Short Visa, Lasting Harm

Short visa, lasting harm
Bob Kinnaird
August 23, 2006

A POLITICAL storm is brewing over new temporary work visas for overseas students and graduates to be introduced from July next year, just before the federal election.

In May, Immigration Minister Amanda Vanstone and Education Minister Julie Bishop said the federal Government would provide new temporary visa mechanisms to help overseas students gain skilled work experience in Australia to qualify for a skilled migration permanent visa.

This was part of the Government's response to the evaluation of the general skilled migration program, conducted by three academics including Monash University's Bob Birrell.

Temporary work and training visas are highly contentious, notably the so-called 457 visa for temporary skilled workers and the new trades skills training visa. The federal Opposition vehemently opposes both these visas, arguing they threaten jobs and training opportunities for Australians, undermine wages and working conditions and exploit foreign workers.

Although the Australian Vice-Chancellors Committee and overseas student recruitment firm IDP Education Australia have welcomed the new temporary visa commitments, Labor has not yet declared its position. That may be because details of the new visas are still being worked out.

But based on the report that recommended them, there are good reasons for concern about these new visas. They could lead to more international students and graduates competing with Australians for entry-level graduate jobs and for highly prized but scarce undergraduate work experience programs.

That could further distort the graduate job market, damage the interests of Australian university and TAFE graduates and lead to further declines in local enrolments.

About 67,000 international student graduates completed university courses onshore in 2004 and 15,400 skilled permanent visas were granted onshore in 2005-06, mainly to university graduates, up 7per cent on 2004-05. Permanent visa numbers will probably fall in 2006-07 due to tighter English language and other requirements.

But the evaluation report recommended a generous threshold entry mark for the two new temporary visas as follows:

* A new temporary visa for graduates for up to two years with full work rights, leading to a permanent visa if they gain 12 months full-time paid professional-level work in Australia.

* A professional year of vocationally specific training in third year, including some optional work experience.

The relevant accrediting authority for the profession or trade concerned would approve the work content in both visas.

Demand from overseas student graduates for the full work rights temporary visa will probably be high, even though the panel thought only a fraction of those eligible would pursue that visa over the other two pathways to permanent visas (the professional year or one year of intensive English study).

But the work visa means potentially large earnings and permanent residence while the alternatives cost students another year's fees.

International students lobby group the National Liaison Committee for International Students has been pushing hard for these temporary visas. Many graduates not interested in permanent visas will also want temporary work visas. Many Chinese and Indian students planning to return home want foreign professional-level work experience, especially with large international firms.

Others will want to maximise their earnings in Australia before returning home, sometimes to pay off loans financing their Australian study. A full work rights visa means they can take sub-professional jobs and also compete in the TAFE graduate labour market. The supply of professional-level jobs for these temporary visa-holders is harder to predict, but many firms will be interested, especially those with international operations in China and India such as banks and information technology services companies. Universities will aggressively promote overseas student graduates to employers, to maximise employment services income and the marketing potential of the new visas. That will alter the structure of incentives in the graduate market to the detriment of Australian graduates.

The report acknowledged there were legitimate concerns about possible effects of these new visas on Australian graduates: depressing the entry-level graduate job market and wages, especially in IT (where this had already occurred) and accounting, where visa-driven overseas students are concentrated.

It proposed some safeguards, including that employers must be reputable and visa-holders paid appropriate skilled entry-level salaries for the profession or trade, although that was not further defined. But it did not propose that international graduates should be granted temporary work visas only if there were no Australian graduates who could do the work. That should be an essential condition of any temporary work visa.

Incredibly, the panel's terms of reference prevented any detailed assessment of the effect of its visa proposals on Australian employment and training opportunities, a clear warning sign about the lack of balance present in the skilled immigration program.

The Government should provide that detailed assessment and explain clearly how these visas serve the national interest and not just the sectional interests of the international education industry and foreign students.

Bob Kinnaird is principal migration and labour market analyst with Sydney firm Kinnaird and Associates.