Inquiry into the Economic Impact of Business Migration in Victoria

Final Report

Final Report - Parts 1 & 2
(614 Kb - 1 min 29 secs @ 56Kb/s)

Minister's Response


BACKGROUND

     

  1. On 23 September 1997, I presented the terms of reference for the Inquiry to the Joint Parliamentary Economic Development Committee. The Committee tabled its report on 14 May 1998.

     

  1. Victoria's population as at June, 1997 was 4,605,100 which represents 24.8% of the Australian population. In 1997, 24% of all overseas migrants (22,990) chose Victoria as their State of residence. In comparison, NSW and Queensland attracted 42.7% and 14.6% of migrants respectively.
  2.  

  3. The composition of migrants that settle in Victoria differs markedly from other States in that Victoria attracts a disproportionately large share of humanitarian and family categories and a disproportionately small share of skilled migrants.
  4.  

  5. While Victoria is the second most favoured State for all migrants, its share of skilled migrants is fourth behind NSW, WA and Queensland. The number of skilled migrants settling in Victoria in 1997 declined a further 4% from 1996.
  6.  

  7. Given the positive economic impact of skilled migrants on the Victorian economy, the Economic Development Committee's research and recommendations which aim to improve our market share in this area have been most timely.
  8.  

  9. The Victorian Government believes that an increase in Victoria's share of skilled migrants would not benefit just Victoria but Australia more generally as it would help distribute more widely the economic benefits of such migrants and the associated physical and social infrastructure costs. NSW, and Sydney in particular, faces resource and infrastructure costs in absorbing increasing numbers of settlers.
  10.  

  11. The Committee found that without specific intervention by State Governments, the main impact of an increase in total migration is that NSW will become relatively more populous than Victoria and Queensland.
  12.  

    COMMENTS

  13. The Committee's findings and recommendations are substantially supportive of the Government's own views. A number of the strategies recommended are already being pursued by the Government and other will be shortly, as outlined below.
  14.  

    Interstate Migration

  15. The Committee noted the historical trend of net migration of Victoria's population to other States since the early 1970s. The net losses hit a peak in the early 1990s when Victoria's migration loss to other States was around 30,000 per annum. This reflected Victoria's poor reputation and economic performance at the time.
  16.  

  17. The Committee recommended attracting 'migrants' from other States to reverse this trend. The Committee also noted that the majority of the historical net population flow from Victoria to other States has compromised persons over 65.
  18.  

  19. The Government's clear and consistent policy direction since coming to office has been to restore Victoria's economic fundamentals and therefore restore investors' confidence in the State and people's general confidence in pursuing rewarding and long term employment opportunities in Victoria.
  20.  

  21. Such a resolute policy direction paid dividends in 1998 with the restoration of Victoria's AAA credit rating. Also, for the first time since 1971, when population figures were compiled in the current basis, Victoria has experienced positive net migration from the rest of Australia to Victoria (in the first half of 1997-98).
  22.  

  23. The Government believes that skilled workers (whether they be Victorians or migrants) will be attracted to stay or come to Victoria if there is fundamental economic and employment growth.
  24.  

    Skilled Migration

  25. The Committee has made a number of recommendations aimed at increasing Victoria's share of skilled migrants. With its highly skilled workforce and world class education and training facilities, Victoria does not confront general skill shortages and therefore the State Government will focus on business skilled migrants specifically rather than broadly on the attraction of skilled migrants.
  26.  

  27. Where shortages are identified, my Department will continue to assist employers experiencing difficulties in recruiting specific skills, particularly in regional Victoria. The Department will actively alert employers to various skilled migration programs available and assist them in their dealings with the Department of Immigration and Multicultural Affairs.
  28.  

    Business Skills Migration

  29. The focus of the Government's strategy is to increase Victoria's share of Business Skills migration as this is the category which the Committee noted brings most economic benefits to the State.
  30.  

  31. The DIMA survey of April 1997 of Business Skills migrants revealed that within their first 12 months of arrival:-

       

    • Average funds transferred was $571,000
    •  

    • Investment in business averaged $585,000
    •  

    • Average employment per new business was 5.9 persons
    •  

    • 55% of those in business were exporting

     

  1. The Economic Development Committee Report has provided a useful analysis of how best to attract business skills migrants from emerging country markets and the activities and programs or our 'competitor' countries in these markets.
  2.  

    Initiatives

  3. While continuing to service enquiries from traditional markets such as Hong Kong, my Department will initially pilot projects in South Africa and Indonesia. Our approach will be to work closely with a panel of migration agents and provide in kind support to reinforce the advantages of Victoria. The panel for those two markets will be selected in consultation with DIMA and the Migration Institute of Australia. Trends will be monitored over the next three years.
  4.  

    Marketing Strategy

  5. My Department has developed an integrated marketing strategy incorporating targeted media advertising, displays and video film which will all be promoted through key intermediaries such as migration agents and State and Federal Government overseas offices.
  6.  

  7. A new web site for the program will also be developed with direct links to other relevant sites and agencies, including the Commonwealth Department of Immigration and Multicultural Affairs.
  8.  

  9. A new booklet will be produced as a marketing tool to highlight the advantages of Victoria as a destination for Business Migrants. It will complement the web site and focus on lifestyle issues, testimonials and material from relevant agencies such as Education Victoria. The documents will be produced in Bahasa Indonesian and Mandarin as well as in English.
  10.  

  11. Targeted media advertising will be the mechanism for increasing the awareness of the advantages offered by this State. This targeted approach will include newsletters produced by migration agents and Commonwealth Government promotional material.
  12.  

  13. Business Victoria, in line with its charter to attract new international investment to the State, is already actively involved in the promotion of inquiries from Business Skills applicants. Its current activities in Business Skills Migration include:-

       

    • Acting as a registrar for State registrations of applicants
    •  

    • Facilitation role for prospective and successful applicants
    •  

    • Assessing applications for State sponsorship
    •  

    • Systematically networking with migration agents and DIMA and providing them with promotional material

     

  1. As mentioned above, these activities will be stepped up particularly in relation to the pilot markets of Indonesia and South Africa.
  2.  

    'Designated' Area Status

  3. A further recent initiative of the Government to increase Victoria's share of Business Migrants was to seek the inclusion of Melbourne as a 'designated' area for the purposes of the Migration Act and Regulations. From 1 September 1998, the whole of Victoria is a designated area for the purposes of the Migration Act.
  4.  

  5. Through this 'designation', migrants who apply to settle in Victoria will receive more points than those who apply for Sydney or most other capital cities. This will have the effect of encouraging more migrants to apply to come to Victoria who may previously not have done so.
  6.  

    CONCLUSION

  7. I thank the Committee for their timely report and welcome their analysis and recommendations. I am pleased today to announce a range of initiatives which are consistent with the broad thrust of the Committee's report.

MARK BIRRELL

Minister for Industry, Science and Technology

Chairman's Forward

Chairman's Forward

1. Summary of Key Findings

On 23rd September 1997, the Victorian Minister for Industry, Science and Technology issued the Economic Development Committee with a Reference to undertake a review of the Commonwealth Government's Business Skills Migration Program and its economic impact in Victoria.

The Committee's initial investigations identified the very small size of the Program. In 1996/97, only 1,350 business migrants were granted visas. Of this total, only 135 chose Victoria as a settlement destination. Ten years ago, Victoria was the second most popular destination for business migrants, behind New South Wales. It is now fourth, with New South Wales, Western Australia and Queensland receiving larger intakes.

This leads the Committee to pursue two main areas of inquiry: specifically, how to increase the total intake or pool of migrants, and how to attract more of these very productive migrants to Victoria.

The Committee looked at the practicality of increasing the total number of skilled and business migrants and found two major problems. The first concern related to State distribution. If the skilled migrant intake was increased by 100 migrants it would result in the following State distribution:-

  • New South Wales 45

  • Western Australia 18

  • Queensland 16

  • Victoria 15

  • All other States 6

Such an outcome has problems in terms of Victoria's relative decline compared to New South Wales.

The second issue concerns the practicality of increasing the total intake, particularly as the Committee understands DIMA has already slightly reduced points testing to meet existing planning levels in specific skilled categories.

The Committee investigated similar migration schemes in other countries, specifically Canada, New Zealand and the United States. As a consequence, it has recommended that the Commonwealth Government should not compromise the quality of business and skilled migrants against the possibilities of larger intakes.

The Committee also examined Australia's population trends and believes the key challenge facing the Victorian Government is to address the declining size of the State's population relative to New South Wales, as well as the growth of Queensland to become the second most populated State some time in the next 15 to 20 years.

One of the key recommendations is therefore that the Victorian Government must become very active in targeting skilled, business and entrepreneurial people to settle in Victoria. In this targeting, Victoria should not limit itself to the traditional migrant categories but should actively target the much larger source of business people that exist in New Zealand and other Australian States.

In this regard, the Committee noted the success Victoria has had in attracting investment and other industry and business from overseas and interstate, but that the equally important areas of attracting business, skilled and entrepreneurial individuals has been a neglected opportunity that must now be vigorously pursued.

The Committee considered in some detail, the factors that influence migrants to choose a particular settlement location and many of its recommendations relate to how Victoria can influence these choices.

One of the key findings of the Committee's investigations was that business migrants are not specifically attracted to a settlement destination because of business opportunities. Like all other migrants, business and skilled migrants settle in a particular location fundamentally because of the location of their family, friends and fellow countrymen.

As this pull factor develops, the effect of chain migration becomes a significant factor. The Committee's evidence suggests the chain migration factor will further disadvantage Victoria unless initiatives are implemented to encourage greater settlement in Victoria, particularly from emerging source countries who have not yet developed a settlement pattern in any one State.

In this regard, the Committee has recommended that the Victorian Government target South Africa as the most likely source of new business migrants over the next few years. As other source countries emerge, the Government should be ready to capitalise on the first wave of new arrivals so as to develop emerging ethnic communities that will act as strong pull factors for further migrants. Several of the Committee's recommendations deal with the need to develop strong links with ethnic communities and to encourage these communities to promote Victoria as a place to live to their fellow countrymen.

Other key reasons why migrants choose one settlement location over another include: availability of educational institutions, ease of entry and visa criteria, and lifestyle opportunities. Key recommendations deal with these issues in detail, however in summary, the Committee has recommended the following strategies:-

  • Greater utilisation of the Department of Immigration and Multicultural Affairs' State Sponsorship Schemes in order to allow the Victorian Government to sponsor a number of skilled and business migrants to settle in the State;

  • Marketing strategies which promote Victoria's lifestyle opportunities to potential business migrants, tourists and short term visitors to Australia; and

  • Capitalise on the link between migration and overseas students.

The second part of the Committee's recommendations dealing with marketing strategies, relates to influencing a migrant's settlement decisions. To this end, the Committee detailed recommendations in the following areas:-

  • Tourist Experiences

  • Migration Agents

  • Knowledge of the country, generally gained from Embassies, trade and other shows, advertisements, the media, internet and other national promotions.

The Committee also believes the Government should actively promote Victoria's lifestyle opportunities/advantages within targeted source countries of potential business migrants as well as generally creating a culture within its departments and agencies that continually promotes Victoria's virtues as a settlement location.

One of the major initiatives recommended by the Committee is the need for the Department of State Development to develop closer links with migration agents with the aim of utilising their knowledge and expertise in attracting business migrants to Victoria. Evidence indicates these agents have a significant influence in the settlement decisions of migrants and importantly, they have extensive knowledge of migration processes and source countries.

The Committee has recommended a number of ways in which the partnership between Government and the migration industry be strengthened. Part of these strategies also involves the need for the Government to employ a migration consultant to liaise with the agents in promoting the State and developing key networks.

As many of these recommendations deal with perceptions of Victoria, compared with other States of Australia, the Committee notes that these initiatives will have a long-term payback.

One of the Committee's specific concerns relates to the perception created by the Australian Tourism Commission advertising on the international stage, which over many years, has projected a vision of Australia as being limited to Sydney and Queensland. Although this may have been a short-term payback for tourism, it results in overseas countries having an unbalanced perception of Australia. The Committee has recommended strongly that the Australian Tourism Commission change its promotional focus to present a more balanced view of Australia as a tourist destination.

The theme of many of the Committee's recommendations concern the need for Victoria to maximise opportunities and use every avenue to promote its lifestyle advantages as well as its business friendly culture and livable city status.

In summary, the Committee believes it is critical that the Victorian Government adopt an aggressive approach to marketing the State to all forms of potential business and skilled migrants and business people generally. If the State does not actively seek to reverse existing settlement patterns of migrants, both from overseas and interstate, then Victoria's skilled population will continue to decline in comparison with other States.

 

    2. Inquiry Process and Acknowledgments

The Committee is grateful to the organisations and individuals who contributed to the Committee's investigations. Only a small number of written submissions were received which is perhaps reflected in the limited scope of the Terms of Reference. The Committee also collected formal evidence through targeted public hearings and conducted a number of informal meetings with key people in the migration industry such as agents, ethnic community and business groups, and other experts in the field. Important initial meetings were also held in Canberra and Sydney with relevant organisations, most notably the Department of Immigration and Multicultural Affairs.

Perhaps of most relevance to the Committee's investigations, were experiences of business migrants who had recently settled in Australia. In seeking to consult with selected business migrants, the Committee noted that many of these people may have held reservations about appearing before a formal Parliamentary Committee. This would particularly be the case for those migrants who had previously experienced a level of suspicion of Government in general.

Given that the Committee required open and frank observations by business migrants, it was decided to appoint the services of a professional market research company to conduct a series of focus group sessions in Melbourne, Sydney and Brisbane. These sessions concentrated in settlement decisions and experiences of the migrants and the nature of their business activities.

On behalf of the Committee, I would like to thank Ms Rosalyn Doyle from Worthington Di Marzio, who successfully conducted these sessions earlier this year. Appreciation is also extended to the many business migrants who participated in the focus groups and provided the Committee with valuable evidence.

The Committee also travelled to Auckland in December 1997 to compare New Zealand and Australia's Business Migration Programs and to learn of the impact of recent changes to New Zealand's selection criteria. The Committee is grateful to theses individuals and organisations with whom it met, for their time, input and hospitality extended during the visit. In particular, I would like to thank Mr David Besley, Chairman of the Association for Migration and Investment for his role in organising a valuable series of meetings.

During January this year, I was able to visit Taiwan, Canada and the United States. Taiwan is an important source country for business migrants and my meetings with Taiwanese Migration agents provided much useful information for their perspective of Victoria as a destination. Vancouver, in Canada has been the major destination of business migrants for some years and my meeting with State officials, Canadian immigration officers and local migration agents and migrant support groups proved extremely useful. This information was passed on to the Committee and formed part of its investigations into overseas programs.

I should conclude by acknowledging the contribution of all Members of the Committee in terms of their participation in the numerous meetings and their deliberations throughout the course of the Inquiry. The hard work of the Committee staff, namely the Executive Officer, Richard Willis, and part-time research officers, Amanda Tinner and Erin Thornton is also greatly appreciated.

I urge the Minister for Industry, Science and Technology to endorse the Committee's recommendations and to take up with the Federal Minister for Immigration, those recommendations that impact upon Commonwealth Government policy. I trust the Committee's Report will help dispel the many myths and prejudices that currently centre on the benefits of migration, and that the recommended strategies will demonstrate to potential migrants that Victoria is an attractive place to live and do business.

 

Hon. Chris Strong, MLC

Chairman
Economic Development Committee
May 1998

Recommendations


On 23rd September 1997, the Economic Development Committee of the Victorian Parliament received a Terms of Reference from the Victorian Minister for Industry, Science and Technology to conduct an Inquiry into the Economic Impact of Business Migration on Victoria.

In its Final Report to Parliament in May 1998, the Committee made the following recommendations:-

Recommendation 1
The Committee recommends that the Victorian Government capitalise on the recent upward trend in Victoria's net interstate migration, by actively promoting the State as settlement destination for skilled and business people in Australia.

Recommendation 2
The Committee recommends that the Victorian Minister for Industry, Science and Technology request the Commonwealth Department of Immigration and Multicultural Affairs to conduct random sampling of business class migrants after the 36 month monitoring period to ensure that the economic objectives of the Program are being maintained.

Recommendation 3
The Committee recommends that the Victorian Minister for Industry, Science and Technology advise the Federal Minister for Immigration and Multicultural Affairs, the the Victorian Government believes a greater economic benefit to Australia is achieved through the business owner/entrepreneur class of business migrant than is the case with the Investment-linked migrant.

Recommendation 4
The Committee recommends that the Victorian Minister for Industry, Science and Technology request the Australian Tourism Commission to redress the imbalance in tourism promotion for each State to ensure visitors and potential migrants have amore balanced view of the whole of Australia as a settlement destination.

Recommendation 5
The Committee recommends that the Victorian Government capitalise on the instability and uncertainty in the Canadian and New Zealand migration programs by targeting business migrants who traditionally settle in these countries.

Recommendation 6
The Committee recommends that the Victorian Government should add to is existing industry attraction program by the development of an aggressive new program to attract skilled, business and entrepreneurial people to Victoria.

Recommendation 7
The Committee recommends that, in developing a strategy to attract skilled, entrepreneurial and business people to Victoria, the State Government should not limit itself to overseas migrants, but rather seek to maximise opportunities from the largest possible pool.

In particular, the Victorian Government should draw on its successful interstate tourism experience to attract business people from other Australian States as well as New Zealand.

Recommendation 8
The Committee recommends that the Department of State Development should specially target business and skilled migrants from those countries that currently provide the majority of the State's overall settler arrivals. These include New Zealand, United Kingdom, the People's Republic of China and Former Yugoslavia.

Recommendation 9
The Committee recommends that the Department of State Development develop stronger links with key educational institutions that are attracting large numbers of overseas students to the State.

The Committee recommends that arrangements be made to include Victorian Government promotional material in the existing promotional material distributed by these educational institutions.

The Committee recommends that the Department of State Development should target the parents of overseas students studying in Victoria to send promotional material on Victoria's lifestyle and business advantages. Any visits to Victoria by parents of overseas students should be seen as an opportunity for further marketing.

The Committee recommends that the Victorian Government Alumni Program be extended to ensure that Victorian graduates are targeted for future migration and as vital links in the family and friends pull factor.

Recommendation 10
The Committee recommends that the Department of State Development, in conjunction with the Department of Multicultural Affairs, work closely with existing migrant community groups in Victoria and where they may not exist, help to foster such groups. The Government should be actively involved with these groups in promotional activities targeting new migrants and in providing the necessary support services and networks for new arrivals.

Recommendation 11
The Committee recommends that the Department of State Development target source countries early in the chain migration cycle in order to develop a critical mass of specific migrant communities who are a potential of source business migrants to the State.

The Committee recommends that, as a matter of high priority, the Department of State Development actively promote Victoria as a destination for future business migrants form South Africa.

The Committee recommends that the Department of State Development, in conjunction with key migration agents, monitor emerging future source countries of business migrants to Australia. Evidence indicates new opportunities may exist in countries such as the United States, Germany, and other parts of Europe and India.

Recommendation 12
The Committee recommends that the Department of State Development fully utilise existing State/Territory sponsorship and nomination schemes within the Commonwealth Migration Program, in order to maximise its share of skilled and business migrants.

The Committee recommends that the Victorian Minister for Industry, Science and Technology request the Commonwealth Department of Immigration and Multicultural Affairs to allow for greater flexibility in the number of skilled migrants that each State or Territory can sponsor in any one year. States that can demonstrate a track record in sponsoring skilled migrants should be given the opportunity to sponsor more than the targeted number each year.

The Committee recommends that the Commonwealth and State Government monitor the commitment of these migrants to a particular nominated settlement location so that both Governments can have the confidence that an increase in the sponsorship schemes will lead to these migrants staying in their selected State rather than reverting back to traditional settlement patterns.

Recommendation 13
The Committee recommends that the Department of State Development, as a matter of priority, should ensure that it fully utilises the allotted sponsorship of 200 skilled migrants under the State/Territory Nominated Independent Scheme (subclass 135 - Migrant). If demand for the allotted places warrants, the Department should request an increase in the maximum allotment by the Commonwealth Department of Immigration and Multicultural Affairs.

Recommendation 14
The Committee recommends that the Victorian Minister for Industry, Science and Technology request the Federal Minister of Immigration and Multicultural Affairs to critically review the bonus points awarded for location of a sponsor under the Skilled Australian Linked Migration Program, to enable State Governments to determine which regions are to be included on the Designated Area List.

The Committee recommends that the Victorian Minister for Industry, Science and Technology request the Federal Minister for Immigration and Multicultural Affairs to include the Melbourne metropolitan area in the Designated Area List to enable those applicants who have their sponsoring family member living in Melbourne the ability to obtain additional points under the points testing.

Recommendation 15
The Committee recommends that the Department of State Development be nominated as an Authorised Development Agency permitted to sponsor Business Skills applicants under the 129 and 130 visa sub-classes.

The Committee recommends that the Department of State Development should ensure that it utilises its maximum quota of sponsored business migrants within the 129 and 130 visa sub-class each year and that it seek to increase its maximum quota if there is sufficient demand by Business Skills applicants.

Recommendation 16
The Committee recommends that the Department of State Development, in conjunction with Tourism Victoria, actively promote Victoria's lifestyle opportunities/advantages within targeted source countries of potential business migrants.

Promotional material should focus on:-

  • Safe and attractive environment, low crime rates, low levels of pollution;
  • Affordable cost of living and housing compared to Sydney;
  • Multiculturalism, ethnic diversity and racial tolerance;
  • Parks and gardens;
  • Moderate climate; and
  • Sporting and cultural events.

Recommendation 17
The Committee recommends that the Department of State Development promote Victoria as the State that helps business migrants understand the Australian business culture, by:-

  • Working with migration agents and ethnic groups to ensure that potential migrants understand the differences in business culture; and
  • Establishing close working relationships with existing ethnic business, professional groups and individuals, particularly in the Asian community, and where these groups don't currently exist, to help establish them.

Recommendation 18
The Committee recommends that the Victorian Government develop a long term, whole of Government strategy, to continually promote Victoria's virtues as a settlement location. The Committee notes that such a strategy has synergies with both tourism and attraction of industry, business and other investment to the State.

Recommendation 19
The Committee recommends that the Department of State Development promote Victoria's lifestyle advantages to tourists with the aim of providing visitors with a positive image of the State which may influence any future migration plans.

Recommendation 20
The Committee recommends that the Department of State Development employ a migration consultant to work in conjunction with migration agents to attract new business migrants to the State and to give Victoria a presence in key source countries.

Recommendation 21
The Committee recommends that the Department of State Development develop closer links with migration agents with the aim of utilising their knowledge and expertise in attracting business migrants to Victoria.

In particular, the Committee recommends that the following initiatives be undertaken:-

  • Victorian Government membership of migration industry association and an on-going presence at all major migration industry functions;
  • State Government sponsorship of migration industry functions;
  • Victorian Government presence on key migration agent missions overseas;
  • Development of promotional material with the agents for distribution to their clients;
  • Introduction of an incentive/fee based system for agents who can introduce business migrant clients to the Victorian Government.

Recommendation 22
The Committee recommends that the Victorian Government's promotional information on Victoria, including opportunities for skilled and business migration be distribution to Australian Embassies.

The Committee further recommends that the Victorian Government maintain good relations with Embassy staff in target source countries.

Recommendation 23
The Committee recommends that the Victorian Government Buisness Offices (particularly Frankfurt, Hong Kong, Jakarta and London) need to be more active in promoting business migration and should:-

  • Form linkages with Embassies regarding any migration inquiries;
  • Promote Victoria to potential business migrants;
  • Provide an annual review of potential sources of business migrants; and
  • Work in with migration agents and any Victorian Government appointed consultants.

Recommendation 24
The Committee recommends that the State Government develop a specific internet website aimed at attracting business and skilled migrants to Victoria. The website should be made available in targeted languages and should be developed with appropriate links to immigration and tourism sites throughout the world-wide-web.

Recommendation 25
The Committee recommends that all overseas trade shows, exhibitions and other public promotion hosted by Victorian Government agencies or attended by Government agencies, actively participate in promotion of Victoria as a destination for tourists, business people and migrants with an emphasis on Victoria as a place to live.

Recommendation 26
The Committee recommends that the Department of State Development develop linkages with Trade Show and Convention operators, to ensure appropriate promotion of Victoria at all events held in the State.

Recommendation 27
The Committee recommends that an promotional activities planned by the Victorian Government for the Sydney 2000 Olympic Games, include a focus on Victoria's lifestyle and educational opportunities.

Recommendation 28
The Committee recommends that a whole-of-Government approach be adopted by the State Government in promoting Victoria to potential business and skilled migrants. In particular, greater co-ordination is required between the Departments of State Development, Education and Multicultural Affairs.

The Committee further recommends that a designated lead agency is required to co-ordinate these activities and that Government give consideration to the small business nature and tourism synergies of these activities in nomination of a lead agency.

 


Findings

On 23rd September 1997, the Economic Development Committee of the Victorian Parliament received a Terms of Reference from the Victorian Minister for Industry, Science and Technology to conduct an Inquiry into the Economic Impact of Business Migration on Victoria.

In its Final Report to Parliament in May 1998, the Committee made the following findings:-

     

  • The Committee finds that without some intervention, any increase in skilled migrant levels can be assumed to follow existing settlement trends, which will exacerbate Victoria's population growth problems relative to other States.

     

  • The Committee finds that without any specific intervention by State Governments, the main impact of an increase in total migration is that New South Wales will become relatively more populous than Victoria and Queensland and that its growth will exceed current projections.

     

  • The Committee finds that interstate migration is a major determinant of Victoria's population growth, both in absolute terms and relativity between New South Wales and Queensland. Although dissections of interstate migration by skill are available, the large volume of departures would suggest a number of skilled people are migrating to other States.

     

  • The Committee finds that ABS data suggests Victoria's loss of population through interstate movements include many newly arrived migrants.

     

  • The Committee finds that interstate movements from Victoria include a relatively high population of people over 65 years of age.

     

  • The Committee finds that the Victoria Government should carefully consider the strategic issues and directions it should adopt as a consequence of its relative population decline.

     

  • The Committee finds that historically the family pull factor had been an advantage in attracting migrants to Victoria, however recent migrant settlement patterns are reducing this advantage.

Given that Victoria is now receiving comparatively less migrants, the chain migration effect of the family pull factor will work against Victoria unless positive measures can be introduced by the State Government to address this trend.

     

  • The Committee believes if Victoria wants to maximise its opportunities to attract business people to the State, it should be looking at all settler arrivals and consequently should target the large number of New Zealand arrivals.

     

  • The Committee believes that the challenge for Victoria is to substantially increase its proportion of skilled migrants from the State's total migrant intake.

     

  • The Committee finds that Victoria is not effectively capturing the significant economic benefits achieved from skilled migration. Although smaller in population and economic output, both Western Australia and Queensland attract more of these migrants than Victoria, while New South Wales attracts over three times as many.

     

  • The Committee finds that a major impediment to the extent of economic contribution made by business migrants is the significant differences in business cultures which make it difficult for certain business migrants to successfully engage in business in Australia.

     

  • The Committee finds that there is a direct link between temporary visits to Australia and business migration. Only 20 per cent of business migrants and over 50 per cent of Independent Skilled migrants had not made a previous visit to Australia.

     

  • The Committee finds that existing tourist destination patterns of overseas visitors are having a significant effect upon Victoria's declining share of migrants, particularly in the business and skilled categories.

The Australian Tourism Commission promotion is heavily weighted towards New South Wales and Queensland. This bias is considered to have a major impact on Australia's migration settlement patters.

     

  • The Committee finds that the location of overseas students is a major pull factor for future migrants.

     

  • The Committee finds that Victorian educational institutions, particularly Monash University and Royal Melbourne Institute of Technology University, have been very successful in attracting overseas students. Accordingly, the Victorian Government should develop partnerships with these major educational institutions in marketing the State to the parents of overseas students.

     

  • The Committee finds that the distribution of Temporary Entry Visas has a significant influence on settlement locations of migrants throughout Australia.

Victoria's ability to attract migrants, particularly business and skilled, is disadvantaged by existing location patterns of temporary visas.

     

  • The Committee finds that Australia has the most effective Program in terms of ensuring business migrants have a commitment to doing business in Australia and contribution to the economy.

     

  • The Committee finds that the international market for business and skilled migration is constantly changing as host countries adjust their respective selection criteria in response to the number, quality and perceived economic benefits of these migrants.

The Committee finds that migration agents have considerable knowledge of the international migrant market place and are able to rapidly respond to changes and direct many thousands of business and skilled migrants to those countries which offer less stringent selection criteria.

     

  • The Committee finds that many migration agents who specialise in S.E. Asian countries, such as Taiwan, consider the United States to be the main market for business migrants, with Australia and New Zealand's entry requirements being far too difficult and stringent in comparison with the USA.

     

  • The significant recent changes made or under consideration to other countries' business migration programs, particularly in Canada and New Zealand, will result in enormous uncertainty in the minds of future business migrants and their agents. Major changes to the Canadian Program will likely have a dramatic impact on its current intake of over 100,000 skilled places and over 20,000 business migrant places.

The uncertainty and instability in these other overseas migration programs places Australia at a comparative advantage when competing with other countries for future business migrants.

If the Canadian recommendations are implemented, then Canada, New Zealand and Australia will all have Business Migration programs that are very similar, thus creating a level playing filed in the competition for business migrants.

     

  • The Committee finds that Australia's existing selection criteria for skilled and business migrants is appropriate and should not be significantly altered to attract an overall increase in skilled migrant intakes.

     

  • The Committee finds that the impact of any significant increase in skilled migrant intakes, without major intervention to alter existing settlement patterns, would be undesirable for New South Wales and Victoria given that:-

     

  • New South Wales receives a disproportionately large volume of migrants and as a result the NSW Government is not actively encouraging an increase in overall intakes; and

     

  • Victoria's small skilled migrant intake would result in a significant relative decrease in the State's skill levels in comparison with other States.

     

  • The Committee finds that the importance of business migration is not the capital the migrants bring into Australia, but the potential they create for increased economic activity and wealth creation within Australia.

     

  • The Committee finds that the role of Victorian Government Business Offices overseas is largely to attract foreign investments to Victoria. There is little evidence that indicates theses Offices have any significant role in attracting business migrants to the State.

     

  • The Committee finds that overwhelming evidence indicates business migrants do not ultimately choose a settlement location based on business opportunities. This fact, together with the marketing approach of the Department of State Development referred to above with its heavy focus in business opportunities, clearly show there needs to be a major refocus of the Department's promotional strategies to future business migrants.

     

  • The Committee finds that Victoria can maximise its intake of skilled and business migrants from existing and future levels by making better use of various State sponsorship schemes within the Commonwealth Migration Program.

     

  • The Committee believes a decision on a State's population growth and its ability to accept higher migrant levels should be left to the State to decide for themselves.

If the Victorian Government wishes to address the State's need for more skilled migrants, it should not be constrained by a Commonwealth decision which discriminates against Melbourne which is, after all, where most businesses are located.

     

  • The Committee finds that the Department of State Development is not actively nominating business migrants under the 129 & 130 State/Territory sponsored Business Skills sub-class visas and is therefore missing the opportunity to attract a greater share of business migrants to Victoria.

     

  • The Committee finds that Victoria's intake of migrants in the skills and business skills categories could be increased by at least 30 per cent by aggressive use of DIMA's State Sponsorship/Nomination Schemes.

     

  • The Committee finds that migration agents have a significant influence on the settlement decision of business migrants. The Victorian Government needs to capitalise on this influence by increasing its presence and involvement with the migration agent industry.

     

  • The Committee finds that the State Government's business migration promotion has limited synergies with Business Victoria's core activity of attracting large overseas investment and trade to the State.

The attraction of business and skilled migrants, and the strategies required to attract these migrants, is more closely related to the activities of Small Business Victoria and Tourism Victoria.

Terms of Reference

Parliamentary Committees Act 1968

Terms Of Reference To The Economic Development Committee

 

The Governor-in-Council, under Sections 4EC and 4F of the Parliamentary Committees Act 1968, refers the following to the Economic Development Committee:

To inquire into and make recommendations on the impact upon the economy of benefits to Victoria of Business Migration.

In particular, the Committee is required to inquire into:

  1. The value to the Victorian economy of Business Skills Migration and the related Program conducted by the Commonwealth Government.
  2. Those matters the Victorian Government may do itself, or seek to influence, to enhance Victoria's ability to maximise the size and benefits of Business Migration.

The Committee is required to report to the Parliament by 1 December 1998.

Dated: 23 September 1997

Responsible Minister:

Hon. Mark Birrell, MLC
Minister for Industry, Science & Technology
Clerk of the Executive Council