Temporary graduate visas are for overseas students who complete their study and wish to undertake work in Australia, often as a pathway to permanent residence. These visas work best when the bulk of temporary graduates seeking permanent residence are able to secure skilled work and eventually a permanent residence employer sponsored (or other) permanent visa.
But a growing number of temporary graduates appear to be struggling to get skilled work and permanent residence visas. This is a sign the system is not working well.
The number of temporary graduate visa holders in Australia was rising steadily prior to the pandemic. The closure of international borders and a very strong labour market in 2021 led to many of these temporary graduates securing permanent residence and thus a slight decline in the stock of temporary graduate visa holders in 2020-21.
From 2022, the combination of the students that remained in Australia during COVID completing their courses, together with the boom in overseas students arriving after international borders re-opened, led to the stock of temporary graduates in Australia rising sharply from 88,694 at end June 2021 to 216,494 at end June 2024.
Note that it is likely the number of temporary graduates in Australia is much larger as there are many (possibly as many as 50,000) applicants for temporary graduate visas in the 300,000 bridging visa backlog.
The strong labour market in 2022 and 2023, together with a larger migration program from 2022-23, was not enough to steady rocketing growth in the stock of temporary graduates. Only around 32,000 temporary graduates secured permanent residence in 2022-23.
With between 700,000 and 800,000 students currently in Australia when the bridging visa backlog is considered, the stock of temporary graduates in Australia will continue to rise. Some recent tightening of criteria for temporary graduates (eg reducing the maximum age from 50 to 35) will not be enough to prevent ongoing growth in temporary graduate visa holders.
Despite tightening of student visa policy over the past year or so, the stock of student visa holders in Australia will continue to rise (albeit a little more slowly than in 2022-23).
A weaker labour market may slow growth in the number of temporary graduates in Australia as more will leave because they can’t get a job. But most will try to struggle through by accepting almost any job that is available, even if it means being exploited.
So what could be done?
The Labor Government is unlikely to further increase the migration program to make more places available to temporary graduates given Peter Dutton has announced he wants to cut the program by around 45,000 places. All things equal, Peter Dutton’s policy would increase the number of temporary graduates in immigration limbo.
The government is unlikely to tighten student visa policy further given the backlash to date. To get to its long-term net migration target of 235,000, the Government will have to focus on tightening policy in other areas unless there is a sharp deterioration in the labour market. Dutton’s net migration target of 160,000 would require further tightening of both student visa policy as well as other visa policies.
The key to a long-term solution in this area is a combination of:
- ensuring overseas students have the academic capacity to undertake high quality courses that give them qualifications that Australian employers value – the government’s capping policy does not help with this; and
- better targeting of temporary graduate visa policy to confine these to students who have completed courses in areas of long-term demand and not just courses that are cheap to deliver.
