Budget Review 2021–22 Index

Dr Susan Love

Border closures and net overseas migration

The assumptions used in the 2021–22 Budget on international travel and net overseas migration (NOM) have been adjusted from the 2020–21 Budget due to the unpredictability of the impacts of the COVID-19 pandemic. Budget Strategy and Outlook: Budget Paper No. 1: 2021–22 (p. 36) states the assumption that the return of temporary and permanent migrants will resume from mid-2022, instead of mid-2021. Pilot programs of international student arrivals are now predicted for late 2021 instead of late 2020 (refer to Budget Strategy and Outlook: Budget Paper No. 1: 2020–21 p. 2-6 for last year’s assumptions). Since the closure of Australia’s international borders in March 2020, only small numbers of international students have arrived in the country (approximately 2,000 between April 2020 and March 2021, according to the Australian Bureau of Statistics’ (ABS) Overseas Arrivals and Departures, Australia dataset). International travel is expected to initially resume through ‘Safe Travel Zones’, such as the arrangement currently in place with New Zealand, with quarantine requirements otherwise continuing to limit arrivals.

NOM is the difference between arrivals in Australia and departures from Australia. Migrant arrivals in Australia are counted in NOM if they are in Australia for a total of 12 months or more during a 16-month period. While NOM is forecast to be even lower than predicted in the 2020–21 Budget, the projected recovery over the forward estimates remains the same. The forecasts in Table 1 are produced by the Centre for Population within the Treasury.

Table 1: net overseas migration, for years ending 30 June

Sources: Australian Government, Federal financial relations: budget paper no. 3: 2020–21, Table A.5 p. 86; Australian Government, Federal financial relations: budget paper no. 3: 2021–22, Table A.5 p. 104. 

NOM was a little higher than forecast for 2019–20, at 194,400 instead of 154,100. The ABS calculates NOM and provides further details of the annual figures for 2019–20 as well as quarterly estimates. The latest quarterly estimates, dated September 2020, indicate that NOM was -34,800 for that quarter. For the 12 months to September 2020, NOM was positive, at 85,100, but down 64.8% since the previous year.

NOM is forecast to be negative in 2020–21 and 2021–22, and more so than predicted in last year’s Budget. However, from a level of -77,400 in 2021–22, NOM is still forecast to reach 95,900 in 2022–23, and to return to near-pre-COVID-19 levels by 2024–25.

NOM affects population growth, which is in turn one of the drivers of economic growth. Budget Strategy and Outlook: Budget Paper No. 1: 2020–21 gave population growth figures of 0.2% in 2020–21 and 0.4% in 2021–22—the lowest growth in over a hundred years (p. 2-13). Budget Paper No. 1 states that the figures are lower—around 0.1% in 2020–21 and 0.2% in 2021–22, before increased growth of 0.8% in 2022–23 (p. 37). It notes that although the overall outlook for the economy is expected to see a ‘near-term strengthening in real GDP’, ‘the weak outlook for population growth in the near term as a result of border closures will also weigh on the outlook for real GDP growth’ (p. 45).  

The Migration and Humanitarian Programs

Budget Measures: Budget Paper No. 2: 2021–22 states that places available in the Migration and Humanitarian Programs are maintained at the same levels as in 2020–21 (p. 11).

For the Migration Program, the allocations of places for the Skill and Family streams remain the same, at 79,600 and 77,300 respectively as confirmed in the ministers’ joint media release of 11 May 2021. A more detailed breakdown was not yet available at the time of writing, but the focus will remain on granting permanent visas to people already in Australia, in particular Partner visas. This is expected to result in a reduction in the underlying cash balance of $298.3 million over the forward estimates, (Budget Paper No. 2, p. 11) likely due in part to the lower proportion of Skill Stream visas, which would generally add more to the economic base.

The Department of Home Affairs’ Administration of the Immigration and Citizenship Programs paper of March 2021 noted that Migration Program planning levels are treated as a ‘ceiling’ rather than a target (p. 28), and that as at 31 January 2021, only 63,786 of the 160,000 available places had been filled, or around 40% of the program (pp. 29–30). However, the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs said in March in an address to the Law Council of Australia:

As you know we will get close to meeting that [160,000]. And that's an instruction to the department, even though we have constrained movement. We certainly want to make sure that we can get as close as possible to our program every year to meet our growth targets …

The Humanitarian Program provides permanent visas for refugees and others in humanitarian need. Budget Paper No. 2 states that the planning level for 2021–22 is set at 13,750 places and will remain at that level over the forward estimates (p. 11). This is the same level as in 2020–21. The planning level in 2018–19 and 2019–20 was 18,750 places. However, in 2019–20 only 13,171 places were filled due to the impact of the COVID-19 pandemic. The Home Affairs Administration paper also notes that ‘not all visa holders were able to travel to Australia’ (p. 41). Offshore Humanitarian visa holders were affected by the International Organization for Migration and the United Nations High Commissioner for Refugees temporarily suspending resettlement travel for refugees, lack of available flights, and the fact that these visa holders are not considered to be Australian permanent residents prior to their arrival in Australia, and therefore not entitled to enter Australia under the COVID-19 travel exemptions.

In last year’s budget media release on the Migration Program, the then acting minister stated that the reduced planning figure for 2020–21 reflected ‘the global impacts of the COVID-19 pandemic which will continue to present challenges to delivery in 2020–21’. This appears to be the case for the 2021–22 year as well; however, in Budget Measures: Budget Paper No. 2: 2020–21, the program appeared to factor in an ongoing reduction in numbers as reflected in reduced expenditure of $958.3 million and revenue reduction of $47 million to 2023–24 (pp. 108–109).

The Home Affairs Administration paper now states (p. 40):

The current size of the program reflects the Government’s commitment to ensuring the best possible settlement support for new and recent humanitarian entrants during the COVID-19 economic downturn and the challenges new arrivals may face in obtaining employment.

According to the paper, only 190 emergency cases arrived on Humanitarian visas between 1 July 2020 and 31 January 2021, and the department only recommenced granting offshore Humanitarian visas beyond emergency cases in December 2020 (p. 41). Filling the full planning level (noting it is treated as a ‘ceiling’ rather than a target) may be challenging, and those people granted visas may still not be able to enter Australia if the borders remain closed as predicted.

Adult Migrant English Program

The Home Affairs measures in Budget Paper No. 2 include a provision for a new service delivery model for the Adult Migrant English Program (AMEP) (p. 127). The AMEP is one of the longest-standing settlement services, offering free English language tuition to eligible migrants and humanitarian entrants to improve their English language skills and settle into Australia. The budget measure does not give figures, citing commercial-in-confidence sensitivities. The new model is not set to come into effect until 1 July 2023, so funding could be directed at commissioning a review of the current model, designing the new model and then going to tender for service delivery.

Budget Paper No. 2 states that the measure builds on the ‘Humanitarian Program 2020–21’ measure from the previous Budget (p. 127). Budget Measures: Budget Paper No. 2: 2020–21 noted reforms to the AMEP under both the ‘Humanitarian Program 2020–21’ measure (pp. 108–109) and the ‘Social Cohesion’ measure (p. 112), although no new funding was explicitly made available.

The AMEP reforms were announced on 28 August 2020 in an address to the National Press Club by the then Acting Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs. The reforms came into effect on 19 April 2021.

The AMEP business model for the delivery of the service is reviewed regularly, most recently in 2019 (see also the Home Affairs AMEP webpage for previous reviews). Current contracts for providers run to 30 June 2022 (details are available on AusTender).

The ministers’ joint budget media release of 11 May 2021 stated that the emphasis of the new model will be ‘linking service provider funding to student outcomes’. Under the current arrangements, providers are funded for teaching according to an ‘actual hours’ model, where they are paid by the Department of Home Affairs according to hours of tuition per student. The 2019 evaluation report made recommendations about the funding model to better guide providers to improve language acquisition and settlement outcomes (p. xx and section 9.4), but these did not include tying funding directly to student outcomes.

However, Investing in Refugees, Investing in Australia: The Findings of a Review into Integration, Employment and Settlement Outcomes for Refugees and Humanitarian Entrants in Australia (the Shergold review) of February 2019 described English and employment services provided to refugee and humanitarian entrants as ‘inadequate’ and not achieving ‘the best labour market or social outcomes’ (p. 2).

The 2017 Joint Standing Committee on Migration’s No One Teaches You to Become an Australian: Report of the Inquiry into Migrant Settlement Outcomes made recommendations on the AMEP, including amending the business model to focus on English language competency (as opposed to delivery of training hours) (recommendations 4–5).

The Government’s announcement in 2020 to remove the limit on tuition hours (previously a total of 510 hours of free tuition, with some clients eligible for supplementary hours) may also have influenced the move away from an ‘actual hours’ funding model.

Administrative Appeals Tribunal

The measure ‘Migration Litigation and Merits Review’ provides $54.8 million over four years to address the backlog of cases within the Migration and Refugee Division (MRD) of the Administrative Appeals Tribunal (AAT). The bulk of this goes to the Department of Home Affairs ($28.8 million) and the AAT ($18.8 million), with $7 million also going to the Federal Court of Australia for additional judges for the Federal Circuit Court (Budget Paper No. 2, p. 131). The AAT’s 2019–20 Annual Report ‘At a glance’ webpage provides a chart (‘AAT caseload overview, 2015–16 to 2019–20’) showing the agency’s backlog is mostly due to the volume of applications in the MRD, and states:

The volume of applications in that Division increased significantly over recent years without a corresponding increase in the number of members and staff to deal with the larger workload contributing to more than 70% of cases finalised in 2019–20 being more than 12 months old.

The measure is to be mostly funded by an increase in the application fee for decision reviews for visas other than protection visas (Budget Paper No. 2, p. 132).

The measure also includes a commitment to amend the Migration Act 1958 to strengthen migrant worker protection in response to recommendations of the Report of the Migrant Workers’ Taskforce (p. 132).

Immigration detention

The ‘Immigration Detention Network’ measure provides $464.7 million over 2020–21 and 2021–22 to increase detention capacity in mainland Australia and at the North West Point Immigration Detention Centre on Christmas Island (Budget Paper No. 2, p. 131). The extra capacity is required because Home Affairs has limited ability to remove or return people to their country of origin due to the effects of the COVID-19 pandemic, including international travel restrictions. The measure does not continue into 2022–23, aligning with the assumption that international travel will resume from mid-2022, permitting resumption of removals.