and even less on the on-again-off-again carbon tax.

Here's an idea, which could lift Swan's poor standing as an economic manager and at the same time, steal some of the Coalition's territory: harness immigration policy for the benefit of the economy and dispense with a focus on currying favour with ethnic groups.

Swan can start with recognising the seamlessness between, on the one hand, the tool that can modulate China's demand for our resources (this tool is called 'vocational training') and the tool to adapt to the Australian public's demand for housing, education, health care as well as most supermarket staples (this tool is called 'employment'), and on the other hand, acknowledge a tool that performs those very same functions in a very different way (this one's called 'immigration').

Given the current skills shortages and the looming catastrophic skill deficits expected, is it not time to close down the disjointed functions of three ministers: the Immigration Minister (Chris Bowen), his Tertiary Education & Skills partner (Chris Evans) and their Employment colleague (Kate Ellis) and merge their responsibilities, working as one department, hand in glove with industry, solely focused on elevating the labour force's skill set in quantum, relevance and timing, regardless of whether talent is home grown or imported.

Surely it's time for a super ministry dedicated to achieving what is so desperately needed.

Surely it's time for a Commonwealth Department of Labour.

[1]http://www.skillsaustralia.gov.au/

[2]http://www.immi.gov.au/about/reports/annual/2009-10/

[3]http://www.aigroup.com.au/mediacentre/directors/

[4]http://www.abc.net.au/lateline/content/2011/s3214358.htm

[5]http://www.abc.net.au/lateline/content/2011/s3214358.htm