17 March 2009

Australia warned of further reducing migration program

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The Australian Government has announced a 14 per cent reduction to its migration program so that the economy can deal with the global economic downturn more efficiently; however, economists and businesses have warned that large-scale cuts to the migration program would dampen the growth of the Australian economy after the downturn lifts.

The Cabinet agreed last week that the Australian skilled migration program needed adjusting to reflect the worsening global economic condition, so that it could be more targeted in its approach and protect the jobs of local workers.  Now, the annual migration intake is sitting at 115,000 rather than 133,500.

The changes to the program go further than a 14 per cent cutback; the Government adjusted the Critical Skills List (CSL) so that some trades that have been given priority processing for their Australian visas have been removed from the list.

The CSL is a relatively small list of skilled occupations that represents those skills that are most needed in Australia.  Australian visa applicants with occupations on the CSL and applicants with employer/government sponsorship are given priority processing in DIAC centres so that they can fill the jobs faster in Australia. 

The Government removed building and manufacturing trades from the CSL, such as bricklayers, plumbers, welders, carpenters and metal fitters, and has left health and medical, engineering and IT professions.

The Government has acknowledged that Australia is still suffering from skills shortages in many professions, and would endeavour to keep its migration program reflexive to the economic conditions and representative of the needs of the Australian workforce. 

But, Craig James, chief economist at CommSec, told ABC Radio said that the Government should think twice before making big adjustments to the number of people they allow to move to Australia

While Access Economics has already predicted that this year's intake would add more than $800 million to the Australian economy, and Mr James conferred that the benefits of Australian migrants go further than plugging gaps in the skilled workforce.

"There's significant multiplier effects right the way across the economy and very positive multiplier effects.  If you don't have those people coming then you have less demand for houses, you have less spending in the community and it adds to a, well provides a restriction on growth in terms of the economy.

"And something that the Government needs to think seriously about, not just in terms of the demand for labour here in Australia but also in terms of consequences for economic growth."

Peter Andersen from the Australian Chamber of Commerce and Industry said that while 14 per cent is a sound cutback to the Australian skilled migration program, he also warns against taking that number any further.

"History tells us that if you cut very dramatically then you have to increase by very large amounts at a later point and that's not good policy.

"What's good policy is to have a relatively stable migration program, one which is calibrated according to the economic circumstances, but one which does recognise that migration is not just short term issue but it's also a longer term issue.

"The key here is to make sure that there is enough agility in our migration program that we are able to ensure that no structural impediments exist when the economy does start to recover."

The Australian Visa Bureau is an independent consulting company specialising in helping people with emigrating to Australia.

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