The country’s intake of skilled workers is to be cut by 18,500 during the next three months in order to prevent an oversupply of labour.

It will be the first cut to the skilled migration program in more than a decade and will reduce numbers from 133,500 to 115,000 by June 30.

Workers from the building and manufacturing trades will be most affected by the Department of Immigration’s decision to remove bricklayers, plumbers, welders, carpenters and metal-fitters from the critical skills list.

These workers will no longer be eligible for permanent residence visas in the general skilled program. Permanent residence visa are still available in the Employer Nomination Scheme and the Regional Sponsored Migration Scheme

Workers in sectors still plagued by skills shortages, such as the health/medical, engineering and IT sectors will not be affected by the new provisions.

Immigration Minister Senator Chris Evans said the new provisions were needed, “so that migrant workers are meeting skills shortages and not competing with locals for jobs”.

“There are still skills shortages in some sectors, such as health care, and these measures will enable industry to continue to source the skilled professionals they need while protecting local jobs and the wages and conditions of Australian workers.”

Mr Evans, while maintaining the standard line that, “Skilled migration plays a crucial role in stimulating the economy,” also sounded a warning for the future, warning that, “the Government will remove (more) occupations from the list if demand for those skills can be satisfied by local labour.”

The immigration program is likely to face further cuts in the May Budget.

The Master Builders Association believes the migration cuts are warranted.

Chief executive Wil Harnisch told ABC News that unemployment in building and construction is heading up at an alarming rate.

“We’re projecting at least a loss of 50,000 jobs in this industry over the next 12 months and it’s likely more to come,” he said.

The country’s population reached 21.4 million in 30 June 2008, an increase of 1.7% or 359,000 people in one year.

Immigration (arrivals minus departures) contributed 213,500 people (or 59% of growth) and natural increase (births minus deaths) contributed 145,500 (41%) to the rise in numbers, according to the Australian Bureau of Statistics.

Surprisingly, New South Wales, Australia’s most populous state, experienced lower growth than any other state except Tasmania.

Western Australia continues to record the fastest population growth (2.7%), followed by Queensland and the Northern Territory (2.3%), Victoria (1.8%), the Australian Capital Territory (1.3%), South Australia and New South Wales (1.1%) and Tasmania (1.0%) for the year ended June 2008.

Population Increases in Australia’s States 2008:

Queensland and Western Australia Favourites With Australians

Queensland and Western Australia received the most people from net interstate migration, gaining 23,100 and 3,800 people respectively from the other states and territories. The states that lost the most people to net interstate migration include New South Wales (down 21,900), South Australia (down 4,400) and Victoria (down 2,500).

Australia’s total fertility rate has increased to 1.93 births per woman, the highest rate since 1981.

Immigration Minister Chris Evans ordered the review earlier in the year as a result of concerns of poor treatment of some 457 visa holders.

There has also been controversy in Australia about whether 457 visas are being used to undercut wages of existing workers rather than as a means to overcome skills shortages.

In the middle of this year, there were 68,000 primary 457 visa holders working in Australia, mostly professional workers paid more the MSL (minimum salary level).

The standard MSL in Australia is $43,440 per annum. For ICT professionals it is $57,300.  In regional areas the standard MSL is $39,100 and $53,530 or ICT professionals.

Mr Evans said the government would now consider the recommendations.

“Market rates for temporary skilled overseas workers would ensure they were not used to undermine the wages and conditions of Australian workers.”

Figures from the Immigration Department show that just one-fifth of the employers who use the scheme recruit three-quarters of Australia’s 457 visa holders.

The review’s other principle recommendations are to:

• Provide workers with clear information about their rights and obligations when they come to Australia.
• Increase regulation of immigration agents.
• Allow workers to apply for permanent residency independent of their sponsoring employer, reducing employers’ power over migrants.

Australia’s Immigration Minister Chris Evans is waiting for next month’s mid-year economic report before making a final decision.

Meanwhile, opposition immigration spokeswoman Sharman Stone said the record 190,300 migrants planned for the coming year should be scaled back to the 2005-06 level of 143,000 – a 25% reduction.

Mr Evans said the country’s current migrant programme was put together when good economic growth and a continuing skills shortage were forecast.

“If those parameters are changing, the government will take a sober look at those issues and make a decision when we have got proper information,” he told Nine Network viewers today.

Mr Evans struck a hopeful note for people still hoping to move to Australia, pointing out the contribution new arrivals make to the economy.

“We know that they consume, they buy property, and they’re a net positive to the budget,” he said.

“And a lot of the skills that are coming in at the moment are in the mining sector, which has allowed us to increase our exports.”

He said there were still industries which had a “strong demand” for labour and the government would analyse the economic situation and consult industry before deciding on what to do.

Opposition spokeswoman Sharman Stone was more forthright. In comments reported in the Age, she said:

“With all the indicators now pointing to a significant downturn in the employment market, the Government must end its dithering and scale back its migration program urgently,” Dr Stone said.

“Unless migrants have prospective employers demanding their specific skills, a big lift in migration will only compound the pressures in what is becoming a much tougher and more competitive scenario for job-seekers.”

A recent reduction in jobs ads and falling numbers of full time jobs in Australia have combined with the global credit crunch to raise fears that the economy will soon not be able to cope with the current rate of migrant arrivals.

“As with all previous governments, and mine’s the same, whenever we set immigration targets we will adjust them according to the economic circumstances of the day,” he told listeners to the Fairfax Radio Network in Melbourne.

Mr Rudd said current numbers are higher than last year’s and the increase had been made on the basis of employer demands for more skilled workers, particularly in Western Australia and Queensland where mining and resources production jobs were plentiful.

There are 190,300 places in this year’s migration program, up almost 20 percent on last year’s. Places are split between 133,500 skilled migrants and 56,500 sponsored family migrants.

In a possible reference to the fact that Queensland and Western Australia are still adding jobs while employment in other states is static, or even shrinking, Mr Rudd said immigration was not one-size-fits-all across the country and the government would take advice on where skilled workers were needed.

It’s not all bad news, however. Houses in Australia are getting cheaper, the Australian dollar has taken a battering on international currency markets and Australia’s Reserve Bank has been cutting interest rates aggressively. The result is that migrants fortunate enough to be arriving to good jobs in Australia, with some capital, are currently finding Australian real estate more affordable than it has been for some time.

Mervyn Bryant, the managing director of Lismore Diesel Service, said that after an Australia-wide search for a tradesman he finally found one in South Africa. “It’s nearly impossible finding a diesel fuel-injection fitter,” he said. “We found a tradesman in South Africa…but he is very concerned about the high cost of schooling his three children here.”

Mr Bryant said the cost per child was $4500 plus administration fees, which had to be paid before school started. “The fees are discouraging some prospective employees from coming,” he said.

Australia is facing a shortage of about 240,000 skilled workers in trades such as plumbing and motor mechanics.

Brendon Boyce, the director of the migrant recruitment agency Recruitglobal, said a family with three school-aged children moving to Australia and living in New South Wales could have to pay up to $14,500 in advance in school fees while receiving a wage of $41,850 a year.

A spokeswoman for the Education Minister said 457 visa holders could apply to have school fees waived.

Twenty sample questions were unveiled by the federal government yesterday which included “what is the floral emblem of Australia?” and “who is the Queen’s representative in Australia?” (the answers are: the wattle, and the governor-general).

However, some of the real questions would have even Australians reaching for the encyclopedia, such as naming the country’s first prime minister (Edmund Barton) and the year when the separate colonies formed a federated nation (1901).

The new citizenship test is expected to be introduced later this year.

The tough test is a far cry from the days when Australia was desperate for migrants and offered Britons the “£10 Pom” deal.

The draft document also lays out values to be taught to new settlers, including compassion, freedom of speech and a respect for Australia’s British heritage.

The test, and laws to ensure that migrants must live in Australia for four years, instead of three, before becoming eligible for citizenship, are in part a response to riots between Muslim and non-Muslim youths in Sydney in 2005.

The federal government wants to promote tolerance, religious freedom, “mateship” and “a fair go” in a country in which one in four of the population of 21 million was born overseas.

The immigration minister, Kevin Andrews, said the new rules would help new citizens integrate into Australian society. The tests will require applicants to correctly answer at least 12 out of 20 questions.

Applicants who fail the test will be allowed to re-sit the examination.

Britain (24,800), India (15,865), China (14,688), South Africa (4,293) and Malaysia (3,838) were the leading sources of skilled workers.

The most common occupations for skilled migrants were accountancy, IT, nursing, mechanical and civil engineering, marketing and general management.

The average age was 31.

Immigration Minister Kevin Andrews said increasing demand for skilled workers coupled with high levels of retirement because of Australia’s ageing occupation were “major economic and social challenges”.

“The reality is we face a shortage of workers in Australia,” he said. “Australia is competing for skilled workers with Europe, the US, Canada and New Zealand. We simply have to ensure that we build a productive nation where business can continue to thrive into the future.”

Mr Andrews said Australia must attract “young, skilled, professionals who will contribute to a cohesive society,” to solve the issue.

He said 50,079 visas were granted to migrants in the family stream, including spouses, fiances or dependents, representing 33 per cent of the total migration program. Britain (6,540), China (6,037), India (3,634), the Philippines (3,098) and Vietnam (3,040) were leading source countries for migrants under the family stream.