Skilled migrant arrivals hit lowest in 20 years – but Covid isn’t the reason for innovation deflation

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Image: @nci Unsplash

The decline in the number of skilled workers arriving in Australia hit the economy and began six years before the pandemic. Alan austin reports on the decline of innovation and the jobs crisis.

If you can’t find a hydrogeologist, sonographer, or barber when you need them, that’s probably why. Home Office data confirms Australia’s historically successful reception program for migrants with specialized skills is being systematically dismantled.

From a peak in 2013 of 106 skilled migrants per 10,000 Australian workers, this ratio has been declining every year. It was drastically reduced in 2018 from 95 to 84, then dropped sharply in 2020 from 81 to 72. It fell last year to just 57, almost half of the peak of 2013. This was the rate. the lowest since 2002, when the Howard-Costello government was rapidly expanding the program and reaping significant economic benefits.

The graph below is based on data from Australian Migration Statistics 2020, updated with the latest edition of The Administration of the Immigration and Citizenship Programs. The shape of the graph from 2013 shows that this cannot be blamed on the pandemic.

Migration

Impact on the economy

There is no doubt that the collapse in skilled worker inflows has been one of the factors in the overall fall of the Australian economy since 2014. One of several. The ever-decreasing availability of qualified technical personnel has had a direct impact on innovation, scientific and medical research, manufacturing production, and the ability of many companies to operate efficiently. These in turn have contributed to lower productivity, slower economic growth, stagnant wages and lower corporate profits in some sectors, although these have generally been robust. Thus, overall living standards have almost certainly been reduced significantly, although quantifying how much is a challenge.

The actual numbers are substantial. Or they were. In its first full fiscal year, until June 1997, the Howard government increased the number of admissions from 24,100 to 34,676. It remained around that number until 2000, when rapid expansion took hold. begin. From 44,721 in 2001, incoming experts rose to 66,053 in 2003, then to 77,878 in 2005. To 97,336 in 2006, the number of experts under Howard had quadrupled in 10 years.

Under Rudd and Gillard, expansion continued, despite a decline in 2010 during the global financial crisis. The peak intake in 2013 was 128,873.

World innovation ranking

From 22nd in the world on the Global Innovation Index in 2009, Australia fell to 18th in 2010 and 17th in 2014. A steady decline began soon after. From 19th in 2016, Australia jumped to 20th in 2018, 22nd in 2019, then 23rd in 2020, and the lowest ranking ever recorded last year to 25th.

Other global agencies have followed similar declines. The World Economic Forum measures the “technological readiness” of 141 countries. Australia’s ranking fell from 19th in 2013 to 21st in 2016 and 27th in 2018.

Slower growth of gross domestic product (GDP)

The decline in economic growth rankings during the Coalition’s tenure is easier to demonstrate. When skilled migration was near its peak, Australia had one of the highest annual GDP growth rates among the 38 developed member countries of the OECD. In 2009, its annual GDP growth was the highest in the OECD.

Currently, in contrast, Australia’s annual growth ranks 30th among developed countries, the lowest level on record. Australia’s modest growth of 3.85 percent for the September quarter, the latest data, is well below the OECD average of 5.40 percent. See the blue table below.

GDP growth Australia

australia quarterly The GDP growth rate for the September quarter was an appalling negative 1.9 percent, the third lowest on record. (The lowest was minus 6.8% in the June 2020 quarter.) The OECD ranking of Australia on quarterly growth in the September quarter was a dismal 36th out of 38. Only Iceland and New Zealand were lower.

The architect of decline

Scott Morrison appears to be the main Cabinet decision maker in this substantial policy shift – which began on a large scale in 1985 under Bob Hawke. Morrison was Minister of Immigration in 2013 and 2014, then Treasurer from 2015 to 2018 and has served as Prime Minister since 2018.

Required skills

Reducing migration might not have been a big problem if education and training had been strengthened to meet the demand for skilled personnel. Obviously, this did not happen.

The missing expertise in Australia is listed in a calendar published by the National Skills Commission. The latest priority list shows 57 professions currently in national shortage with strong future demand. These include specialists such as aircraft structural maintenance technicians, ultrasound technologists and geotechnical engineers. It also includes welders, bakers, cooks and nurses, whom Australia is expected to be able to recruit from the 245,000 unemployed young people.

Nine trades in shortage have low future demand, including farmers, winegrowers and roofers.

The calendar lists 87 shortage occupations with moderate future demand. These include tilers, environmentalists, nursing aides, and dental assistants, who don’t seem to require extensive specialist training. It also includes hydrogeologists, geophysicists, cardiologists, and diversionary therapists who probably do.

Maybe we all need more Diversion Therapists.

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