Why now? Revamping Australian citizenship

Why is Peter Dutton (and Pauline Hanson) talking about a tougher citizenship test?

Before getting to this question, let me state my position on citizenship: the existing requirements for citizenship – four-year residency, a permanent visa, and the existing citizenship test is already performed in English – are more than sufficient. I believe birthright citizenship, or jus soli for the lawyers out there, is a human right, as the United States, Canada and most of Latin America hold. The 21st century will bring home some of the very difficult political questions about who belongs where as migration continues to increase. The current ad-hoc citizenship processes across the world will struggle to cope. The losers will be migrants, as the countries they live and work in seek to assert vague notions of sovereignty for political gain.

Peter Dutton did not wake up on January 2 and decide, on a whim, to start agitating for harsher citizenship measures. This was a calculated decision, just another marker in a longer process which started in earnest when Malcolm Turnbull kicked him out of the National Security Committee of Cabinet, and before that, when Scott Morrison as Immigration Minister created the Department of Immigration and Border Protection. Here is a marker for 2017: the prevalence of security and citizenship as national topics of conversation is inversely related to Malcolm Turnbull’s political ability.

Immigration hawks view the world in discrete units, such as the number and type of visas granted and border crossings. They don’t have much use for social cohesion and diversity, concepts somewhat ill-suited as evidence for measurement and decision-making. The world is black and white, devoid of grey and extremely risk averse. In the aftermath of 9/11, Dick Cheney illustrated what became known as the One Percent Doctrine: “If there’s a 1% chance that Pakistani scientists are helping al-Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response. It’s not about our analysis … It’s about our response”.

‘It’s about our response’. When considering Peter Dutton’s words and actions in 2017, I would encourage you to keep these words in mind. The approach outlined by Cheney above is an approximation of the worldview linking immigration and security, where zero tolerance drives policy fundamentals and crowds out most other considerations.

One unit considered by policy makers but often overlooked in public commentary is time. Time is precious and extending it is a neat way of increasing power without appearing to make wholesale change. Anyone on a visa, permanent of temporary, falls under the Migration Act and the various powers contained without it. Drawing out the time visa holders spend as migrants instead of citizens, enhances the power of the Immigration Minister, provides governments with more flexibility and, importantly, increases the number of people overseen by the Department of Immigration and Border Protection. More widgets, higher growth, bigger numbers: this is the language of power in Canberra if you want a place at the big kids table.

To my mind, these are the reasons behind the push for greater citizenship hurdles for migrants to overcome. This is why Peter Dutton is talking about citizenship. He wants a longer time period allowing more opportunity for security agencies to assess people and creates more possibilities for other issues and agencies to be brought into the mix (i.e. welfare and the Department of Social Services). This may include additional English testing and some form of a migrant demonstrating “Australian values”. When looking for a needle in a haystack – a terrorist on a student visa for example – more time increases your odds. But the flip side is everyone else is also affected. Students who are not terrorists, i.e. all of them in any statistical sense, would be treated to the same rules being used to find the ever elusive needle.

There are a host of other potential problems with using time to place more barriers in front of citizenship. For example, the ABS tells us humanitarian migrants earn more income the longer they stay in Australia:

Income earned by Humanitarian migrants after a period of residency


It is not difficult to imagine how gaining citizenship assists people move into higher skilled jobs and earn more income. Citizenship is used by many public service agencies as an entry requirement and large multinational companies often preference citizens as they are not subject to visa restrictions. What if increasing the length of time it took to become a citizen – from say four years to six – also reduced occupational mobility in the labour market? What if this held back people who would otherwise have a smoother settlement journey? While marginal, these are large probabilities beneath the surface and never examined as a counter to the security narrative.

You can trace Peter Dutton’s comments early in 2017 to movements last year as well as looking ahead. Leaked documents show the Cabinet considered revised immigration regulations in March 2016 (which I wrote about with Peter Mares and Anna Boucher here). This came only four months after Parliament passed an overhaul of citizenship rules, including new powers of revocation for dual-citizens. From what I understand, these new powers have not been used or tested in the court system, with a number of legal experts at the time considering them unconstitutional. Looking ahead, the Joint Standing Committee on Migration is conducting an inquiry into Migration Settlement Outcomes. This is code for examining welfare, English proficiency and citizenship rights of new migrants (see the Terms of Reference here). You can expect this inquiry to be used as “evidence” for a new round of sweeping changes to migration and citizenship law. Incidentally this is occurring at exactly the same time as every single government service provider for humanitarian support programs find themselves in the middle of a procurement process. If you were a cynic, it wouldn’t be a good look in stifling a dissenting view from those supporting humanitarian migrants on the ground. I would urge people to engage with the Parliamentary inquiry as there is a paucity of evidence to generate more barriers for people who want to become Australians.

This is the result of citizenship as a security policy tool. Gone are ideals about give and take, about rights and responsibilities. Today citizenship is viewed as solely as a privilege, something the state can choose to bestow upon you. Thankfully most people do not subscribe to this view, signalling a political opportunity to oppose or at least modify the pending legislation. Yet every discussion about citizenship through a security frame and in such a haphazard manner, stokes the coals of Hanson. Every media cycle promotes her views and gives her a platform. These national conversations might suit Peter Dutton’s short-term interests yet they undoubtedly hurt Malcolm Turnbull and any considered strategy to confine the far-right in Australia to the fringes.

Post-2016: Trump, Brexit and Hanson do not belong together

A new trope has emerged in the Australian media. ‘Something something, out of touch, post-something post-something, Trump, Brexit, Hanson’.

The most confronting example I’ve seen to date was back in November when the headline editors at the Guardian asked “First Brexit, now Trump: can Australia be spared a similar voter backlash?” Spared? And while Lenore Taylor provided one of the more readable takes in this new genre, she was unable to shake the self-doubt from such a stultifying headline. The Trump-Brexit-Hanson narrative within Australian political journalism, occupying a grey area somewhere amongst opinion, analysis and news, has exploded over the past eight weeks. There are already 24,500 results for “Trump Brexit Hanson” in Google News. Combining these three words as the foundation stone for content has become a crutch spanning the political spectrum and outgrowing any one type of social network. Take your pick:

Warren Mundine (Daily Telegraph)

Trump, Brexit and One Nation’s resurgence deliver two key lessons.

First, politicians who speak directly to voters about what voters care about can prevail, regardless of the media and commentariat.

Second, if centrists are unwilling or afraid to embrace commonsense views, voters will turn to extremists and populists, however offensive.

David Lipson (ABC)

The election of Donald Trump and Britain’s exit from the European Union are the hallmarks of a tectonic shift in Western politics, fuelled by rural and regional revolt. As a consequence, the long-forgotten people in the regions of Australia are now at the forefront of every politician’s mind.

Jennifer Hewitt (AFR)

For all the surprise in Australia about the election of Donald Trump, for example, he says the complete disdain and disgruntlement among swinging voters towards establishment politicians here is not that different to the US or to the sentiment that drove Brexit in the UK.

James Massola (SMH)

In the election of Donald Trump, the triumph of the Brexit campaign and, in Australia, the election of four Pauline Hanson One Nation senators, three Nick Xenophon senators and a phalanx of disparate crossbenchers, voters have sent a clear message: “the system is not working for us, and we are dissatisfied with our elected representatives”.


My festive hot take is here in Australia, we shouldn’t lump Hanson in with Brexit and Trump.

Anyone who is concerned about Pauline Hanson should be aware of where her support comes from and what this may say about the political and social landscape of Australia. The people who voted for Hanson are not chumps or dullards and deserve their say as much as everyone else. Combine this with the journalistic imperative to find a way to explain complicated stories confined by tight word limits and the rationale for why journalists lump together Trump, Brexit and Hanson becomes clear. Everyone knows Trump, most people know Brexit and Hanson is a divisive figure with a long history in Australian politics. We also need to know about how Hanson is shaping the debate and what this may mean for the future.

But before the end of 2016 and as a primer for your Christmas day dinner conversation, I urge anyone thinking Trump, Brexit and Hanson are even somewhat equivalent to reconsider. When your uncle repeats some version of the accepted wisdom derived from the above quotes, you can counter with the following. Grouping them together is dangerous, misplaced and bestows an additional sense of undeserved legitimacy on Hanson. It’s also wrong. Removing this crutch from Australian political analysis in 2017 would be a welcome addition to the media landscape. Early 2017 will mark a test as the legitimacy for Hanson will grow with the inevitable One Nation gains at the Western Australian state election coinciding around the same time with Article 50 for Brexit and Trump becoming President. Luckily for you, there is ample evidence demonstrating why Hanson is a disparate political movement compared to Trump and Brexit.

The first exhibit is straightforward: examine overall support. Over 95 per cent of Australians did not vote for Hanson while about half of all American and British voters selected Trump and Brexit respectively (of course noting Clinton’s victory in the popular vote). Much more should be made of this and even if the Hanson vote increases to one in ten or one in five nationally, which would represent stark political failure by the major parties, there would remain a deep gulf in terms of comparative voting outcomes. Why does Hanson get the benefit of the doubt from less than five per cent of the national vote and a few profile stories of One Nation voters? Compared to Trump and Brexit, she failed miserably.

Trump was able to attract ~40 per cent of the GOP primary vote on a platform containing not much more than anti-migrant rhetoric. This transformed into a broader coalition at the general election. He captured one of two party institutions in the United States with little resistance. Brexit attracted a majority – more than one in every two votes – in a high-turnout U.K. election. In contrast, Hanson attracted 1.8 per cent of the primary vote in the House of Representatives and 4.3 per cent of the primary vote in the Senate. She peaked at 9.2 per cent of the Senate vote in Queensland. The comparative figures are stark yet always overlooked when explaining the link between the three political movements. Trump co-opted a mainstream political institution in the GOP and Brexit was a take it or leave it option. One Nation is neither of these. Instead it is a renegade party akin to UKIP in the United Kingdom but without the opportunity of an up or down referendum of generational importance. As will occur in the future, One Nation was forced to compete in a crowded field of candidates across the country and the overall level of support Hanson attracted can help explain an important yet relatively small story about the political landscape in Australia.

This leads into a second factor behind these political forces, the motivation for support of Trump and Brexit compared to Hanson. Concern about immigration was a primary consideration in the success of Trump and Brexit. Trump’s GOP primary success was catalysed by disparaging remarks about Mexican and Muslim migrants. This was not a factor to explain his early success, it was the factor. GOP stalwarts from Jeb Bush, to Marco Rubio and even Rick Perry in the 2012 cycle, were undone by their support of various migration initiatives to address the 10m+ undocumented migrants in the United States. Trump was ruthless on this and while the reasons for his victory in the Presidential election are more varied than concern about migration – partisanship, a lack of GOP dissent, Hillary Clinton – migration cut the track for future success. Brexit was similar except with an inverse timeline. As the proponents of Brexit hammered away over months on a mishmash of messaging, eventually they figured out nothing had the potency of anti-migrant rhetoric. In the fortnight leading up to the June vote, Nigel Farage and other pro-Brexit campaigners focused almost exclusively on immigration, feeding the beast. Google Trends shows a doubling of search interest in ‘immigration’ in the week of the Brexit vote. This anecdotal evidence is supported by more thorough empirical research linking migration to Trump and Brexit, from people like Matthew Goodwin and Eric Kaufmann. I’m particularly convinced by the link towards more negative attitudes on migration and fast-changing levels of migration, feeding into support for overtly anti-migrant rhetoric. This deep dive at Vox on race and immigration in the context of Brexit and Trump has much more.

Now turn to the Australian context behind these factors of support in the United Kingdom and the United States. A full 28 per cent of Australians were born overseas (a slightly lower proportion of electorates are born overseas). The increase has occurred in conjunction with the 25+ years of economic growth. Clearly there has been large disparities in the growth of the migrant population if you start breaking down Australia into small chunks but overall, the picture is constant growth off an already high proportion of migrants in the population. The United Kingdom and the United States, at 14 per cent and 13 per cent respectively, have about half the proportion of migrants yet they have increased their share at a much faster comparative rate than Australia over the last 15 years as they came off a lower base of migrants. And while you can construct an equation where Hanson’s supporters look at least somewhat comparable to Trump and Brexit supporters, there are proportionally fewer of them in any relative sense. Urban? Education? Inequality? Migrant? In every single Australian comparison of similar cohorts, the political advantage lies more with the ‘establishment’ than the ‘outsider’ compared to the United Kingdom and United States.

A high migrant population does not provide an automatic barrier to political success of anti-migrant parties. But it does make it substantially more difficult, especially for forming government as marginal seats in capital cities counter balance the appeal in outer-suburban and regional electorates. A party of government must consider this at all times as opposed to a party of protest in an Australian electoral system which isn’t winner takes all. Hanson’s re-election attempt in 1998 is the best example of this. Even with the most primary votes, she lost on preferences as the Coalition pushed Labor over the line. It’s also worth considering why specific anti-migrant parties have failed in (modern) Australia. Recent evidence includes the disastrous performance of Reclaim Australia and the Australia First Party at the 2013 election despite significant media attention. Even non-racist anti-migration parties like Sustainable Population Australia have failed to carve out any presence on the national level. Their litter of Senate candidates over multiple election cycles hasn’t generated attention or more than a handful of votes. I’m not arguing we have moved past the ability of anti-migrant parties to establish themselves or the capacity of politicians to implement anti-migrant policies. Instead the size of the challenge should be noted and every profile of a Hanson voter should place their attitude in a broader context. The Scanlon Foundation Social Cohesion survey this year found historically high support for the current level of immigration, even though a large majority of voters have no idea what the actual rate is. These perceptions mean at a national level, Hanson has a much more difficult environment to grow her support into something resembling a permanent electoral fixture, equivalent to Trump and Brexit.

As Lenore Taylor wrote in her article referenced at the top of this blogpost, Australia is different in a number of other ways as well. Inequality is more muted. Electoral participation is mandatory. Growth did not flatline after the GFC and unemployment never spiked. Hanson is probably here to stay for quite sometime but this does not mean she is equivalent to generational electoral events elsewhere or a new trend where migrants are unwelcome in Australia. I’m extremely wary of One Nation’s future electoral success at the State level as well as her ability to shape the political agenda and other political actors. Her platform in the Senate must not be ignored or normalised. But before we frame political stories in 2017 through the lens of Trump, Brexit and Hanson, reconsider the basics here in Australia and stop lumping them all together.

How to feed research into Australian migration policy: Self-selection and labour market performance

I attended a great presentation yesterday by Christian Dustmann, who heads up the migration-themed CREAM research organisation, based at University College London. I’ll post a link to the video when available. There were lots of interesting bits and pieces but two things stuck out in an Australian policy context.

The first point was his emphasis on how migrants self-select and the flow on effects on these processes. There is lots of research on migrant selection but I find it tends to fall into the background when thinking about migration policy responses. The act of migration itself is a choice. Even in forced migration situations there are often options about where and when to travel. Dustmann focused on the selection at play in labour markets. Migrants are not stupid he said, and will select into markets where outcomes are more promising.

In Australia, this has policy implications. For example governments of both stripes and others on the crossbench continue to promote migration as a partial solution to regional labour shortages and even propping up the viability of existing communities. But it is hard to push migrants out into regional areas as there are relatively fewer employment opportunities. Migrants in Australia tend to be more urban than even existing Australian residents, selecting into locations which have potentially greater incomes. Recent policy examples such as the backpacker tax and the SHEV protection visas shed some light on this. Backpackers wouldn’t be out in regional areas if it weren’t for government policy. The incomes are not great and the work is hard. They select in looking for more residency. Instead of using prices and wages, the government can use the promise of more time in Australia. This obviously doesn’t work with Australian workers as they already have unlimited residency. The same forces are at play with the SHEV visas. The government knows asylum seekers are searching for more permanent residency outcomes so load up regional incentives into a more promising visa pathway.

Yet there are clear limits to these policy incentives. It is much more difficult to create this same incentive for a highly skilled worker who has numerous options across the world as they will select in elsewhere. Relying on this incentive is also quite short-term as after permanent residency is granted and labour mobility frees up, you would expect a drift away from these labour markets in line with choices others would make. Using migration to tie people exclusively to a single region is also not a good idea over a long period. Dustmann’s point was this process is more complex than people and policy-makers probably imagine. Instead of just focusing on the effect on wages and ‘Australian jobs’, existing native residents might leave labour markets or choose not to participate when migrants enter. This is not a simple static environment but one where change and response to that change is the default. Unfortunately this more complex argument is not very compelling to people who believe migrants steal domestic jobs from Australian workers. The response from both the Coalition Government and Labor must improve to counter a broader acceptance that migrants steal jobs, as the media certain isn’t going to help. And as the backpacker tax argument shows, often some of the more disadvantaged socio-economic communities have come to rely heavily on migration despite increasingly voting for political rhetoric which says there is no place for them in modern Australia.

In a roundabout way, this leads to the second take away.

Australia runs a skilled migration program and the general consensus is we do it well. The visas themselves are mostly achieved by using proxies for determining skills, things like a qualification or demonstrated work experience. But using proxies does not guarantee migrants will work in jobs associated with those qualifications or earlier work experience. This isn’t necessarily a bad outcome but we know migrants face added barriers in the labour market not faced by native workers, things like language proficiency and understanding norms. This leads to ‘downgrading’ in terms of their jobs which is difficult to capture in research and data because we never have a full picture of how people fare.

Dustmann presented some of his recent research using earned income and compared this to native income in a distributional sense. The graph below shows the proportion of recent migrants at different points in the earned income distribution, compared to natives.

dustmannwagespredictionSource: Dustmann et al, The effect of immigration along the distribution of wages

The flat line represents natives while the two other lines represent the actual and predicted outcomes of migrants place in the wage distribution of the United Kingdom.

The dotted line (actual) shows recent migrants are 1.5 times more likely than natives to be working at the very bottom of the wage distribution, which then falls away, flattens out and then rises at the very top end of the distribution. This pattern is quite different to the other line, which is the predicted distribution of recent migrants using their education as a proxy. Effectively, for recent migrants arriving in the UK, this graph captures the actual downgrading which occurs, at least for income purposes.

This is fascinating for Australian policy makers. Running a skilled program and relying on education and previous experience requires bureaucrats to make a whole bunch of decisions, such as what occupations to put on eligibility lists for example. You might have heard Peter Dutton recently say goat farmers are now not allowed to be hired on 457 visas. This is a policy choice. What this data shows is downgrading has massive implications for policy makers because out in the labour market, employers and migrants sort themselves out differently to what you would predict if you just considered qualifications. Thinking about this type of finding and replicating it for Australia should help us better understand migrants in the Australian labour market. If anyone reading this is interested in looking into possible replication of this research in Australia in 2017, please get in touch (henry.sherrell@anu.edu.au). I am following up whether the data is available and what might be required. The paper and methodology are linked above in the source. It doesn’t look easy but I think it is worth considering given the potential implications.

A big concern I have is how research about migration is getting fed into policy initiatives. I think we tend to do this fairly poorly and while migration policy cannot address everything which happens in the labour market after a migrant arrives and starts working, constantly trying to work out how to improve the situation is important. I don’t see much evidence this is occurring in any structured and meaningful way, despite the large amount of hot air which being spewed forth in the wake of Trump and the 2016 Australian election. Without it, simple reactions – like Dick Smith’s recent claims – to complex environments will start driving political decisions, leading to disastrous unintended consequences.

A space for big business in the migration debate: some suggestions

The Business Council of Australia has a new President, the former CEO of Origin Energy, Mr. Grant King.

His first comments about a month ago were what you might expect from an incoming BCA President: “My focus will be on continuing to drive a more innovative and competitive economy, improving incentives for businesses to invest, and making the economy more flexible so it can respond to global forces of change.” A couple of weeks later, King said he wanted to get some bipartisan support for policies the BCA advocates, make the complex simple and prioritise the right issues.

I’ve written in the past how big business is missing in action on migration policy. For as long as I can remember there have only been two stances from the BCA on migration: silence or reaction to others setting the agenda. In recent years they have been cleaned up by the CFMEU on the ChAFTA deal and failed to constrain the nativism which is seeping into the Coalition. There are a few reasons why big business might shy away from engagement on migration. After all, I can imagine how advocating for more migrants coming to Australia could easily come across as simple rent seeking. Stepping into the fray might generate additional volatility and provoke backlash from angry populists.

I don’t find this line of argument at all convincing. Consider the standard BCA positions on taxation and industrial relations and the almost non-stop advocacy of positions which would directly benefit BCA members and shareholders. And unlike taxation and industrial relations, migration policy actually needs as many coherent advocates as possible at the moment and businesses have a role to play. The field is pretty bleak as anti-migrant coalitions bubble away on the margins. Dick Smith’s history of “environmental” advocacy has coalesced with Pauline Hanson’s outright discrimination. Labor is content to poke the bear on skilled migration while the Coalition couldn’t dig themselves out of their own backpacker tax hole without help from the Greens. What a mess. Who is prepared to stick up for Australia’s greatest nation-building tradition?

The most obvious place for the BCA is addressing the continued failure to demonstrate the role skilled migrants play in the labour market. Skills transfer, training and development, and ideas generation from migrants are examples of actual innovation. Every single BCA member has numerous 457 visa holders employed who bring their experience and expertise to the Australian labour market and broader economy. These people aren’t being exploited in kitchens or on construction sites. They aren’t stealing jobs. Where are the stories by BCA members showing the real world effects of being able to tap into a global labour market? We’re told labour mobility is an integral part of international competitiveness so it’s time to show how this happens. Product managers revolutionising the retail supply chain? IT architects transforming how businesses manage their databases? Senior executives who bring with them new methods of business strategy? What about how migrants themselves play a critical enabling role in opening up potential export opportunities?

Instead of a 20-something start up founders popping up in the AFR every other week to say how we need to reform our visa system, I want to see CEOs from BCA members with Grant King’s backing talking about the importance of skilled migration to job creation. Reacting to the news cycle when another case of migrant exploitation has been uncovered is the complete opposite of effective advocacy. Which brings me to my main point.

Migration is so important to big business in Australia it’s time to stump up some political capital and purchase public confidence: The BCA need to get behind a clean up of the 457 visa program. Their members play by the rules so won’t have to worry about the implications. Instead, small and medium businesses who exploit vulnerable workers need to be shown it is unacceptable as this behaviour undermines the entire program. Get behind a price hike and a proper compliance operation to weed out those who wilfully exploit migrants.

Why would any business group would get behind a policy change which would result in a (small) cost increase? Clearly the status quo is not good enough and the end outcome if nothing changes is massive policy backlash to the visa program which a Turnbull Government will be unable to oppose. Exploitation also has broader implications for the labour market, creating incentives to undermine norms in search of profit. The more systemic this becomes, the more difficult it is for employers who comply with regulations to compete on an even playing field.

No need to stop there Mr. King. At a big picture level, the BCA should think about how to demonstrate what the differences in labour market activity mean for Australian workers and the importance of migration policy in addressing economic ups and downs. We only have one immigration policy but the labour market in the Sydney CBD is very different to Bundaberg. How can we better adapt migration policy across these different environments? BCA members see how the economy unfolds in real time through their sales and activity data. Instead of creating incentives to hoard this information, figuring out member-led initiatives to better inform a ‘demand-driven’ migration policy could create great dividends. Giving policy-makers more confidence about potential changes and improvements will lead to better outcomes.

If that sounds too difficult, how about fighting for migration policy to remain tethered to economic policy instead of being completely subsumed into security policy? Talking about migration through a security lens undermines policy capacity in the bureaucracy to improve labour markets. A good example to raise would be the massive blowout in processing times for 457 visas driven by greater security obligations. The time to process a visa under the Turnbull Government has almost doubled and it now takes 6-8 weeks instead of the 3-4 weeks average under the Labor Government. Where is the outrage? This harms businesses ability to respond quickly to their workforce needs. As security priorities continue to grow in a Department of Immigration and Border Protection uninterested in economic policy, BCA members will feel the brunt of poor processes and the lack of transparency. I haven’t once heard Peter Dutton as Immigration Minister give a big speech about the role of migration in economic policy. If he isn’t up to the task, start agitating for change.

Finally a simple suggestion. Get behind the Productivity Commission’s recommendation for a population policy as a vehicle for a more informed discussion. The ad-hoc nature of migration policy and the lack of depth hurts business over the long-term. More stability, more evidence and more engagement will lead to improvements.

None of these suggestions would directly benefit BCA members and one of them would add a small increase in costs for BCA members. But they would each prioritise the right issues, foster some policy debate where partisanship is tempered and attempt to better explain the complexity of migration. You only need to look at the backpacker tax debate to see the potential for future migration policy failure. And with the global environment tilting further towards populism and anti-migrant sentiment, the BCA have to put in the hard yards in 2017 to try and set some boundaries before the politics of the next election appears in 2018. Instead of responding to the next story Mr. King, get on the front foot and put the case forward about the importance of migration to Australia.

Post-script: Looks like more of the same is on the agenda at the moment. 

We Don’t Know: The backpacker tax edition

I imagine everyone is sick of the backpacker tax. This will certainly be the last time I think about it in awhile. But instead of focusing on the tax itself, I want to show a couple of examples of what we don’t know when migration policy decisions get made here in Australia and the consequences of this.

We don’t know where backpackers live. There are about 135,000 backpackers in Australia at the moment and we simply don’t know where most of them are (the exception are people who apply for a second visa and need to show their postcode). This isn’t necessarily a bad thing in itself but gets overlooked when making decisions about tax. Income tax can be influenced by the geography of the labour market and not being able to understand this broader context constrains the capacity to inform policy.

More importantly, we don’t know where, how much or for what price backpackers work. This is very important for income tax policy. What we do know is a very high level picture about average incomes ($13,300 per person) and we know limited aspects of industry coverage, again only related to the second visa application (as this is restricted to construction, agricultural and mining). There was a survey back in 2008 showing some industry and occupational information however the labour market has changed since then, as have migration trends. Basically, we don’t know much at all. This means any questions about tax incidence or the potential effects on labour participation are going to draw a blank. Would a higher tax rate actually make Australian workers more competitive as backpackers withdraw their supply? I didn’t see this argument mounted during the debate but I can imagine a set of circumstances in urban Melbourne and Sydney where this is the case. The farmers might suffer but a 19 year old kid who isn’t studying or working may find it marginally easier to enter the hospitality or retail industry.

We don’t know why backpackers come to Australia. It’s probably a mixture of a bunch of things: holiday, lifestyle, work, future residency options. The list goes on and many individuals will have different reasons. This can have a big effect on policy decisions. For example, the Productivity Commission found about 20 per cent of backpackers who arrived between 1991 and 2014 ended up with a permanent visa. These people will be motivated very differently from genuine tourists, with a number of labour market effects (and tax implications) to follow. I think it is plausible to think people seeking residency are more likely to work cash in hand and accept sub-standard working conditions than those just having a holiday. The much bantered discussion about ‘competitiveness’ and New Zealand’s tax rate doesn’t much matter if Australian minimum wages are substantially higher than alternatives and people are choosing Australia for the beaches instead of the tax rate. I imagine this last point is pretty important in the behavioural decision making process for many potential backpackers thinking about coming to Australia.

Getting into the weeds, we don’t know how many backpackers claim their superannuation when the leave Australia. This is despite an integral part of the final backpacker tax compromise incorporating changes to the superannuation rules and fees for backpackers. How can we make sound fiscal projections if no-one knows what the answer is to these questions? The ATO provided evidence to the Parliamentary inquiry into the legislation and could only say about 100,000 temporary migrants withdrew their super each year. These could be students, 457 visa holders, backpackers or even New Zealanders. As about 220,000 backpacker visas have been granted in each year recently, who knows how much revenue the Government will end up due to changing the superannuation withdrawal fee from 95 per cent to 65 per cent? #WeDontKnow

We don’t know how many backpackers want to come to Australia (but we know more do). If we are worried about the labour market in regional Australia, there are other options to encourage more people into the backpacker program. The following countries are ‘maxed out’ against their cap for the number of backpacker visas available: China, Chile, Argentina, Spain, Thailand, Poland, Portugal, Slovakia, Slovenia, Turkey and Malaysia. These last two have a combined population of over 100 million people and are only able to send 100 people each year to Australia under their respective agreements. Instead of fretting about tax rates which may or may not have large implications, opening up some of these tiny country caps would almost certainly attract more backpackers to Australia. A proportion of these would then head out to regional Australia. And after all, attracting more backpackers to Australia seems to be a primary goal of the Government judging by Scott Morrison’s post-vote Twitter activity:


Showcasing Coalition social media posts seems like an appropriate place to end. Hopefully we have all seen the last of the backpacker tax for sometime and if the most this stale debate has achieved is create a world-class example of poor policy process, then maybe some future government in the future can look back and not make the same mistakes.

Move over security: economic and cultural immigration may prove difficult for the Turnbull Government

Rightly or wrongly, since 2001 immigration policy has haunted Labor. But things could be changing quickly.

Despite the best efforts of establishing a militarised Border Force, the emerging immigration debates in Australia are not about security. They are economic and cultural, and contain an entirely different set of propositions and implications. If Peter Dutton has grasped how important this is for his portfolio, his actions and words fail to show it. On economic immigration matters, the Coalition will be permanently chasing Labor. Even worse, on cultural immigration, the Coalition is stuck in the middle of two competing strands, where a foot in both camps approach will fail to please anyone. Malcolm Turnbull is in a genuine pickle.

Peter Dutton cannot out ‘Australia First’ Bill Shorten on the intersection of migration and jobs. He doesn’t have the support in caucus. More Coalition members than Labor members believe immigration is substantial economic positive for Australia. He doesn’t have the natural Liberal constituency of big business as they despise jingoism being bad for business. The Nationals know economic immigration is the last big hope for many towns in regional Australia even if they have never fully embraced it publicly. And in general, people don’t believe the Coalition are better for their job future than Labor, even if they are seen as better for managing the economy overall. After all, the Labor party is named after workers.

All of this will constrain policy options and rhetoric for the Coalition. The Government simply will not be able to get ahead of Shorten, who will always be willing to go a step further. For example, if the Government reduced the permanent migration program in the next Budget, Shorten would move to cut it a bit further. He knows Chris Bowen and Jim Chalmers can clean up the mess later if they win government in the future. On economic immigration – 457 visas, international students, backpackers – Dutton is chasing Shorten, who will not let up easily.

This has serious implications for the Coalition Government. Instead of leaking the names of employers who use visa programs under the Labor Government to the Daily Telegraph as happened this morning, Turnbull and Co should talk about anything else. Don’t feed the beast as keeping the spotlight on temporary migration is good for Shorten, almost regardless of the content. Internal Labor research must light up on the issue of foreign workers. This is the same reason Tony Abbott said no to the Malaysia Solution, drawing it out and maintaining the focus on asylum right up until the 2013 election. Peter Dutton should not say the words ‘457 visa’ for two years and he certainly shouldn’t start proposing alternative policies in response to Labor. Malcolm Turnbull should talk about literally anything else: the budget deficit, infrastructure, regional perks and security policy. Allow events help push the conversation away from this stuff.

Unfortunately for Turnbull, the problem is even worse for cultural immigration. The chilling effect of One Nation on the LNP in Queensland and the Coalition federally is yet to fully play out. Yet already there are ominous signs for the Government. Multiculturalism is heavily supported by the public and despite what you read from Essential, most people don’t want an outright ban on muslim migrants. The geographic concentration of Hanson support in traditional Coalition strongholds means she can freelance on these questions without proper opposition. Again, regardless of his efforts, Dutton cannot out pace Hanson to the right because of institutional Liberal policies and a broader cross-section of electoral appeal. You could see David Coleman, the Member for Banks, appear very uncomfortable when Dutton was speaking in Parliament about second and third generation Lebanese Australians. Reconciling a single approach to questions of cultural immigration with regional Australia and suburban marginal seats is very difficult.

The Coalition are literally caught in the middle where everyone from the far-left to the centre-right support multiculturalism and a non-discriminatory migration policy while the fringes get excited about the prospects of returning to White Australia. I don’t know what the solution is but again, I would guess it starts by not feeding the beast. Entering into a debate on the merits or otherwise of muslim migration or trying to highlight bad settlement outcomes (see this parliamentary inquiry) will only egg on the far-right. Whatever public rhetoric is used or policy suggestions mused about will not be enough to sate appetites. On the weekend, a small possibility was flagged: the introduction of new citizenship requirements with stricter English requirements. I don’t see how this does anything to aid the Coalition as opposition from Labor will mean Senate difficulties, which in turn gives One Nation a higher platform, allowing them to own the issue and move forward. That’d what being in the middle is all about and to deliberately enter into self-defeating public debates cycle must be avoided at all costs.

Finally, everyone knows Malcolm Turnbull doesn’t believe either the case for ‘Australia First’ nor promoting cultural assimilation. Trying to fight these big public debates without your Prime Minister onside is exceedingly difficult and will only highlight division and confusion. Tackling these issues head on will attract more attention and provide more incentives for Labor (economic migration) and One Nation (cultural migration) to keep hammering away in different areas of the electorate. This is the difficulty with more populist approaches to migration policy. None of this is necessarily good for migration policy. In fact, much of this may have serious negative effects. But at this stage, that’s largely by the by as the media and political observers are fixated on the machinations instead of the policy outcomes.

My battle with the Australian Border Force Act: A small, but worrying, example

Update: Since this post was published, the Department have reviewed my initial request and have provided the data. I appreciate the Departmental staff who reached out and initiated this off their own bat as I did not request any type of review activity. 

There are hundreds of interesting questions to ask when someone moves from one country to another. For as long as I can remember, Australia has been one of the best places to explore migration. There are two reasons for this: We welcome immigrants and the government and bureaucracy collect and make accessible robust migration data.

They are not household names but people like Graeme Hugo, the late Paul Miller, Deborah Cobb-Clarke and Peter McDonald have shaped global debates on migration. A new generation of scholars are now examining big, important questions about the intersection migration and work as well as any number of other themes, many of which will help us as a society in the future. Yet this tradition depends on access to Australian migration data from a number of sources, including the ABS, the Department of Immigration and various surveys funded by the government.

Until I received the following email from DIBP, I hadn’t realised just how uncertain this type of knowledge will be in the future:

“The data that was provided to Department of Agriculture was done so for a specific purpose in line with the Australian Border Force Act 2015 (ABF Act).  Unfortunately your request does not comply with the ABF Act and we are therefore unable to provide the requested data.”

I didn’t receive this email because I asked for something controversial. The reason this email stopped me in my tracks was I asked for something which was already largely public.

About a month ago I stumbled across the below map in a Senate submission to the Working Holiday Reform legislation.  The Department of Agricultural and ABARES had produced the map to help show where backpackers worked to gain their second visa. This was an important part of a big public debate about the merits or otherwise of the backpacker tax (as I write this legislation has just been voted on in the Senate, amended and defeat for the government).

I’d never seen this information before and I’m interested in exploring it further as there are decent labour market implications stemming from backpackers and the results may shed light on employment and migration trends. As you can see below, the Department helpfully documented the top 10 postcodes where backpackers worked to become eligible for their 2nd visa:


I get teased a little bit about the number of emails I send asking for stuff. But I’ve found you normally don’t get something unless you ask for it. So using the Department of Agriculture’s handy feedback form on their website, I asked for the data showing how many 2nd working holiday visas have been granted for each postcode.

The top 10 postcodes are already public but as the map shows, there is lots of other information about what you might term a ‘long tail’ of postcodes. One reason I wanted this information was to match up major industries in these postcodes and understand what type of work these people were doing. It would also be good to go back a couple of years and compare trends over time, whether employment activity shifts over time. All sorts of things were possible.

One thing I’ve learnt in the past is don’t ask for too much, too soon. In addition, there is always a potential privacy consideration when examining immigration data. For these reasons, I limited my request to the list of postcodes and number of second visa grants in each. That’s it.

This ensured I excluded information about individuals like age and country of birth which may compromise privacy. I also assumed if the number of backpackers in a postcode was less than five, it would be shown as “<5” as this is standard practice for other types of immigration data.

ABARES let me know they had passed the response to the Department of Immigration and Border Protection. After following up with DIBP twice, about a month after my initial request, I received the above email which prompted a series of internal questions roughly in this order:

  • You have to be f****** kidding me?
  • If the data was provided to the Department of Agricultural with the knowledge it would be at least partially public, why isn’t the same data available but in a different format? i.e. a spreadsheet not a map based
  • How does my request not comply with the ABF Act? What’s in the ABF Act which prevents highly aggregated data being shared to better inform our understanding of relevant public debates?

And finally: why couldn’t someone work out a way to comply with the ABF Act and still provide me with data?

From what I can work out, the relevant part of the ABF Act is Part 6 pertaining to secrecy and disclosure provisions. Section 44 outlines ‘Disclosure to certain bodies and persons’ and subsection (1) is about ‘protected information that is not personal information’ disclosed to “an entrusted person”. This is the same process causing serious consternation among health professionals working in detention centres.

I am not “an entrusted person”. According to subsection (3), the Secretary of the Department has authority to designate this. Perhaps I should email and ask? Again from what I can work out, it looks like the person who created the data made a record now classified as protected information. This information is then automatically restricted to people who are classified as entrusted, including other bureaucrats, such as those in the Department of Agriculture.

Yet this begs the question. If the Department of Agriculture can publish a partial piece of a protected record, why can’t the Department of Immigration and Border Protection?

All I know is this stinks. And while this concern does not rank anywhere close to those faced by doctors and nurses who work in detention centres, the slow corrosion of sharing information caused directly by this legislation will have massive costs to how we understand migration in Australia.

Think about the very reason we’re even having a debate about the backpacker tax. Not enough people knew about immigration policy, trends and behaviour. The wonks at Treasury didn’t do any modelling on the labour market implications and the politicians in ERC and Cabinet – including the National Party – had no idea about what this might do to their own constituents. Outside the government, when I did a quick ring around in the days after the 2015 budget, the peak industry groups for horticultural didn’t think the backpacker tax would be a big deal. If I was a farmer, I’d rip up my membership. People should have known from very early on this would have real effects in the labour market as I wrote 10 days after the Budget. The fact no-one stopped or modified the tax before it got out of control shows we are working off a low base in terms of awareness about immigration.

The Australian Border Force Act is only going to make that more difficult. Hiding basic, aggregated data behind this legislation will increase future episodes of poor policy making and limit the ability of Australia to set an example to world for immigration. Our Prime Minister is fond of musing on our successful multicultural society yet alongside this decades of learning that has shaped communities, policy decisions, funding allocations and everything else under the sun.

I have no idea how I’m meant to take part in this process if access to information is restricted to bureaucrats and ‘entrusted persons’, who at the moment don’t seem able to analyse worth a damn, judging from the quality of public debates we are having. I don’t expect a personalised service with open access to immigration data. But I expect the public service to serve the public interest, especially when the matter is straightforward, uncontroversial and has the potential to inform relevant public debate.