The migration planning level announced in last year’s budget was rendered largely meaningless when it was changed from a “target” to a “ceiling.”

The figure in this year’s budget will be similarly uninformative. For the first time since the second world war, Australians have no idea of the government’s real immigration target. It is entirely the preserve of the home affairs minister.

Judging from the minister’s past actions and what we know of his views, let’s try to work out what will happen to migration and humanitarian programs over the next couple of years — and, more importantly, what that means for net overseas migration, the number of long-term and permanent arrivals minus departures. We can then get some idea of the effect migration will have on the size and profile of our population.

One of the things we know for sure is that Peter Dutton cut the migration program by 6400 places in 2016–17. That was the gap between the ceiling of 190,000 places, which used to be a firm target, and the number of permanent visas issued by the home affairs department. Recent reports in the Australian suggest the minister is likely to cut the 2017–18 migration program by 20,000, which means around 170,000 visas compared with the ceiling of 190,000. The reduced program is still likely to maintain a two-to-one split between skilled and family migration, which means a likely skill stream in 2017–18 of 113,000 places and (after allowing for the small special-eligibility category) a family stream of around 56,000 places.

But there is another factor to take into account, and that is the impact of a new visa for New Zealand citizens who have been in Australia for many years and have an income of more than $53,900. In this financial year and beyond, these people have a right to apply for formal permanent residence and  will be counted as part of the skill stream. Based on current application rates, some 10,000 places will need to be found in the likely 2017–18 program of 170,000. As the stock of long-term New Zealanders in Australia continues to grow, the government will need to continue to find more places for New Zealand citizens who have been in Australia long-term, which will effectively cut the intake.

These places will most likely be taken from the “skilled independent” visa category, which uses a points test and doesn’t require employer sponsorship. This category is also likely to bear the brunt of the overall cuts to the skill stream in 2017–18. In 2016–17, 42,422 skilled independent visas were issued, already some 1600 fewer than in the previous year. The number is set to fall much further: in December 2017 and January and February of this year, places in the category were released at around 30 per cent of the rate for the same period in the previous year.

Employer-sponsored visa numbers are also likely to fall, with fewer people applying following the tightening of requirements announced in April last year. Because these changes only took full effect from March this year, there is still a backlog of around 50,000 applications, which will take all of 2017–18 and much of 2018–19 to clear. Some 48,250 employer-sponsored visas were issued in 2016–17, making up around 39 per cent of the skill stream.

From 2019–20 the lower number of applications will force Peter Dutton to make the bulk of his cuts to the skill stream in employer-sponsored visas. Subject to the strength of the economy, employer-sponsored visa numbers in 2019–20 could fall back to around 10,000 per annum, the level prior to the major reforms introduced by the Howard government in the early 2000s.

The spectacle of a Coalition government reducing employer-sponsored visas will be another postwar first. These visas have traditionally had the highest policy priority because, according to the government’s own research, these migrants already have a skilled job, earn the highest average incomes, and thus make the largest economic and budgetary contributions. They generally have strong English-language skills and the occupational skills employers need, and they quickly integrate into Australian society. Targeting these visas for the largest cuts from 2019–20 seems strange, especially if the labour market continues to tighten.

Offsetting the declining application rate in employer-sponsored visas is the rapidly increasing demand for visas in the business innovation and investment program (around 7260 visas in 2016–17). By the end of June 2017, more than 15,000 applications for these visas were waiting on a decision. The minister will need to deal with increasingly urgent questions about the effectiveness of this scheme, and a tightening of the rules seems inevitable.

Based on his public statements about the importance of achieving a better dispersal of the immigration intake, the minister is likely to avoid cutting state-specific and regional migration visas, which together provided some 36,494 places in 2016–17 (around 30 per cent of the skill stream). But once these migrants have gained residency and fulfilled any medium-term obligations, nothing compels them to remain in the smaller states and in regional Australia. Questions remain about how many of these migrants do stay and whether this program succeeds in moving migrants out of the hotspots of Sydney and Melbourne.

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