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1 Introductory concepts 2  Market mechanism  3 Elasticities  4 Market structures 5  Market failures  6  Macro economic activity/eco growth  7 Inflation 8  Employment & unemployment  9  External Stability  10  Income distribution 11.Factors affecting economy  12  Fiscal/Budgetary policy  13  Monetary Policy   14 Aggregate Supply Policies  15 The Policy Mix

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Immigration and labour markets


Australia's migration program typically includes three major categories:  Skilled, Humanitarian and Family, with the Skilled program representing the largest intake of all immigrants.  


The Australian skilled migration program is designed to target migrants who have skills or outstanding abilities that will contribute to the Australian economy.  Over 2012-13, this category of migration is expected to account for two-thirds of the total migration program (i.e. 129,250 of the 190,000 migrants entering Australia) and DIAC reports that this trend will continue into 2013-14.


There are four major categories of skilled migrants:


  1. General skilled migration (e.g. independent migrants without employer sponsorship).  This group represents the largest category of total skilled migrants, attracting approximately 49%.
  2. Employer Nomination involving Australian employers nominating overseas workers to fill skilled vacancies or to fill labour market shortages.  This represents approximately 42% of total skilled migrants.
  3. The Business Skills Migration category encourages successful business people to settle permanently in Australia and develop new business opportunities.  This represents approximately 8% of total skilled migrants.
  4. Distinguished talent which is a small category for distinguished individuals with special or unique talents of benefit to Australia.  This represents less than 1% of total skilled migrants.


An effective and well targeted immigration program will help to ease stresses in those labour markets facing skills shortages. Leading into 2008, the Australian economy faced capacity constraints, partly due to a number of shortages in skilled areas such as Mining Engineers and Accountants.  The tight labour markets constrained production levels (or Aggregate Supply), added to wage rates, and increased inflationary pressures.  Australia increased the intake of skilled migrants over this period, increasing the supply of labour, helping to boost employment and production, assisting in wage restraint.  Once the economy entered the economic downturn over 2008-9, the government reduced the skilled migration intake in 2009-10 to minimise pressure on unemployment.  However, as the economy recovered over 2010-11, the government once again lifted the skilled immigrant intake to fill the skills requirement in regional communities in particular.  In this respect, a skilled migration intake is an effective tool which can be turned on or off relatively quickly in response to changing economic circumstances.  This is highlighted in the chart below, which summarise the changes in Australia's migration numbers between 2007 and 2013.

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