DIMA Annual Report 1996-97

Sub-program 2.1: Economic Entry

Objective

To benefit the Australian economy through the entry of skilled and business people.

Description

Business migration is an integral part of Government economic strategy and business mobility issues are actively pursued in the Asia Pacific Economic Cooperation (APEC) context.

The business entry programs are designed to support the Government's economic and business mobility goals.

The sub-program is delivered through a range of flexible business entry categories that provide for either short-term entry, long-term temporary entry or permanent entry tailored to meet the needs of business in Australia and overseas.

The Business Branch coordinates policy and planning for the business entry programs, as well as providing support for both offshore and onshore delivery areas.

Business entry programs require the effective coordination of both onshore and offshore client service areas.

Financial and staffing resources summary

	1996-97 Budget and AEs $'000s	1996-97 Actual $'000s	1995-96 Actual $'000s
Budgetary (cash) basis
Components of appropriations
Annual appropriations
Running costs	32 017	31 361	32 872
Other program costs	-	-	-
Total appropriations	32 017	31 361	32 872
Less adjustments	-	-	(1)
Total outlays	32 017	31 361	32 873
Total revenue	15 971	14 451	10 161
Staffing
Staff years (actual)	397	322	414

Performance information

Outcomes are measured by the extent to which:

1. business mobility is enhanced;
2. entry selection contributes to the Australian economy;
3. business is satisfied with the processes; and
4. the Minister is satisfied with advice provided.

Performance outcomes

(i) Business mobility

In broad terms, business movements into and out of Australia have grown to significant levels. During 1996-97:

• 200 000 Australians worked overseas;
• 300 000 business visitor visas were granted (visa subclass 456 and ETA equivalent);
• 24 000 visas were granted to business people and highly-skilled specialists for periods of stay of up to four years (visa class 457); and
• 12 000 visas were granted for business migrants and sponsored skilled migrants (visa classes 120, 121 and 805).

As is evident from the above statistics, the overwhelming majority of business movements to Australia are temporary in nature. Numbers in this category show strong growth as the internationalisation of the economy increases.

Chart 7: Visa subclasses 456

Note: 1996-97 figure includes ETA equivalent visas.

Chart 8: Visa subclass 457

It is the mix of entry programs adopted during the past 18 months which has supported mobility objectives.

Building on the introduction in November 1995 of the Business short-stay visa, which provides the holder with multiple entry to Australia for five years or the life of the applicant's passport, whichever is the longer (with many countries issuing passports valid for 10 years, many business travellers are able to obtain a business visa for that period), the following initiatives were significant:

• the Electronic Travel Authority (ETA), introduced in September 1996, which allows both tourists and business visitors to obtain a visa for Australia at the time they purchase their airline ticket overseas.
• the Australian Business Access Card (ABAC), introduced in November 1996, is issued to business people with a multiple entry business visa or ETA. As well as showing that the Australian Government has accepted the holder as a bona fide business person who is welcome to Australia, this plastic card will provide an increasing number of benefits, including priority queuing for immigration processing for arrivals and departures.
• as a response to the desire of the APEC forum to promote business mobility throughout the APEC region, the APEC Business Travel Card, a departmental initiative, is currently on trial in Australia, South Korea and the Philippines. The APEC Card enables a frequent traveller to make one application for multiple entry to participating APEC countries and provides streamlined entry and exit arrangements at airports.

The number of longer-term temporary movements has remained relatively static in recent years. Increasingly, short-term temporary entry is able to satisfy the needs of international business.

However, there remains a significant niche for longer-term temporary movements. These are, in the main, company executives on posting to Australia for a number of years, a further sign of economic internationalisation as companies expand operations across borders and seek to expose their senior staff to a range of operating environments world-wide.

Permanent migration on the grounds of skill shortage in Australia, or the desire to develop a business in Australia, remains a small but solid component of Australia's migration program.

Numbers are relatively stable; increasingly the desire to remain permanently in Australia is taken after several years business experience on a temporary basis.

(ii) Entry selection

A number of permanent and temporary entry categories — especially business skills, employer nomination, labour agreement, independent, regional sponsored migration, and temporary business entry — focus on benefit to the Australian economy.

Surveys of the investment and export performance of permanent business migrants demonstrates the positive economic impact of this class of migrant. Within three years of their arrival in Australia:

• 82 per cent were engaged in business, up from 79 per cent at 24 months and 54 per cent at 12 months;
• each new business employed an average 4.5 people; the same as at 24 months, but up from 3.7 people at 12 months;
• 76 per cent of businesses were engaged in exports, up from 66 per cent at 24 months and 61 per cent at 12 months;
• 18 per cent of exporting businesses had earnings worth more than $1 million. The most common region of the world exported to was Southeast Asia, tapped by 75 per cent of exporting businesses;
• 30 per cent of businesses had an annual turnover of $1 million or more; up from 28 per cent at 24 months and 26 per cent at 12 months;
• cumulative funds transferred to Australia by principal migrants were, on average, $1.5 million, up from $0.96 million at 24 months, and $0.45 million at 12 months; and
• average money invested in the business was $0.51 million, up from $0.42 at 24 months and $0.26 at 12 months.

For longer-term temporary entry, reforms were introduced in August 1996 as a result of an inquiry chaired by Mr Neville Roach, Managing Director, Fujitsu Australia Limited.

The Roach reforms simplified the earlier temporary regime by reducing the number of visa categories and introducing the concepts of benefit to Australia and key activity. Where these factors are clear cut, no labour market testing in Australia is required.

For the benefit of businesses located in Australia, entry programs have been designed to provide industry with the flexibility to meet long-term staffing needs where local skilled personnel are not available. In this respect:

• 60 labour agreements are currently in place (up from 55 in 1995-96), covering entry through 250 permanent and 1 600 temporary skilled visas;
• 150 Regional Sponsored Migration Scheme (RSMS) visas were issued in 1996-97 (up from 38 in 1995-96), to meet employer needs in regional Australia;
• the number of regional bodies certified to sponsor skilled migrants under the RSMS increased from nine to 21; and
• 24 regional headquarters agreements approved in 1996-97 (up from 18 in 1995-96), leading to 204 permanent and 364 temporary visas issued, with 700 jobs created in 1996-97.

Labour Agreements, and the companion Employer Nomination Scheme, have recently been reviewed by a committee of review, chaired by Dr Ian Lin.

The committee's recommendations for a variety of procedural improvements for speedier processing, without sacrificing integrity, were accepted by the Government.

In relation to permanent entry, studies have shown that skilled migrants make a positive contribution to the Australian economy.

In addition to having higher levels of income than Preferential Family migrants, they also spend more on housing, transport and other major household expenditure items. Skilled migrants also have unemployment rates close to or below the Australian average, 18 months after arrival in Australia.

On 1 November 1993, the former Government decided to provide access to special eligibility permanent entry visas for the People's Republic of China (PRC) nationals in Australia at the time of the Tiananmen Square incident.

In conjunction with this measure, it also decided to allow better qualified asylum seekers from all nationalities and highly qualified students (mainly but not exclusively from the PRC) undertaking post-graduate study to apply for permanent residence.

A total of 49 678 people applied under the special visa classes 815 (PRC Permanent Entry Visa), Class 816 (Special Permanent Entry Visa) and Class 818 (Highly Qualified Onshore Permanent Entry Visa).

At 30 June 1997, 96.3 per cent of all applications had been finalised — 42 084 people who applied under these special visa classes had been granted permanent residence visas.

Demand in both the Independent and Concessional categories continued to be strong. Both reached their caps for the number of visas able to be issued in June and May 1997, respectively.

This was in spite of the pass and pool entrance marks for both categories being raised during the course of the year to record levels.

In addition, the Minister announced he would re-introduce regulations relating to points for English language skills, and, for those with limited English, points for fluency in two or more languages.

To reinforce the increased skills focus in the former Concessional Family, now Skilled — Australian Linked (SAL) category, the Government decided to extend the Occupations Requiring English (ORE) list so that about 80 per cent of occupations are included.

The impact is that, from 1 July 1997, most applicants in the SAL category will need a higher level of English language ability.

The General Points Test (GPT) is one of the primary criteria specified in the Migration Regulations which has to be met by applicants for an Independent or SAL visa.

The pass and pool marks for each visa class are varied regularly as a means of controlling this part of the migration program. Only the Independent and SAL visas are subject to this mechanism. The pass mark is the total number of points that must be scored to pass the GPT.

Because of the high marks, both categories now require applicants to have Australian acceptable post-secondary qualifications and generally be under 40 years of age.

The result of these measures is that both categories will deliver greater economic benefits to Australia by allowing for the entry of young, skilled migrants who are more readily employable and therefore able to contribute to the Australian economy.

To reflect the fact that the Concessional Family category has been transformed into a genuinely skilled category, the Minister announced in May 1997 that its name was to be changed (from 1 July 1997) to Skilled — Australian Linked, (SAL) and this category will be included in the Skilled stream rather than the Family stream.

The Government has announced that the GPT for these two categories is to be reviewed, to ensure that both categories are selecting migrants who are most suited to the needs of Australia's labour market.

(iii) Satisfaction of business

Processes were developed to engage business more actively in advising on their satisfaction with Portfolio programs and services.

This included the establishment of a Business Advisory Panel to advise the Minister, business reference groups in key States and regular seminars and consultations with business.

Feedback from business during the year was consistent. Clients were generally happy with Portfolio program products, and happy with the direction of reforms following the Roach and Lin reviews.

But they were less happy with levels of service at State and Territory offices and overseas posts, especially the time taken to process cases and the fragmentation of services.

This dissatisfaction is being addressed by the establishment of business centres in 1997-98. The centres will result in smoother, quicker, simpler processing.

In early 1997, the Minister announced the Review of the Student Visa Program (RSVP) to provide a detailed analysis of the support provided by the Student Visa Program to the overseas Student Program (an Employment, Education, Training and Youth Affairs portfolio program).

Given that the latest Australian Bureau of Statistics figures for 1996 show that export revenue generated by the export of education was approximately $3 billion, representing some 63 000 student visas granted offshore during that period, Australia's overseas education industry is vitally interested in the cost-effective administration of the student visa process.

At the conclusion of the RSVP, the Department will be in a better position to meet the needs of the industry, while maintaining the integrity of the migration program.

Chart 9: Students by source countries 1996-97

(iv) Satisfaction of Minister

The Minister was provided with a range of advice on emerging business trends and needs during 1996-97. Satisfaction with this advice is evidenced by the range of actions and initiatives that have followed: ETA; APEC Card; ABA Card; implementation of Roach Review of Temporary Business Entry recommendations; acceptance of Lin Review of ENS and Labour Agreements; development of regional initiatives such as expansion of RSMS, Regional Established Business in Australia (REBA) category and skill matching; development of business centres; and establishment of the Business Advisory Panel.

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