You get what you deserve: Big business and immigration policy

One day in my year 12 Economics class, Mr Darling walked in with a small stack of A4 pages. There was a quote plastered in bold type covering the entire page, “You get what you deserve”, a backpage headline pulled straight from the Herald Sun. Shane Crawford, a high profile Australian Rules Football player for Hawthorn, had just been suspended and he apparently muttered the words to the media on his way out of the Tribunal.

Mr Darling was a decent teacher but motivation was not in his wheelhouse. As he handed each of us a printout, he said we would get the score we deserved at the end of the year. For some unknown reason, I stuck that A4 page on the inside cover of my exercise book and this moment from my otherwise unremarkable year 12 is etched in my memory. Economics turned out to be my best subject but as they say, correlation doesn’t equal causation.

From time to time, I think about “you get what you deserve”. Mr Darling’s words did not resonate with me. As I grow older, I see how manifestly untrue “you get what you deserve” is. Many people in life don’t get what they deserve. Most deserve better. But very occasionally, this saying neatly sums up a complex situation.

I’ve worked in and around migration policy for the best part of eight years and I’m increasingly becoming convinced the big business community in Australia doesn’t have the will or the ability to prosecute a public argument on migration. Almost meekly, they sit by the sidelines and watch as others shape discourse and policy.

They get what they deserve.

Perhaps this is unjust as there are individuals from the big end of town who do their best, both for themselves and their companies as well as the public interest. Yet as a community, big business are failing on migration policy at the very time they need to be leading from the front. Some might disagree but an engaged, outward looking business community is one of the foundations for a successful migration policy framework in the 21st century.

These thoughts were prompted by events last week. The CFMEU ran an extremely effective ad during Masterchef on Sunday night skewering the Chinese-Australia Free Trade Agreement. This was a loud public bang in an until then slow burning campaign that has caught the attention of the broader union movement, the Opposition and crossbenchers, and increasingly, the general public. When ChAFTA was signed, I thought there would be a bit of bluster on the migration provisions. This would blow over and everything would get signed.

I don’t believe this anymore. A clear ‘anti-migration’ perception of the agreement has formed outside of Canberra. The CFMEU and ETU have been on top of their game, creating a campaign that has cut through technical jargon and politics. The ALP has been forced to listen and advocate, a difficult position with Free Trade Agreements as they are nearly impossible to change or retrofit once agreed.

I believe the union campaign is without substance. There are several minor matters in ChAFTA that should be further explained. But I do not think the union campaign is xenophobic or motivated by race. A more likely explanation is one found at the centre of many issue-based campaigns, a combination of self-interest and apprehension of government intentions. Anyone calling the campaign racist has not done the hard yards and sought to explain the agreement to a now-skeptical public. Free trade has been grudgingly accepted by the public for decades and advocates need to continue to demonstrate why these agreements are welfare enhancing.

To recap for those who have wisely avoided reading the technical documents, there are three policy changes central to the union campaign:

  • The removal of advertising jobs to Australians before applying for a 457 visa for Chinese citizens:
    • ChAFTA will remove job advertising for about one percent of the 457 visa program. In general, advertising jobs is not an effective method to get Australians, especially those already unemployment, into the labour market. Employers respond to prices more than regulation. This points to increasing the fees of the 457 visa as a more effective method to provide Australians preferential access in the labour market. In my opinion, this is a small, positive change.
  • The removal of ‘in-person’ skill assessments for Chinese citizens:
    • Under ChAFTA, Chinese citizens are subject to the same provisions as Canadian, British, German and over 90 per cent of all other visa applicants. The removal of in-person skills assessment does not change the fact any Chinese 457 visa holder will still require the relevant occupational licensing and a paper-based skills assessment before they get their visa. Anyone in the world can get a dodgy qualification, you don’t need to be Chinese.
  • The introduction of “Investor Facilitation Agreements”:
    • These agreements are based on current legislation and ministerial powers. Immigration Minister Peter Dutton could sign an IFA tomorrow. They have been rolled up into the ChAFTA as a tactic to push negotiations over the line. In reality, they are completely separate. But the government cannot use this to negotiate with the Chinese government on one hand and then expect the public to ignore it completely. There should definitely be more transparency around the process. A commitment to publicly releasing all agreed IFAs would go a long way to demonstrate how negative effects on Australian workers are illusory.

The union campaign has excelled at highlighting a specific, negative interpretation of these three policy issues. But to my mind, there is a commonsense rebuttal available for each concern.

I’m yet to see such rebuttal from the big business community. Now the best they could manage was tin-eared and late to the party. To date the biggest shot I’ve seen fired is a front page story in the Australian, led by Rio Tinto’s Andrew Harding saying the union campaign “feels xenophobic”. Twiggy Forrest and Kerry Stokes also lent support.

Perhaps broader business support is there behind the scenes. But the time for helpful phone calls ended the day the text of the agreement was published. For weeks now, the policy sales job has been missing in action. Andrew Robb has been left high and dry to do the heavy lifting but with the government already in the doldrums, it was hardly an easy task. The entrance of Harding and Co into the public debate can be best described as reactive. Having let the unions set the boundaries of the debate, there isn’t much ability to pivot back to the presumably positive changes in ChAFTA, such as the removal of quotas and tariff barriers.

There is no reason the business community couldn’t have rolled out a focused campaign to support a bilateral Free Trade Agreement with our single largest trading partner. A handful of industry leaders could have come together and flogged the media high and dry about the benefits of the agreement. An advertising buy, business lunches, a press club speech or two, some market research. Anything. Showcase examples of how the Australian-Chinese business relationships have made Australia richer over the past two decades. Those cheap TVs didn’t make themselves.

Instead, the collective passivity demonstrates the tendency of big business to jump in when it suits, not when there is a fight to be had or gains to be made. This is a dirty little bipartisan secret in Canberra that many in government are unwilling to speak up about. In this example, the cost could be a more fractured relationship with Australia’s most important economic partner.

Big business cannot be relied on to advocate for policy, even one squarely in their interests. When I talk to people about the 457 visa program, they picture a poor bastard on shitty pay getting exploited by their employer. This happens because those who gain the most from the program – Australia’s largest companies – sit back and let the narrative be dictated by others. There are about 35,000 employers using the 457 visa program and if I were a betting man, I’d wager every single member of the Business Council has at least one 457 visa holder on their books, with an average somewhere between 20 to 100 depending on the industry. No-one imagines the computer programmer, the market researcher, the financial analyst, the management consultant, the surgeon, the university researcher or the CEO, let alone state government sponsored nurses and teachers.

Highly paid, highly skilled, filling vacancies, teaching Australian’s and importing innovation with an average salary of over $88,000, well above full time average weekly earnings. This is what the picture of the 457 visa program should be. Yet when the current inquiry being led by the Senate Committee on Education and Employment looks around for evidence of this, they see nothing. For months they have heard stories of worker exploitation and not once have they heard from an ASX200 company about the benefits of temporary and circular migration for business, local economies or Australia as a whole. Perhaps these inquiries are viewed as worthless in Sydney and Melbourne. This is regrettable as they are markers in a debate to capture the public imagination and inform the bias of parliamentarians.

Worse, big business remain silent when news breaks about more short-term self-interest. The hospitality industry has been granted in-principle approval for a lower salary threshold for the 457 visa. The agreement will create the option to negotiate a salary threshold of $48,510. This is 10 per cent lower than the standard program threshold of $53,900. This is despite wage growth in the Accommodation and Food Services sector being below the labour market average from September 2009 (when the 457 visa program was reformed) to March 2015.

I can’t think of a single policy decision that is laced with more risk to the 457 visa program than this. This is the type of decision that gets crushed by history. This will hurt big business as the pendulum will inevitably swing back faster in the opposite direction, probably soaking the program in administration. Why any business or industry leader would let a program as important as this – filling skilled vacancies – be held ransom by a small minority of dodgy operators I do not know.

Unfortunately this goes beyond ChAFTA and salaries for the hospitality sector.

Migration is going to become one of the defining areas of public policy of the 21st century, a battle of increasing security concerns and hyper-nationalism against how liberal we want to call our societies. Business communities will need to be at the forefront of this fight, for their own self-interest above anything else. I have little confidence based on current trends this will occur. Building a narrative where migrants contribute to our national story instead of a story where every new arrival is viewed with suspicion is not going to happen by itself.


“FactChecking” the “FactCheckers”: The Chinese-Australia Free Trade Agreement

I hate Fact Checking. I think it is a ridiculous way to undertake journalism. It implies a level of objectivity that often is not there. So-called “Fact checkers” routinely ignore context and knowingly wade into complex debates where there is no independent truth.

So it is with the Conversation’s series on the Chinese Australian Free Trade Agreement. The latest in this series is authored by Stuart Rosewarme, “Factcheck: Could Foreign Workers Be Paid Less Under the China Australia FTA?“.

At the heart of the public debate on the labour migration provisions in ChAFTA is the “Investor Facilitation Agreement” (IFA) Memorandum of Understanding (MoU). The IFA is a contractual agreement between a company and the government that outlines potential concessions to the 457 visa program.

Stuart Rosewarme is checking whether this agreement will allow for foreign workers on 457 visas be paid less than Australians doing the same job. He concludes:

Michael O’Connor is correct in that there is no black-and-white statement in the MOU that stipulates that foreign workers working side by side with an Australian worker shall unconditionally receive the same conditions and pay.

Clause 2(e) of the MOU does say that Chinese firms operating in Australia must agree to “comply with all Australian laws and regulations, including applicable Australian workplace law, work safety law and relevant Australian licensing, regulation and certification standards.”

However, Clause 5 opens the door to removing those protections through negotiated “concessions”.

Mr O’Connor’s concerns have considerable merit.

The problem with Stuart Rosewarme’s piece is that he doesn’t appear to know much about how the 457 visa works, either in practice or the regulations which govern the program.

“Michael O’Connor is correct in that there is no black-and-white statement in the MOU that stipulates that foreign workers working side by side with an Australian worker shall unconditionally receive the same conditions and pay.”

Buried in Regulation 2.72 at Section 10C of the Migration Regulations is the law governing how 457 visa holders must be paid the same as Australian citizens:

(10)  If the person is a standard business sponsor**–the Minister is satisfied that:

(c)  the terms and conditions of employment of the person identified in the nomination will be no less favourable than the terms and conditions that: (i) are provided; or (ii) would be provided; to an Australian citizen or an Australian permanent resident for performing equivalent work  at the same location;

“No less favourable than the terms and conditions” is commonly referred to as ‘Market Salary Rates”. While a minority of employers can and do pay 457 visa holders less than their Australian counterparts, this is against the law. This requires improved enforcement, not more legislation or statements of intent.

Because this is the law, the IFA would have to explicitly provide a concession for 457 visa holders to be paid less than Australian workers. Possible concessions are outlined in the IFA MoU in Clause 4:

(a) the occupations covered by the IFA project agreement;

(b) English language proficiency requirements;

(c) qualifications and experience requirements; and,

(d) calculation of the terms and conditions of the Temporary Skilled Migration Income Threshold (TSMIT).

‘Market salary rates’ are not listed in the MOU as a possible concession. This means any employer who signs an IFA has to comply with Section 10C of Regulation 2.72: providing ‘no less favourable terms and conditions’ to any 457 visa holder who is performing the equivalent work at the same location as Australian citizens or Australian permanent residents.

Calls for a “black and white statement” on whether 457 visa holders will be paid the same as Australian’s deliberately confuses the audience. The law requires this and there is nothing in the IFA to allow foreign workers to be paid less than Australians. Mr. Rosewarme should have mentioned this clearly in his ‘factcheck’ and showed that, no, it is not possible for the IFA to allow companies to pay 457 visa holders below Australian rates of pay.

I have seen others argue that Clause 4(d), in relation to the Temporary Skilled Migration Income Threshold, allows companies to pay 457 visa holders less. This clause in the MoU relates to Migration Regulation 2.72, Section 10CC, creating a salary level which must be met to use the 457 visa program. The standard threshold is $53,900.

However this salary level does not work as a ‘minimum salary’ and employers cannot pay 457 visa holders $53,900 regardless of their job. The threshold determines that positions with a salary below $53,900 are not eligible for the 457 visa program. Even if an IFA outlines a reduction in the salary threshold, companies will still be required to pay 457 visa holders “no less favourably” than Australian citizens or permanent residents.

Mr. Rosewarme bases most of his argument on this line in Clause 5:

“The project company may be asked to provide additional information by DIBP in respect of its requests for concessions in the above areas.”

Clause 5 of the MoU clearly references Clause 4 as the ‘above areas’. This limits any discussion or possibility of concessions to those identified in Clause 4. This means the only concessions possible under an IFA relate to; occupations, English language, qualifications and the salary threshold. Nothing about market salary rates or wages and conditions. Nothing about broader workplace laws.

I disagree entirely with Mr Rosewarme’s “verdict”. He has not provided “facts” to back up his assertions. He has simply cobbled together a mishmash of references and assumptions, many of which are not grounded in reality.

For the Conversation to run this piece, PLUS have another “reviewer” give it the stamp of approval, shows just how inept this style of journalism and policy engagement is.

**Update: It has been pointed out to me that Regulation 2.72 10C applies to “standard business sponsors” and not work agreements. This is correct. However since the ‘no less favourable’ status was introduced in Section 10C, I understand every single work agreement has contained this same status. Further, this does not change that a work agreement/IFA would have to explicitly outline a concession from the standard program, something which is not raised in the MoU under Clause 4.


Private humanitarian sponsorship

The government recently released a discussion paper, “Community Support Program“, outlining options for private sponsorship of humanitarian migrants. This has been trialed over the last two years and there was sufficient demand in the community to indicate a permanent program of over 500 people per year.

I was surprised at this given the cost, approximately $30,000 for a family of five. Yet over 650 visas were granted from July 2013 to March 2015. Interesting, Syria and Iraq were the top two countries of origin, showing the program responds to current humanitarian crises.

Migrants can only be sponsored by Approved Proposing Organisations who have to:

  • ensure the visa application charge (VAC), which is approximately $30,000 for a family of five ($19,124 for the primary application and $2,680 for each secondary applicant), is paid;
  • provide the cost of airfares and medical checks;
  • provide initial practical support to assist humanitarian entrants settle successfully; and
  • provide services which are broadly similar to those currently provided to humanitarian entrants under the Humanitarian Settlement Services programme.

This is no small undertaking in both upfront costs and ongoing support.

However I have two main points of contention with this proposal.

The main criticism is the limitations placed on sponsorship. Organisations basically need to already be providing government funded support to become eligible to privately sponsor migrants. This automatically shrinks the potential of the program. Instead of something radical, this becomes a quaint addition to the humanitarian program.

I understand why the government create eligibility barriers. They don’t want to be on the hook for when dodgy private sponsors do not provide support. This is the standard, risk-averse position any government would take. But it also shows why this idea will not thrive until there is more willingness to fail. Private sponsorship has the potential to unlock tens of thousands of new placements for humanitarian migrants but only if a new community can be galvanised to sponsor them. Restricting sponsorship to well established settlement service providers cuts this option off at the very start of the journey.

 

Lastly, if there are going to be heavy restrictions, the visa fee should be reduced. $30,000 for a family of five stinks of ‘cost recovery’ from the government. This will keep program numbers artificially low and privilege certain communities over others.

If the government really believed in a system that tilted towards private sponsorship, they would either greatly expand the number of sponsorship options with a high upfront bond to dissuade cheating or lower the visa fee to encourage more private sponsorship funneled through a small number of select providers.

Personally, I think there is merit in exploring these ideas. Yes, the government might use private sponsorship to shirk greater responsibility. But the humanitarian program has hardly shifted in decades and it took the unhinging of our asylum policy to up the number. I can at least imagine a humanitarian program of 40-50,000 in two decades time where a substantial minority is provided by private sponsorship. And that would be a good thing.


Migration and youth unemployment

In any debate about migration, youth unemployment will be one of the first figures raised by opponents. How can you argue against a 19 year old kid out of work? The current youth unemployment rate is 13.4 per cent.

For sometime, I thought the introduction of mass temporary migration – international students, working holiday makers and 457 visa holders – since the mid-1990s might have exacerbated youth unemployment relative to general unemployment. Students in particular are highly concentrated in urban areas and are assumed to work in entry level jobs. We haven’t had a recession since 1991 but temporary migration is a new feature of the labour market since then.

So this from Jeff Borland in May 2015 was interesting:

“It has been suggested that the current episode of higher unemployment involves some ‘new’ features – high youth unemployment, high long-term unemployment and large regional disparities in unemployment. Analysis of previous downturns, however, reveals that these features were all present. Hence the current high rates of youth unemployment, for example, seem to be best regarded as a manifestation of the cyclical downturn rather than a long-term worsening of the labour market outlook for the young.

This is positive for supporters of migration. Youth unemployment was high in the past without temporary migration. It will be high in the future with hundreds of thousands of temporary migrants. The “manifestation of the cyclical downturn” reduces the likelihood migrants are substituting youth out of jobs and points toward the natural ups and downs of the economy. However I figure this type of evidence is not going to persuade. Blaming migrants for unemployed young Australians hits a particular emotional nerve for many and is difficult to respond to.


Immigration: Nation building or gatekeeping?

The Chifley Research Centre published an article of mine on their ‘New Progressive Thinking’ blog. This is republished below.

“Immigration: Nation building or gatekeeping?”

The role of immigration has been central to building modern Australia. Arthur Calwell was certainly a passionate believer in White Australia yet his vision of mass migration in the aftermath of World War Two laid the foundation for a prosperous future. Similarly, while Gough Whitlam’s foray into asylum policy was regrettable, his introduction of the Race Discrimination Act and the abolition of White Australia ensured future migrants – regardless of where they are from – are fully welcomed to our society.

Together these policy decisions continue to shape current migration programs. Since the end of the recession in the early 1990s, Australia has run relatively large and open migration programs. We don’t talk about it much as attention is drawn to asylum policy but migrants to Australia are a progressive force.

Wage growth for lower skilled workers is stimulated by skilled migration. Australia accepts skilled migrants at some of the highest rates in the world. These skilled workers are complementary to lower skilled workers, creating economic benefits like a wage increase of 4.5 per cent between 1990 and 2000.

Census data for recently arrived permanent migrants show how this occurs. New migrants are over-represented in manager and professional occupations and under-represented as labourers, machinery operators and drivers, and retail and administrative workers. This points to the small but important role migration has to play in tackling inequality within Australia. Those at the bottom are the biggest economic winners from Australia’s skilled migration framework.

Yet Australian policy also addresses between-country inequality, where the bulk of global inequality is generated. The Center for Global Development ranks Australia 5th at promoting development through migration for a large share of students and migrants from developing countries. The Rudd and Gillard governments also piloted and introduced the Seasonal Workers Program, stimulating economic development in the Pacific.

But accepting large numbers of new migrants only works when they are supported. The process of how migrants settle is fundamental to future social cohesion. This includes resources and on the ground support. But perhaps most importantly, political leadership is the vanguard for public sentiment and social cohesion.

And this future, plus our rich history, is being risked in the name of security and border protection. The concept of nation building is receding and being replaced by barriers to fair participation in our society. The language of immigration is changing rapidly.

At the heart of this change in the transformation of the Department of Immigration and Citizenship to the Department of Immigration and Border Protection, to include the much heralded Australian Border Force.

Consider the following:

–       From 1 July 2015, immigration officials will be armed. Amongst the first sights a new migrant will witness will be a holstered gun and a set of suspicious eyes.

–       Visa cancellations on ‘character grounds’ have increased 500 per cent in the last 12 months.

–       In the 2015 Budget, an additional $40m was allocated to an ‘anti-people smuggling strategic communications campaign’. This was one of five ‘national security’ expenditure measures in the Budget under the Department of Immigration and Border Protection, totalling $324.9m.

–       At the same time, the government has slashed Australia’s humanitarian program as well as funding for organisations like the International Organisation for Migration who play a critical role in the region helping displaced migrants and asylum seekers.

–       In the 2014 Budget, the government removed the option for new migrants to bring out their parents unless they can stump up over $45,000. This is despite family reunion being a core element of settlement for new communities.

–       A small symbolic shift – email addresses will change from immi.gov.au to border.gov.au – will inform everyone who corresponds with immigration officials about the new priorities.

These are just a few of the changes that highlight the priorities of the Abbott government when it comes to immigration policy. The Secretary of the Department of Immigration and Border Protection succinctly summed up this new environment in his Australia Day message to staff:

“More than settlement, we should look to become Australia’s gateway to the world, and the world’s gateway to Australia. On occasions, at times of heightened threat such as caused by terrorism or pandemics, we will need to act as the gatekeepers and as necessary man the ramparts and protect our borders.”

But a gatekeeper in a permanent environment of ‘heightened threat’ will never open their door.

There are options for the future. Just as AusAID has been merged into the Department of Foreign Affairs and Trade, it will be difficult to unwind what has now occurred.

This means new opportunities are required to further improve immigration policy. English language and employment are the two most obvious starting points. Assistance to new communities to learn English is virtually unchanged since the 1990s. Ensuring the hospital, the courtroom and the classroom are places where new migrants feel comfortable is central to our nation in the 21stcentury.

Social cohesion and multiculturalism did not just magically appear. It took leadership, hard work, time and funding to ensure Australia is the one of the most socially cohesive and diverse societies in the world. Maintaining and building on past success must be a priority for progressive Australia.


How to understand 457 visa statistics: Don’t read the Australian

 

In August last year, I wrote about some poor reporting on 457 visa statistics. Natasha Bita in the Australian wrote:

RISING  unemployment has dampened demand for migrant workers, with 40 per cent fewer foreigners seeking visas to work here last financial year.”

This was nearly completely incorrect. The “demand” didn’t really do anything. Instead, a giant price increase on 1 July brought forward thousands of visa applications into June 2013:

This price increase did not create demand. Instead many visa holders already in Australia applied for a renewal a bit earlier than they would’ve otherwise and a number of businesses brought forward overseas hires. All of this masked what was a very standard year in 2013-14.

Ten months later. Same journalist, same paper… same mistakes:

Indian, British and Chinese workers are queuing for jobs in Australia, with applications for 457 work visas jumping by 15 per cent in a year.”

By definition, if you have artificially low numbers for 2013-14, you are going to see increases the following year even with the status quo. The same price hike on 1 July 2013 is “causing” the current rise in visa applications. This is because the 15 per cent “jump” is occurring in 2014-15, referenced against 2013-14, the year with artificially low numbers.

This isn’t rocket science. The current movements in visa application trends are probably about 10 per cent related to the labour market and 90 per cent related to the decision in the 2013-14 Budget to jack the fees of 457 visas by 200-800 per cent (depending on family size). This should wash out of the system over the next 6-12 months.

The public are told a nice narrative that correlates succinctly with the numbers. What a shame the narrative is completely unfounded.

There are many culprits here.

Let’s start with the Department of Immigration and Border Protection. They could have mentioned even a little bit of this background in their quarterly reports (March 2015). Instead, they are making the reports harder to understand by taking away some important contextual graphs on page 1. Of particular note was the graph that showed the actual number of 457 visa holders in the labour market, “Number of primary subclass 457 visa holders in Australia at the end of each month”:

Screen Shot 2015-07-06 at 8.56.38 pm

Looking at the graph, you see the number of 457 visa holders in the labour market moves slowly over time and never erratically (noting, of course, the dip in December as people holiday outside of Australia).

Unfortunately, you cannot see this graph in the latest report. For some reason, it has been removed. You instead need to dig into a pivot table that currently has a broken link. Yet even the text report says “The number of primary visa holders in Australia on 31 March 2015 was 106,750.” An extra couple of clicks and you can find out that the number at 30 June 2014 was 108,870. Doesn’t sound like a rollercoaster ride of 15 per cent increases and 40 per cent slumps to me.

I’d be very surprised if Natasha Bita read my previously blog post. Reading obscure migration blogs is not recommended for reporting in national newspapers. However I would’ve happily taken her phone call in my day job at the Migration Council Australia. I’ve spoken to numerous journalists – including three from the Australian – about migration trends and what my interpretation is of the latest statistics. I know a handful of other people who provide similar opinions. Instead, her article is a complete grab-bag of seemingly random statistics with a misleading central point (noting it is not deliberately misleading).

Lastly, I’ll take some of the blame. I got really hot under the collar when I read Ms. Bita’s article from last August. I made a commitment to myself that I would work harder to try and explain migration and the labour market – as I see it – to more people in the media, whether this be by random emails or actively following up what I regarded as mistakes. I started strong but a disappointing experience in March this year dissuaded me from keeping it up. My resolve has firmed once again.

There are really interesting, difficult policy questions regarding migration policy and the labour market in Australia. Yet the tosh that gets served up in the media makes it all but impossible for even interested readers to understand what is occurring. More damagingly, poor reporting prevents policy settings from being more closely examined. The hospitality industry continues to run rampant with the 457 visa program, with little regard for policy goals, the people they exploit or wages they seek to undercut.

This is horrible for policy outcomes and underpins ignorance in the community on how migration effects the labour market. The rising public debate about the migration provisions in the Chinese-Australia Free Trade Agreement will demonstrate how this ignorance can harm social cohesion and attitudes to migrants in the community.


Migration and Development in an Australian Context

The development blog Devpolicy have kindly published a piece of mine, titled ‘Migration and Development in an Australian Context‘. Full text below. Devpolicy are one of the very few Australian outlets who have an active interest in how migration to Australia can stimulate development in the Pacific. I’d encourage you to read their blog whenever you get the chance.

Would you rather be rich in a poor country or poor in a rich country? Dani Rodrik asks this question in his keynote presentation [pdf] to a recent World Bank conference on migration and development.

Yet this isn’t a question at all if you only focus on income.

Rodrik shows a rich person from Niger has a representative income of $2,918 while a poor person from Norway has a representative income of $13,049. This disparity reflects the fact that “the bulk of global inequality is generated by income gaps between countries, not within countries” (for an excellent breakdown of between and within country inequality, see Branko Milanovic’s article ‘Global inequality of opportunity: how much of our income is determined by where we live’).

There is a loud public debate about inequality in Australia and only muffled whispers about the role migration might play in addressing inequality. ‘Between country inequality’ is the poor cousin of ‘within country inequality’ notwithstanding the fact that a person moving from the Solomon Islands to Australia would rank amongst the most powerful mitigating forces of global inequality.

Yet Rodrik does not propose radical solutions. He values the role of the nation-state. His conclusion – there is more opportunity for labour mobility from poor to rich countries but limits are important – points in part to a policy solution of iterative expansion and regularisation of migration pathways, carefully managed by migrant-receiving countries.

If you accept this argument, Australia is well positioned to further the migration and development agenda. Our geography allows for highly effective management of our borders. Our economy and existing migrant community stimulate demand from people across the world to migrate to Australia.

The Center for Global Development ranks Australian highly on migration as a development tool due to both a “large share of foreign students from developing countries” and a “large number of immigrants from developing countries entering Australia”.

This status quo is positive but has occurred almost completely by accident. Australia has a generous immigration framework not because it fosters development for other countries but because both major political parties in government see it as beneficial for Australia. As far as I’m aware, no Immigration Minister has set out to boost Australia’s development effectiveness by tinkering with the standard migration programs that do the heavy lifting of immigration to Australia.

The one program with an explicit mandate to boost development is the Seasonal Worker Program. The introduction of the program was recognition that there is a place for migration in Australia’s development arsenal. However as readers of this blog are all too aware, the SWP is a program lacking success to date. This is in part because it is not a standard migration program. Whatever the rhetoric about the benefits for regional Australia, the program settings erred towards a development-centric approach instead of one focused on domestic employers.

Stephen Howes has written extensively (here and here) on the changes announced last week to the Seasonal Worker Program (SWP). Taken as a whole, these changes point to a shift in how the SWP is considered by government.

For a start, the Northern Australia White Paper is not the place you would immediately think of for a detailed discussion on Pacific labour. Yet by linking Pacific labour mobility explicitly to domestic policy concerns, such as labour demand in Northern Australia, the government has reinforced a central theme of Australian immigration policy: first and foremost, success will be judged by the benefit provided to Australia and Australians. If the SWP is to succeed in Northern Australia, it will be because Northern Australia needs the SWP, not because the SWP will help Pacific development.

Some might protest that we can surely accept more migrants from poor countries because it is the right thing to do, not because it is good for Australia. Unfortunately for people who advocate from this position, the last six years of Seasonal Worker Program highlight some of the problems inherent in this approach.

While the recent changes are promising, the government still has some serious legwork to do. Advocacy and promotion to potential employers should be priority number one following the liberalisation of the regulations. The biggest risk is inaction and bureaucratic drift across multiple agencies. With working holiday visa holders likely running to exit the horticultural sector and heading straight into the tourism sector, employers will need assistance to ensure a smooth transition as possible.

As nothing catalyses action like a target, I would like to propose one: 10,000 visas granted for the Seasonal Worker Program in 2017-18, with 50 per cent going to Northern Australia. We know labour demand exists for migrants to do this work but it is backpackers who predominantly undertake it. A target of 10,000 visas for seasonal workers would not undermine opportunities for Australians and it would show a public commitment to the program, from the government directly to employers.

However not all of the changes announced in the White Paper were positive. Other changes to the working holiday visa program – to allow participants to come to Australia for two years full-time work – push the program further away from its original intention. ‘Cultural exchange’ is being replaced as the primary consideration by labour concerns. The fact this program overwhelmingly facilitates migration from developed countries should give us pause. A low-skilled labour migration program that mostly excludes developing countries is not something to expand.

Finally, it is never too early to think about what should be next. What are other potential migration pathways to encourage Pacific development while meeting the standard of net benefit to Australia? Will the government’s proposed two-year microstate visa lead to more permanent migration opportunities? Can a visa lotto program – such as the U.S. diversity lotto or the New Zealand Pacific Quota – emerge in Australia? Can migration provide effective short- and medium-term relief from natural disasters like Tropical Cyclone Pam in Vanuatu? What are the major barriers to working holiday agreements with Pacific island countries? Working through how ideas like these can be incorporated into Australia’s immigration framework should be higher on the agenda for those with an interest in Pacific development.


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