Explainer: would Australia’s immigration system work in Britain?

Almost as nice as Margate. Bondi image via www.shutterstock.com

There is an irony in Nigel Farage pointing to Australia as a country with an immigration policy to emulate. At the launch of his party’s immigration policy for the upcoming general election, the UKIP leader said: “We want an Australian-style points system to decide who comes to live, work and settle in this country.”

In Australia, permanent migration in the year ending June 2014 was 203,000 in a population of 23 million people. In the UK, permanent migration in the year ending September 2014 was 624,000 in a population of 64 million, on a par with Australia’s permanent migration as a proportion of population.

However, Farage is correct to point to Australia in relation to control of migrant numbers. In the 2013-14 financial year, the target figure for permanent migration in the economic and family (selected on the basis of an individual’s relationship with a sponsor – usually a family member – in Australia) programmes was 190,000. The number of new migrants actually admitted was exactly this. In Australia, migration is regulated to the very last person.

Aggressive policies

Both conservative and progressive governments in Australia have been promoting aggressive economic migration programs for many years now. When limiting migration looked like it might be popular in the 2010 federal election, both sides of of the political divide made noises about reducing the migrant intake. However, this quickly died away as business and industry warned of the dire economic consequences of reducing immigration.

Whereas most new permanent migrants were part of the family program in the 1990s, economic migration now dominates. In 2013-14, economic migration made up 128,550 places compared with just over 61,000 migrants through the family program.

Department of Immigration and Border Protection

How the point system works

There are two pathways for migrants to apply for permanent residency through the economic migration stream – via independent points testing and employer nomination. The point-tested stream is the larger of the two: 74,740 new migrants entered Australia through it in 2013-14.

Points are awarded for a range of characteristics, including level of education, type of skilled employment, and the amount of experience in this employment, age and English language ability. A points system allows the government to engage in long-term planning, considering not only what skills are in demand in industry immediately, but what will be needed in the future.

But governments sometimes get their projections wrong, and some commentators suggest that it is better to let the market determine what skills are most needed in the economy. Second, no matter how skilled and experienced a new migrant might be, if there is no job for them to apply for, then they will be either unemployed or underemployed.

Can we import some Aussie beaches while we’re at it? Gareth Fuller/PA

The great advantage of employer-nominated migration is that the market has determined that a job vacancy exists. Employers nominate migrants to fill these vacancies and they enter Australia with guaranteed employment. The government still plays a role in the process by constructing a list of skills in demand. Employers are limited to nominating migrants to fill positions from this list.

Another phenomenon in Australia has been the increase in two-step migration. Many of those who apply for permanent residency have already worked in Australia as temporary migrants. This gives migrants the chance to “try before they buy”. And it means that Australia is only making a commitment to migrants who already have a positive track record of employment in the country.

Cheap labour

Australia does not have an equivalent to the free movement of people in Europe. Besides the relatively free movement of people between Australia and New Zealand, entry to Australia is highly regulated.

Nigel Farage claims that the UK’s “open door immigration” leads to wage compression. But Australia’s immigration policy does not dampen the demand for low wage employment. The Australian equivalent of cheap labour from the European Union is temporary visas granted to working holiday makers who must be between 18 and 30 years old and international students.

The numbers are staggering: 239,592 working holiday visas were granted in the 2013-14 financial year compared with just over 20,000 in the UK in 2013. And there were 293,223 international student visa grants in the same financial year.

Australia’s hospitality sector benefits from cheap migrant labour. Michelle Robinson, CC BY-NC-ND

Working holiday makers can work full time for a maximum of six months with any one employer. Since 2005, working holiday makers have been able to apply for an extension to their visa for a second year. These second working holiday visas have been very popular, particularly among young people from Taiwan, the UK, South Korea and Ireland. There were nearly 46,000 second working holiday visas granted in 2013-14.

Students can work for up to 40 hours a fortnight during study periods and full time in holidays. Their dependents and partners also have generous work rights.

These two groups largely satisfy the demand for unskilled labour in a range of industries. They are also highly represented in investigations of exploitation of migrant workers.

Lessons to be learned

“We want to do as the Australians do”, Farage said in his speech. But what is to be learned from the Australian situation?

The first thing to note is that a country with very tight controls on migration nevertheless chooses to have a high level of permanent and temporary migration, something Nigel Farage, who wants to bring down the number of working migrants to between 20,000 and 50,000 a year, opposes.

The lesson from Australia is not in its ability to regulate migrant entry. The lesson, if there is one, is in how to balance the economic benefits of migration against the threat to local jobs and to the maintenance of fair wages and conditions of work for both migrants and local workers.

UPDATE: This piece was amended on March 6. It originally stated the number of permanent migrants in the year ending September 2014 was 298,000.