Introduction

Net overseas migration (NOM) is the net gain or loss of population through immigration to Australia and emigration from Australia. These flows of migration, in both directions, impact on issues such as Australia's skilled and unskilled labour supply, national income from the educational provision for international students, housing availability, cultural diversity, social cohesion and Australia's international obligations to assist refugees. Variations in volume and the characteristics of travellers who arrive in, and depart from, Australia impact on policy decisions and future planning at all levels of government.

Australian citizens and permanent residents wishing to emigrate from, or return to, Australia, have always been free to do so at any time. Since the formal introduction of the Trans-Tasman travel agreement in 1973, New Zealander citizens have also been free to cross Australia's borders at any time. However, for those people wishing to immigrate to Australia from other parts of the world, the Australian government has long-standing formal immigration programs which are managed by the Department of Immigration and Citizenship (DIAC).

Over the past three years, NOM has more than doubled from 146,800 persons in 2005-06 to a preliminary NOM estimate of 298,900 persons in 2008-09, the highest on record (Figure 3.1). The increase is partially due to a change in methodology introduced after 30 June 2006. However, the main driver during this period has been the substantial growth in temporary visa arrivals to Australia's shores (see Figure 3.13).

Temporary migration has become increasingly important with more international students, business entrants, working holiday makers and other long-term visitors staying in Australia for periods up to four years or more. Over recent years, there has also been a continued increase of temporary entrants applying for permanent residency or other visas whilst onshore. These changing patterns in traveller behaviour over time have created challenges for the Australian Bureau of Statistics (ABS) in accurately measuring Australia's net overseas migration. In response to this challenge, the ABS has made some improvements to methodology and processing systems to more accurately capture these changes, and ultimately to improve the quality of NOM estimation. The Australian Department of Immigration and Citizenship's ability to capture and process all traveller information combined with the ABS's improved methodology and additional processing, has placed Australia's measurement of NOM amongst the world's best practice.


Change in methods to improve NOM estimation

Introduction of the 12/16 month rule for estimating NOM

In 2007, to better measure the changes in traveller behaviour and in particular to more accurately capture and measure temporary migration, the ABS introduced improved methods for calculating NOM. The key improvement was the introduction of the '12/16 month rule', whereby a traveller is included in the resident population if they are in Australia for a total of 12 months or more over a 16 month period, or conversely, subtracted from the population if they are away for a total of 12 months or more over a 16 month period. This has replaced the previous method (12/12 month rule) where a traveller had to be in, or away from, Australia for 12 continuous months.

The current methodology (12/16 month rule) has been calculated from December quarter 2003 to test systems and for quality assurance purposes. This was undertaken before the official release of these new NOM data from the 1 July 2006 when it was used in producing Australia's official estimated resident population (ERP) figures. Prior to this date, the previous methodology (12/12 month rule) had been used to produce the official ERP figures. The change in method has therefore resulted in a break in the official NOM time series at 30 June 2006. For further information on the '12/16 month rule' and the '12/12 month rule' refer to the Glossary and paragraphs 28 to 45 of the Explanatory Notes.

Analysis undertaken by the ABS comparing the previous method (12/12 month rule) to the current method (12/16 month rule) over a three year period (December quarter 2003 to September quarter 2006), shows the current method estimate to be on average 25% higher than the previous estimate. Additional information on the current methodology (12/16 month rule) and the reasons for the change in method can be found under the Explanatory Notes tab, available with the electronic release of this publication in the Technical Note - '12/16 month rule' Methodology for Calculating Net Overseas Migration from September quarter 2006 and onwards.

Enhancements to Preliminary NOM Estimation

In 2009, an opportunity arose when legislative changes were introduced in the Federal Financial Relations Act 2009 which allowed the ABS to publish quarterly Estimated Resident Population (ERP) figures at the end of each scheduled month of release (March, June, September and December).

The later release date made it possible for the ABS to use an additional quarter of travellers' movement data (the quarter after the reference period), enabling the methodology used for preliminary NOM estimation to be improved. The two key changes to the methodology for estimating preliminary NOM were:

• changing from a 'two year ago' to a 'one year ago' propensity model; and
• reducing the pool of travellers used in the propensity model.

The preliminary NOM results discussed throughout this chapter are based on these improved methods. Additional information on these improvements is available in the following chapter.

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