The SOL is a threshold list of skilled occupations – if your occupation is not on this list you do not meet one of the basic requirements of a skilled visa application, and as such cannot migrate to Australia under the general skilled program.

This list does not vary very often, but with a reclassification of skilled occupations having taken place in Australia in the last few months there is an expectation that the SOL will be subject to fairly significant amendment within the next year => as ever, if you are an intending migrant and you have an occupation that appears on the SOL as presently constituted it would be prudent to lodge your application sooner rather than later, just in case your occupation is omitted from a new SOL.

The Skilled Occupations List is published in DIAC booklet 1121i.

Note also that a migration skills assessment from the appointed assessing body for the nominated skilled occupation must be obtained before you lodge your application for an offshore general skilled visa.

The Migration Occupations in Demand List, or MODL

In times past the MODL was a key list, in that those who nominated an occupation that appeared on the MODL could claim additional points towards the skilled visa points pass mark, and could anticipate that their visa application would be processed as a priority – occupations that appear on the MODL are likely to be in relative shortage in Australia and applications where a MODL occupation is nominated ought therefore reasonably be prioritised.

However, since the Immigration Minister published the Critical Skills List (see below), MODL occupations have been effectively demoted in the processing pecking order – the only real advantage to having a MODL occupation at the present time is an ability to claim additional points, as follows:

15 points
* nominated occupation is on the MODL
* employed in the nominated skilled occupation or a closely related skilled occupation for a period totalling at least one year in the four years immediately before the visa application is lodged with the Department of Immigration.

20 points
As above, plus the visa applicant has a job offer for full time employment in Australia in the nominated occupation from an organisation that has employed at least ten people on a full time basis for the two years immediately before the visa application is lodged.

The present MODL is available here.

The Critical Skills List, or CSL

The CSL was introduced by the Immigration Minister last December, as a means of prioritising skilled visa applications where the nominated occupation was identified by DIAC as being in “critical demand” in Australia. The Department of Immigration will therefore process applications where a CSL occupation is nominated as a priority over other skilled visa occupations, save for those occupations that have been sponsored by a State or Territory Government (see below).

The CSL can be viewed here.

A review is under way presently into the MODL which is likely to lead to the abolition of the CSL => as above, if you are an intending skilled visa applicant and have an occupation on the CSL it would be prudent to prepare and lodge a visa application now, while you have comfort that your visa application will be processed as a priority.

Wanted Skills Lists Published by State and Territory Governments

All of Australia’s State and Territory Governments participate in Australia’s skilled migration program to the extent that they are given the ability to sponsor or nominate individuals who have occupations that are wanted in their State or Territory for the grant of a visa under the skilled migration program.

This sponsorship can be for the grant of a visa under one of the permanent visa subclasses, eg subclass number 176, or a provisional visa, eg subclass 475, which leads to permanent residency after the required period of living and working in a “regional area” of Australia.

In addition to having a skilled occupation the States and Territories each have additional requirements they will require applicants to satisfy prior to the sponsorship being granted.

The principal reason for seeking State or Territory Sponsorship is to facilitate the priority processing of a skilled visa application.

The lists of skilled occupations that are wanted in each State and Territory have been amended relatively frequently over the last 9 months, as have the additional details required of applicants for sponsorship. We believe this is in no small part due to the significant number of individuals that have been applying for State and Territory sponsorship since the Immigration Minister’s announcement as to skilled visa priority processing last December – we suspect that additional requirements are being introduced in an effort to reduce the large numbers of applicants; our preference would be for the State and Territory Governments to make available suitable resources to meet the demand for sponsorship.

ANZ Bank said the possibility of rising joblessness “looms as a cloud over the horizon” but “is likely to present as a second-order influence on housing market outcomes.”

“Policy stimulus and tight fundamentals, due to record high population growth and weak building levels, continue to exacerbate the shortage of housing – this has supported the market until now and will continue to do so,” ANZ said.

In previous months, economic analysis focused on the link between higher unemployment and falling home prices, on the expectation cash-strapped owners would have to accept lower prices on their houses.

“We expect dwelling prices to edge higher for much of the remainder of 2009 with upside risk presenting from intensification of strong fundamentals, a shift in price expectations and a restoration in market confidence.”

The unemployment rate, currently at 5.7 per cent, is forecast to grow to 8.5 per cent by the middle of 2010 as the pace the economy slows and forces companies to cut staff.

More resilient than overseas

“While house prices in most other developed economies have tumbled significantly since the global financial crisis, Australian house prices have been resilient, softening only 1.2 per cent in the year to May 2009,” ANZ said, citing data from property value monitoring group Residex.

Homes prices in the UK and US have fallen by about 20 per cent in some markets, reflecting the extent of the debt-fuelled housing bubble.

“Prices momentum has clearly improved on the back of significant interest rate cuts and government assistance to first-home buyers,” ANZ said.

In addition to the first-home buyers grant boost, expanded to $21,000 for a newly build home, the Reserve Bank has chopped interest rates down to 3 per cent from 7.25 per cent since the emergence of the financial crisis.

Shortfall of homes

ANZ also cited the shortfall of homes in Australia as another key support for house prices.

The Housing Industry Association estimates a shortage of 85,000 homes in Australia, driven in part by high emigration levels.

“Population growth is running at its highest level in four decades, providing an unprecedented call on national dwelling stock,” ANZ said. “The supply-side has been inhibited by high development costs, land availability and developer uncertainty.

“The now chronic demand-supply imbalance will intensify upward price pressures, providing a key signal to investors and developers alike to engage the market for the first time in a number of years.”

Deeper drops

Despite the forecast of higher prices, other measures of homes prices show deeper drops. The Australian Bureau of Statistics registered a 6.7 per cent fall in the weighted average of eight capital cities in the year to March.

JPMorgan last month forecast a spike in unemployment, taking it to 9 per cent by 2010. The surge in joblessness implies a 14 per cent drop in house prices over the same time.

“The most economically significant variable is unemployment,” JPMorgan economist Helen Kevans wrote last month. “Projections for unemployment, therefore, have a significant baring on our house price forecasts.”

The Australian Government reviews the Australian visa application fees on an annual basis, as part of the release of the Federal Budget release. Typically, fees will increase in accordance with changes in the Consumer Price Index, resulting in an increase of approx. AU$40 – AU$60 for the skilled migration visa application fee.

However, this year has seen a 20 per cent increase applied to some Australian visa application fees, including the skilled migration fee.

As a result, the skilled migration application fee will stand at AU$2,525 from 1 July 2009; a full AU$420 increase from the previous fee. With this in place, the Department of Immigration and Citizenship (DIAC) is estimated to pull in an extra $402.3 million over the next four years.

A full list of changes is available by downloading the Form 990i PDF from DIAC. It’s vital that all applicants understand exactly how much their application will cost, because DIAC have stated:

“A visa application is not valid until the department receives the correct amount of the Visa Application Charge (VAC). If the correct amount is not paid, it will result in your visa application being delayed until the correct amount is received. Your visa application may be returned with a request that it be resent with the correct VAC amount.”

Therefore, as applicants who do not pay the correct fee upon lodging their visa application stand the risk of having their application be subject to delays, it is important that they are fully aware of all costs before a lodgement is made.

Potential migrants who are able to lodge their application so it is received by DIAC before 1 July, 2009, are advised to do, as all applicants who do so after this date will be required to pay over $400 more for their Australian visa application; a substantial increase on the overall costs for emigrating to Australia.

The Government reduced the Australian skilled migration program at the turn of 2009, when the recession was starting to take effect.  The planning level for the remainder of the 2008-09 financial year was reduced from 133,500 to 115,000 skilled migration visas and the Critical Skills List (CSL) and priority processing order were both introduced so that the Government could target the skills it needed most.

As of the 01 July 2009, the Australian skilled migration planning levels will be further reduced to 108,100 visas, and the CSL and priority processing order will remain as guidelines for the Department of Immigration and Citizenship’s visa processing officers.  This means that sponsored visas and independent visas with skills nominated in the health, engineering and IT sectors will constitute a major part of Australian visa approvals during the start of the next financial year.

While the MIA has recognised the importance of downgrading and targeting the Australian skilled migration program during the economic recession, it has also perceived an impending problem with the restrictions placed on trade occupations.

Projected levels of Australian visa grants for trades occupations will be likely to cause trouble if the Government follows through with its massive plans to build up infrastructure.  Not only will trade occupations be subject to more stringent job-readiness criteria, they will have their English language requirements raised from an IELTS score of 5 to 6.  This means that, without a job offer or government-sponsorship, those with trade qualifications will find it much harder to have their Australian skilled visa approved.

Maurene Horder, CEO of MIA, said the new testing system for trades occupations needs greater flexibility to test for job-readiness.

“It’s hard to imagine a one-size-fits-all assessment system of employability,” she said.

The MIA also shares a concern that the new emphasis on employer-sponsored and government-sponsored Australian visa applications will flush out young internationals who choose Australia for educational purposes.

This means that prospective Australian student visa holders will be put off choosing Australia as their international studying destination because they will not be guaranteed a permanent Australian visa post-graduation.  Not only will this dampen revenue from the nation’s second largest export industry, but the growing disparity between the ageing population and young qualified workers will continue to broaden the gap in the skilled workforce. 

Fortunately, the Australian skilled migration program remains flexible to the needs of the Australian economy.  While states/territories and employers have been given greater power to target the skills they need, the Immigration Minister Chris Evans also has the ability to extend the planning levels for the Australian skilled migration program and amend the CSL so that certain nominated trades can have priority for processing, if the economy needs a boost in skilled workers. 

Senator Evans said in a recent statement that the Government is committing itself to “a long-term planning framework for migration as a key component of the current reform agenda” and that their extension of the family migration scheme is testament to its perception of the importance of family.

“We are recognising the importance of family through this boost which will benefit Australians who seek to have their parents, partners or children join them to live here permanently,” Senator Evans added.

The family stream of the Australian migration program has had 2,500 places added to the Spouse and Fiancée Visa program, 1,000 places to the Parent Visa program, and 300 to the Child Visa program.

This decision is sure to be met with a mixed response. Many people have been vocal in their disapproval of the grant, suggesting the incentive has brought forward demand from first-home buyers and artificially inflated prices in our mortgage belts.

On the flipside, the argument is that demand from first buyers has been relatively flat since 2004. As interest rates dived, house values fell and the Government provided a boost to the grant. Pent-up demand was released, resulting in the flurry of activity we now see. For many of these affordable areas the recent price growth is simply offsetting the falls in housing prices that many recorded between 2004 and 2009.

I expected the Government to maintain the $21,000 boost for new dwellings and wind back the grant for existing dwellings to $7000. The logic for this is it makes sense to focus the greatest stimulus on areas of the housing market that will provide the greatest benefit to the economy. A focus on stimulating new dwelling sales would also help alleviate our chronic housing undersupply.

Another budget announcement likely to affect the property market is the $22billion allocated to infrastructure spending. The key benefactors will be regions along the eastern seaboard, particularly south-east Queensland.

Yet perhaps the most immediate requirement is to establish links between the outer fringes of our metro areas where the large proportion of our population growth is concentrated. Many of these regions are in desperate need of transport infrastructure improvements and public transport options. This is where the most affordable land is, yet few want to live where travel routes are congested or are substandard.

For investors, targeting those areas earmarked to benefit from infrastructure upgrades can result in strong capital growth as the projects near completion.

The Skilled Occupations List (SOL) lists all occupations that the Government considers to be a skilled profession for purposes of migration to Australia. Applicants for a General Skilled Migration visa must nominate a skilled occupation listed on the SOL in order to gain points towards their Australian visa application.

They must also have their nominated skills assessed by an approved assessing body before their application will be accepted by DIAC.

The Government periodically reviews the SOL so that it remains reflective of the Australian economy, and this week, after consultation with DEEWR, DIAC have released a revised version of the SOL to go live on 15 May 2009.

While no occupations have been removed or added from the SOL, the Government has changed the assessing requirements for occupations. Now, Vocational Education and Training Assessment Services (VETASSESS) can act as a co-assessing authority alongside the Trades Recognition Authority (TRA) for all countries except “recognised countries” for the following occupations:

4311-11 General Electrician
4431-11 General Plumber
4312-11 Refrigeration and Air-conditioning Mechanic
4211-11 Motor Mechanic
4411-11 Carpenter and Joiner
4411-13 Carpenter
4411-15 Joiner
4313-11 Electrical Powerline Tradesperson
4313-13 Cable Jointer
4414-11 Bricklayer
4311-01 Supervisor, Electricians
4312-01 Supervisor, Plumbers
4411-01 Supervisor, Carpentry and Joinery Tradespersons
4313-01 Supervisor, Electrical Distribution Tradespersons
4414-01 Supervisor, Bricklayers
4211-01 Supervisor, Motor Mechanics

“Recognised Countries” are UK, India, Sri Lanka, South Africa and the Philippines.

Effectively, this means that skilled applicants in the above trades, who are not residents of any recognised country, now have another option to TRA to have their skills assessed in order to complete their Australian visa application.

It is not clear whether VETASSESS has plans to conduct practical assessments in any other country but they may consider doing so, depending on demand.

Official interest rates are at a 49-year low of 3%, where the central bank has moved them in response to the slowing economy.

Silver lining on interest rates

Business Day reporter Chris Zappone sees hope for homeowners despite the Reserve Bank’s decision to leave interest rates unchanged.

”While the near-term outlook remains weak, there are further signs of stabilisation in several countries,” said Governor Glen Stevens in a statement. ”The Chinese economy in particular has picked up speed in recent months and many commodity prices have firmed a little.”

”I think they feel they’ve done enough,” said economist Adam Carr of ICAP. ”There would need to be a further deterioration in the labour market or a flare up in the financial crisis to push them into cutting again.”

Mr Carr foresees no chance of a rate cut until after the June quarter inflation numbers are released on July 22.

The RBA has cut 425 basis points from interest rates since September in an effort to blunt the worst effects of the recession.

In that time, repayments on an average $400,000 mortgage have fallen by about $1000 a month as commercial banks passed on most of the RBA’s cuts.

Financial markets took the RBA’s announcement in its stride, with stocks little changed. The Australian dollar, though, rose marginally to 74.11 US cents, but later dropped back below 74 US cents.

Fragile confidence

Financial markets have risen for most of the past two months, placing most stock markets – including Australia’s – back into positive territory for the year.

The RBA’s statement noted the ”path of gradual improvement” in equity markets and a revival of credit markets but warned that more economic pain is on the way.

”(C)onfidence remains fragile and balance sheets are under pressure from the effects of economic weakness on asset quality,” Mr Stevens said. ”Credit remains tight.”

The central bank noted that the Australian economy started shrinking towards the end of 2008, and the contraction has continued ”in 2009 to date,” both at home and abroad.

It predicted wage increases will diminish as unemployment rises, helping to ease inflation further.

Banking on China

Recent data pointing to a rebound in China – likely to become Australia’s largest trading partner this year – is underpinning much of the RBA’s stance, said TD Securities Senior Strategist Annette Beacher.

”We were looking for more of an easing bias in the statement given the weak data flow and we expect the weak data to continue,” said Ms Beacher. ”But it appears the RBA is staunchly convinced of a Chinese recovery.”

Yesterday a gauge of Chinese manufacturing rose to its highest in nine months, while other measures including investment spending have also been trending higher.

In Australia, though, several key indicators are likely to get worse before improving, including unemployment, denting government revenues and sapping wider demand in the economy.

The jobless rate, currently at 5.7% is tipped to rise to 5.9% on Thursday. JP Morgan economist Helen Kevans forecasts the unemployment rate climbing to 9% by the end of 2010 as the economy gets dragged down by the global recession.

HiFX senior consultant Tom Averill said the RBA’s mention of the Chinese economy helped send the dollar higher.

The statement indicated that ”the policy stimulus put into effect by Australia and the broader world is having an effect of containing the downturn,” echoing the comments of US Fed Chairman Ben Bernanke, said Mr Averill.

Budget

The RBA’s faith in the combined stimulus may mean its cash rate has hit bottom at 3%, according to analysts, including HSBC’s chief economist John Edwards.

”Next week’s Budget will confirm a substantial deficit and associated fiscal impulse,” Mr Edwards wrote in a note to clients.

”As Mr Stevens notes today, the effect of earlier rate cuts and their impact on household income have yet to become fully apparent.”

The Federal budget is expected to include additional spending, with a budget deficit predicted to swell to more than $50 billion for the coming financial year.

Victoria’s state budget, announced today, contains $11.5 billion in additional spending, and predicts economic growth to remain positive.

Total new home sales rose by 4.2% last month to 8210, accelerating from the 3.9% growth pace in February, according to the Housing Industry Association. The increase marked the third month of gains.
 
”It is clear that in the first quarter of 2009 the project home building market was buoyed by the First Home Owners Boost for new dwellings together with very low variable mortgage rates,” said HIA Chief Economist Dr Harley Dale in a statement.

”The First-Home Owners Boost for new dwellings is clearly lifting residential building activity and securing jobs within the Australian economy,” he said, calling for an extension of the program past its June 30 cut-off.

Federal Government leaders, including Prime Minister Kevin Rudd, have hinted they intend to scale back incentives for first-home buyers, announced as part of the first round of stimulus spending aimed at reversing the economic slump. The current grant rises to as much as $21,000 if the purchase is for a newly built residence.

NSW leads

Among the states, detached home sales jumped 4.1% in March, led by New South Wales, where they increased 15.2%.

”While the rate of growth in sales reflects to an extent the low base from which a recovery is emerging,” the HIA report said, ”there is no doubt that the previously mentioned triple boost from low interest rates, stimulus to first-home buyers, and builder discounts have injected some life into a previously moribund new home building market, especially in Sydney.”
 
Sales of detached houses also jumped 14.6% in Victoria and 7.3% in Western Australia, the HIA said.

Low interest rates and the first-home owners’ boost are having a targetted effect, spurring house sales but leaving multi-unit sales ”at very weak levels,” the HIA said.

Sales of apartments rose 4.7% in March, following a flat February and four straight months of falls, HIA said.

”This reinforces the fact that while investor enquiries have increased in recent months, actual building activity in the residential investment space is still heading south, a concerning sign for low and lower middle income rental households.”

The Prime Minister, back from the global summit on the financial crisis, presided over a community forum on the economy in Melbourne yesterday. He announced the big banks – the Commonwealth, NAB, ANZ and Westpac – would postpone mortgage interest repayments for up to 12 months or offer short-term reductions in interest payments.

Mr Rudd said the G20 summit and yesterday’s meeting were aimed at rebuilding the economy and jobs. “Acting globally, acting nationally, acting locally, to help those who lose their jobs through no fault of their own,” he said.

Of the London summit, Mr Rudd said it was “an unusual and empowering thing” to sit down with the King of Saudi Arabia, the president of communist China, the president of capitalist America and presidents from countries as diverse as South Africa, South Korea and Brazil “all speaking different languages, but all speaking the one language: what must we do to rebuild jobs?”

The jobs fund includes a new $150 million infrastructure employment scheme that will create immediate jobs in communities hit by the downturn. The fund also involves $500 million for already-flagged programs, including a $300 million local jobs scheme to invest in community works such as heritage projects and commuter bike paths, and $200 million for council and not-for-profit projects to upgrade local facilities.

The Government would also spend $20.8 million to hire “local employment co-ordinators” to liaise with local and government organisations to maximise employment opportunities in hard-hit areas. Seven have initially been identified, including Canterbury-Bankstown in south-western Sydney and the Illawarra.

In a reprise of their jobs campaign under the previous Labor government, the trucking magnate Lindsay Fox will join the former ACTU boss, Bill Kelty, to advise employers in disadvantaged communities on practical ways to retain workers and even hire apprentices and employees.

Mr Rudd said that following discussions with the Government, the banks would work with borrowers who have lost jobs.

The banks were prepared to consider extending the period of the mortgage contract and reducing the amount of each payment due and even waiving fees in hardship cases. Interest would be capitalised into the loan, meaning it would still need to be paid in the long run. Mr Rudd said the banks would make assessments based on the borrowers’ ability to meet new contractual obligations in the long term.

The Opposition Leader, Malcolm Turnbull, said the remarkable omission from Mr Rudd’s jobs schemes was any measure to make it easier for small and medium businesses to keep employees on the payroll.

The Government’s approach did nothing to relieves taxes on small businesses or to relieve them from the “crushing burden of regulation and red tape”, Mr Turnbull said.

RP Data National Research Director Tim Lawless believes this turnaround in market conditions has largely been created by mortgage rates being at their lowest levels since 1970 and as a result, providing a significant boost to affordability. Mortgage rates peaked at 9.6 per cent in August 2008, and have fallen to 5.8 per cent with the prospect of more cuts when the RBA Board meets this coming Tuesday.

According to Christopher Joye, CEO of Rismark International, “The recovery in prices over the last quarter has been driven by the 40 per cent reduction in mortgage rates, the boost to the first home owners grant, the Government’s fiscal stimulus and a significant housing shortage. It is now clear that the boost to the first home owners grant has been one of the Government’s most successful policy measures – this price strength will hopefully encourage developers back into the market.

“The resilience of Australia’s housing market has also been underpinned by our robust banking system, which CBA recently reporting that its 90-day mortgage default rate was a stunningly low 0.38 per cent.

“Despite doomsday rhetoric from some, housing finance volumes have been strong with AFG disclosing that approvals in February 2009 were the best seen since November 2007.

“The improvement in home values in 2009 following modest 3 per cent falls in 2008 highlights the absurdity of the sensationalist predictions by one or two economists in 2008 that prices would fall by 30-40 per cent.

“These index results also vindicate statements last week by the RBA that it expects to see a measured recovery in Australia’s residential property market,” Mr Joye said.

The latest ABS housing finance data suggests real estate investors have yet to make a return to the property market. The value of investment loans has not been this low since 2002, reflecting the low level of investor confidence across all asset-classes.

RP Data’s Mr Lawless suggests the prospect of positively geared property is likely to lure more investors back into the market.

“More and more, properties are showing ‘positive cash flow’. In fact, assuming an 80 per cent loan to value ratio home loan and a discounted 5.4 per cent interest rate, investors in apartments are likely to find that rental income goes a long way towards covering mortgage repayments across every capital city.

“Another interesting dynamic over the last year has been the reversal of the ‘two tiered’ market that was evident between 2003-2007.

“During this period affluent areas had a tendency to perform best as the financial services industry boomed. At the same time, the mortgage belts suffered from low sales volumes and declines in values. South West Sydney was a classic case in point – in today’s market it is the opposite. The top 10 per cent of homes in Sydney and Melbourne are off by more than 12 per cent while more affordable homes around the $450k mark have recorded price growth.

“People sometimes forget that homes worth more than $1 million account for less than 5 per cent of all sales. Their performance has therefore little impact on the broader housing market where 80 per cent of all sales occur within the $200k to $600k price bands” Mr Lawless said.