However, Labor is exposed as it is falling short of its comfortable forecasts of just a few months ago. May’s budget pegged net overseas migration at 400,000 in the year to June 30. AMP chief economist Shane Oliver said it could be as low as 498,000. Abul Rizvi, a former deputy secretary at the Department of Immigration, estimates 470,000 and says he doesn’t understand why the government didn’t act more quickly to avoid this outcome.
May’s budget said net overseas migration would fall to 315,000 this financial year, but that looks bleak. “They have delayed action for so long that 315,000 will be taken out of the water,” Rizvi said. “At some point the restriction has to happen – and when it does there will be all kinds of outcry from all kinds of stakeholders.”
That’s because Australia has a “demand-driven” migration program that doesn’t impose limits on large parts of the economy that rely on overseas arrivals – such as universities and other education providers that generate $26.6 billion in business last year. We have around 650,000 overseas students, as well as around 200,000 temporary graduates.
It is too late to sever the connection between education and migration in Australia as it has become integral to the business model at our universities, ever since Canberra told academics to find new ways to make money without relying on paying taxes
Education is now worth more than gold to the Australian economy – $26.6 billion against $23.5 billion last year – when exports are counted in terms of goods and services as well as tuition fees. But the strain on the rest of the economy is impossible to ignore. Anyone who takes a tram from Melbourne University, down Swanston Street and past RMIT University, or takes any other form of public transport around our biggest universities can see this. The student population continues to grow.
Have universities become too greedy? The fact is that they get the profit from the uncovered transfer system without covering all the costs. They have no obligation to invest in housing, although the best of them build more housing. They have no responsibility to pay for transportation congestion. Is it sustainable?
This is not an idle question: cabinet ministers are analyzing this pressure point. The transition strategy includes a plan for greater integrity in the education sector under changes decided by the three key ministers involved: Education Minister Jason Clare, Skills Minister Brendan O’Connor and Home Affairs Minister Clare O’Neil.
The worst aspect of the problem is the advent of “ghost colleges” that build classrooms to pretend they are teaching students abroad, only to find the desks and chairs empty because the students are working all day. . Clay Lucas exposed this trend in his reporting here last month. Stopping that problem is part of the new policy.
A key test for the migration strategy is whether it ensures Australia hires the highest-skilled workforce – something O’Neil has named as a priority. The current system rewards aspiring migrants who persevere, rather than encouraging those with the right skills.
If changes are not made, Australia could end up in a class of “limbo workers” who are on temporary visas but have no path to permanent residency, destined to wait years with secondary social status. This is the American model, with a growing group of guest workers being granted amnesty every few years. And it’s a working underclass that Labor says it wants to stop.
Labor is exposed if its migration strategy cannot control the numbers. But the “big Australia” claim is the wrong way to frame this new policy. There will be simpler visas for some workers with the most essential skills, but the broader goal is to fix the broken system. Above all, the goal should be to ensure that the recent surge in migration becomes a thing of the past, not a sign of the future.
David Crowe is a leading political correspondent.