Go to top of page

Skilled Migration and Net Overseas Migration

Here at Labour Market Branch, we've noticed there has been some discussion on Net Overseas Migration (NOM) today. As such, we have asked our resident NOM guru for a short piece outlining this issue.  Laze is acting Assistant Secretary, Migration Planning and Strategies Branch, Department of Immigration and Citizenship. Below he takes us through his understanding of migration trends and forecasts.

'Net Overseas Migration - it's about the quality'

The Australian Bureau of Statistics recently announced that Net Overseas Migration (NOM) for the year ending 31 December 2010 was 171 100 persons. This was almost half the peak NOM recorded in December 2008 of 315 700 people.

The ABS data are in line with already published Department of Immigration and Citizenship forecasts of NOM, see: The Outlook for Net Overseas Migration – May 2011.

This is a sizeable drop and brings NOM back to more sustainable levels. The decline in NOM is largely due to the government’s reforms, introduced from December 2007, to sharpen the focus of the skilled migration program on high value occupations and end potential abuse of student visas. In addition, the impact of the global financial crisis and the relatively high Australian dollar has contributed to the decline in NOM.

As the economy continues its expected recovery over coming years, there is scope to increase permanent skilled migrant places (as announced in the 2011-12 Budget). In addition, temporary skilled 457 visas (which are uncapped and employer sponsored) will be free to increase and meet labour and skills needs.

In this way the government achieved two seemingly inconsistent objectives – addressing labour market and skill pressures and reducing the impact of immigration on population growth.

NOM trends and forecasts

Based on trends in visa applications and grants, the department is forecasting NOM for the year ending June 2011 of around 160 000 persons. Beyond June 2011, NOM should stabilise at around 180 000 persons each year. These forecasts take into account changes in the Migration and Humanitarian Programs announced as part of the 2011-12 Budget.

Most of the decline in NOM is due fewer temporary migrants with limited work rights; and not skilled migrants with much broader work rights. As a result, the share of NOM has shifted to permanent and temporary skilled workers.

The important points to take from this are;

  • The skilled component of NOM – permanent skill stream visas and Temporary Business subclass 457 visas – is projected to increase its share of NOM from around 25 per cent in 2009 to 43 per cent by 2014.
  • On the other hand, temporary migrants with limited work rights – consisting of international students and working holiday makers – are expected to fall from their peak of 47 per cent in 2009 to 21 per cent by 2014.

As you can see from the graph above, the proportion of skilled migrants with full work rights is increasing over time from 2008-09.

Quality matters

So while migration levels have dropped, the number of skilled migrants is on the rise.

The make-up of our migration intake matters. Migrants have different labour market outcomes depending on their visa category, skill level, and even depending on whether they are located in or outside Australia, see: Migrant Economic Outcomes and Contributions – April 2011.

This short piece notes that skilled, and especially employer sponsored migrants (such as those under the Employer Nomination Scheme and the 457 program), perform best in terms of low unemployment rates, high participation rates and high incomes. They also make a substantial net positive contribution to Australia’s budget.