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Migration and the Accounting Profession in Australia

Report prepared for CPA Australia by The Centre for Population and Urban Research Monash University

Published: May 2005

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Description

This report examines the sources of growth in Australia"s accounting workforce. It focuses on the ways in which changes to Australia"s skilled migration selection system have affected the migration component of this growth. The importance of the immigration component has been magnified in recent years because domestic training in accounting has stabilised. Since 2001 almost all of the growth in the training of accountants at the university level in Australia has occurred amongst overseas-student enrolments.

Reforms to Australia"s skilled migration selection policy introduced between 1999 and 2001 favoured applicants trained in Australia. They encouraged overseas students who have completed courses in selected fields at the undergraduate or postgraduate degree level that have been judged to meet professional standards by the relevant accrediting authority to apply for permanent residence. These fields include accounting and information technology, though not other business-related fields of study.

Under this reformed system, overseas students who apply in Australia for permanent residence within six months of completing an Australian course do not have to possess any job experience in their field. By contrast, other applicants, who apply from outside Australia, must have some relevant occupational experience. The new selection system has, in effect, traded off work experience and overseas training against youth, familiarity with English and Australian training.

Since the introduction of the reforms there has been a sharp increase in the proportion of the skilled migration program which is drawn from former overseas students trained in Australia . This has been particularly evident in the two occupations with the largest numbers of former overseas students applying for permanent residence. These are information technology and accounting.

Overseas-student enrolment levels in accounting have increased rapidly since the late 1990s, especially in the graduate diploma and masters courses which CPA Australia and the other accounting accrediting authorities (ICAA and NIA) have assessed as meeting the educational standards required for immigration purposes in the profession. By first semester 2003- 04, overseas students enrolled in accounting courses made up around 47 per cent of all commencing students in the field - 65 per cent at the postgraduate level and 37 per cent at the undergraduate level.

There is a strong, if not conclusive, causal association between growth in overseas student enrolments in accounting courses and subsequent applications for permanent residence. It is estimated that nearly one half of the overseas students currently finishing a university accounting course have sought confirmation from an accounting accrediting agency that their credential is acceptable for immigration purposes. Graduates from mainland China , who constitute the largest single enrolment group, have a high propensity to seek permanent residence after completing their accounting course in Australia.

The outcome of these developments is that overseas students trained in Australia are now a major source of the growth in new entrants to the accounting workforce in Australia. In 2003-04, 2485 former overseas students with accounting qualifications received permanent residence visas under the onshore overseas-student visa subclass. This number exceeds the total number of accountants entering Australia as settlers under other migration programs. Relatively few of these settlers are coming from English-speaking-countries. One consequence of the increased reliance on overseas students in the accounting profession is that the number and proportion of accountants being drawn from non- English-speaking countries has increased sharply.

IDP Australia projected in 2003 that there will be further rapid growth in overseas student enrolments in business courses at Australian universities. (No estimates are provided for accounting). However, this projection did not take into account recent changes to Australia"s migration selection regulations which affect the prospects of overseas students gaining permanent residence. The regulations have been tightened because of Australian Government concerns about the size of Australia"s migration intake if it is expanded to accommodate the rapid growth in the number of prospective migration applicants from overseas students. There has also been concern about the capacity of overseas students trained in Australia to meet employers" needs, given their lack of occupational experience and, in some cases, difficulties with English.

As a result of these concerns, the Australian Government has moved to curtail the nexus between overseas-student completions and immigration outcomes by increasing the pass mark in the Skilled Independent category to 115 as from 8 May 2002 and to 120 in April 2005. In March 2002, it also increased the minimum time required to qualify for meeting the Australian-training requirement from one year to two years.

Partly because of these developments, this paper argues that IDP overstated the likely projected growth in overseas-student numbers in Australia. For the immediate future, however, because accounting has been placed on the Migrant Occupation in Demand List (MODL), overseas student enrolments in accounting are likely to grow. This is because applicants with occupations listed on the MODL are virtually assured selection as permanent residents.

Data drawn from the 2001 Census for this report confirms the government"s worries about the employment prospects of some overseas students. It shows that persons qualified at the degree level in accounting who have been trained overseas and come from the main- English-speaking countries do very well in obtaining professional level work in accounting or in managerial positions. By contrast, those with similar qualifications who come from non- English-speaking countries have struggled to secure professional level work in accounting. However, persons trained in accounting in Australia from non-English-speaking countries do better than their overseas-trained counterparts from the same countries.

The combination of the increased draw on migrant accountants and the parallel stabilisation of domestic training in accounting means that the make-up of the accounting profession will increasingly be influenced by the migrant component. For the immediate future, this component will largely derive from the ranks of overseas students trained in Australia. There has been some concern that an increased reliance on migrants could make the accounting and other affected occupations vulnerable to a "brain drain". Analysis of the movements to and from Australia of accountants indicates that up to 2003-04 there have been only small losses to overseas locations of accountants who are Australian residents, including those born in Asian countries.

Availability

The full report is available on the CPA website .

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