Assessing the skills of those who wish to migrate to Australia as skilled migrants is a key element of the migration system. The migration of skilled personnel to Australia enhances the Australian labour force and contributes to the Australian economy. The importance of skilled migration has been further highlighted by the widespread recognition that Australia faces a serious shortage of skilled labour and the prospect of a rapidly declining working age population in a decade’s time.²

Furthermore, skills recognition processes play a crucial role in facilitating the engagement of migrants and overseas trained Australians in employment commensurate with their ability, thereby maximising their productive potential and contribution to the Australian economy.

Evidence to the inquiry reinforced the need to review arrangements in this area. The Department of Immigration and Multicultural Affairs (DIMA) noted that, while ‘Australia has comparatively good overseas skills recognition, licensing and upgrading processes, there is scope for substantial improvement’.³

What is the problem and what can we do about it?

As noted in the section on the background to the inquiry, previous reports have identified the problem of lost productivity due to various barriers to timely recognition of skills, occupational licensing and employment of overseas trained individuals. The problem is compounded by the current shortage of skilled labour in Australia.

The policy objective of skills recognition and licensing processes are to ensure that:

• those selected to migrate on the basis of their skills are able to integrate readily and rapidly into the Australian work-force
• others who migrate to Australia and who have overseas qualifications and skills have effective pathways for assessment, recognition and upgrading.⁴

This report aims to address the lost productivity and skill wastage in the labour force by promoting an efficient and world-class skills recognition and licensing system that is responsive to the needs of both industry and clients, while maintaining Australian occupational standards. The report recommends a number of measures to promote domestic and international labour mobility. The Committee believes that these measures, if implemented, will assist in maximising the contribution of overseas trained workers in Australia.

Where have we been and where are we going?

To assist in reading this report, it is useful to provide a brief picture of Australia’s current overseas skills recognition framework and what the Committee, over the course of the report, recommends this framework should look like in the future (see Figures 1.1 and 1.2).

As Figure 1.1 indicates, there is no national coordinating body for overseas skills recognition in Australia. As Figure 1.2 shows, the Committee’s recommendations, along with the Council of Australian Governments (COAG) initiatives, combine to create a more streamlined framework for the future. However, in light of the COAG initiatives, the Committee has not recommended at present the creation of a single national overarching governance body to coordinate and harmonise skills recognition and licensing/ registration arrangements in Australia.

Figure 1.1 Current skills recognition framework

Figure 1.2 Proposed skills recognition framework

While skills stream migrants clearly represent a major skills source for Australia, families of skills stream migrants, family stream migrants, humanitarian entrants, temporary residents and Australian citizens who have trained offshore represent other important sources of skills. As the Victorian Government commented:

Australian jurisdictions are starting to recognise that migrants who arrive here under the full range of visa categories, not just skilled visas, may have skills that could be utilised in Australia.⁵

Each of these groups requires some form of skills recognition, whether pre-migration or post-arrival.

Any difficulties being experienced by these groups in skills recognition, upgrading and licensing could have a significant economic and social impact, given the migration numbers involved. This represents a potential ‘wastage of skills’ for the individual and the Australian community as a whole. As recent Australian research has noted:

Studies consistently show that skilled migration enhances the health of the economy and labour market. A critical element in achieving this positive outcome is that the knowledge, skills and training of incoming migrants are fully utilised. If the appropriate job matching fails to occur, then the migrants will be ‘under-employed’, in the sense that they are not able to make the same productive contribution as they might otherwise be able to make. The process by which qualifications attained prior to entry to Australia are assessed and recognised will be a major determinant in the eventual employment position of immigrants. Further, the better this process works, the more it will promote the retention of migrants, and further enhance the attraction of Australia as a destination.⁶

In terms of economic impact, in a submission to a recent Productivity Commission inquiry, DIMA stated it had provided:

... empirical research evidence of the extent of under-utilisation of the human capital already delivered and to be delivered through the migration program. Given that at present 25% of the workforce is comprised of migrants, and the fact that migration alone will keep Australia’s working-age population growing past the end of the next decade, it would be reasonable to assume that the extent to which Australia maximises the use and realises the productive potential part of its diverse workforce would impact on its economic growth and competitiveness in the global market.⁷

In terms of impact on Australia’s social capital, as one witness commented:

Left to the market, certain categories of immigrants, especially refugees, are likely to end up in pockets of disadvantage in the large cities. Poor integration—economic and social—causes social marginalisation of whole communities. This is a well-known phenomenon around the globe, which causes long-term serious social problems.⁸

New migrants and refugees who have been in the country for less than five years are often at a disadvantage when it comes to finding work. In June 2005, for example, there were 36,400 unemployed migrants who had arrived in Australia between 2001 and 2005, most of whom were from non-English-speaking backgrounds:

Those from the Middle East and Africa, in particular, have much higher unemployment rates which may lead to disaffection and community unrest in the long run if not addressed.⁹

While this report identifies areas where Australia’s overseas skills recognition procedures might be improved, the Committee fully supports the view of the Department of Employment and Workplace Relations (DEWR) that there should be no changes to these procedures that result in a ‘dilution of the skill level of temporary business or permanent Skill Stream migrants and, as a result, their employability, competitiveness in the labour market and contribution to the economic well being of Australia’.¹⁰ The need to balance rigorous accreditation procedures that ensure the level of skills of those coming into the country is equivalent to Australian quality and safety standards with the call for streamlined, fast-tracked arrangements is one of the challenges facing Australian policy makers.

This chapter provides an overview of Australia’s migration policy and discusses some of the benefits for Australia from skilled migration before looking briefly at Australia’s skills shortage. (The development of Australia’s overseas skills recognition framework is discussed in Chapter 3.)

The chapter then looks at some statistics, demographics and trends and provides some indication of the numbers involved for the different groups requiring skills recognition, as listed in the Committee’s terms of reference. Statistics on employment outcomes for the different groups and their countries of origin also help provide context.

Chapter 1 concludes by providing an overview of the different groups requiring overseas skills recognition and the relevant visa categories involved. It also briefly discusses issues related to Australian qualifications that may be held by skills stream applicants and the need to have those qualifications assessed for migration purposes by assessing authorities.

Australia’s migration policy and benefits of skilled migration

The focus of Australia’s migration program has evolved over the last 60 years since the federal immigration portfolio was created in 1945. This saw the implementation of a large-scale migration program to stimulate post-war economic development. In the 1950s and 1960s the program aimed to bring in workers to develop Australia’s manufacturing industries. By the early 1990s, the program had a range of social, humanitarian and economic objectives. Over the last 10 years the emphasis of the program has been on skilled migration, both temporary and permanent, particularly to regional areas.¹¹

The government has developed policies designed to target migrants with experience in areas where there is a skill shortfall through its General Skilled Migration program. The Migration Occupations in Demand List (MODL) identifies where there are major skills shortages. Some 97,500 places were allocated for skilled migration in 2005-06, the largest number ever allocated.¹² Table 1.1 shows the migration planned intake over the period 1995-2006.

Table 1.1 Migration program planned intake 1995–2006

Source Ministerial press releases 1996–2005 and DIMA website—see Phillips, Skilled Migration to Australia.

There has also been an increase in temporary migration to Australia over recent years, particularly by business and skilled migrants. A link has also been evident between temporary and permanent migration, with a temporary visa often being the first step towards permanent migration. In 2004–05, for example, 39,000 permanent visas were granted to individuals already in Australia on visitor, student or temporary worker visas.¹³

In April 2006, the Productivity Commission released a report, Economic Impacts of Migration and Population Growth, that examined the impact of migration on Australia’s productivity and economic growth and impediments preventing Australia from realising productivity gains from migration. The report found that ‘economic output, employment and investment all increase as a result of skilled migration’, although the ‘overall economic effect of migration appears to be positive but small’.¹⁴

In contrast, DIMA commented that ‘[o]ur capacity to select migrants who have recognised skills and English language ability to quickly enter the labour market means that skilled migrants make a strong contribution to the Australian economy’.¹⁵ The Committee notes these differing views on the impact of migration on the national economy.

Extent of Australia’s skilled labour shortage

Over the last few years there has been an increasing amount of evidence that skills shortages are being experienced in some occupations and industries. The reasons for skills shortages are complex and varied.

The recent National Industry Skills Reportby the Department of Education, Science and Training (DEST) identifies ‘the importance of skills, and labour availability, as a key business issue for enterprises and industries in all sectors’, with these pressures being driven by the general rate of economic growth and the growing impact of workforce ageing.¹⁶

DEWR’s Workforce Tomorrow report notes that population ageing will impact on ‘all major industries and occupations across most Australian regions’ and that over the next five years ‘the es timated impact of population ageing is equivalent to a shortfall of 195,000 workers’.¹⁷

Skilled migration is just one way of addressing the skills shortage. Greater diversification of the workforce is frequently emphasised as another way of increasing the available labour force, with broadened participation from women and Indigenous people, for example. The Chamber of Minerals and Energy, Western Australia, commented on the significance of this area in the resources sector , stating that involving Indigenous people in employment and training ‘is a significant focus for the industry as a whole’.¹⁸ Similarly, the Committee notes that training and support to assist the employment of women is also a priority, given that, according to research undertaken by the Women’s Economic Policy Analysis Unit at Curtin University, ‘about 65 per cent of non-employed or under-utilised labour in the Australian labour market is female’.¹⁹

The importance of domestic training of local workers, in terms of expansion of training opportunities for Australians, was also emphasised by a number of witnesses. For example, Engineers Australia commented that:

... the value of educating and developing the skills of Australians must not be overlooked when the option of taking on large numbers of skilled migrants to overcome skill shortages may be seen as an expedient alternative. While continuing to facilitate skilled migration, it is imperative that the Australian government also make an undertaking to increase the education and training opportunities for Australians ...²⁰

While the issue of local training is outside the terms of reference for this inquiry, the Committee acknowledges the validity of points raised in this area. There needs to be a strong commitment to the training of people in Australia, as a long term investment in Australia’s future. There is also a role for government to support Australian industry in responding to immediate skills shortages through the migration program.

Issues concerning the broader goals of the migration program and domestic employment conditions and remuneration are similarly outside the Committee’s terms of reference, as are issues relating to proposals for semi-skilled workers.

Skills in demand

As the Committee was asked to inquire into overseas skills recognition, upgrading and licensing, it is important to clarify what is meant by ‘skills’ in this context. The Committee took this term to encompass looking at the recognition process for overseas qualifications—educational attainment represents a measure of skill— through the various Australian assessment and licensing bodies and at several other skills sets that play an important role in this process. These include English language skills, work experience (local and offshore) and qualifications gained in Australia.

In terms of English language skills, for example, Australian research consistently highlights the importance of English proficiency to the labour market outcomes of skilled migrants to Australia. Local work experience also plays a role in improving employer acceptance of overseas qualifications.

Similarly, it is important to clarify what is meant by ‘skilled’ as opposed to ‘unskilled’. As DIMA commented, the Australian Standard Classification of Occupations (ASCO) system classifies all occupations into nine broad categories:

The top four categories are generally regarded as skilled: that is, professionals, paraprofessionals, tradesmen and managers. Categories 5, 6 and 7 are generally regarded as semiskilled and categories 8 and 9 are generally regarded as unskilled.²¹

The Committee therefore focused largely on categories 1 to 4.

Occupations in demand

In terms of the occupations in demand, as DEWR have commented:

There are already skill shortages emerging in most Trades—shortages of Engineering/Metal, Wood and Automotive Tradespersons, and Chefs and Cooks have been evident for over ten years and there are also shortages in some construction trades. Skill shortages for Professionals are evident in the health sector, for Registered Nurses and Health Specialists (such as Physiotherapists). There are also national skill shortages for Accountants, Child Care Workers and Civil Engineers.²²

The MODL lists occupations and specialisations identified by DEWR as being in ongoing national shortage and in demand for migration. There are over 80 occupations currently listed on the MODL. More detail on the operation of the MODL is provided in Chapter 2.

During the inquiry, the Committee heard from state and territory government representatives about skills shortages across many sectors:

Our shortages are broadly similar to those of the country as a whole. We need people in the construction related trades in particular—plumbers, bricklayers, carpenters, joiners and electricians, and the list goes on. Related to that we certainly need civil engineers and people in the metal trades, automotive trades and mechanical trades. We need medical personnel of all persuasions, chefs, some hospitality workers and some teachers in specialised areas, particularly science and mathematics.²³

Similarly, the local government sector has growing skills shortages, particularly in engineering and planning. As the Western Australian Local Government Association stated:

On our visits in the last few months, the first thing on the agenda for every council is skills shortages ... what they are doing and how they can address that.²⁴

Skills shortages are particularly acute in certain locations and sectors. For example, the supply of dentists per 100,000 people in rural and remote locations is often less than half the Australian average.²⁵

The Committee was advised by the Chamber of Minerals and Energy, WA, the peak resources industry representative in the state, that skills shortages in the resources sector in Western Australia are particularly acute—see Figure 1.3.

Figure 1.3 Skills shortages in the WA resources sector²⁶

Regional issues

The Committee reviewed of state specific migration mechanisms in September 2001 and commented on the problem facing regional areas:

Equitable social and economic development of Australia has long been a concern for policy makers. One difficulty in realising this aim had arisen from the disproportionate attraction that the metropolitan areas exert on people compared with that of what is often called regional Australia. Australia’s capital cities and their hinterlands have expanded while regional Australia has grown less quickly or has lost population.²⁷

State specific and regional migration schemes—including the Skilled Independent Regional (Provisional) (SIR) Visa, the Regional Sponsored Migration Scheme and the State and Territory Nominated Independent Scheme—seek to attract skilled migrants to regional areas where employers have been unable to fill skilled vacancies through the local labour market. State and territory government representatives spoke about the success of such schemes:

Australia’s Skilled Migration programs, particularly those which focus on regional Australia, are valued by the Northern Territory as they provide flexibility to access skills which are not available within the local labour force.²⁸

In 2004-05, 18,700 visas were granted under the state specific and regional migration schemes, an increase on the 12,720 visas granted the previous financial year.²⁹ While the numbers of regional skilled migrants are rising, the Committee heard that many regional areas still require large numbers of skilled workers.³⁰

COAG agreed to establish a new Commonwealth regional program in collaboration with the states and territories, which commenced in July 2006, to identify solutions to labour market needs in the regions, including coordination of labour market information so as to better understand the extent and location of skills shortages.³¹

Regional settlement adds another dimension to overseas skills recognition in terms of skills upgrading issues and access to support services. DIMA has stated, for example, that ‘the Australian Government is committed to increasing the settlement of entrants under both Humanitarian and Migration programs in regional locations’ to decrease pressure on major cities, contribute to the development of regional towns and address labour shortages in these areas.³²

The issue of regional migration programs and the need to maintain rigorous overseas skills recognition processes was also raised with the Committee:

... where regional programs exist and you do not monitor integrity, people tend to use the soft entry point as a gateway to somewhere else.³³

Statistics, demographics and trends

Source countries

Over the 1950s and 1960s most migrants to Australia came from the UK, Ireland and Europe. In 2004 the largest source country of migrants to Australia was still the UK but significant numbers of migrants also came from Asia:

The increase in immigrants from China and India representing about 17 per cent of total permanent and long-term arrivals in 2004.³⁴

As one witness highlighted, Australia needs to have arrangements in place to undertake skills recognition for people from a broader range of source countries than might have been the case previously:

I think one of the challenges for Australia in the future is where we will source our skilled migrants, because it is very plain that our traditional sources of migrants in the trades area—places like England and Ireland, Canada and the USA—are going to dry up very rapidly. I think we are going to be faced with how to assess and upgrade the skills of people from other source countries to be able to meet the needs in the future.³⁵

Utilisation of migrant skills: Longitudinal Survey of Immigrants to Australia

DIMA has tracked the labour market experiences of migrants through a number of surveys, including the Longitudinal Survey of Immigrants to Australia (LSIA).

The LSIA is a comprehensive survey of migrants to Australia.³⁶ The LSIA provides government and other agencies with reliable data to monitor and improve immigration and settlement policies, programs and services. Information is gathered on areas such as employment outcomes for migrants, improvements in English language proficiency and the use of settlement services.

Longitudinal surveys collect data from the same individuals at different times over an extended period. The LSIA is currently surveying migrants who arrived in Australia between September 1993 and August 1995 (LSIA1); September 1999 and August 2000 (LSIA2); and December 2004 and January 2005 (LSIA3).

There have been many reports published on the LSIA research.³⁷ Of interest to the Committee here is the information relating to utilisation of migrant skills—migrants obtaining employment that matches/recognises their qualifications . This area is significant because of the economic and social impacts if migrant skills are not being fully utilised.

During the inquiry, the Committee heard from DIMA that the LSIA had confirmed that:

... while employment rates and real income levels of recent skilled migrants have improved significantly compared to those of earlier cohorts in the same categories, a number of skilled migrants are in jobs that do not match their qualifications or in jobs that do not recognise their qualifications. The data indicate that, for example, 20 per cent of skilled independent migrants and their migrating spouses do not use their qualifications in Australia, compared to only eight per cent not using their qualifications in their home countries.³⁸

The major reasons identified by DIMA for this included ‘difficulties after arrival in getting a licence in the particular skill that they have’ and that ‘Australian employers, in some parts of Australia, remain sceptical and perhaps risk averse in hiring people with skills from overseas’.³⁹

DIMA also commented that:

… 20 per cent not using their skills is a waste—it is a waste for the individual, it is a waste for the economy and it is a waste for Australia’s budget—and anything we could do to get that 20 per cent figure reduced would be worth while pursuing.⁴⁰

Similarly, the Western Australian Government commented that there is ‘significant evidence’ that the ‘skills, knowledge and expertise of migrants are not being maximised, resulting in high unemployment and wasted resources’.⁴¹

DIMA noted that some of the ‘contributing factors to the downward occupational mobility of skilled migrants after arrival in Australia’ relate to overseas skills recognition issues :

• Recognition of overseas skills for employment purposes
• Recognition of overseas work experience
• Different licensing and registration requirements in States and Territories
• Lack of local work experience, in particular training for use of technology in the workplace
• Registration/licensing requirements regarding entry to the labour market of some professions and trades
• Real or perceived English language proficiency shortfalls
• Perceived attitudes, behavioural and performative traits of qualified/skilled migrants by employers.⁴²

Labour market outcomes

According to DIMA information, in August 2005 the trend unemployment rate for Australia was five per cent, but unemployment rates for recently arrived migrants tended to be much higher. Migrants who arrived in the period from January 2001 to August 2005 had an estimated unemployment rate of 9.2 per cent. Of these, migrants born in the main English-speaking countries had an unemployment rate of 5.6 per cent, while those born in other countries had a rate of 11.4 per cent.⁴³

Generally, migrants who have had more time to settle in Australia have lower unemployment rates. Similarly, those who enter Australia under the skills stream have lower unemployment rates than those entering under other categories.

Analysis of LSIA data shows that unemployment rates vary according to migration category. Table 1.2 summarises the unemployment rates of LSIA2 migrants, for example, at six and 18 months after arrival in Australia. Family stream and humanitarian entrants have higher unemployment rates than skills stream migrants.

Research by the National Institute of Labour Studies shows that the labour market performance of skilled migrants has improved significantly in recent years.⁴⁴ LSIA2 migrants had significantly better labour market outcomes than LSIA1 migrants. For example, after six months the unemployment rate of LSIA2 migrants was half that of LSIA1 migrants (from 21 per cent to 10 per cent). The better labour market outcomes of LSIA2 migrants was ‘mainly due to the introduction of higher skill, age and English language requirements for points tested applicants’.⁴⁵

More recently, DIMA indicated to the Committee that the results of the first wave of responses to LSIA3:

... confirm that the major improvements that occurred following the reforms to the Migration Program evidenced in LSIA2 have been sustained. For example, 8% of skilled principal applicants in wave 1 of LSIA3 were unemployed compared with 10% in LSIA2 (migrants entering in 1999-2000) and 21% in LSIA1 (migrants entering in 1993-94).⁴⁶

As DIMA stated, ‘whereas OECD countries are mostly worried that the employment experiences of migrants to their countries are getting worse, as a general rule in Australia the employment experiences of migrants are actually improving’, and some of this positive development can be attributed to ‘our immigration selection criteria, the settlement support services we give our migrants and our procedures for the recognition of overseas qualifications’.⁴⁷

Table 1.2 LSIA2 unemployment rates by migration category—principal applicants

Source DIMA, ‘Migrant Labour Market Outcomes’, Fact sheet No. 14, April 2005, http://www.immi.gov.au/media/fact-sheets/14labour.htm (accessed 25 July 2006 ).

The Committee commends DIMA on its LSIA research. The Committee was also interested to hear about DIMA’s new initiative to link immigration data with census data to provide a longer term view of the progress of new migrants:

Immigration data on migrants entering Australia from 2000 has been sent to the ABS which is now examining the data in preparation for a trial match against data from the census “dress rehearsal” which should take place in July/August 2006. If successful, the real match of immigration data against a sample of 5% of the 2006 census will take place in mid-2007, with results being available for use as soon as possible after that. It should be emphasised that the results of this exercise will be statistical only ie the names and any other identifying information will be stripped from the data before the ABS releases it to DIMA.⁴⁸

The Committee recognises the importance of such research and believes that, if possible, there should be enhanced data collection on migrant utilisation of overseas qualifications and other indicators of the effectiveness of skills recognition processes.

Migration statistics for groups requiring skills recognition

Table 1.3 provides a breakdown of the different groups requiring skills recognition, as listed in the Committee’s terms of reference, cross-referenced against the relevant migration program for that group. Any difficulties being experienced by these groups in overseas skills recognition, upgrading and licensing could have a significant economic and social impact, given the numbers involved. The number of visas granted in 2004-05 for each program across different visa categories is set out in Tables 1.4-1.8.

Table 1.3 Breakdown of groups seeking overseas skills recognition

a Some individuals in these groups may not require skills recognition (eg not of working age and/or not intending to work in Australia )

b Do not require overseas skills recognition (eg not of working age)

Table 1.4 Visa categories and visas granted 2004-05

Source Productivity Commission, Economic Impacts of Migration and Population Growth, p. 214.

Table 1.5 Skills stream visa categories and visas granted 2004-05

Source Productivity Commission, Economic Impacts of Migration and Population Growth, p. 219.

Skills stream visas represented some 60 per cent of the visas granted in 2004-05 across the skills stream, family stream and humanitarian programs. An additional 20,000 places was allocated to the skills stream program in 2005-06.⁵⁴

It is important to note that, unless it is indicated otherwise, family members of skills stream migrants, such as partners and children, are included in DIMA skills stream figures. Family members of skills stream migrants are classified as ‘secondary’ applicants accompanying the primary applicant. One estimate is that secondary applicants represented approximately 50 per cent of skills stream migrants in 2004-05.⁵⁵ Table 1.6 provides some indication of the numbers of principal and secondary applicants for a range of skills stream visas.

Secondary applicants do not necessarily have the same skill levels as principal applicants but can still be highly skilled. However, the Committee notes that the term ‘skills stream’ is somewhat confusing in that it includes secondary applicants who ‘ are not necessarily direct contributors to the labour market ... as might be assumed by the label of “skilled” ... for the stream’.⁵⁶

Taken together, family members of skills stream migrants and family stream migrants represent a sizeable group. The planned level for the family stream in 2005-06 is 45,000.⁵⁷ Family stream migrants may also be highly skilled:

... a higher proportion of immigrants entering under the family stream between 2000 and 2004 had post-school qualifications than did the Australian-born population.⁵⁸

Generally, individuals in these groups seek skills recognition on arrival in Australia. The same generally applies to humanitarian entrants. Skills recognition pathways for each of these groups have arguably not received much attention from policy makers to date, given that there is no formal requirement for pre-migration skills recognition.

Temporary residents may similarly face difficulties with skills recognition, particularly if there are licensing or registration requirements for their occupation.

Table 1.6 Skills stream visas granted 2004-05 (principal and secondary applicants)

Source Birrell et al, Evaluation of the General Skilled Migration Categories, p. 10, p. 29, p. 43 and p. 51.

Table 1.7 Family stream visa categories and visas granted 2004-05

Source Productivity Commission, Economic Impacts of Migration and Population Growth, p. 220.

Table 1.8 Temporary visa categories and visas granted 2004-05

Source Productivity Commission, Economic Impacts of Migration and Population Growth, p. 223.

Groups requiring skills recognition

The terms of reference for the inquiry require the Committee to, firstly:

Investigate and report on current arrangements for overseas skills recognition and associated issues of licensing and registration for:

• Skills stream migrants who obtain assessment prior to migrating;
• Families of skill stream migrants, family stream migrants and humanitarian entrants who seek assessment/registration/upgrading after arrival;
• Temporary residents who need skills assessment/recognition; and
• Australian citizens returning after significant time overseas, with overseas qualifications.

While skills stream migrants clearly represent a major skills source for Australia, families of skills stream migrants, family stream migrants, humanitarian entrants, temporary residents and Australian citizens who have trained offshore represent other important sources of skills. Each of these groups requires some form of overseas skills recognition, whether pre-migration or post-arrival, but each group faces slightly different issues.

Humanitarian entrants and some families of skills stream migrants and family stream migrants can face additional barriers to overseas skills recognition through lower levels of English language proficiency and the costs and time involved in seeking skills recognition while managing other aspects of early settlement.

It is important to further clarify what is meant by the terms ‘skills stream migrants’, ‘family stream migrants’, ‘temporary residents’ and so on. The series of fact sheets and booklets about migration to Australia⁵⁹ and other information available on the DIMA website provide the best reference source in further defining these different groups and understanding the different visa categories involved.

Skills stream migrants

Skills stream migrants may enter Australiaunder the General Skilled Migration (GSM) program or the Employer Sponsored Migration (ESM) program. There are 12 GSM visas⁶⁰ and three different Employer Sponsored Migration visas (see Table 1.9).

Table 1.9 Visa categories, visa subclasses and passmarks/poolmarks

Source The DIMA General Skilled Migration booklet (March 2006) sets out information on the each of these categories, excepting the onshore overseas student categories and the skilled Independent Regional visa (applicants for these visas are referred to the DIMA website). The DIMA Employer Sponsored Migration booklet (March 2006) sets out information on the three employer sponsored visas. The passmarks and poolmarks are sourced from the DIMA website.

General Skilled Migration

Under the GSM program, visa applicants must have post-secondary professional or trade qualifications that have been assessed by an organisation in Australia, known as a skills assessing authority, as suitable for their nominated occupation.

For the information of skills stream migrants, the DIMA Australian Skills Recognition Information (ASRI) website states:

Regardless of which General Skilled Migration visa you apply for, you must provide evidence that your skills have been assessed as suitable for your nominated occupation by the relevant assessing authority for your nominated occupation before your visa can be granted.⁶²

The applicant’s nominated occupation must be listed on the Skilled Occupation List (SOL) current at the time they apply.⁶³ The SOL includes approximately 450 occupations listed across four major groups: managers and administrators; professionals; associate professionals; and tradespeople and related workers.⁶⁴

The list uses the ASCO system to determine titles and codes for a range of occupations and provides details of the relevant Australian organisation approved to assess a person’s skills and qualifications for migration purposes for each occupation.

The SOL also states the number of points awarded to each occupation for the ‘skill’ part of the GSM points test. The points test applies to a range of visa categories under the GSM program. With the exception of the Skilled—Designated Area Sponsored and the Skill Matching visa classes, the points test is used to assess applicants against a range of skill related factors.

The number of points prescribed for each factor reflects its relative importance in the context of an applicant’s potential contribution to Australia . The skill, age, English language, work experience and MODL components therefore earn the highest points. Other factors recognised include Australian qualifications, spouse skills, work experience obtained in Australia and fluency in a community language other than English.

Applicants must score sufficient points on the points test to reach the mark applicable to their visa subclass (see Table 1.9). The pass mark changes from time to time. Applications which achieve a score below the pass mark but above the pool mark are held in reserve for up to two years after assessment.

The MODL is a subset of the SOL. The only occupations eligible for the MODL are those designated as 60-point occupations on the SOL. The MODL lists occupations and specialisations identified by DEWR as being in ongoing national shortage.⁶⁵ A visa applicant receives extra points on the points test (over and above the 60 points) if their nominated occupation is on the MODL. The MODL is now reviewed twice a year to take into consideration existing and emerging skills shortages.

Unlike most of the other groups requiring skills recognition, skills stream migrants under the GSM program require pre-migration skills assessment, in this case formally through the assessing authorities. Overseas students who have gained Australian qualifications are still required to obtain a skills assessment to qualify for the GSM. The DIMA website states that t o lodge a valid application for one of the following visa categories,

• Skilled—Independent Overseas Student (subclass 880);
• Skilled—Australian Sponsored Overseas Student (subclass 881); and
• Skilled—Designated Area Sponsored Overseas Student (subclass 882):

  … you need to obtain a skills assessment. This is an evaluation of your qualifications to make sure that you are sufficiently qualified for your nominated occupation. … To lodge a valid application, the skills assessment must be performed by the aproved Australian assessing body for your nominated skilled occuption.⁶⁶

If an applicant for one of the three skilled student visas has completed an Australian qualification that qualifies them for the occupation they have nominated for migration purposes, the question arises: do they still need to have their skills assessed by an assessing authority and, if so, why, given that they have an appropriate Australian qualification? This is discussed in more detail in the following section.

Skills stream migrants under the GSM program also need to meet licensing and registration requirements. As DIMA emphasises for the information of applicants under the GSM program:

Once you have had your skills assessed and visa granted this does not necessarily mean you can practise or be employed in your occupation in a particular state or territory of Australia. Some states have particular licensing or registration requirements for a number of occupations.⁶⁷

Further, applicants are informed that they may need to demonstrate eligibility ‘for membership of a professional or industry organisation’.⁶⁸ English language proficiency and work experience requirements also vary across visa categories under the GSM program.

Assessment of Australian qualifications

The Committee was surprised to discover that skills stream migrants with Australian qualifications still need to have those qualifications assessed for migration purposes by assessing authorities. In a submission from the South Australian Government, it was noted that:

The Commonwealth currently requires overseas students studying in Australia to have their Australian qualifications assessed if they wish to apply for permanent residency. This involves a financial cost and lengthens the time taken to assess their migration applications. This represents an unnecessary barrier for this group of potential migrants and should be removed.⁶⁹

The Committee noted that this potentially affected over 14,000 student visa applicants in 2004-2005 (see Table 1.6). This was confirmed in evidence from DIMA, who advised that:

Last year we visaed something like 16,000 overseas students as permanent residents. They completed their studies and converted to permanent residence.⁷⁰

This growth in skilled onshore visa applications has also been noted in other studies.⁷¹ This is of importance for two reasons: firstly, that in effect it reduces the number of GSM applicants requiring detailed pre-migration assessment of their qualifications; and, secondly, that there is a significant cost and time delay for those applying under the skilled onshore student visa category.

As set out in Table 1.6, when examining the number of applicants requiring skills assessment under the GSM program, it is only principal applicants that require assessment (accompanying family members do not require assessment). For 2004-05, there were 32,659 primary applicants requiring pre-migration assessment out of 59,804 under this category. When the student visa applicants are deducted from this total, this leaves some 18,218 applicants requiring detailed pre-migration assessment of their skills.

While the Committee acknowledges that it is necessary to determine if someone holds a qualification from an Australian institution in the field in which they are seeking migration approval, the level of checking and assessing is not as difficult as that required for overseas obtained qualifications. The Australian qualification would allow the individual to obtain registration or licensing from the appropriate authority (if necessary), as would occur for an Australian resident who has completed the same course. It does seem inequitable, therefore, that overseas students are required to apply for assessment, and pay broadly the same level of fees as applicants who hold overseas qualifications that might be more difficult to assess and compare.

The Committee notes Dr Birrell’s finding that:

Two occupations dominate the visa outcomes under the 880 visa subclass. In 2004-05 some 40 per cent of these visas were issued to persons nominating computing professional as their occupation and 31 per cent to persons who nominated accounting. To judge by university enrolment trends, the number and share of those nominating accounting in the 880 visa subclass is likely to escalate in the next couple of years. This is because accounting is now a MODL occupation and, as a consequence, an increasing proportion of overseas students are enrolling in accounting courses.⁷²

The standard fee charged by the relevant assessing authorities for these professions⁷³ is $350 for each assessment. On this basis approximately $3.1 million is being charged each year, for assessing Australian qualifications. The Committee does not believe this to be a fair impost on students who have already contributed significantly to the Australian economy through payment for their courses, and who will also be facing the costs (as do Australian citizens and residents) associated with registration and licensing (where required).

Employer Sponsored Migration program

The Employer Sponsored Migration (ESM) program has three parts: the Employer Nomination Scheme (ENS), the Regional Sponsored Migration Scheme (RSMS) and Labour Agreements (see Table 1.3).⁷⁴

Similar to the GSM program, applicants under the ENS must have their qualifications assessed by an Australian assessing authority.⁷⁵ However, this requirement is waived under the ENS if the person has:

• worked full-time in Australia in the occupation for which they have been nominated for the last two years (and have spent at least the last year working for the employer who is nominating them); or
• been nominated to fill a highly paid senior executive position with a salary of more than $165,000 per annum (excluding superannuation or allowances).⁷⁶

The applicant must also satisfy any mandatory licensing, registration or professional membership requirements.

The ENS enables Australian employers to recruit, on a permanent basis, highly skilled staff from overseas or temporary residents currently in Australia when they have been unable to fill a vacancy from within the Australian labour market or through their own training programs. Under the scheme, a visa applicant’s nominated occupation must be listed on the Employer Nomination Scheme Occupation List.⁷⁷

The RSMS enables employers in regional Australia to fill skilled positions they are unable to fill from the local labour market. The visa applicant must have relevant qualifications for the nominated position that are equivalent to at least an Australian diploma level and meet any mandatory licensing, registration or professional membership requirements.

Labour Agreements enable Australian employers to recruit, either permanently or temporarily,⁷⁸ a specified number of workers from overseas in response to identified or emerging labour market or skill shortages in the Australian labour market. The employer is required to provide DIMA with details of the qualifications and skills needed to satisfactorily perform the duties of the position. The nominee’s visa application is then ‘assessed’ by DIMA to ensure that ‘they have the qualifications, skills (including English language skills) and experience specified in the agreement’.⁷⁹

It is unclear to the Committee whether this step involves a formal assessment by DIMA of the applicant’s English language skills or whether DIMA simply relies on an employer’s assertion that the applicant has adequate language skills for the position. As is set out in Chapter 7, the Committee makes a recommendation on this point with regard to Labour Agreements and Temporary Business (Long Stay) 457 visas.

Applicants under the ESM program therefore require skills assessment pre-migration. Similar to applicants under the GSM program, applicants under the ENS require formal skills assessment pre-migration through the assessing authorities—although if they meet either of the two criteria listed above for this scheme, this requirement is waived.

DIMA stated that under the RSMS ‘assessments are generally conducted by the relevant assessing body for the occupation where required’. Under Labour Agreements, DIMA stated that the applicants are ‘expected to have qualifications and experience that are suitable for the agreed position and how that is determined can differ across occupations and industries’.⁸⁰

The Committee believes that the actual process followed under these two programs to check that an applicant’s overseas skills and qualifications are recognised in Australia could be more clearly set out in the relevant documentation and made more transparent.

If applicable, applicants under the three programs must also provide evidence from a relevant Australian registration or licensing authority that they will be able to meet necessary registration or licensing requirements. This is different from the process under the GSM program where, if applicable, migrants come up against licensing and registration requirements post-arrival rather than pre-migration.

The English language proficiency and work experience requirements vary across visa categories under these programs. For example, under the RSMS an applicant must have ‘functional’ English ability (such as an average International English Language Testing System band score of at least 4.5).⁸¹ However, there are functional English exemptions under this scheme. Exceptional circumstances for functional English might be considered in the following cases:

• functional English is not essential to perform the full range of required duties for the position and
• the transfer of skills to other Australian employees can still take place and
• the employee is able to comply with Occupational Health and Safety (OH&S) requirements and
• reasonable efforts have been made to recruit a suitably qualified person who does have Functional English and this was unsuccessful and
• the employee has been working in the occupation in Australia for at least the 12 months prior to lodging the visa application and has received training in English during this period.⁸²

Primary applicants with less than functional English under the ENS, RSMS and Labour Agreements (including Regional Headquarters Agreement and the Invest Australia Supported Skills Program) incur a second instalment of the visa application charge (a cost of $5,540).⁸³

Families of skills stream migrants

Skills stream migrants can include a partner in their application (as well as other relatives who are substantially reliant on the applicant for financial support for their basic needs).

There is no test for skills or language ability for family members of skilled stream migrants, as there is for the principal applicant, and therefore no requirement for pre-migration skills assessment.⁸⁴ Family members of skills stream migrants who wish to work in Australia therefore face a different challenge in that they generally seek skills recognition after their arrival in Australia. These individuals may also face licensing and skills upgrading issues on arrival in Australia. Other factors such as English language proficiency and local work experience similarly influence employment outcomes.

Family stream migrants

The family stream of Australia ’s migration program enables the migration of immediate family members such as spouses and children as well as, under certain circumstances, parents and certain other members of extended families. Migrants in the family stream are selected on the basis of their family relationship with their sponsor—that is, a relative who is an Australian citizen or a permanent resident of Australia.

There are a number of visa categories applicable to family stream migrants but they are not discussed here as they do not impact on their skills recognition pathways. There is no requirement for skills assessment pre-migration for this group .

Like the families of skill stream migrants, family stream migrants who wish to work in Australia generally seek skills recognition after their arrival in Australia . Similarly, these individuals may also face licensing and skills upgrading issues on arrival in Australia. Other factors such as English language proficiency and local work experience similarly influence employment outcomes.

Humanitarian entrants

The Humanitarian program for refugees and others in humanitarian need comprises:

• an offshore component, with a refugee category and a Special Humanitarian Program category;⁸⁵ and
• the onshore component, with a permanent protection visa category for people who arrive in Australia on a temporary visa and fulfil other criteria and a temporary protection/secondary movement visa category for people who arrive in Australia without a visa.

People granted permanent protection visas onshore or refugee and humanitarian visas offshore have the same entitlements as other Australian permanent residents, including work rights. Following two years of residence in Australia, such individuals can also apply for Australian citizenship.

Temporary protection visa holders have the same entitlements as other temporary residents, including work rights. Temporary protection visas provide for residence of three years in the first instance.

With the exception of people detained as unauthorised arrivals, protection visa applicants are granted a bridging visa which allows them to remain lawfully in Australia until their applications are finalised. A bridging visa may have work rights attached depending on individual circumstances. Onshore applicants who arrive lawfully may be granted a permanent visa.⁸⁶

There is no pre-migration skills assessment for humanitarian entrants. As with families of skills stream migrants and family stream migrants, humanitarian entrants who wish to work in Australia seek skills recognition after their arrival in Australia, and also face the same licensing and skills upgrading issues in pursuing their occupation. Again, other factors such as English language proficiency and local work experience influence employment outcomes.

The Committee emphasises that humanitarian entrants may face some skills recognition difficulties not faced by entrants under other migration schemes due to a range of complex personal circumstances. For example, humanitarian entrants are more likely to arrive without documentary evidence of their qualifications. These issues are discussed further in Chapter 7.

Temporary residents

There are a number of visa categories applicable to temporary residents. Of interest here are the following temporary visas with work rights:⁸⁷

• Temporary Business (Long Stay) visa (subclass 457); and
• Working Holiday Maker program.

There is no requirement for working holiday maker visa holders to seek pre-migration skills recognition. As with families of skills stream migrants, family stream migrants and humanitarian entrants, this group would be seeking skills recognition after arrival in Australia.

As with applicants under Labour Agreements and the RSMS , applicants under the other temporary visa category—Temporary Business (Long Stay) visa—may require pre-migration skills recognition.

Temporary business (long stay)

Businesses unable to meet their skills needs from within the Australian labour force can sponsor personnel from overseas on a temporary basis to work in Australia for up to four years under the Temporary Business (Long Stay) 457 visa. The visa holder must not cease to be employed by the employer who sponsored them.

The nomination must relate to an occupation that meets a minimum skills threshold covering managers and administrators, professionals, associate professionals, and trade and related workers.⁸⁸ On the advice of DEWR, occupations in these groups may be removed if there is an oversupply of people with these skills in Australia.

The person identified to fill the nominated vacancy:

… must satisfy the department [DIMA] that they have skills which match those required for the vacancy for which they have been nominated …

A skill assessment of the visa applicant is not generally required. If, however, there are doubts about the visa applicant’s skills and/or experience to fulfil the duties of the position, a skills assessment may be required. Where Australian registration or licensing is required to undertake the nominated position, applicants may be asked to provide evidence that they are eligible for the relevant registration or licence.

Medical practitioners are required to provide evidence of registration to practise in the state or territory in which they will be working ...⁸⁹

Use of the 457 visa has become more widespread and has undergone some fine-tuning by the government:

Last year something in the order of 60,000 such visas were issued. Those visas allow a person to be in Australia from anywhere between three to four years, and they can then extend that visa if they wish. An important change that the government made earlier this year in respect of that visa was to say that, if someone has been in Australia on that visa for two years with a particular employer and that employer wishes to then retain them and there is agreement between the employer and the employee regarding permanent sponsorship, the employer can then automatically convert that to permanent resident after two years. That is essentially designed to try to streamline the process of converting those temporary entrants into permanent residents where the individual employee and employer agree that that is what they would like to do.⁹⁰

Two issues arise with the 457 visa: the degree to which the skills of the applicant are assessed and the way in which their temporary residency status can be converted to permanent residency without further skills assessment.

As noted earlier, under the 457 visa, qualifications may be checked pre-migration through DIMA. DIMA advised that:

Given the objective of quick, streamlined entry for the 457 visa, formal skills assessments are required only if the decision-maker believes they are not able to decide the application based upon the information provided in the application.

In these cases, the applicant is directed to approach the relevant skills assessing authority for their occupation to obtain a formal skilled migration assessment (emphasis in original).⁹¹

Formal skills assessment is usually only required for professional and trade occupations for which state and territory registration or licensing requirements apply.

The Committee notes that the actual assessment process DIMA follows with regard to this visa class could be more clearly set out in the relevant documentation and made more transparent. In particular, the Committee is concerned about how DIMA determine whether 457 visa applicants have adequate English language skills.

Again, as with the Labour Agreements, it is unclear to the Committee whether DIMA relies on an employer’s assertion that the applicant has adequate English language skills for the position or whether DIMA undertakes a formal assessment of the applicant’s level of language skills. The Committee finds the lack of clarity and transparency in this process unsatisfactory, as is reflected in its recommendation on this area in Chapter 7.

Others have argued that there should be skills assessments for all temporary 457 visa applicants. The Australian Computer Society advised the Committee that its research indicated that:

… many ICT temporary residents being sponsored into Australia are not providing skills that are considered in short supply within the ICT sector. Rather it would appear that the 457 program in particular is being used to provide the option of using overseas workers with limited job experience at a lower wage rate than employing Australian workers.

…

There should be skills assessments for temporary resident 457 visa applicants to verify skill sets and ensure that only skills in short supply are imported into Australia. For time critical applicants temporary entry could be granted with the sponsor having to repatriate the applicant should the skills assessment be unable to corroborate the asserted skills.⁹²

DIMA defended the current system, advising that:

It is not quite correct to say that there is no skills assessment or review of that, particularly in regional areas where we have a regional certifying body process and where those bodies are gazetted by our minister but nominated by state and territory governments. Those certifying bodies may be chambers of commerce; they may be state governments. For example, it is the Attorney-General’s Department in South Australia. Where the sponsor seeks to put people into regional areas at a salary lower than the minimum salary level or at a lower skill level, for example—I think we spoke last time about the ASCO classifications—when they are looking at ASCO 5, 6 or 7, then the regional certifying body has to certify that those people have the skills at that level and that those skills are needed. So there is a process of requiring those skills to be demonstrated. We have also tightened up our sponsorship approval process by seeking confirmation from potential sponsors that the skills are in fact to the level stated, and we have been doing a lot of work on that. We also think there is scope for improvement, and we are looking at whether there is any scope for requiring further skills assessment, particularly offshore for the 457 visa holders.⁹³

The conversion of 457 visa holders to permanent residents has implications for the GSM part of the skilled migration program:

We tend to manage it on the basis of priorities. If you are employer sponsored in the skills stream, that we view as the highest priority. If an employer has established that they want you, then clearly it has been established that that person is needed by the Australian economy, and so they will get priority. If large numbers of people transfer to employer sponsored migration, we would do all we could to accommodate those people. If necessary, that would mean squeezing down on, say, the skilled independent categories where you are not sponsored by anybody.⁹⁴

The Committee notes that the use of 457 visas, and the ways in which the integrity of the program can be monitored, were discussed at the July 2006 COAG meeting. The COAG communique noted that such visa arrangements ‘should not be at the expense of the employment and training of Australians’ and that employers ‘must meet appropriate and consistent Australian standards and demonstrate that they advance the skills of the Australian workforce’. COAG has asked the Ministerial Council on Immigration and Multicultural Affairs (MCIMA) ‘to identify and implement cooperative measures to ensure the effectiveness, fairness and integrity of the temporary skilled migration arrangement, including appropriate and consistent minimum standards’. The MCIMA is to report to COAG on this matter in December 2006.⁹⁵

Working holiday maker program

The Working Holiday Maker 417 visa provides opportunities for people between 18 and 30 to holiday in Australia and supplement their travel funds through temporary employment. Australia has reciprocal working holiday maker arrangements in place with a number of countries.

The Work and Holiday 462 visa provides opportunities for tertiary educated people aged 18 to 30 to holiday in Australia and supplement their travel funds through temporary employment. This visa arrangement is in place for people from Iran, Thailand, Chile, Turkey and Bangladesh.⁹⁶ There are also requirements for proof of English proficiency under this visa class.

Both visas allow a stay of up to 12 months from the date of first entry to Australia. Applicants can work with each employer for up to six months. The applicant’s main reason for coming to Australia should be to holiday; any work they do should be to support themselves while they holiday. Applicants are permitted to do any kind of work of a temporary or casual nature. They are advised by DIMA that registration or licensing may be required for working in some occupations.

Figures for 2000 indicate that 78 per cent of Working Holiday Makers were involved in lower skilled work, with 10.9 per cent holding professional jobs (mostly nurses and then computing, physiotherapy and teaching) and three per cent trade jobs (mostly chefs).⁹⁷

Australian citizens with overseas qualifications

Australian citizens with overseas qualifications, returning to Australia after a significant time overseas, generally seek skills recognition after their arrival in Australia. These individuals may also face licensing and skills upgrading issues on return to Australia.

Conclusion

This overview of the different groups requiring overseas skills assessment and the relevant visa categories involved introduces many core issues relating to skills recognition, licensing and upgrading that will be discussed in subsequent chapters.

It is apparent that the offshore visas under the GSM program are probably the least efficient way in which an individual with qualifications gained overseas might seek to come to Australia. The ESM program⁹⁸ and conversion of the student visas for those holding Australian qualifications (under the GSM program), are much more direct pathways for individuals.

The plethora of visa types, each with different conditions, makes the process of applying to migrate a very daunting prospect. (See Appendix D for a list of visa classes and subclasses.) The complexities involved in determining an appropriate visa may therefore represent a hurdle from the outset for some individuals seeking skills recognition. The recognition process is complicated by ‘the great number of different visa categories and the difficulties that people report about getting information about how to apply for those various visas.’⁹⁹ As one witness commented to the Committee:

The number of visa categories that sit there, it is a maze that confuses everyone.¹⁰⁰

The Committee notes the importance of accurate information for all groups involved in skills assessment, but in particular for those in the pre-migration phase. The importance of initiatives such as the DIMA web portal is discussed in Chapter 3.

DEWR, Workforce Tomorrow: Adapting to a More Diverse Australian Labour Market, 2005, p. 3. See also Productivity Commission, Economic Implications of an Ageing Australia, Final Report, March 2005. Back

A. Millbank, J. Phillips, and C. Bohm, Australia’s Settlement Services for Refugees and Migrants, E-brief, 9 June 2006, p. 5, http://www.aph.gov.au/Library/intguide/SP/settlement.htm (accessed  25 July 2006 ). Back

See Phillips , Skilled Migration to Australia , p. 3. Back

COAG, Communique, 10 February 2006, http://www.coag.gov.au/meetings/100206/index.htm#attach (accessed 25 July 2006 ). Back

DIMA, Submission No. 80b, p. 2. Back

DIMA website, http://www.immi.gov.au/skilled/skilled-workers/rsms/exemptions.htm (accessed 31 August 2006 ). Back

Australian Computer Society, Submission No. 61, p. 5. Back

Mr Rizvi, DIMA, Transcript of Evidence, 5 September 2005, p. 9. Back

COAG, Communique, 14 July 2005, http://www.coag.gov.au/meetings/140706/index.htm (accessed 25 July 2006 ), p. 16. Back