Temporary migration and COVID-19 labour market considerations

Image
staff blog tile

Written by Rick Leach. Following the completion of a first-class honours degree in New Zealand, Rick has worked as a Labour Market Analyst at the ABS, Department of Employment, and most recently at the National Skills Commission. Special thanks to Jane Press and Karman Kaur for their assistance and guidance in developing this document. 

The opinions expressed in the staff authored blog are those of the author/s and do not necessarily represent the position or policy of the National Skills Commission or the Australian Government.

Background

Temporary work visa holders make an important contribution to the Australian labour market, providing short-term skills and labour in many industries. The closure of Australia’s international borders in response to the COVID-19 pandemic has resulted in a large drop in temporary visa holder numbers. This paper summarises these changes and briefly outlines their possible impact on the broader labour market.

Key findings

For each of the five years to March 2020, there was on average 1.6 million temporary visa holders with a full or partial work right in Australia, with a peak of 1.7 million holders in the year to March 2019. In the 12 months to 31 March 2021, following Australia’s COVID-19 international border closure, the number of temporary visa holders fell by 318,000 to just over 1.3 million.

The largest falls in temporary work visa holders over this period were for international students (down by 190,000) and working holiday visa holders (down by 80,000). These two categories alone make up just over 85 per cent of the overall decrease from last year (see chart below). International student decreases were predominantly driven by reductions in students from China and India, while decreases from the United Kingdom (UK), France and South Korea[i] drove the working holiday visa numbers down.

The chart depicts temporary visa holders by visa type from 31 March 2020 to 31 March 2021 Source: Department of Home Affairs, Temporary Entry Visa Holders Pivot Table (March 2021 comparison with previous quarterly snapshots), BP00191 from www.data.gov.au

International student numbers fall

It is difficult to analyse the labour market impact of such a large fall in international students, as the primary purpose of the international student program is for visa holders to study, with work being incidental and to support living expenses. It is common, however, for international students to work in lower-skilled jobs in the services sectors located in and around their place of study such as accommodation and food services; health care and social assistance; and retail trade[ii]. Recent changes to temporarily suspend the work limits for international students employed in the tourism and hospitality sector were introduced to help address reported worker shortages in this sector[iii].

Working holiday maker impact

Working holiday makers[iv] (or backpackers) can work in any occupation or industry for specified periods of time[v]. The drop in working holiday visa holders due to COVID-19 is likely to be felt in the labour-intensive areas of these industries – agriculture, forestry and fishing, and accommodation and food services[vi][vii]. Australian Government incentives to encourage local job seekers to undertake agriculture work[viii], and access to the Pandemic Event Visa for temporary visa holders working in certain industries[ix], were introduced to help address ongoing labour demand.

Temporary graduate visas increase

Interestingly, the number of temporary graduate visa holders increased by 4 per cent over the 12 months to 31 March 2021, as onshore international students completed their qualifications and were granted temporary graduate visas.[x] Most of the increases came from two countries, India and Nepal, while there were reductions from China and Pakistan. Data shows that until they gain work in their chosen field of study, most temporary graduate visa holders work in the accommodation and food services and retail trade industries[xi]. The number of temporary graduate visa holders in Australia is expected to increase with the Government announcement that, from 2021, visa holders who studied at regional institutions can apply for a second temporary graduate visa.[xii]

New Zealand citizens in Australia may increase

There has been a small fall in Special Category visas which allow New Zealand citizens to work in Australia under the provisions of the Trans-Tasman Travel Arrangement (down by 2 per cent or 13,000). The phased re-opening of borders opening between the two countries and travel becoming easier there may see an increase in these visas. New Zealand citizens often work in industries such as construction; transport, postal and warehousing; and professional, scientific and technical services[xiii].

Highly skilled visas and the Australian labour market

The workforce needs of Australian businesses are supplemented by the temporary resident skilled employment visa holders (job-matched primary visa holders down by 20,000, with large decreases from India and the UK) and temporary resident–other employment (down by 1,000, with decreases mainly from China, Sri Lanka and USA). Primary visa holders of such visas are more likely to work in the professional, scientific and technical; information media and telecommunications; and healthcare and social assistance industries[xiv]. While the number of overseas workers in Australia under these visa categories did not fall as substantially as other visa categories, the labour market impact could still be considerable. This is because such visas are mainly for highly specialist skills and/or where labour market testing has shown the positions cannot be filled from the Australian labour market. See Table 1 for details on temporary work visa grant by broad category.

Table 1: Temporary visa holders with a full or partial work right

 

31-March-20

31-March-21

% Change

(Mar 20 to Mar 21)

Special category (NZ citizens)

672,432

659,254

-2%

International student

567,924

377,785

-33%

Working holiday maker

119,266

38,630

-68%

Other temporary

5,392

3,944

-27%

Temporary resident (Other Employment)

40,805

39,334

-4%

Temporary resident (Skilled Employment) All applicants

 

Temporary resident (Skilled Employment)

Primary applicants (only)

139,331

104,333

-25%

77,691

57,954

-25%

Temporary graduate

96,819

100,325

4%

TOTAL

1,641,969

1,323,605

-19%

Source: Department of Home Affairs, Temporary Entry Visa Holders (March 2021 comparison), BP00191 from www.data.gov.au

Conclusion

The closure of Australia’s international borders in response to COVID-19 has significantly reduced the numbers of temporary visa holders with a full or partial work right. This will have an impact on those sectors where data shows that in aggregate terms, temporary visa holders are more likely to be employed, such as accommodation and food services; health care and social assistance; retail trade; agriculture, forestry and fishing; construction; transport, postal and warehousing; professional, scientific and technical; and information media and telecommunications. The longer-term impact on the Australian labour market and the skills implications will remain an on‑going focus of the NSC.

 

[i] The UK, Republic of South Korea and Taiwan are three of the 19 countries covered by the Working Holiday Maker (Subclass 417) visa program, to which annual visa caps do not apply. In contrast, each country which is a party to the Work and Holiday (Subclass 462) visa program, is subject to an annual visa cap and as such is less likely to be included in the top countries for the Working Holiday visa programs.

[ii] ABS Characteristics of Recent Migrants Survey, November 2019.

[iii] Eligible participants can work more than 40 hours a fortnight if they work in specified sectors https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/student-500/temporary-relaxation-of-working-hours-for-student-visa-holders.

[iv] For published Department of Home Affairs visa data, Working Holiday Maker includes both the Working Holiday Maker (Subclass 417) and Work and Holiday (Subclass 462) programs, and cover both first, second and third year visa holders.

[v] Joint Standing Committee on Migration, Review of the working holiday maker program and its role in the economic recovery, Department of Home Affairs, Submission 42, p.6.

[vi] ABS Australian Census and Temporary entrants Integrated Dataset, 2016, 3419.0.55.001.

[vii] Working holiday visa holders may be able to apply for a further visa to continue working in agriculture for an additional 12 months, see https://immi.homeaffairs.gov.au/work-in-australia/Pages/working-in-agriculture/agricultural-employers.aspx. Working Holiday visa holders can work longer than six months with one employer in Northern Australia if in Tourism and Hospitality, Aged Care and Disability Services, Fishing and Pearling, Tree framing and felling, Construction and Mining https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/work-holiday-417/6-month-work-limitation.

[viii] Eligible participants can get relocation assistance if they move to take up any ongoing work including a move to a harvest,  regional or remote area to take up short-term agricultural work, including harvest work, see www.employment.gov.au/relocation-assistance-take-job.

[ix] Temporary visa holders working in, or intending to work in critical sectors such as agriculture, health care, aged care, disability care child care and tourism and hospitality may be able to apply for the 408 COVID-19 Visa up to 90 days before their existing visa expires and then remain in Australia for up to 12 additional months https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/temporary-activity-408/australian-government-endorsed-events-covid-19.

[x] This increase in temporary graduate visa grants, follows increases in the number of international student visas granted in preceding years. See https://covid19.homeaffairs.gov.au/student-visa.

[xi]ABS Australian Census and Temporary entrants Integrated Dataset, 2016, 3419.0.55.001.

[xii] See International Students Studying in Regional Areas on https://immi.homeaffairs.gov.au/visas/working-in-australia/regional-migration, noting the definition of regional for this measure includes all of Australia other than major cities of Sydney, Melbourne and Brisbane.

[xiii] ABS Characteristics of Recent Migrants Survey, November 2019.

[xiv] Department of Home Affairs, Temporary Entry Visa Holders, BP00191 from www.data.gov.au.