Yet the Feds 2021 Budget immigration policy has significantly increased the supply of low wage foreign labour to Australian Industries.

The Morrison government have capitulated under pressure from Industries demanding more low skilled foreign workers.

Australian Industries have been able to press the government into allowing Foreign students to work unlimited hours and terminate employment restrictions.

This lobbying is coming from representatives of employers such as the Committee for Economic Development of Australia, and from industry associations relying on low skilled workers, including the hospitality and horticulture industries.

This recent visa decision is woeful, given the Federal government have a Productivity Commission report gathering dust, which revealed temporary visa holders comprise 50% of the growth in Australia’s youth workforce (15-24).  

This is such a poor immigration decision (expanding the size of the temporary entrants workforce in terms of removing any limits on employment) has the prospect of escalating youth unemployment shown in Chart 1 below?

Chart 1 highlights the rise in education visa grants along with Australian youth unemployment.

The PM said the new visa policy move would be important for the “large numbers” of international students that remained in the country. There are nearly 340,000 foreign students in Australia and 1.74 million temporary visa holders in total.

Productivity Commission report on the migration intake

In 2016 a Productivity Commission report revealed temporary entrants aged 15-24 years with work rights (students, working holiday makers and temporary graduates) comprised around 50% growth in Australia’s youth labour force.

What they found was alarming in terms of the growth in young temporary workers increased the risk of displacement – it is more likely felt at the lower end of the skill spectrum and in the Australian youth labour market.

The Federal government and indeed the West Australian State government have made no effort to limit the social/employment damage of Australia’s huge stock of temporary foreign workers on local lower skilled residents.

The McGowan government has expanded the State visa nomination program since entering office, developing a new foreign graduate stream and enabling temporary regional visas to be used in Perth’s metropolitan region.

Why did the Morrison government make such a rash visa policy decision?

The student visa changes highlights a worrying development in government migration planning. Their new student Temporary Activity visa (subclass 408) is estimated to result in a small but unquantifiable increase in the underlying cash balance.

Unquantifiable costings should be avoided by government because they may provide a misleading picture of the financial and other impacts of a proposal.

The social costs/ labour force impacts could be significant given there are nearly 340,000 foreign students in Australia at March 2021.

The economic imperative of huge net overseas migration could be the primary reason the government fail to openly debate or reform their mass migration program.

Concerns about infrastructure lags, hospital demand, congestion, rapid demographic/cultural change and social cohesion are less important?

In the most basic form of economic policy, ensuring a massive intake of migrants increases the gross domestic product, consumer spending and tax receipts.

Closing Comments

The lifting of conditions on the foreign study visa is a reckless move by the Morrison government, pandering to Industries pounding on about labour shortages when there is none.

Look at the large group of Australian youth on the dole in Chart 1 below.

By March 2021 there was 280,000 young Australians looking for a position and a unemployment rate of 12.8% (original data).

Foreign students were granted automatic work rights in 2008 by the Australian Labor Party, Australia’s youth and low skilled workers have borne the brunt since.

Enabling unlimited working hours for foreign students in industries such as tourism, health, hospitality, aged care, and agriculture, will likely increase Australia youth unemployment and displace low skilled residents.

(Source: Australian Bureau of Statistics, Labour Force, Australia Released 15/04/2021; Department of Home Affairs, Student visa program, Updated 29/04/2021)

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