Labor needs to end the migration surge, but these cuts are not enough

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Labor is right to be cautious with its new curbs on migration but is running out of time to cut the numbers when it admits the intake has soared to 510,000 a year.

The good news is that the government has a robust plan to cut the intake to the levels seen before the COVID-19 pandemic – around 250,000 a year – while still attracting the new citizens the country needs.

Has the federal government made the right call on migration?Credit: Brook Mitchell

The bad news is that some of the changes seem too modest to deal with a powerful global trend that pushed arrivals to a record high. That means the new plan will not be enough.

A key challenge is that the government is only responding in December to a report it received in March from a review it launched in September last year, when it asked former public service chief Martin Parkinson to lead a migration inquiry.

Why did it take so long? Home Affairs Minister Clare O’Neil set up a sequence of changes this year, which means the migration strategy released on Monday is only the latest step.

O’Neil made big changes in early October to crack down on visa fraud, false asylum claims, human trafficking and “ghost colleges” where migrants pretend to study so they can gain work rights. This had to be done before the broader strategy to make sure there was a stronger regime to underpin the newer measures.

Even so, a faster plan would have shielded Labor from political grief. There was talk of a response to the Parkinson review in October, but they let the timing slip. Then the High Court made its ruling on indefinite detention on November 8, forcing O’Neil and Immigration Minister Andrew Giles to focus on that immediate problem.

Some of the latest steps are simple and practical. Applying a stricter English-language test on aspiring students, for instance, will turn away about 41,000 undergraduates and 38,000 graduates who would otherwise arrive or stay, according to informal estimates within the government.

The change to the language test brings the standard applied to students up to the same benchmark applied to skilled foreign workers, so it is hard to argue it is unfair.

Another measure will toughen the “genuine student test” and reject applicants who look like they are only coming for work – such as someone with a good degree overseas who wants to study hospitality in Australia. On the government estimates, about 39,000 would fail this test each year.

The government is also phasing out the “pandemic event visa” that allowed graduates, and many other migrants, to apply to stay an extra year and apply again in later years. This will be stopped in February and the government expects about 70,000 of these visa holders to leave over the next year.

The government could have gone faster and harder on the pandemic visa, which has grown to 115,000 people, and done more to force people to exit the country. This is important because the net migration intake is about how many people leave as well as the number who arrive.

Why is the government so gentle in phasing out the pandemic visa? It was worried that employers would suddenly lose workers they needed. It also thought that visa holders given a sudden ultimatum might stay anyway, some of them by claiming asylum.

The intake of skilled foreign workers will continue, given the skills shortages across the economy, and the government knows it needs to attract more workers in hospitals and aged care. In these areas, the focus is on simplifying the visa system to bring in essential workers.

Will these changes work?

“Most of the things they’ve done are sensible, it’s just that they’ve done them too slowly,” says Abul Rizvi, a former deputy secretary in the Department of Immigration.

The political deadline is pivotal. The government promises to halve the intake to 250,000 a year in the year to June 2025, which means it must show it has an outcome by the time voters go to the election due early in that year. The migration results for the 2024 calendar year will reveal if the government is on track.

This is a delicate balance because migration kept the nation’s gross domestic product rising over the past year and disguised what was really happening to households. When measured per head of population, GDP stopped growing this year.

Labor may have to choose between a migration surge and an economic slump.

The pressure is on because Labor has been caught out on migration. While other countries have also been surprised by the migration surge after the pandemic, that is no solace to voters who worry about housing and urban congestion.

The government told Australians in May that net migration would be 400,000 for the year, much higher than it had predicted six months earlier. The Coalition accused it of running a “big Australia by stealth” but Labor expressed full confidence it could keep the number under control. It jumped to 510,000 instead.

If Labor fumbled that forecast, why should voters trust it with the new one?

The key challenge is that the system is driven by demand. The government hopes that stricter standards will cut the numbers, but a strong labour market will continue to act as a magnet for migrants. Rizvi thinks the government’s new measures will not be enough if demand for workers remains high.

That is why the government will have to be ready to go further if its new strategy does not get results.

First, it is thinking about tougher tests for young travellers who work while on holiday. This is another sign of caution because one of the responses to the Parkinson review is to hold another review, this time into the working holiday-maker visa. Farmers and other employers rely on these workers, so the government has to act with care.

Second, it is reviewing the “points test” that determines if potential migrants have the right skills to gain entry to Australia, a big factor in the skilled worker intake.

Third, it is clearly open to more drastic changes for universities and technical colleges. The simple fact is that universities are now huge businesses with large revenues that deliver great economic benefits but also real costs to the community when overseas student numbers rise too fast.

The government is open to reforms like a cap on overseas student numbers or a higher fee on every applicant to slow the demand. This makes sense because the universities, like any part of the economy, operate within a social licence. They cannot assume uncapped growth.

Labor was caught out by the migration surge and cannot risk being surprised again. It has made a very public pledge to halve the intake and will have to do whatever it takes to meet its target.

Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.

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