SkillSelect and points-tested visas

Canada introduced the points-test for immigration purposes in 1967.  Australia quickly followed suit in 1973.  The points-test works by scoring characteristics such as age, language ability, qualifications and previous work experience, amongst other things.  Each characteristic is scored and if the number of points meets the threshold, you can migrate to Australia.  Since 1973 this system has undergone frequent change, including restricting what type of occupation people must be qualified for and how to assign value for different characteristics.

Up until 2009, each application would be lodged into a queue.  If the visa application had the requisite number of ‘points’ to pass the test, then a departmental officer would approve the application once it made its way to the front of the queue. The most important take away here is that if a person lodged a valid application, it could not be refused. When some quirky policy settings were introduced in the mid-2000s, many more people than expected were able to meet the points-test threshold. This led to a massive increase in valid applications from a wide variety of occupations. Mainly it increased the time required for a visa application to be approved.

To combat this issue, priority processing was introduced in 2009.  This afforded the department the power to grant visas to people who were a higher priority. Peter Mares has an excellent discussion of priority processing here and showcases some of the downside, including long waiting times for those in non-priority areas, mainly young people transitioning from a student visa to a permanent visa.

In 2012, all of this changed. The department introduced a new process for points-tested visas called SkillSelect. Instead of lodging visa applications, people now lodge an expression of interest to apply for a visa.  The expression of interest is not a visa application and therefore can be denied, or simply ignored. Instead, every month, those people with the highest scores are invited to apply for a visa. This means those people with the ‘best’ scores are quickly provided with visas while also not inducing a huge queue for other applicants. It’s clever and there is no doubt you’ll see it elsewhere in the world in the future.

Even better, we now have monthly data releases to see track how the points-test operates.

Points-tested visa invitations 2012-13

(source: DIBP 2013)

This graph shows invitations for two classes of points-tested visas. After the introduction of SkillSelect in August 2012, numbers rise to a peak of 2,800 in November and December 2012. There is a pretty steep decline after this. This provides good insight into migration demand for points-tested visas to Australia, something that is otherwise difficult to establish.

One explanation for the slowdown is that because of the low numbers from August to October, additional invitations were issued in November and December, with invitations levelling off to a more ‘normal’ level in the early months of 2013.

However an alternative explanation is that demand for these visas, at current policy settings, is weak. One way to understand demand is to look at the time and points cut off for invitations.

In August, you required 75 points and to lodge you expression of interest by the 11th of July. By November you only required 60 points and lodge by the 8th of August (60 points is also the current threshold level for these visas). In December, the points threshold was again 60 but the lodgement date had rapidly caught up and was now the 10th of November. By June, the points was 60 while the lodgement date was the same day as invitations were issued.

What does this mean? If you lodged an expression of interest to apply for a points-tested visa on the 16th of June 2013, you were invited to apply for that visa the next day.  I would venture that rarely has an immigration bureaucracy across the world been able to act so swiftly.

I don’t know which version is true. To date in 2013, there were over 2000 invitations in both July and August. This appears like a positive sign of healthy demand for points-tested visas. However it is still the case that if you lodge your expression for a visa the day before invitations are sent, you will receive it. In addition, many students graduate in July and August and it is likely they constitute a new group of people who begin to apply.

To me, there seems to be no backlog at all and I’m not sure this is a good sign given the historically large numbers of temporary migrants in Australia. There is no lack of migration demand in Australia, but there may very well be a mis-match between the ability to acquire a points-tested visa and a willingness to live and work in Australia. It may be the case that policy settings are too restrictive to allocate the planned number of points-tested visas. Of course, it may not be as well – this is speculation on my part. We’ll see if either the points-threshold changes or if the 2013-14 migration report show a difference from originally planned numbers.

If the settings are too restrictive, questions around the allocation of points for individual characteristics, occupational ceilings  and their relevancy to the labour market and the soundness of the planning process will need to be asked.  I would err heavily on the side of ‘everything is OK’ until there is some hard evidence to suggest otherwise.

There is a dearth of analysis about this in Australia. Hopefully SkillSelect will become a major source of primary data for the department and other researchers to interpret. For example, follow up surveys of migrants about income and employment at different points levels. I’ve always wondered what the actual difference between someone who scores 75 compared to a 60 and now we have the opportunity to find out.  It’s pretty easy to make a credible argument that employers are better able to match up migrants than the bureaucracy, especially in the short term. Hopefully the depth of this new data source will contribute to more robust foundations of points-tested visas.

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