Unpacking the Migration Strategy

The government’s Migration Strategy was released this week and, if well implemented, will have minimal impact on the higher education sector – but will not be such good news for the VET sector.

Higher Education

Graduate work rights

A number of commentators have focussed on the Migration Strategy’s changes to reduce post study work rights for international students and suggested this will diminish demand for study in Australia. What they typically have not included in their analysis is how Australia’s changes sit within the context of the changes underway in key competitor countries.

For example, in the UK the government has just announced a review of their Graduate Route (ie an intention to reduce post study work rights). This review follows the UK’s recent decision to prevent many international graduate students bringing their families with them when they study in the UK. In Canada the government has just announced an increase in the funds students need to attain a visa, and changes to wind back previous extensions to post study work rights. And while international student numbers have rebounded in the US, with Donald Trump ahead in the polls it remains to be seen how positive international students feel about future study options there.

Against that backdrop – and on the assumption that changes outlined in the Migration Strategy do in fact make it easier for skilled higher education graduates to move onto the new ‘Skills in Demand’ visa (and have an easier route to permanent residency) – it is unlikely that there will be a significant softening of demand for Australian higher education on the basis of the changes to post study work visas.

Furthermore, with half of all degree-qualified international graduates working in very low skilled occupations such as delivery drivers, kitchen hands and labourers while on their post-study work visas, we owe it to them to help them find meaningful work, relevant to their skills, when they graduate. If well implemented (and a lot hinges on how well the pathway to the ‘Skills in Demand’ visa works) the post study work visa changes should be a positive for students.

The fact that the government is retaining the option for graduates in regional areas to apply for a second post graduate visa (1-2 years depending on location) is a positive move. The negative is in reducing eligibility to post study work visas to students aged 35 or less, potentially ruling out some of the best and brightest Masters and PhD students from studying in Australia.

English language levels

The measure which is likely to have more of an impact on higher education student numbers is the change to lift English language levels for study in Australia, and new reporting requirements on providers in relation to this measure.

The reporting changes are still to be determined but given the recent requirements being introduced in relation to student support and handling sexual assault matters– these could be quite onerous and intrusive (especially given the persistent concerns that some universities are not properly assessing prospective students’ English language levels).

VET

The much more significant changes arising from the strategy will be in the VET sector and, as the government intends, this is where student numbers will noticeably decrease.

Genuine student test

While the criteria for the Genuine Student test are yet to be released (and will be clarified in a Ministerial Direction) and the test will apply to both higher education and VET students, it is in the VET sector where it will have its biggest impact.

One of the key changes the Genuine Student test will introduce – is a focus on the worth of the student’s qualification to their future career aspirations. That means the Department of Home Affairs assessing what the student will earn on their return to their home country.

While Australian higher education qualifications typically bring a wage premium to graduates returning to their home countries – the same is not true of many VET qualifications. As I have previously noted, this is one reason for the relatively low level of offshore VET delivery (of full VET qualifications). While many countries in Asia, South America and Africa are starting to recognise the importance of VET and are building their own VET systems – most VET graduates in these countries do not earn a significant wage premium from their studies, and the much higher cost of studying in Australia make the financial returns even less certain.

Currently almost 40% (9,783) of the 26,195 courses listed on CRICOS are VET qualifications. It remains to be seen how many of these courses still have international students enrolled in 18 months’ time.

For example, will the students enrolled with one of the 91 VET providers offering the Certificate IV in Marketing and Communication really benefit their future careers by this study – when they will be paying an average student fee of $9,980 for the course as well as their living costs, travel, student visa costs, etc? And for some students their living costs are likely to be significant with five providers offering the course over at least a 75 week period (!?!), while another 10 providers are graduating students after 26 weeks or less.[1]

The Certificate IV in Marketing and Communication prepares people for work as media planners, PR officers and advertising assistants – occupations not currently in shortage in Australia (and unlikely to be highly paid in their home countries). Therefore in future, students who are interested in this course are unlikely to be able to convince the Department of Home Affairs that they meet the Genuine Student test, even though many of them will be genuine students, after all three TAFE Institutes have CRICOS approval for this qualification.

This is not an isolated example – in total there are 2,820 CRICOS-approved qualifications from the Business Services Training Package. And while a number of the Business Services Diplomas and Advanced Diplomas are explicitly (and legitimately) packaged as pathways to higher education study, and thus in my view, unlikely to be impacted by the Genuine Student test (if properly assessed), the impact on other providers which don’t have pathways agreements, or which offer predominantly Certificate level courses is likely to be severe.

Of course not all international VET students are studying business. There are many thousands of international VET students enrolled in courses leading to occupations which are currently in shortage in Australia.

While these students might not be able to prove a wage boost from their studies when they return home, Australia needs their skills and hence their studies could be assessed as genuine, although perhaps not for all occupations in shortage. The changes being considered in the Migration Strategy in relation to a new “Essential Skills” visa pathway to attract workers for the aged and disability care sectors – which explicitly looks to the Aged Care Industry Labour Agreement and the PALM scheme[2] as more appropriate means of attracting and retaining workers needed in the care sector – are likely to act against the international VET sector being able to educate thousands of students in care courses in future. If students undertaking these courses find it harder to move onto a post study work visa after their course, it seems unlikely they will meet the Genuine Student test (because in their home countries these occupations are typically poorly paid).

Providers who predominantly recruit onshore students

The Genuine Student test will also make it much harder for providers whose business model focusses on enrolling students already in Australia. Not only is the government considering further changes to restrict “onshore visa hopping” but they will also apply much greater scrutiny to students who finish one qualification and apply for further study.

The explicit focus of the reforms is the higher education students who currently subsequently go on to study a relatively cheap VET qualification, often not linked to their degree, after they finish their higher education studies and/or when their post study work visa expires. Most of these students are unlikely to pass the new Genuine Student test. But the test is also likely to create challenges for VET providers whose business model is focussed on offering further education options for VET graduates after they finish their first qualification. Unless the subsequent qualification clearly relates to the student’s career aspirations and makes sense in terms of their earnings when they return to their home country – these students are also likely to fail the Genuine Student test.

Higher risk providers

Effective immediately, providers with a higher immigration risk assessment will have their student visa applications processed more slowly. Taken at face value, this is fair and sensible BUT with $19 million announced in the strategy to hire new staff to process and scrutinise visa applications this means a lot of new Immigration officials with a lot to learn and hence even greater delays on visa processing for higher risk providers.

Ordinarily I would not be raising any concerns about measures explicitly designed to make it more difficult for high risk providers to recruit students. I strongly support risk based regulation – but there have been a number of providers recently hit by unexpected visa rejections (probably as officials knew the changes associated with the Genuine Student test were coming and started to ask questions they hadn’t previously).[3]

It is understood that some good providers, including some TAFE Institutes, have been impacted by these unexpected visa rejection decisions and these in turn may have contributed to a higher risk rating.

The impact of delays on the processing of visa applications for these providers is unknown.

More changes still to come

Even as providers in both sectors contemplate what these changes mean for them and their students, it is important to keep in mind that more changes are planned and that the Migration Strategy clearly gives weight to the work of the interim report of the Joint Standing Committee on Foreign Affairs, Defence and Trade Inquiry into Australia’s tourism and international education sectors. That report contained a large number of recommendations which would further impact the sector, and is particularly focussed on the private international VET sector.

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[1] The diversity in the duration of VET courses on CRICOS is staggering and concerning. While much of the public conversation is about private VET providers offering short courses, in some instances TAFE Institutes have similarly short durations for their courses. And it may well be that longer courses for international students allow more time for students to be working (part-time) in Australia…

[2] The author is a member of the Pacific Australia Labour Mobility (PALM) Working Group and provided advice to the Department of Foreign Affairs and Trade on the design of a pilot scheme to support more Pacific workers to gain work and receive training in the Australian aged care sector.

[3] There have been a number of instances shared on social media where the Department of Home Affairs has recently rejected visa applications because the applicant would not earn enough on their return to their home country to warrant their study choice. This would appear to be an example of government officials moving to action changes to policy ahead of their formal announcement in the Migration Strategy.