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Chapter 1: What is the main topic discussed in this episode?
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Hey guys, we've got a special episode of ABC Business Daily for you today. There's so much heated political debate at the moment about Australia's immigration program. And last week I found an email in my inbox which dealt with the economic outcomes for Australia's skilled migration program and some really interesting insights into
into how migrants do, depending on which visa they get, to come over to Australia. So if you'll bear with us, this is a special episode in a slightly different format than you're used to, but I think you'll really enjoy the chat. So welcome to ABC Business Daily.
Music
I'm Carrington Clarke. And I'm Dr. Peter Varela, Research Fellow at the Tax and Transfer Policy Institute at the Australian National University.
Peter, thank you so much for joining me on the pod. Give me an idea of what sparked this particular piece of research. What questions were you trying to answer through it?
Okay, so migration policy has always been a really, really important policy, both for economic reasons, for sort of broader nation building reasons, and for just sort of general welfare of Australians and migrants. It's always been a really important policy. My interest in this sort of sparks from the availability of data.
As of about 10 years ago, there was sort of a access to sort of large data sets that allowed us to track the outcomes of migrants, allowed us to see where they work, how much they earn, the occupations that they're working in, which has sort of opened up a big field of research, but also sort of big opportunities for thinking through how the migration program works that wasn't quite as easily available before that data was here.
I'm going to start with one of the issues that I thought was most interesting to me because it seemed to fly in the face of the accepted kind of orthodoxy, which is there doesn't seem to be a strong link between migrants studying at Australian universities and how well they do in the labour market.
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Chapter 2: What are the economic outcomes of Australia's skilled migration program?
It does seem to fly in the face of what I think most people would have expected. And I think one of the strong arguments from the higher education industry, right? They keep talking about it's our third biggest export earner with a huge amount of money is being plowed into Australian universities by foreign students studying there.
And your research looks at just that pathway from coming over on a student visa and then getting a different type of visa to work within Australia. And yet it appears that those people who've come through Australian universities aren't doing as well in the workforce as, say, bringing someone over on a skilled visa to start off with if they've studied overseas. So how can we understand this?
Because As you say, you would think if you've come here, you've studied in an Australian university. We have good universities, world-class universities. They've spent time within the Australian environment. They've learned some of those cultural norms, et cetera. Why are they doing worse?
So you do have to be careful not to try to have a single answer to that. But the single answer I'm going to try to give, use the word pathways, the pathways that people follow from Australian education to a permanent visa. There isn't a clear pathway for this cohort. There are lots of different things that people do. There are graduate visas.
There are the possibility to go from a graduate visa to a temporary employer-sponsored visa. There are state and territory nominated visas. There are various different things. But essentially, that pathway is not working particularly well. And the way that I would characterize that, we are encouraging people to do things for points.
We're encouraging people to study in regional areas, to do language tests, to do the sort of professional year programs that are available in some occupations, rather than sort of giving the advice that you would give to a non-migrant graduate, which is go and get a grad job, do your best to get into the labor market. And so that's sort of the headline advice.
Can we find a way to get a cleaner pathway for these cohorts into the Australian labor market?
So let's talk through that, the points system when it comes to getting a working visa in Australia. You talk about you get extra points for going to a regional area by doing English tests. How problematic is that system? And the design of the points system was supposed to kind of have a system in place that helped us get the migrants that were most likely to do well, right? Why is it failing?
OK, so I should start with the sort of acknowledgment that there is an item in the budget that says that there is going to be an optimization of the points test. So this is something that is there. There's very little additional information. on this at the moment. It's something that we expect more information over the coming months. But there is policy moving in this space.
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Chapter 3: How does studying in Australia impact migrants' labor market success?
But I'm also sort of kind of optimistic that we might do a little bit better.
There's obviously been a debate as well about whether or not part of what universities have been selling is not just about education, but it's a pathway to visas. Did your research go into that? And do you have a firm view on whether or not that is the case? And is that a good or a bad thing?
There is no way to kind of measure that. So I'm an empirical researcher. My job is to go into the visa system and see what's happening. And the question you've just asked of how many people go through the student pathway as a sort of a a ticket to residency is very difficult to directly measure.
I will start from the important statement that international education is a fantastic thing to be able to sell. It is an export market that every country would love to have. It is sort of a thing that has wonderful productivity tech spillovers within Australia. It also has sort of really important international relations benefits.
So if you talk to DFAT, they will sort of see international education as a really important mechanism. It's kind of soft power. Soft power, exactly. And so the international education, it is sort of very valuable on a lot of important dimensions. So when we talk about how we want to think about this pathway. We do have to be very careful not to sort of get too down on this exercise.
We still have a fantastic education system. Now, in terms of how closely you want to tie education to that permanent migration pathway, this is kind of an ongoing debate and it's a pendulum that kind of swings back and forth for different countries. If you go back, there was the Knight Review in Australia and there was a concern
at that time, that we maybe want to tie these, make it a clearer pathway for migrants. And so some of the reforms at that point, the graduate visa reforms, the adding of studying in Australia to the points test, were designed to sort of encourage that pathway.
And the way I sort of see it is a bit of a pendulum back at this point to kind of separate out education in Australia, that international study, with the pathway a little bit. And so I think people would be sort of relatively on board with that pendulum swinging back. It's just a question of how far is where the disagreement goes.
Okay, so you did look at potential or you've been thinking about potential solutions to this problem.
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