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Opinion article

Do we have the right jobs for regional skilled visas?

CEDA Senior Economist Gabriela D'Souza assesses the merits of incentivising migrants to move to regional areas. She argues that rather than forcing migrants to move outside of cities, governments should focus on drawing migrants to regional areas by investing in infrastructure and fostering sustainable employment opportunities.

In certain policy making circles, moving migrants to regional Australia has long been viewed as a quick fix for infrastructure strain and housing undersupply in major cities. The chair of the committee that will be looking into Australia’s migration intake, Julian Leeser, recently commented that “… we should have more people move in to regional Australia, and that is borne out by the fact that we have got all these jobs that aren’t filled in regional Australia.”
 
The government’s latest proposal, announced in this years’ budget, would see a portion of the skilled migrant intake ‘incentivised’ to move to regional areas and earn above a certain threshold of income in order to be eligible for permanent visas.[1] This would create a new class of visas that would make a quarter of the migrants in our permanent skilled migrant intake live in regional areas to gain permanent residency. This program builds upon previous attempts to incentivise settlement in regional areas through extra points on the visa points test.
 
In 2016, approximately 600,000 permanent skilled migrants and temporary migrants lived in regional Australia. The government believes that the regions are crying out for more people, but it isn’t clear exactly how many migrants they think should live in regional areas or how this should be decided.
 
Despite widespread support for these policies, there is little evidence that moving migrants to regional areas is good for regional economies in the long the run. A study from researchers at Victoria University found that regional migration programs have some short-term economic benefits, but that these benefits peter out over the long term. This is because regional migration policies can have displacement effects and migrants who are drawn to regional areas by policy incentives only stay for short periods of time.
Decades’ worth of empirical research demonstrates that areas with concentrated resources are generally where we see economic growth, and this is what attracts people to cities. Skilled migrants are drawn to major cities for the same reasons as everyone else: cities are where jobs are currently being created at the greatest rate.
 
Online job vacancy data from the Department of Employment, Skills, Small and Family Business shows that there are approximately 45,000 jobs available in regional areas. However, only 37 per cent of these roles are in the professional and managerial fields that, according to the 2016 Australian Census and Migrants Integrated Dataset, employ over 70 per cent of Australia’s skilled migrants.[3]
 
In contrast, the same data shows that approximately 130,000 jobs are available in major cities across all occupation codes, of which 57,000 are the kinds of highly-skilled jobs that migrants generally take up. Moving migrants to regional areas where there are not enough high-skilled roles will force them to remain unemployed or work in lower-skilled occupations. The cost of this skill mismatch is significant. According to a Deloitte study, skill mismatch costs the Queensland economy approximately $250 million.[4]
 
If we want to encourage economic development in regional areas, we need to reduce barriers to investment, improve infrastructure links, provide good quality services such as education and health, and promote the role of anchor institutions like universities. Instead of forcing migrants to live outside of major cities, all levels of government should focus on building up regional economies to promote sustainable jobs and population growth in these areas.
 
Migration policy is often reluctant to acknowledge that migrants are usually best placed to make decisions regarding where their work will be most highly rewarded and where they will be most likely to make good lives for themselves and their families. Regardless, migrants make decisions about their careers and lifestyles based on any number of factors and migration policy should not needlessly limit their autonomy.
 
[1] Details about this income threshold have not yet been made available.
[3] From the government’s announcement this includes regions that are not Sydney, Melbourne, Perth, Brisbane or the Gold Coast.
About the authors
GD

Gabriela D'Souza

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Gabriela D’Souza joined CEDA as Senior Economist in 2018 with eight years of experience in public policy. She has worked at some of Australia's most well-known and respected public policy think tanks and economics research centres. She has conducted research on a wide range of public policy issues including education, immigration, multidimensional disadvantage, and area-based measures of exclusion. Gabriela has a master’s degree in economics from Monash University and is an affiliate of Monash University’s Department of Business Statistics and Econometrics.
 

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