Dean Forbes


Australian International Education Conference

Perth 10-13 October 2006

Professor Dean Forbes

Deputy Vice-Chancellor

Flinders University

What kind of immigration futures do we need to create and manage?  The defining issues revolve around how we – universities, government, industry and the community – deal with the emerging global knowledge economy.


The global knowledge economy (GKE) is the set of interconnected economic activities built around the creation, management, transfer and consumption of knowledge.  

Countries such as Singapore, Canada and Australia are developing knowledge-based economies.

•    Around half their GDP is attributable to knowledge-based industries,

•    Just under a third of their labour force could be labeled “knowledge workers” (McKeon and Weir 2001 p 4). 

Education in general, and universities in particular, are critical to an effective knowledge economy (KE), for obvious reasons.  Moreover, universities have a dual role.  Courtesy of our international education activities, we attract potential knowledge workers (ie international students) to universities, and often the staff to teach them.  But we also export knowledge workers, both in the form of our graduates, and of our researchers and university staff. 

Despite the limitations of our size, and our geographical location, Australia is acquiring some of the characteristics of a talent bank.  This talent bank accepts deposits of knowledge workers, and the withdrawal of knowledge workers.  Both are an essential part of a dynamic global labour market.

Australian cities have been acquiring some of the characteristics of “Education cities” as a result of the influx of international students, and the efforts undertaken to maintain the flow.  Other cities, Singapore in particular, are making great strides to build the capacity and diversity of their higher education in order to make the cities more attractive to international students, and improve the quality of the programs available to local students.  Singapore is also very keen to attract what it calls ‘foreign talent’.

Picking up the talent bank theme, I now want to comment on two aspects:

•    Creating knowledge workers

•    Attracting knowledge workers


Australian universities have been extraordinarily successful in attracting fee-paying international students, and in so doing creating knowledge workers.  The numbers speak for themselves.  In August this year enrolments of international students totaled 167,954, 5% up on the same time last year (AEI 2006).  Another 80,000 or so are enrolled in Australian transnational programs.

It is plausible to argue that immigration arrangements have been a significant factor in supporting this growth.  A number of policy adjustments have been significant.  They include:

•    The introduction of risk based country Assessment Levels that are annually adjusted according to an analysis of the data.

•    The shifting of student visa processing from in-country embassies to locations such as Adelaide, and hence the speeding up of visa processing.

•    The development of E-visa capabilities.

•    An expansion of the visa categories under which students can enter or stay in Australia.  Eg The Occupational Trainee Visa introduced at the end of 2001, and changes to the Professional Development Visa.

•    The General Skilled Migration visa applicable to graduating onshore students has created an additional incentive for students to come to Australia and study, especially in those regions where students can earn an additional five point bonus.

•    A regular process of consultation with education peak bodies to discuss student visa related issues.

This is not to argue, of course, that there are not still issues of concern to universities, but I will return to these later.


A significant, but by no means the sole means, of attracting knowledge workers to Australia is through attracting university alumni back to Australia, or to particular parts of Australia.  There are large numbers of Australian citizens and former residents now living overseas in the UK, New Zealand and the US, and annual departures have been on the increase since the mid 1980s (Productivity Commission 2006)

Both state and federal governments are keen to attract them back to Australia.  One example is the Federation Fellow scheme for university researchers.  Another is the South Australian Government’s ‘Make the Move’ scheme.  It is focused on making prospective residents aware of the opportunities in SA, and is targeted both interstate and overseas.  In addition to attracting skilled migrants, it also has a strategy for bringing graduates back to Adelaide through advertising and annual university alumni events in Melbourne, Sydney and Canberra.

But one of the most significant policy innovations of the last few years is the Department of Immigration and Multicultural Affairs policy designed to create opportunities for international graduates to stay in Australia.

In order to allow, indeed encourage, skilled people to come to Australia and become citizens, Australia has a general category of General Skilled Migration Visas (GSM).  There are a range of GSM visas, including the onshore and offshore visas for skilled independent workers, that is, those not being sponsored by employers.

Almost 12,000 people moved to Australia in 2004-05 under the Offshore Skilled Independent Visa (Visa Class 136).

Close to 13,000 people obtained visas in 2004-05 under the Onshore Skilled Independent Migrants Visa (Visa Class 880).  This is the visa that allows international students to become permanent residents and citizens.


Many international students come to Australia, and many also have the opportunity to stay in Australia, and a small but increasing proportion do.  The challenge for us in the universities is to think about how we can facilitate:

•    The pathways into Australia for future higher education students

•    The transition through education and into the knowledge economy:
    + for students who want to stay,
    + as well as those who want to return to their home country,
    + or students who want to move elsewhere (to third countries)

In other words, how can we build Australia’s capacity to be a smooth functioning talent bank?

Immigration and visa futures will have a significant impact on our success in this task. 

There are annual reviews of the effectiveness of the GSM program.  A major review took place in 2005-06 (Birrell, Hawthorne and Richardson 2006).  Some issues of concern have arisen about the 880 Visa Class immigrants.  That is the former international students.

Based on an examination of the 3rd Longitudinal Survey of Immigrants to Australia (LSIA 3) in 2005, it was found that:

•    Some 84% of the 880s were employed, compared to 81% of the 136 group.

•    Only 58% of the 880’s jobs were skilled, compared to 79% of the 136s.

•    Average incomes of the 880s was only $33,550, compared to $52,580 for the 136s.

This led to conclusions that the 880 immigrants were seriously underperforming in the labour market compared to the 136 immigrants. 

The result is that DIMA is currently tightening up the visa requirements for the 880 group, amidst much public consultation and discussion.

They are looking to improve the English language capabilities of the 880 visa people, and their experience in the workforce, before they are able to shift from a temporary to a permanent residents visa.

Let me first comment on the GSM evaluation study.  The core of the Birrell et al evaluation was an analysis of the labour market performance of a sample of the 880 immigrants, as part of LSIA 3.

The method of determining how well the 880 immigrants were performing in the labour market was:

•    Through a comparison of the 136s and the 880s in terms of labour market outcomes,

•    A comparison of the 880s and recent Australian graduates. 

I am uneasy about this.  There are a number of differences between the groups being compared that concern me.

•    In 2004-05, 34% of the 136 immigrants were from mainly English-speaking background countries, whereas only 2% of the 880 immigrants were (and that pattern is repeated annually back to 200-01 p 27).

•    The 880 immigrants were significantly younger than the 136 immigrants.  A significant number of the 880s were in the 20-24 year age range (p 23).

•    Some 17% of the 136 cohort were tradespersons, compared to just 6% of the 880 cohort (p 24-25).

•    The 136 group who were interviewed had arrived in Australia six months before the survey, whereas the 880 group had been granted a visa six months prior to the survey. 

Do these differences in the two groups make them suitable for the determination of comparative performance in the labour market?

What is the likely impact of the GSM changes on international students? 

Despite my misgivings about some of the interpretations of the data, I believe the policy changes to English language requirements and work experience provisions are sensible in themselves.  Few would argue that better English language and more work experience would not be helpful to graduates finding work. 

What future issues might we have to address in order to sustain our capacity to attract international students?

First, in the short term, it means that there are changed conditions in terms of PR for the majority of students in Australia.  While universities are not permitted to sell the benefits of PR as part of their recruitment of international students, there are students in Australia who will feel their trust has been misplaced when the conditions under which they legitimately decided to come here have been changed.  This may damage the credibility of Australian higher education.

Second, with regard to the longer term, the evaluation of GSM resulted in a number of public statements about university qualifications obtained by international students in Australia that may have longer term consequences for international education.  Implicit in much of the public debate is the assumption that some of the courses being studied in Australia are sub-standard.

•    A member of the Evaluation team was quoted as having “questioned whether masters courses at Australian universities were delivering graduates of a professional standard” (Morris 2005).

•    A reference by to the “relatively short two year masters degrees” (Campus Review, 1 February 2006)

•    A comment in the Evaluation Summary Report  is that “students are choosing to study subjects that will readily gain them permanent residence but where the courses [accountancy and IT] are low cost and have limited academic demands…” (p 3; also Morris 2005)

The underlying assumption, of course, appears to be that the course and university they studied at (along with English standards and work experience) are the key factors determining labour force outcomes.  Surely, though, there are a range of intervening factors between the kind of degree a graduate has, and the labour force outcome.

Third, what will be the impact on the number of students coming to Australia? 

Bob Birrell is quoted as saying that the proposed changes to the GSM will discourage potential students from applying to come to Australia.  In the same article he also said that the desire for PR is the main factor driving the growth of overseas student enrolments (Lane 2006). 

The AVCC, through its President, Gerald Sutton, and IDP through CEO Tony Pollock have both been quoted as saying that the proposals would not present a disincentive to students coming to Australia (The Australian, 10 May 2006).

Fourth, commentator Bob Kinnaird has a different concern about the GSM legislation because of its potential impact on domestic students. 

•    He has been concerned by the squeezing out of Australian students in IT courses (Riley 2006)

•    He is concerned that the changes to the GSM policy will increase competition with Australian students for entry-level jobs and for work experience programs (Kinnaird 2006)

The Labor Party has also expressed concerns about the GSM program.  Immigration spokesman Tony Burke is quoted as saying “Skilled migration should be used as a stopgap…and it’s now being used as an alternative to providing training…and no doubt a cheaper alternative” (Morris 2006). 

Will this result in future pressure to scale down or abandon the GSM program in the future?

Fifth, the concern in the GSM Evaluation with the apparent English levels of skilled 880 migrants has also provoked concerns.  It has been a key aspect of the changes to be introduced to the GSM 880 visa in 2007, and it has often been mentioned by Minister Vanstone in the media (eg Joint Media Release 8 May 2006).  It has lead to speculation that an exit English language test may be being contemplated by government. 

It is not just international students for whom English language skills are critical.  An OECD (2006) study of immigrant students across 17 OECD countries identifies the support given for acquiring language skills as a crucial factor differentiating countries where immigrant students perform more poorly at school than their native peers, and those (including Australia) where their performance is on a par with their peers.

Moving on from the GSM, one final issue is worth raising.   In The Flight of the Creative Class, Richard Florida bemoans the fact that in the aftermath of the September 11 attacks the tightening of visas for students wanting to come to the USA had a detrimental affect on the numbers of international students coming in, and those staying on as permanent residents.  This he argues has jeopardized the growth of the creative industries in North American cities. 

The Australian Government’s post September 11 anti-terror legislation has defined new offences, given the Government extra powers to ban terrorist organizations, and increased the coercive powers to security organizations.  These new laws have already had an impact on academic research and access to materials (Tham 2006).  It is not difficult to foresee a situation where, as in the USA, the anti-terror legislation has a significant impact on the visa arrangements for both international students and skilled migrants.

Given the rigor of the Australian response, I am surprised it has not already.


Adelaide.  Make the Move  2006 <>

Australian Education International 2006  Monthly Summary of International Student Enrolment Data – Australia – August 2006, Canberra

Birrell, Bob, Lesleyanne Hawthorne and Sue Richardson 2006 Evaluation of the General Skilled Migration Categories, Canberra

DIMA 2006  Evaluation of the General Skilled Migration Categories: Summary Report, Canberra

Florida, Richard 2005 The Flight of the Creative Class, HarperCollins, New York.

Government of South Australia 2004 Prosperity Through People: A Population Policy for South Australia, Adelaide.

Joint Media Release, Senator Amanda Vanstone and the Hon Julie Bishop 2006 Evaluation of General Skilled Migration Categories, Canberra.

Kinnaird, Bob 2006 “Short visa, lasting harm” The Australian, 23 August 2006.

Lane, Bernard 2006 “Tougher rules for student residency”, The Australian, 10 May 2006.

McKeon, Rob, and Tony Weir 2001 “Preconditions for a knowledge-based economy” B-HERT News, No 11, pp 4-5.

Morris, Sophie 2006 “Row flares over foreign workers” Australian Financial Review, 3 April 2006).

Morris, Sophie 2005 “Poor English makes skilled migrants unemployable” Australian Financial Review, 14 October 2005.

OECD Organisation for Economic Co-operation and Development 2006 Where Immigrant Students Succeed – A Comparative Review of Performance and Engagement in PISA 2003, Paris.

Productivity Commission 2006 Economic Impacts of Migration and Population Growth, Position Paper, Melbourne

Riley, James 2006 “IT uni courses hit by migrant flood” The Australian, 10 January 2006.

Tham, Joo-Cheong 2006 “Australian terror laws and academic freedom”