Opinions on Business

  • A Very Fine Filter

    Immigration – the political hot potato of our times!   We face seven weeks of dog whistle politics, Alt Facts and media beat-up about our (mis)management of immigration numbers. Immigrants are scapegoated for our collective failure to invest wisely in infrastructure, housing, transportation and vocational training.

    From an employer perspective, I want to explore if our immigration policies as implemented have much impact on our skills shortage.  I struggled with the unfriendly statistics and plethora of visa categories, and got to a provisional view that positive immigration flows may bring both social and macro-economic dividends, but their direct impact on skills vacancies may be negligible.

    • All prosperous nations acknowledge obligations to be good world citizens, accepting a proportion of the “poor huddled masses yearning to be free”. However recent elections in G20 countries show that their electorates are increasingly uncomfortable with this altruism.
    • Alongside this, the growth dividend is bound to be cash negative in the short term, as increased tax revenues from immigrants cannot possibly fund the extra built assets required for the population jump. However, immigrants also spend their net pay, which benefits the whole economy with the usual multiplier effect.

    In this simple research, I focus only on Permanent Migration. What emerges for me is that the immigration policies of New Zealand seem to be minimally influential in redressing our skills shortage. See http://skillshortages.immigration.govt.nz/ . We probably need to look more to our own tertiary institutes, relevance and cost of education, and individual career ambitions for the solutions.

    Let’s set out some data: –

    • Net Permanent Migration in the year to June 2017 was 72,300, a record not matched in 150 years.
    • Australian citizens have automatic visa-free entry. For the last two years, the net Permanent Resident flow for Australians and New Zealanders combined has been approximately zero.
    • A Permanent Residency Visa is offered in four main streams – Skilled / Business, Student, Family, and International / Humanitarian. There are numerous sub-streams, whose flows are managed by points, ballots, quota and occasional halts.
    • Family and International / Humanitarian are social programmes.
    • Students generate revenues for schools and tertiary institutes, but don’t bring skills for the wider economy.
    • The only source of skills which is designed to rectify our training and experience deficits is the Skilled Migrant Category.

    In 2015/16, 25,756 permanent immigrants entered under this category. Say 26,500 in 2016/17. Sounds like a useful number to add to a workforce of 2.65 million. However further filtering occurs:

    • The skills are borne by the Principal Skilled migrant. Accompanying are the Secondary Migrants (partner, children, et al). So, the points-carrying, qualifying “Skilled” number drops to 13,000 people.
    • Then we learn that the Immigration Service is prepared to reclassify a just-capped tertiary degree as a Skilled Migrant possessing skills and experience. 45% of the Principal Skilled Migrants are graduates (already resident in-country) transiting from Student visas to the Skilled Migrant visa category.
    • Most employers would not agree – these folks are still unskilled and inexperienced. Our number may thus reduce to 7,000 “Skilled” professionals, managers, technicians and tradespeople.
    • I was not able to correlate the degree or diploma qualifications of the Students transiting to Skilled Migrants with the Long Term Skills Shortage List, which is skewed to high skills, high income professions.

    So, of the 72,300 Net Permanent Migrants, my cursory and inexpert research indicates that only a very few (at best 7,000 or 0.3% of the workforce) gain permanent residency to address the constricting shortfalls in our skills inventory. The entry of the rest occurs in response to other social, demographic and macro-economic strategies.

     

    I welcome your Comments and Corrections, to cast light on these matters for me and other readers!