CHAIRMAN -I am drawing a bit of a long bow: I have a question on Italian immigration. There was some commentary recently on this. You might be able to give me an answer to that under this subprogram. Why is Italian migration down ?

SENATOR ROBERT RAY -Applications to emigrate to Australia from people born in Italy and lodged anywhere in the world currently represent less than one per cent of all applications received. Applications to emigrate lodged worldwide by Italian born people currently have a 55 per cent success rate compared with a global success rate of 42 per cent. The number of applications received from Italian born people has dropped dramatically from last year, with the upturn in the Italian economy. So far-until the end of December-there have been only 164 applications. I can give you a breakdown of those figures from 1984-85 to December 1988. The figures relate to Italians and immigrants from Italy, which are two separate figures.

CHAIRMAN -Is it the wish of the Committee that that document be incorporated in Hansard? There being no objection, it is so ordered.

<INC.DOC>

The document read as follows-

INTAKE AND SUCCESS RATES-ITALY

Applications lodged

In Rome

Cob

Italy

(a)

All

nationalities

World Wide

Cob

Italy

All (A1)

nationalities

1984-85 ...

311

71%

of 439

376

32,168

1985-86 ...

585

55%

1062

726

82,260

1986-87 ...

623

48%

1306

784

117,511

1987-88 ...

465

34%

1353

618

142,831

(end 1988-Dec 88) ...

93

27%

348

164

(less

than 1%)

62,117

APPLICATIONS VISAED (AS A % OF APPLICATIONS FINALISED)

In Rome

Cob

Italy

All

nationalities

World wide

Cob

Italy

All

nationalities

1984-85 ...

71%

68%

70% (b)

70%

1985-86 ...

49

49

49

59

1986-87 ...

47

49

46

53

1987-88 ...

51

47

49

52

(end 1988-Dec 88)...

63

74

55

42

ACTUAL NUMBER OF APPLICATIONS VISAED

1984-85 ...

280

387

340

31,617

1985-86 ...

274

499

341

40,686

1986-87 ...

299

605

352

50,694

1987-88 ...

221

545

286

56,921

(end 1988-Dec 88)...

99

325

133

28,482

</INC.DOC>

SENATOR DURACK -I ask the general question about the position of principal adviser for refugees. This is apparently a new position. A sum of $150,000 is provided for it. Is it a permanent position? Does it cover extra staffing?

MR HARRIS -The establishment of this position was announced by the Government on 8 December last year. That amount of $150,000 does not represent the salary of one officer; it represents the salary of an officer and support staff.

SENATOR DURACK -How many?

MR HARRIS -Two staff plus administrative costs for the staff.

SENATOR DURACK -Is the position a ful time position?

MR HARRIS -Yes, it is a level 3 position.

SENATOR DURACK -It is another Public Service position; it is not an external position?

MR HARRIS -No, it is a Public Service position, filled from within the Public Service.

SENATOR SHORT -The Department spent an extra $1.66m on departmental forms as a result of changes to the selection criteria. How many forms were produced? What do we get for our $1.66m?

SENATOR ROBERT RAY -I thought you might ask that, so I brought along a couple of examples. I will table those for your perusal.

MR HARRIS -We have 800 forms within the Department. One of them must be a form about forms. We also have a significant number of leaflets. The colour coding that you see on the forms that the Minister has offered you to examine enables us to colour code information leaflets so that persons coming into our office can acquire information relevant to the colour of the interests of the person, as it were. The estimates that we are talking about reflect a number of matters, including the Government's announcement in December of a new migration points test and for other rules that relate to migration. They also reflect a concerted effort on our part to make forms more user friendly and more susceptible to accurate decision making. Thus, the migration form, as short a time ago as three years, comprised four pages and did not allow, by itself, an accurate decision to be made which would enable a review to be undertaken sensibly. This new form allows review bodies to examine the decision quite meticulously.

SENATOR ROBERT RAY -I have tabled a couple more.

SENATOR SHORT -Do the four-page ones now go on to--

MR HARRIS -Twenty-seven.

SENATOR SHORT -One would hope it would allow for a more immediate response. I presume that is the purpose of it. It is an enormous document, is it not?

MR HARRIS -We do provide with it, when it is purchased overseas, an explanatory leaflet to allow the person to self-assess before the person spends $200 on the application, to reduce the prospect of people wasting their money or raising their expectations unduly.

SENATOR ROBERT RAY -It is also necessary to say that if you want the criteria to be applied across the globe in a non-discriminatory way, you should put in place a system that is as uniform and objective as possible. If the form is as objective as possible, laying out criteria, answering questions and taking the subjectivity out as much as possible, the appeal system then applies and can be measured from the form. You can make sure that the officers have completed all their tasks and check that they have completed them.

SENATOR SHORT -Do you know how many forms were produced?

MR HARRIS -I do not know.

SENATOR ROBERT RAY -I think there were 26 separate forms.

MR GIBBONS -We can provide you with the figures.

SENATOR SHORT -Was there any shortage of forms at any of the regional offices?

MR HARRIS -There were shortages of citizenship application forms in the very early part of the citizenship program. This had to be met by photocopying, and the like. We are currently examining tenders that allow for management design , distribution and printing to be undertaken at, we hope, a significant saving , compared to the systems which we are currently using.

SENATOR ROBERT RAY -By tendering out, the responsibility for delivery, timing and storage of a lot of these forms, will no longer be ours. It is a sort of on-demand production. When we need the forms, it is part of their contract to make sure they are available, for supply and delivered, otherwise the tender will go to someone else. It is a bit like the Mazda plant in Hiroshima: you get only one chance to make a mistake.

SENATOR SHORT -On 31 March you suspended the lodgment of independent and concessional applications.

SENATOR ROBERT RAY -That is correct.

SENATOR SHORT -When was the Department aware that there would be a blow-out in that category?

SENATOR ROBERT RAY -As you know, on 3 June 1988 the points system was changed to 80 points plus a pool system. Those who received below 80 points but who received 75 points-25 for employability-were placed in a pool. It is quite obvious that this year's program can be filled from the 80 point achievers. On about 31 March, or just prior to that date, we realised that we had enough for this year's program. Those who have achieved 80 points and been processed will be accepted for next year's program. Those who are in the pool have each been sent a new form and told that they can apply to go into the two pools next year-I understand that we are processing twice next year-to see whether they can make the pass mark. There will be no extra fee charged, but we need them to fill out a new form because the points criteria have changed.

MR SULLIVAN -The closing of the program this year was not due to, if you like, a blow-out. When we recognised in late February-early March that we had sufficient applications to the assessed stage under the current policy to see the program through, combined with the fact that from 1 July we were instituting a new system which would require further information from applicants, it was deemed important to signal to applicants that we had sufficient assessments under the old program, the old policy, and to close off as much the policy as the program so that people would start to access new forms, so that they can be assessed under the new policy which will apply for the 1989-90 program. So it was a recognition by us that we had sufficient cases in that processing pipeline to fill the program. There will be no blow- out in the program.

SENATOR ROBERT RAY -In conclusion, I might say that this is another example-I think a justifiable example-of why one prefers the concept of a floating pass mark from a set pass mark in respect of which, in the end, you cannot guarantee the target that you have set.

SENATOR DURACK -Were there many significant changes in the criteria under this category from 1 July? You mention that some new information will be required.

MR SULLIVAN -The major change from 1 July is the introduction of the concept of the floating pass mark. We go into two streams-a family stream and an economic stream. We have the points test, in respect of which details are available. We look to factors such as skills, age; for independents, language ability. In the concessional area we look to settlement factors, location factors and sponsorship factors. Instead of having a fixed and predetermined pass mark, which we hope will meet the program, and we manage to that number, we now have a floating pass mark, which allows us accurately to manage to the program number. We start accepting the concept as applications come in, and we work with the number of applications received to meet the program number and that will generate the pass mark required in both the economic and family categories, other than the immediate preferred family categories and the demand driven categories on the economic side.

SENATOR SHORT -How many of the successful applicants in the category that we are talking about would have failed to secure the required 80 points if it were not for their having scored the 15 additional concessional points? Do you have any details on that? If you do not, perhaps you will take that question on notice.

SENATOR ROBERT RAY -That is a very difficult question. I will ask the officers . I think that would be very hard to calculate, although a guesstimate could certainly be made.

MR HARRIS -I though a question almost identical to this one was raised in the estimates discussion six months or so ago. We can refresh the answer that we gave on that occasion.

SENATOR SHORT -I must confess that I have not refreshed my mind on that one. Mr Cadman asked me to put that question to you. If it is the same question, could you have a look at whether an update can be made? If not, you can take the question on notice. In that context, could I have details of the top 10 countries of origin for that type of applicant?

MR HARRIS -The top 10 countries of origin for applicants who score some or all concessional points that enable them to pass?

SENATOR SHORT -Yes. We talked at the last Estimates committee hearing about the delay times in processing applications at all overseas posts. Again, you can take this question on notice. Could you provide us with an update on that?

MR HARRIS -Yes.

SENATOR SHORT -I understand that there has been a recent upgrade in the level of migration officers to ASO6. Is that correct?

MR HARRIS -Yes.

SENATOR SHORT -Could you give me some background to that?

MR HARRIS -I suppose it is fair to say that Immigration overseas has for many years been seen as the poor relative of government overseas service. At the same time, we are asking more and more of our officers to be managers and to be accountable for their decisions in the Federal Court and before other review bodies. We are also increasing somewhat the complexity of the immigration program with, for example, floating pass marks, pooling and the like. To reflect those factors, especially the desire to have enhanced management characteristics in our staff overseas, the Department came to the view that no officer overseas should be below an ASO6 level; that at posts where there was more than one A-based migration officer, the senior officer should be an ASO7; and that where there was a large policy or management role to be undertaken overseas at our larger posts or our more policy oriented posts, the officers should be ASO8. To that effect, we negotiated with Finance how to fund that reclassification. The positions have recently been advertised and committees are examining applications now.

SENATOR SHORT -There have been quite a few changes within your Department and, I guess, to some extent in other departments too, as a result of the amalgamation of the Third and Fourth Divisions, the regionalisation of a lot of activities and, therefore, as I understand it, to some extent, a flatter promotion structure. Would you have any comments about the effect that those changes have had on your Department in terms of morale and the attitude of officers?

MR HARRIS -Morale is an interesting question. I have often thought that we should undertake periodic surveys of staff in some sort of quantitative way to determine how they are thinking or feeling about the Department as a whole. I do not believe that we have an accurate estimate of what the morale is today as compared with that of any other period. Change does cause concerns amongst staff. This has led to some programs to alleviate the bigger concerns among staff who are not as capable as others of adjusting to change. But there has been a major benefit. This has allowed the Department to put decision-makers on our counters, rather than persons who, well versed or experienced as they might be in a limited role in departmental activities, cannot typically meet all of the needs of our clients as they queue up to meet us. So putting the decision-makers there has caused some concern for officers who do not wish to confront the client to give the client bad news. It makes them accountable to the client for the decisions that they might orally provide to him. So there are these concerns. But at the same time this gives clients a massive increase in the quality of service. It allows officers to be multiskilled across a range of decision making in the Department rather than specialising in the one area.

Some people think that multiskilling is good for them because it opens their career prospects. Some prefer the certainty of their specialist knowledge in one small area of the Department. I suppose, overall, we would suggest that as the change tends to cement itself in place, as the training takes effect and as the confidence of officers is boosted, the hope and expectation is that staff will see this as an important initiative which the management sees it to be.

The regionalisation of the Department provided staff with the benefit of being able to work much closer to home than they previously did. They see that as a benefit. It is obviously a benefit for the clients as well.

Sitting suspended from 6.44 to 8 p.m.

SENATOR SHORT -Before dinner we were talking about the morale question and I was going to ask whether you felt that there is any relationship between your views on how things are going in the Department and the resignation rates. Do you monitor and keep figures on resignation rates from the Department?

MR HARRIS -We have had two exercises this fiscal year relating to resignation, involuntary resignation or involuntary retirement. I do not believe that I have ever seen an analysis of a resignation rate over time in the Department. Resignation would not be the only feature that would be an indictator of morale, people move from department to department. However, it would be the major cause of staff loss in Immigration. People move to advantageous positions in other departments.

SENATOR SHORT -Would it be possible to take out figures on the number of officers of say the ASO5 level and above who would have resigned from the Public Service, from your Department, over the last five or six years?

MR HARRIS -That would require a large amount of work. We did have an exercise recently regarding resignations at the upper level of the ASO stream. These people were resigning from the Department to enjoy opportunities offered by the private sector. There were a large number of resignations for that purpose . There were 11 or 12 in the year to October 1988.

SENATOR SHORT -Would you take it on notice and look at it? If it does require an enormous amount of work get back to us, but if it does not, I would like to know, if possible, the number of officers of ASO5 level and above who have resigned in each of the last five or six years.

MR HARRIS -We will have a look at that.

SENATOR SHORT -The Minister might remember that at the last hearings in October we discussed the question of who might be business migration agents. There was some debate concerning one of our Senate colleagues. I raised the question of State instrumentalities being agents. From memory, the Minister expressed some sympathy with the point we were debating which was whether State instrumentalities or State agencies ought to be able to be business migration agents and whether they were in a different category from a senator. The Minister undertook to look at that. Could he tell me what has happened as a result of that?

SENATOR ROBERT RAY -I met on 17 March with all my State and Territory counterparts. The matter was on the agenda and it was discussed. The clear view of the State Ministers was that they thought their involvement at this level was essential. That is where the matter has rested at this stage.

SENATOR SHORT -Will you be taking that further, or are you accepting that view ?

SENATOR ROBERT RAY -I do not see compelling views one way or the other. It might be argued that, vis-a-vis, accredited migration agents in the private sector, representing government, may be seen to be in a better position. On the other hand when one comes to integrating these people, States such a South Australia, the Northern Territory in particular, and Tasmania say they have great difficulty getting business migration agents and they need to stay involved in this area. It is very hard to tell them that they cannot. I do not think they think there is a comspiracy against them not to deliver any business migration people, but they certainly feel affronted if they do not get `their fair percentage'.

SENATOR SHORT -When we were debating this last time I think the question at issue was whether a State department or instrumentality would be advantaged in gaining clients compared with a private agent.

SENATOR ROBERT RAY -That is right. I think they probably are advantaged, but I do not think it is a dramatic advantage. They must be advantaged in the marketplace by the fact that by representing a State government they can offer extra settlement services-I do not mean in the way of money or anything, but as a facilitator to try to get people to come. I do not think it is working out that way, but certainly the theory is that they must be advantaged.

SENATOR SHORT -Does that not concern you?

SENATOR ROBERT RAY -I do not really have many complaints from the association that represents private business migration agents. They do not feel that there is pressure at the moment. As I say, we have these two conflicting demands, if you like-we are not talking about Victoria or New South Wales or even Queensland-from the minor States that must have a chance to get their fair share of business migration. We have that on one side and the conflicting problem on the other side that they could potentially be and be seen to be-I think that is important-in a more advantaged position by their clients.

SENATOR SHORT -There has been quite a bit of comment in the media and elsewhere in recent months about the non-activities of business migrants once they arrive. For example, there was a claim about three months ago that the New South Wales Government was unable to find more than half the migrants who had entered New South Wales under the business immigration program; 522 business migrants were missing. What is being done to monitor business migrants on their arrival in Australia?

SENATOR ROBERT RAY -I did read that claim, which I think was made by Mr Peacocke. I read those claims in the Sydney Morning Herald, that he had sent me a letter on this. I received the letter quite a while later. It is not surprising that even if they did survey a thousand business migrants that they would not all be in Australia. Obviously if they are businessmen they would constantly be travelling. However, we have put in place a monitoring program, which we do not do for any other migrant.

MR SULLIVAN -The monitoring program put in place in July 1988 requires that a business migrant fill out and return to the Department a questionnaire both 12 months and 24 months after entering Australia, outlining progress in undertaking their business activities. The story you referred to dealt with the collection of a sample for a joint Commonwealth-States research program on business migrants and what they do. That survey will be concluded this calendar year. I think it will have some good data on what business migrants do once they come to Australia. The fact that the New South Wales Government could not locate all those people involved two things. Some were overseas and New South Wales was complaining that they had no follow-up address on some migrants, which is a fact of life these days. When we issue a visa to a migrant, that visa can be taken up within a period of time and then where the migrant settles and lives is really up to him. Whether he contacts the New South Wales Department of Business and Consumer Affairs is something that has been up to him. So it is not just that business migrants may be overseas but whether they can be found by the New South Wales Department.

SENATOR SHORT -If someone comes in on a business migration basis, do you check that he or she actually sets up business?

MR SULLIVAN -No, we check that they transfer the capital. We rely very much on business background and an intent to set up business. If the migrant does not set up business, we are not in a position to take action against him or her. We do not have any system of conditional visas as worldwide they have not been seen to be very useful. The major measurement of the program is how successful we are at picking a previously successful business person. We make that presumption that, that person having transferred significant capital and having the skills that made him a successful business person in the past, he would have a natural tendency to create and start a business in Australia. In fact the most recent survey was a State survey, and it found that within two years of settlement 50 per cent of business migrants had established businesses. It then worked out some figures of employment growth and export growth and it regarded that result as extremely satisfactory at the end of two years.

SENATOR SHORT -Why would it not be 100 per cent?

SENATOR ROBERT RAY -We might bring out people to be nurses; we might bring out people under the family reunion program because they miss each other. Circumstances change. We do not check up to see whether a bricklayer is still a bricklayer six months late or whether family reunion is working or whether they are still talking to each other. In immigration we build a hurdle. It is a very complex one, but if they jump it, they are in. If, through these surveys, you find that that is not a category that you support, that is that the uptake level in business is not sufficient, then you abolish that hurdle. You do not have that category any more. But I do not think anyone could possibly expect a 100 per cent uptake in this area or in any other area.

SENATOR SHORT -The figure of 100 per cent may be a little optimistic, but given that people are admitted, as I understand it, on the basis that they are coming to set up a business and after two years you find that only 50 per cent have, I would have thought that raised significant questions about the program.

SENATOR ROBERT RAY -It certainly does not worry me. That is the take-up rate at this stage. People sometimes take a long time to get involved in a business , to make up their minds which field they will go into.

MR SULLIVAN -We can certainly see indicators of further intent even after that period. We are not noticing capital diminution or anything like that, so it is not as if there is a suggestion that they do not still intend to take up a business. There is a significant capital requirement of half a million Australian dollars. They often take on business opportunities quite different from what their previous businesses may have been. I think necessarily there can often be quite a long lead time. They are business persons who often take decisions on the best place for their capital at a certain point in time. I do not think they regard a 2- 3- or 4-year wait as being anything more than a sensible business decision. The thing that we certainly monitor is whether the capital is returning or staying in Australia. We find that it does stay in Australia and it actually increases rather than decreases. The only conclusive survey recently was by a State government; we were not involved in it. It expressed satisfaction with the program. That State has not committed more to the business migration program on the basis of those results in terms of employment creation, export growth and knowledge transfer.

SENATOR BEAHAN -As a matter of interest, which State is that?

MR SULLIVAN -It is one of the smaller States.

MR SULLIVAN -SBS broadcasts half an hour earlier.

SENATOR SHORT -Are business migration program migrants required to give any written undertakings?

MR SULLIVAN -Business migrants basically have to satisfy a number a criteria. The major criterion is a successful business background. There is a capital criterion. The major basis of the capital criterion is that it is an objective measure of previous business success. Then they have to indicate an intent to set up a business. There are no undertakings. They then have to meet normal migration criteria. They have to prove that they actually do transfer the capital requirement prior to visa issue. Before they are granted the visa they must produce evidence from an institution saying that they have actually transferred capital to Australia.

SENATOR SHORT -When you say that they have to meet normal immigration criteria , do you mean health and security checks?

MR SULLIVAN -Yes, health, medical, security and character checks.

SENATOR SHORT -If there were two people, both with half a million dollars, and one applied to come to Australia as a business migrant and was accepted there is no guarantee that a person who applied under a different category with the same amount of wealth or assets would be accepted. Is that correct?

MR SULLIVAN -There is no greater guarantee than, for instance, under the employer nomination scheme where people can migrate to this country under special arrangements and the day after they arrive leave the employment of their nominating employer and do something else. We know they are business persons. We know they have the capital required to set up a business. For instance, there is an emerging relationship betwee age and taking up a business. A younger person with capital and a business background does not have many other options other than to set up a business. An older person may decide that investment is a practical alternative to business.

SENATOR ROBERT RAY -I think I should add three other things, especially relating to the last matter taken up by Mr Sullivan. There is a case which I am looking at at the moment to vary the capital amounts according to age. Instead of having $500,000 it may be better to have $350,000 at the younger age and $1m at the older age. People are more likely to take up a business when they are younger, and that is the mark we should be going for. I should put two other points on record. Our scheme is one that relies on building the hurdle. It is a much more sophisticated and rigorous scheme than that of our competitors. New Zealand and Canada are saying the mark is $250,000, and they virtually never check anything. So we run a far more rigorous scheme than our two competitors in the rest of the world. Whilst we monitor, I am not inclined to say that we should be totally interventionist. Otherwise, there are more resources for us. Having a regular monitoring process via surveys will in time give us enough material to see whether the scheme, by whatever the varying criteria is, is a success or not. I do not really want to put all these people in the field to go around checking, like department of labor inspectors. But then again we are the deregulationists and I suppose we have to wear that.

SENATOR SHORT -Do you evaluate to ensure that the business capability that particular migrants are bringing matches in any way the demand in Australia. For example, let us take retailing or restaurateuring in Australia. Some restaurants appear to be saturated with entrepreneurs and people experienced in the area. If you find an industry which would appear to be relatively well supplied, if not saturated, does that weigh at all in your assessment of the suitability of business migrant applicants?

SENATOR ROBERT RAY -Of course not. How am I supposed to know? Maybe you are a business genius and know whether one area is flooded or not; I do not. It is supply and demand-dog eat dog. If they want to go into the restaurant business they can go into it. If they want to go into making plastic footballs, even though we have three companies here already, that is competition. It is called free enterprise. It is their business judgment; it is their $500,000. It is usually a lot more than $500,000, but it is their choice. It is a bit of competition.

SENATOR SHORT -What are the criteria by which you judge a person to be a business migrant applicant?

MR SULLIVAN -As I said, the major criterion is to have a successful business background.

SENATOR SHORT -In anything?

MR SULLIVAN -Yes.

SENATOR ROBERT RAY -Not that they have won the pools and happen to have the money.

MR SULLIVAN -We differentiate. The major reason we have a capital transfer level is that it is one of the best objective measures of business success. We take special measures for an applicant to show that that capital accumulation is through business, not through inheritance, particularly.

SENATOR SHORT -Are they required to demonstrate that?

MR SULLIVAN -They are required to demonstrate through books of accounts and other means how they accumulate the capital. The other point to be made is that business migrants generally spend a lot of money in making their decision . We put a lot of emphasis on how we decide who is a good business migrant for Australia but a business migrant also spends an enourmous amount of money in deciding to come to Australia. Over 90 per cent of business migrant principal applicants will have had at least one exploratory visit to Australia. Over 60 per cent of them will have engaged a consultant to assist in the preparation of their application and to assist them in setting up a business in Australia. About 80 per cent of them will have contacted the relevant State departments of industry. They absorb from all those places a lot of advice. When we are talking about a base level of $500,000 of their own capital, which means we might be talking about businesses of $1m plus, they are far better positioned to determine whether their business is going to succeed. Very few of them come to Australia to lose money. I think there have been reports recently of the fact that businesses set up by people with non-Australian backgrounds have been more successful than those in the general business community.

SENATOR ROBERT RAY -I guess that is because failures do not count; they have already been winnowed out in the process.

SENATOR SHORT -Has there been any change since we last discussed these matters in the relative rigour of the criteria for business migration in Australia, relative to other centres of business migration, New Zealand and Canada in particular?

SENATOR ROBERT RAY -I have under consideration three or four things. I will decide on them in the fairly near future. Taking into account that point I made earlier, it may be better to graduate the money according to age. It also may be necessary in a volatile exchange market. It is not terribly volatile at the moment, but a country like Malaysia has a 20 per cent currency difference between when the scheme was instituted and now. We might have to take that into account. We may also have to take into account the taxation regime. Mr Sullivan correctly said that the accumulation of capital is an indication of business success. It can be very hard to compare if we just use someone who has made their money in Sweden or Hong Kong when one has a tax rate of 60 per cent and above and one who has a 15 per cent flat rate. All these things are in mind just to improve our competitive position with Canada and New Zealand, who as I say are not terribly rigorous. One of the ads that is running in Taiwan says, `Come to New Zealand-the gateway to Australia'.

MR SULLIVAN -The Canadian and New Zealand programs are very aggressively marketed in several countries. Our program is probably marketed in a more low- key fashion than both of those schemes. The criteria of the Canadian scheme have certainly eased remarkably, whereas probably our criteria have toughened in that we have ensured consistent enforcement of the criteria now.

SENATOR SHORT -Since when?

SENATOR ROBERT RAY -The Canadian scheme requires you, two years later, to prove you started up a business; otherwise you can go home. It would not surprise the senator that not one person has been sent home and I doubt that one person has been checked.

MR SULLIVAN -They also have schemes where the initial criterion for busines migration was that you had to set up a business that created at least five jobs. The current scheme is that you have to set up a business that can at least support yourself. So you can see it has relaxed. When I say we have ensured consistent enforcement of criteria, that is probably over the last 12 months in particular.

SENATOR SHORT -Am I right in summarising what you are saying as that our criteria and the administration of those criteria are probably the most rigorous around?

SENATOR ROBERT RAY -Certainly, yes, except that there are not a lot of schemes . There are really only three big players in the scheme, New Zealand, Canada and us. With total justification, I can argue we are the best. If you ask whether there is room to continue to improve as we get more knowledge in the area, I have to say yes, there is room for improvement. Some of those improvements may be announced in the next month but when we get all the survey information again I am not going to be inflexible and say, `look, we can't change it', or `we are just going to go on as ever'. We will react if we find that parts of the scheme are unsatifactory. The unfortunate thing is that the scheme is open to all sorts of idiotic articles in the paper. They get a run once a month. Every time you ask for a correction or a justification on one piece of evidence, people duck for cover.

SENATOR SHORT -How is the level of business migrant applications running at present?

SENATOR ROBERT RAY -I cannot answer that in the way you have asked it. We do it as a total group, that is, we allow 12,000 places for business migration, which includes families. You see the difference? That target of 12,000 will underrun this year by 2,000. There are three reasons for that. One reason is the competitiveness from Canada and New Zealand. The second reason is, for most part of this financial year, a lift in the exchange rate. Even today I suspect it is a lot higher than it was on 1 July last year-at 81c or whatever it is. Thirdly, I think our immigration debate has not helped our image in Asia. Those three factors are the ones that I divine for the fall-off.

SENATOR SHORT -I understood from the press reports that I tried to follow assiduously of your tour of Asia--

SENATOR ROBERT RAY -I went to Hong Kong; it was not really a tour of Asia.

SENATOR SHORT -For somebody who has not been to Hong Kong for a long time, for me, it is a tour. From the reports that emanated from your visit to Hong Kong , you were saying that the immigration debate we have had here did not have the significance that had been earlier suggested by some people. Is that correct?

SENATOR ROBERT RAY -I would like you to draw attention to anywhere I am quoted as saying so. One erroneous newspaper report filed by Mark Baker interpreted my remarks in a particular way. I did not intend them that way, nor would anybody else construe them that way. I was asked the question: had there been a fall-off in application rate? I said no. But remember we anticipated a doubling of the scheme, and the scheme certainly has not doubled in areas in Hong Kong, Taiwan and Malaysia. The real question was: from the previous year, have you dropped off? The answer to that is no. But if the question is: `Did the anticipated increase occur?', the answer is no, it did not. That was taken by a reporter and written up to suggest that I said, `Applications are not dropping off'. The second part of your question concerned whether a rather broad immigration debate in Australia affected the major source area, which is Asia, where 80 per cent of business migrants come from. A lot of the evidence I saw in Hong Kong suggested yes, it had. Nevertheless, as much as possible when I was in Hong Kong I did not take a partisan political note; I tried to dampen the debate down, not fire it up. I even went so far as to say that if their image of the Opposition was that it had a racist policy, `Don't worry; Oppositions don't carry their policies into government'. I had to go that far- with your permission or not; I do not know.

SENATOR SHORT -Why did you expect a doubling in the program?

SENATOR ROBERT RAY -The program has been doubling year on year. You could also say that estimates in this area are out, but you also have to look at the feedback. The major feedback you get is from the accredited business migration agents. The main feedback you get is through their association. They do surveys of their own. You only have to talk to Jim Davey, their president. They would say the one and only reason, the big reason, was the immigration debate. I say, using my judgment, that was one of the factors. I also have to recognise there are two other factors running that also could have contributed in some measure to that. If you asked me to apportion the three reasons, I cannot do so. It is a subjective judgment. Make up your own mind.

SENATOR SHORT -I note with interest that you listed the immigration debate third.

SENATOR ROBERT RAY -No.

SENATOR SHORT -It was the third of three that you listed.

SENATOR ROBERT RAY -But I did not list them in priority.

SENATOR SHORT -But what evidence do you have to support the statements that were made-I am not sure whether it was you who made the statements-last year that the immigration debate had cost Australia-or would cost Australia-I think , from memory--

SENATOR ROBERT RAY -Repeat what you just said then.

SENATOR SHORT -I was asking what evidence you have for statements that were made last year by spokesmen for the Government-I am not sure whether you were included in it-to the effect that the immigration debate had cost Australia in business migration, amounts ranging from $300m to $500m, although it varied by several hundred million, depending on who made the statement.

SENATOR ROBERT RAY -There were two statements made, one by the Prime Minister and one by the Foreign Minister. In my memory, they did not vary. They used the figure of $350m, and they said this word-and listen: `could'; that this debate `could' cost us $350m coming into the country. I am not saying you have to, but if you attribute the whole loss of 2,000 people-which represents about 700 business migrants-undershooting this year, it does not take much for you or any of us in the room to work out that 700 business migrants not coming here will come to exactly $350m. But I have to say this: it is not as though people make a statement about the future course of events without trying to alter those events. Both the Prime Minister and Foreign Minister have gone out of their way to reassure people that if they come here as business migrants or any other form of migrant, they will be made welcome in this country. That in turn has had an effect on outcomes in this particular area. I stress-and I went back and checked-that the word used was `could' cost us.

SENATOR SHORT -What evidence at all was there to underpin any basis for that figure?

SENATOR ROBERT RAY -The first time I had evidence to this effect put before me was when I joined the consultation on the CAIIP recommendations. I was in Sydney, and representatives of the business migration program put to me that we were facing a total disaster, with between 30 to 50 per cent drop-off in people even contacting them to show interest in business migration. They attributed it then solely to the migration debate. I think if you asked them now they would still attribute it to that, plus those other two factors I have talked about.

SENATOR SHORT -But in fact there has been no drop-off.

MR SULLIVAN -I think, Senator Short, you are asking how we thought there was going to be 12,000? How we did that was to look at applications in process at the beginning of the 1988-89 year, compare that to applications in process at the beginning of the 1987-88 year and application rate per month, and determine from that a growth factor on the 1987-88 program. That exercise indicated that we would be looking at the start of the financial year at a program of 12,000. As the year has gone on, experience has shown that we are looking at a program result of around 10,000. As we have done the exercise now for next year, we are looking at a program result next year of 10,000, based on exactly those same two factors; that is, how many have we got in process and how many applications we are receiving. We might find, with the experience of the work that has been done on the general education and understanding of business migrant applications, that that program number might be exceeded next year. How we got that 12,000 was based on that extrapolation of a number of cases in process at the beginning of the program year and application rates as compared with 12 months before. They were proven to be an accurate way of measuring program expectations up until this year. This year has seen that that was not an accurate way. There are obviously factors involved, and the Minister has stated what he believes they are.

SENATOR ROBERT RAY -I should stress as well that these are estimates. This is a demand driven category. It might be capped or at least there is no intention of capping it for the future. We have put down a target for next year of 10, 000, but we would hope that it would be 15,000. It is demand driven. Where the other areas are capped, it will be adjusted according to whether the program runs on 10,000, 8,000 or 15,000.

SENATOR SHORT -Do I understand from what Mr Sullivan said that it was essentially a statistical extrapolation? Is that what you in effect said?

MR SULLIVAN -That is right, in terms of estimating program outcome.

SENATOR SHORT -So if you got the 12,000, which would have been a doubling, or whatever the percentage increase was, there would be every chance that this year or next year the figure would be 24,000?

MR SULLIVAN -No, it would depend on the number of cases. If we were accepting twice as many applications a month as we were this time last year and we had double what we had in the processing pipeline this time as we had last year, then we would be probably extrapolating a further doubling of the growth. As the case is now, we have got slightly less in the pipeline that we had this time last year and our application rate has plateaud at a level, which means that at the moment we would say our program year will be equal to what it is running at now. If we pick up increased application rates and we find that at the end of the program year we have got a higher number of cases in the processing pipeline that we expected, then that would affect our estimate of what the next program year would bring.

SENATOR BEAHAN -It is also true, is it not, Minister, that estimates of revenue foregone would have to include things other than business migration? For example, they would have to include the export of education. If I could just refer to an experience of my own in South Korea, people there expressed concern that students would not come to Australia because of the immigration debate. So it is more widespread than simply business migration.

SENATOR ROBERT RAY -I suspect that the reaction to that debate is variable through different countries. Certainly South Korea and Hong Kong is where it is highlighted most of all. It was not even necessarily highlighted in an objective manner. I would not even interpret some of the statements made about the coalition parties' policies that way, even though I have been critical of some aspects of the circumstances in which it arose. Therefore, it is important that at least Government spokesmen make it very clear what current policy is and what they perceive future policy to be. I would also appreciate at some stage if the Opposition would do the same; it would be very helpful. Two or three weeks before I arrived in Hong Kong, I thought to some extent that Mr Ian Sinclair hinted at that when he said that business migrants from Hong Kong were very welcome in Australia. That, allied with statements made by Senator Gareth Evans in Hong Kong and myself, has dampened down the issue. Also, the fact that we were seen to be very responsible in assisting in doubling our intake of refugees from Hong Kong has restored a lot of Australia 's reputation there. As I say, that reputation may have been put in doubt, and not even in a fair way, by a far more extreme interpretation of the co- alition's policy than I would have put on it.

SENATOR SHORT -This debate could be endless, Minister. I would want to say for the record that I think statements by Government spokesmen that $350m, or whatever figure you may choose to pick, could be lost as a result of a particular factor is so vague and ill-based as to do no one any good, including the country. I will not pursue it any further.

SENATOR ROBERT RAY -We all have our own editorials and our own views on that, but Estimates Committee is probably not the place to debate them.

SENATOR SHORT -No. You said that 80 per cent of the business migrants to Australia come from Asia. Is that percentage reflected in our advertising expenditure budgets for the program?

SENATOR ROBERT RAY -I suspect that there has been more advertising disproportionately outside Asia than inside Asia. Mr Sullivan might answer that.

MR SULLIVAN -That is true. We target our advertising money at areas where there is not, if you like, an automatic current demand and particularly where an credited business migration agent may be doing a fair bit of promotion himself. While we do some advertising in Asia, we have, particularly in the last year, looked at Europe, North America, South America and, more recently, the Gulf area as places to promote the business migration program.

SENATOR SHORT -Has there been any response to that yet?

MR SULLIVAN -The accredited agent's report, very positively on some of the exercises they have conducted in South America--

SENATOR ROBERT RAY -I interpolate there that a 2,000 per cent inflation rate is as big a push factor as 1997.

SENATOR SHORT -I understand that a senior departmental official was sent to Asian capitals-presumably in the second half of last year-to check on the ` blacklash' of the Asian migration debate. Is that correct?

SENATOR ROBERT RAY -I stand to be corrected, but no. I sent an official to a variety of different parts of Asia to make sure that we had sufficient security to the business migration program-I will ask Mr Sullivan as he was the person who went, to give a full report in a moment-and to check that the business migration program could not be used as a device for criminal or other infiltration. It was nothing to do with the immigration debate, but Mr Sullivan may prefer to comment on that.

MR SULLIVAN -The primary purpose of the visit and the Minister's instructions were that at that time there was a fair degree of media criticism and media exposure of what they saw as possibilities of criminal elements using the business migration program to rotate funds and use other such schemes. It was my task to basically review what forms of character and security checking we did from our major business migration posts--

SENATOR SHORT -You were the traveller?

MR SULLIVAN -Yes, I was the traveller-and whether they could be improved. Particularly in a large source countries such as Hong Kong the degree of vetting of a business migrant applicant is very reassuring. We go beyond normal police checks and go into the special agencies that have been created, in Hong Kong in particular, to look at corruption and other matters in the colony. We access all such sources in getting a clearance on a business migrant applicant. That, combined with the information that banks were able to provide on the fact that they saw no case of rotation of funds and, in fact, reported that they saw a buildup of capital after migration, was reassuring from a program perspective.

SENATOR SHORT -So Hong Kong was quite satisfactory?

MR SULLIVAN -Yes.

SENATOR SHORT -Do you have concerns about other capitals?

SENATOR ROBERT RAY -That constitutes advice to government, but in general, no. We have concern from one country where we do not have full diplomatic representation. I think you would understand the sensitivity of exploring that issue too far at this point. But overall, the concerns are very minor.

SENATOR SHORT -The last time we were talking about the fees charged by business migration agents you said that the fees were not regulated or monitored. I think the quote in from Hansard was that `we have an understanding of the fees'. I don't know whether the Minister used this term or whether Mr Harris did. Has anything more substaintial been done since then to monitor the fees charged by agents?

MR HARRIS -No, other than the Bill that is currently before the Senate, which seeks to reduce or eliminate the last vestiges of regulation of price control and licensing of migration agents. Accredited agents are not regulated; they are a contracted creature. Competition seeks to define what prices are charged . There are a large number of accredited agents in the field and still more seeking to become accredited agents.

SENATOR ROBERT RAY -It is not absolutely necessary or a requirement. I think probably 10 per cent of people do not use agents. It is a figure I have seen. However, if you are not paying too much it is probably much better to go through an agent in terms of self-interest, but it is not compulsory to do so.

SENATOR SHORT -What are the current delays in processing applications in the business migration area?

MR SULLIVAN -The current delay in processing business migration applications is about four to five months, as compared to probably seven to eight months 12 months ago.

SENATOR SHORT -I have a figure written down here-it might be wrong-of about three months. That was six months ago.

SENATOR ROBERT RAY -I do not think so. I would have taken note of that figure. It may be there, but it would have been an error.

SENATOR SHORT -Perhaps you can check that and let me know in due course if you have anything to add.