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Submission to Skills Australia

31 March 2010

Contact: Andre Kaspura Policy Analyst, International & National Policy, Engineers Australia 11 National Circuit Barton ACT 2600 Tel: 02 6270 6581 Fax: 02 6273 4200 Email:

often engaging in research and development of new engineering principles. The engineering team comprises: • Professional Engineers apply lifelong learning. University Bachelors degrees in engineering are accredited by Engineers Australia and discussions are presently underway to extend the accreditation process to diploma and advanced diploma courses offered by TAFE colleges. Professional Engineers exercise a disciplined and systemmatic approach to innovation and creativity. originality and understanding in adapting and applying technologies. specifying. In the workforce. monitoring. depending on circumstances. Engineering Technologists require at least the equivalent of the competencies in a three year Bachelors degree in engineering. and the adaptation of established technologies to new situations. • Engineering Technologists exercise ingenuity. engineering services are often closely inter-related. justify and defend these selections to clients. can be undertaken by engineers with any of the qualifications mentioned above. components and systems. Some engineering services. technologies and materials. expertise and analytical skills of Engineering Technologists equip them with a robust understanding of the theoretical and practical application of engineering and technical principles. training and experience of Engineering Associates equip them with the necessary theoretical knowledge and analytical skills for testing. For this reason Engineers Australia prefers to conceptualise the arrangement of engineering qualifications into the engineering team. • Engineering Associates apply detailed knowledge of standards and codes of practice to selecting.Specialised Engineering Occupations 1. The education. equipment. plant. The education. ENGINEERS AUSTRALIA 31 March 2010 Page 1 . Engineering Associates require at least the equivalent of the competencies in an Associate degree in engineering or a diploma or advanced diploma in engineering from a university or TAFE college. Professional Engineers require at least the equivalent of the competencies in a four year Bachelors degrees in engineering. Professional Engineers apply their analytical skills and well developed grasp of scientific principles and engineering theory to design original and novel solutions to complex problems. Professional Engineers challenge current thinking and conceptualise alternative approaches. installing. TAFE colleges offer diplomas and advanced diplomas in engineering. commissioning. Universities offer Bachelors degrees of four years and three years (full time equivalent) duration and also Associate degrees and diplomas and advanced diplomas in engineering. critical perception and engineering judgment to the performance of engineering services. but other engineering services require the application of competencies that are available only in qualifications with longer durations. fault diagnosis and understanding the limitations of complex assets in familiar operating situations. Within their specialisation. Engineering Technologists contribute to the improvement of standards and codes of practise. The Engineering Team The Australian education system offers engineering qualifications at several levels of competency. repairing and modifying complex assets such as structures. developing related new technologies or applying scientific knowledge within their specialised environment. colleagues and the community. maintaining. comprehension of risks and benefits and use informed professional judgment to select optimal solutions.

Graduations of Engineering Technologists showed signs of increasing in 2005 and 2006 but in the last two years have fallen back to the levels experienced in 2002 to 2004. In Victoria.6% smaller1. This is the proportion of graduates who move directly into full time higher education studies. Graduate Destinations 2007. 2 Evidence of Engineering Skills Shortages In the Government’s revised arrangements for skilled migration.Specialised Engineering Occupations The relationships described above define the complementarity between the three levels of the engineering team. This proportion varies from over 13% in chemical engineering to zero in mining engineering. This part of the Submission briefly reviews that evidence. these statistics need to be understood against the strongly skewed distribution of TAFE engineering specialisations between jurisdictions. The apparent 5. www. the two largest groups of graduates are in Mechanical and Industrial engineering and Electrical and Electronic Engineering. the largest group of graduates is in Manufacturing In Queensland. This pattern of graduations requires particularly high mobility to locate graduates to areas of high demand. Deploying inappropriate engineering skills and competencies does not make the best use of the skills available and so can intensify the impacts of skills shortages. The actual numbers of degree graduates that move into the labour market are about 9.025 in 2007 but fell back slightly in 2008.0% increase between 2007 and 2008 should be seen against the graduation levels in 2004. The statistics in Table 1 are all entry level graduations that have the potential to move into the engineering profession. This is especially important when there are engineering skills shortages. While encouraging on the surface. The Skilled Occupation List (SOL) is intended to apply only to the independent skilled migration stream. Australian Engineering Graduation Levels Australia engineering graduation levels have been largely static (Table 1) but is showing some signs of increasing in recent years. Table 1 uses the Australian Standard Classifications of Education (ASCED). the largest group of graduates is Other Engineering and in Western Australia it is Electrical and Electronic Engineering. This shows a smaller increase of 1. In NSW.graduatecareers. Graduations here increased from 3.1%. Engineers Australia believes that this complementarity is the key to optimising productivity in the delivery of engineering services. This is particularly the case for Professional Engineers. The independent skilled migration program is intended to supplement skills in which Australia has a medium to long term shortage.391 in 2002 to a peak 4. skills shortages are seen as short term cyclical phenomena to be addressed by employer nomination visas. Engineers Australia believes that the most appropriate way to proceed is to investigate the availability of skills and competencies at all levels of the engineering team and to instigate corrective policies to bring forward a balanced team. by sponsored visas by State and Territory Governments and bt temporary 457 visas. The only clear signs of growth in Table 1 are for Engineering Officers or ENGINEERS AUSTRALIA 31 March 2010 Page 2 . Engineers Australia contends that Australia has a long term shortage of engineers at all levels in the engineering team. 1 Graduate Careers Australia.

This survey was designed to assist responses to macroeconomic policy questions and has been demonstrably successful for this purpose. Statistics at this level are fraught with standard error problems and meaningless for practical purposes. Table 2 shows the unemployment rates for degree and diploma qualified engineers in ENGINEERS AUSTRALIA 31 March 2010 Page 3 . But the Labour Force Survey was not designed to provide statistics for microeconomic analyses addressing policy in respect to specific occupations.Specialised Engineering Occupations TABLE 1 THE POTENTIAL FLOW OF NEW GRADUATES TO THE ENGINEERING PROFESSION MEN POTENTIAL FLOW TO Engineering Officer (University) Engineering Officer (TAFE) Engineering Technologist Professional Engineers Total 2002 176 2810 473 4098 7557 2003 141 2850 449 4224 7664 2004 115 2905 441 4398 7859 2005 134 2898 583 4016 7631 2006 106 2961 679 4252 7998 2007 213 3070 475 4324 8082 2008 269 2968 472 4574 8283 WOMEN Engineering Officer (University) 10 Engineering Officer (TAFE) 405 Engineering Technologist 77 Professional Engineers 847 Total 1339 15 390 74 879 1358 9 420 76 857 1362 7 550 133 785 1475 8 595 130 792 1525 72 670 99 737 1578 78 651 127 741 1597 ALL DOMESTIC ENTRY LEVEL GRADUATES Engineering Officer (University) 186 156 124 Engineering Officer (TAFE) 3205 3300 3165 Engineering Technologist 550 523 517 Professional Engineers 4945 5103 5255 TOTAL 8886 9082 9061 Source: Statistics supplied by DEEWR and NCVER 141 3530 716 4801 9188 114 3556 809 5044 9523 285 3740 574 5061 9660 347 3619 599 5315 9880 Unemployment Among Engineers Unemployment rates measure the prevailing balance between the demand for labour and its supply. Direct time series statistics on the labour market for engineers can be obtained from the ABS Labour Force Survey. A much better alternative is to use 2006 Population Census statistics to set a comparative benchmark that can be complemented by other statistics to allow sensible judgments about the situation. Unemployment rates among qualified engineers in Australia have been considerably lower than in the labour force as a whole indicating that the demand for engineers is much stronger than the demand for labour in general and the supply of engineers is much weaker than the supply of labour in general.

00 3.76 4.75 2. By definition an individual in an occupation is employed so that unemployment cannot be measured this way.05 3.49 0.43 3.00 1.56 4. A more practical reason is that educational qualifications held do not necessarily line up with an individual’s occupation or occupational status.60 4.13 5.67 2.24%.00 0. Thus the Table is confined to the distinction between degree qualified and diploma qualified engineers.61 2.00 0.05 3.64 2.36 0.00 0.72 2.00 0.37 4.85 3.76 3.54 2.66 0.09 . No distinction can be drawn between Professional Engineers and Engineering Technologists because the ABS defines a Bachelors degree to have duration between 3 and 6 years full time equivalence.22 2. ENGINEERS AUSTRALIA 31 March 2010 Page 4 .21 2.85 0.27 3.71 2.00 2.92 0.50 2.72 2.60 3.10 4.97 DIPLOMA QUALIFIED 2.33 3.00 3.31 2.52 5.21 2.66 5.44 2.59 2.49 5.02 4.789 Engineering & Related Technologies NFD Manufacturing Engineering Rest of Manufacturing Engineering Chemical Engineering Mining Engineering Materials Engineering Rest of Process & Resource Engineering Automotive Engineering Rest of Automotive Engineering Mechanical Engineering Industrial Engineering Rest of Mechanical & Industrial Engineering Construction Engineering Structural Engineering Building Services Engineering Water & Sanitary Engineering Transport Engineering Geotechnical Engineering Ocean Engineering Rest of Civil Engineering Electrical Engineering Electronic Engineering Computer Engineering Communications Technologies Rest of Electrical & Electronic Engineering Aerospace Engineering Aircraft Maintenance Engineering Aircraft Operations Rest of Aerospace Engineering Maritime Engineering Rest of Maritime Engineering Environmental Engineering Biomedical Engineering Rest of Other Engineering ALL SPECIALISATIONS Source: ABS.52 4.93 3.84 5.67 2.29 1.148 1616 4030 5829 3877 4384 3621 338 220 18573 1218 844 381 1334 22 72 215 127 16 20336 17484 7110 3860 5547 21397 1618 1428 8843 580 1501 3582 1087 421 2130 249. The latter includes Associate degrees and advanced diplomas.66 3.50 3.74 4.24 2.37 3.53 4.28 2.34 7.32 6.00 3.77 5.91 1.34 2.00 2.56 2.95 LABOUR FORCE 106.11 1.65 2.29 3.48 3.92 ALL QUALIFICATIONS 2.88 3.34 0.43 2. TABLE 2 UNEMPLOYMENT RATES FOR ENGINEERING EDUCATION SPECIALISATIONS IN 2006 SPECIALISATION DEGREE QUALIFIED 2.12 0.31 2.85 3.17 5.Specialised Engineering Occupations Australia in 2006. 2006 Population Census Tablebuilder Estimates are shown for all major engineering specialisations.58 1.92 0.06 4.45 3.00 3. The statistics in Table 2 are also classified using the ASCED system because the deployment of skills throughout the economy is better reflected by an education based system than an occupation system.42 4.93 2.86 4.18 0.46 3.67 6.05 4. 5. When the 2006 Population Census was conducted the unemployment rate for the Australian labour force was 5. groups of engineers that have unemployment rates at or above this rate are highlighted in yellow.42 6.36 0..79 3.00 0.00 0.64 4.95 4. In Table 2.37 2.00 3.00 2.26 3.

Electrical Engineering (2. Work is in hand to obtain similar statistics for diploma qualified engineers but this is not available yet. Even relatively large groups (such as Mechanical Engineering with 18.37% compared to 3. The statistics relate to degree qualified engineers only. Skilled Migration of Engineers Australia’s migration intake of engineers has shown exceptional growth during the past 9 years. Mechanical Engineering with 3. Table 3 shows that engineers have come to Australia under both permanent and temporary visa classes.85%.336 and Electrical Engineering with 17. Nor are statistics for the engineering occupations in the Managerial occupations groups available at present.05%) and Electronic Engineering (3.02%.Specialised Engineering Occupations Table 2 demonstrates several important issues: • Only 3 groups of degree qualified engineers (Communications Technologies. • This result applies to both degree qualified and to diploma qualified engineers.32%).34% compared to 2.573.484) are small when compared to the labour market at large. strong continuing growth in engineering construction. Table 3 is sufficient to compare the magnitude of the migration intake to domestic graduations and to the stocks shown in Table 2. Materials Engineering (2.74%.75%. • With the exception of one group. Mechanical Engineering (2.46%).88% compared to 3. What is important is that there are no anecdotal reports of unemployed engineers despite the record skilled migration intake of engineers in 2008-09. the main body of Civil Engineering with 20. Territory and Federal governments and new coal.13%). Computer Engineering and Environmental Engineering) had unemployment rates at or above the national unemployment rate. the infrastructure projects announced by State.48% compared to 3. gas and iron ore project announcements point to a resumption of the strong demand for engineers. Engineering and Related Technologies not further defined.(Rest of) Civil Engineering with 2. Never-theless. Since the Census there has been very strong demand for engineers and these unemployment rates will have fallen. Materials Engineering with 2. Civil Engineering (2. In many cases the unemployment rates for diploma qualified engineers is lower than for degree qualified engineers including Mining Engineering (1. Rest of Electrical and Electronic Engineering and Maritime Engineering) had unemployment rates at or above the national rate. most engineering specialisations are comprised of relatively small stocks of individuals. Although the global financial crisis has interupted economic growth in Australia. The statistics in the Table are classified according to the now outdated Australian Standard Classification of Occupations (ASCO) and are intended to reflect labour market destinations rather than just educational background.34% compared to 4. • Key groups of engineers have exceptionally low unemployment rates including Mining Engineering with 1. Rest of Automotive Engineering. Electronic Engineering with 3.43%.65% compared to 1. There are important limitations to these statistics. Electrical Engineering with 2.79%). ENGINEERS AUSTRALIA 31 March 2010 Page 5 . • Only 5 groups of diploma qualified engineers (Rest of Manufacturing Engineering.05%).85% and many other groups with similar unemployment rates. Chemical Engineering.

When these statistics are compared to the stock statistics for the engineering education specialisations in Table 2.8%.3% of the intake.4% and Other Engineers. Assuming that 2008 graduates all enter the labour market in 2008-09. The survey is aimed at business entities. including Chemical Engineers were 9.6% of new engineers in the Australian labour market that year. Engineering Technologists were 7. In 2006. In the Government’s recently announced changes to skilled migration arrangements. Electrical and Electronic Engineers were 24. Mechanical and Production Engineers were 20. that employ large numbers of engineers. was higher than in any other previous year with the exception of 2007-08.8%.1% and the temporary intake of engineers. In 2008-09. since 2004-05 and 457 data Department of Immigration and Citizenship YEAR In 2008-09.204 engineers as permanent migrants. These outcomes provides a measure of the demand for engineers not satisfied by the potential supply of graduates. This compares to 5. 4.Specialised Engineering Occupations TABLE 3 IMMIGRATION OF ENGINEERS TO AUSTRALIA PERMANENT PERMANENT TOTAL TEMPORARY OVERALL OFF-SHORE ON-SHORE PERMANENT 457 VISA TOTAL 2000-01 1240 31 1271 0 0 2001-02 1140 271 1411 0 0 2002-03 1447 451 1898 0 0 2003-04 1420 952 2372 1250 3622 2004-05 1732 1800 3532 1810 5342 2005-06 2312 1629 3941 2970 6911 2006-07 1980 2140 4120 3510 7630 2007-08 2503 1909 4412 4580 8992 2008-09 2746 2458 5204 4210 9414 Source: To 2003-04 Birrell. All key engineering specialisations were represented among the permanent migration intake. Australia accepted 5. The results of the survey are consistent with the evidence discussed above. Civil Engineers were 23. both private and public sector. temporary migration is seen as an important component of how migration is expected to deal with cyclical excess demand in conjunction with employer nominations and State/Territory sponsorship under permanent migration. reflecting the economic uncertainties of the time.1% of the intake. Survey Evidence Since 2006 Engineers Australia has included a number of questions on engineering skills shortages experienced in the preceding 12 months in its annual survey of engineering salaries.2% of the intake. the significance of Australia’s dependence on migration for its engineers is highlighted.210. domestic graduations comprise 38. Mining and Materials Engineers were 7. In addition another 4. when the global economic crisis was at its height. As expected temporary migration of engineers fell in 2008-09 compared to 2007-08.914 new domestic degree qualified graduates in 2008. What is surprising is that the fall was just 8. 2007 and 2008 over 70% of business entities experienced significant problems in recruiting ENGINEERS AUSTRALIA 31 March 2010 Page 6 . Sheridan and Rapson.210 migrant engineers were admitted on temporary 457 visas.

Details can be made available. The benchmark statistics from the 2006 Population Census show that unemployment rates for most engineering specialisations were exceptionally low. Engineers Australia reiterates that support. Available evidence strongly supports the view that Australia will need to continue accepting large numbers of qualified engineers in its skilled migration programs. Domestic graduations are showing some signs of increasing. Engineers Australia believes that as well as including Civil engineering Draftspersons and Technicians on the SOL. These low rates were evident for both degree qualified and diploma qualified engineering groups. The migration intake is evenly divided between permanent and temporary visa classes and. for all major engineering specialisations this conclusion holds.Specialised Engineering Occupations engineers. but the changes that have occurred to date have only just overcome an earlier falling trend in graduations. The permanent migration intake was not affected by the global financial crisis. There are a few categories of engineers in each group that are the exceptions to this general desciption. However. Engineers Australia strongly believes that the engineering profession is most productive when engineers with different skills and competencies work in teams to complement each other. The evidence shows that there are shortages of diploma qualified engineers and degree qualified engineers. However. despite the global financial crisis. the inter-dependency that is critical to maximising engineering productivity suggests that the following occupations should be included on the SOL: • ANZSCO 3123 Electrical Engineering Draftspersons and Technicians • ANZSCO 3124 Electronic Engineering Draftspersons and Technicians ENGINEERS AUSTRALIA 31 March 2010 Page 7 . Skilled migration of engineers is an expression of strong excess demand for engineers relative to domestic supply. There has been strong growth in demand for engineers since the 2006 Population Census. However. The evidence for this is the large intakes of both permanent and temporary migrant skilled engineers since then. Engineers Australia acknowledges that the application of the concept of “specialised occupations” to the Skilled Occupations List (SOL) is a significant improvement over former arrangements. Because of this rigid application of the concept is not necessarily in the best interests of skilled independent migration. the strong intake of temporary visa engineers in 2008-09 and the comparatively small fall in this intake from 2007-08 suggests any lag in the size of the permanent intake is likely to be just as small. together with the scale of the intakes. 53% of respondents still experienced these difficulties. this concept is also partially susceptible to the market forces that determine labour market destinations. 3 Engineers Australia’s Position In Submissions responding to the discussion papers proposing changes to the former MODL and to the migration points test. Engineers Australia has supported the direction of the Government’s skilled migration programs. although a lagged effect may become evident later. indicates that on-going supplementation of domestic supply through permanent migration will be necessary for some time. This change may have been encouraged by the strong demand for engineers but is not yet sufficient for Australia’s needs. The survey considers actions taken by businesses to deal with the shortages and the consequences of engineering shortages. In 2009.

Engineers Australia believes strongly that the present statistical base for migration policy requires serious development to increase the level of objectivity possible. is an issue that requires attention. In skills development and migration. statistics to support analyses are fragmented and often based on different classification systems. There are also other problems with the surveys relating to data collection and occupational coverage. In recent years there have been important changes in the degree groups highlighted in Table 2. Finally.Specialised Engineering Occupations • • ANZSCO 3125 Mechanical Engineering Draftspersons and Technicians ANZSCO 312912 Metallurgical or Materials Technicians This proposal is consistent with the statistical arguments presented in this Submission and Engineers Australia’s views on how to maximise productivity from the engineering team. particularly as the roll out of the National Broadband Network proceeds. Engineers Australia has little confidence in DEEWR skilled vacancies surveys. The Table demonstrates the importance of definitive information at the appropriate level of disaggregation. But when disaggregated to focus on specialist Manufacturing Engineering shortages are evident. there have been changes in Maritime Engineering education including the incorporation of the Launceston Australian Maritime School into the University of Tasmania. These statistics are not an adequate substitute for ABS statistics.727 in 2001 to 1. Statistics on skilled vacancies reflect the churn that occurs in the labour market as well as genuine unfilled vacancies. This. The number of degree graduates in Electrical and Electronic Engineering has fallen sharply from 1. This group includes diploma level electrical and electronic engineers who are in short supply and communications technologies who are in over-supply. the largest group of TAFE graduates is in Electrical and Electronic Engineering which accounts for about one third of TAFE engineering graduates. This group includes the “Rest of Electrical and Electronic Engineering” and Communications Technology. If this trend continues then the circumstances of these groups may change. together with the concentration of these courses in some jurisdictions. Similarly. ENGINEERS AUSTRALIA 31 March 2010 Page 8 . Engineers Australia believes in evidence based policy design. For Example when Manufacturing Engineering and Technology is considered as a whole the unemployment rate that is produced is close to the rate for the labour force as a whole. Surveying skilled vacancies cannot provide statistics about the labour market status of engineers. The implications of this change will need to be worked through.076 in 2008. There is a similar issue in respect of TAFE graduations of chemical engineers and automotive engineers. Table 2 demonstrates that not all engineering specialisations were in short supply in the 2006 Population Census. However TAFE graduations in Manufacturing Engineering have remained relatively high.