skilled occupation list 2012 - updated

SKILLED OCCUPATION LIST 2012 UPDATE

Comments by Engineers Australia

9 December 2011

Contact: Andre Kaspura Policy Analyst, International & National Policy, Engineers Australia

11 National Circuit Barton ACT 2600 Tel: 02 6270 6581

Email: [email protected] www.engineersaustralia.org.au

Skills Australia 2012 SOL Update

ENGINEERS AUSTRALIA 9 December 2011 Page 1

1. Introduction Engineers Australia is the peak body for engineering practitioners in Australia, representing all disciplines and branches of engineering. Membership is now approximately 96,000 Australia wide and Engineers Australia is the largest and most diverse professional engineering association in Australia. All Engineers Australia members are bound by a common commitment to promote engineering and to facilitate its practice for the common good. Engineers Australia represents engineering practitioners in all industries and in an extraordinary range of occupations throughout Australia. Engineers Australia believes that the pro-forma approach used by Skills Australia for the 2012 update to the Skilled Occupation List (SOL) takes an unduly narrow approach to engineering and engineering occupations that does not adequately recognize the characteristics of engineering and the progression of engineers through different occupations in typical career paths. Engineers Australia believes that the engineering labour market in Australia remains very tight despite record levels of skilled migration in recent years. Time series statistics from the ABS Education and Work surveys show that although the global financial crisis eased the engineering labour market, this was a temporary stay and since this disruption the engineering labour market has resumed the pre-crisis trend. When evaluating this view it is important to bear in mind that during the worst of the crisis engineering unemployment remained very low at a time when immigration was at its highest in a decade. Although there has been some improvement in the numbers of domestic students commencing engineering courses, there has not yet been a discernible impact on course completions. In time there will be an impact, but given prevailing retention and attrition rates, this is likely to be marginal given recent levels of skilled migration. Engineers Australia believes these circumstances indicate that no changes in engineering occupations on the SOL are warranted for 2012. Engineers Australia has completed the submission proforma provided but has found it unduly limiting. Accordingly, Engineers Australia has set out supplementary comments in this submission using the questions in the proforma as headings.

2. Are there occupations that you represent where there is evidence of imbalances in the demand for and supply of skills in the medium to long term?

These conditions have been characteristic for engineering over the past decade. Since 2001, the average annual growth in the demand for engineers has been 4.8% per annum exactly matching the average annual growth in the supply of engineers1. Through much of this period, the unemployment rate for engineers was well below the unemployment rate in the Australian labour force overall and consistent with rates generally regarded as by economists as “frictional unemployment”. In addition, the labour force participation rate for engineers was substantially higher than for the economy overall and much higher than for non-engineering skills requiring equivalent educational qualifications as in engineering. The key point is that skilled migration was essential in achieving the labour market balance; without it there is a severe imbalance. 1 See Engineers Australia, The Engineering Labour Force, 2001 to 2010, 2010, www.engineersaustralia.org.au

http://www.engineersaustralia.org.au/



The impact of the global financial crisis (GFC) increased engineering unemployment from a low of 2.4% in 2008 to 4.1% the following year. The engineering unemployment rate has since fallen and is expected to resume the downwards trend evident before 2008 as government infrastructure investment gathers pace and with the continuation of the minerals boom and the preparatory and infrastructure work associated with it. Although the GFC disrupted the engineering labour market, unemployment remained well below the levels experienced in the economy overall and demand continued to grow. The changes described occurred during a decade when there was unprecedented growth in skilled immigration of engineers. The increase in the engineering unemployment rate immediately after the GFC occurred when permanent migration of engineers was at record high levels and before employers adjusted their employment of engineers on temporary 457 visas. Indeed, during 2009 and 2010, the growth in permanent migration of engineers was sufficiently large to offset the reduction in 457 visa employment and in both years the overall immigration of (permanent and temporary) engineers was at record levels. This situation demonstrates the fundamental reason why the current engineering occupations on the SOL should remain unchanged. There was persistent and high demand for engineers over the decade, and even though there was extraordinary growth in the immigration of engineers, the supply of engineers just maintained pace with demand. The underlying factor is that Australia’s education system is not supplying sufficient engineers to meet demand. Engineers Australia believes that the present level of domestic completions of four year and three year bachelors level degrees in engineering and advanced diplomas and diplomas in engineering could sustain growth in the demand for engineers of about 9,000 per year. This figure includes professional engineers, engineering technologists and engineering officers. However, demand growth has averaged over 13,000 per year and has been significantly higher in many years; as high as 22,000. Engineers Australia believes that there is a persistent misalignment between the demand for engineers in Australia and the capacity of educational institutions to supply new graduates to meet this demand. Although, the combination of additional places in engineering and the more recent shift to demand driven places in universities has increased commencements in entry level engineering courses, these changes have not yet materialised in an increase in completions. Even when this occurs, taking into account historical retention and attrition rates, the increase in completions is likely to be marginal and insufficient to make a substantive difference to the demand-supply gap. Growing Australia’s domestic supply of engineers is a challenge for the very long term and while strong demand conditions persist, continued reliance on immigration is essential. The comments made above relate to the engineering labour force whereas the SOL relates to particular occupations within the engineering labour force. Statistics at this level of disaggregation, particularly time series statistics, are not available from official sources in Australia. Engineers Australia’s approach is to consider statistics that are available to build circumstantial evidence. The demand for and supply of engineers is multi-dimensional; demand and supply may relate to different engineering specialisations, to different levels of skill and work experience and/or to different geographic locations.



Table 1 shows key statistics relating to the geographic distribution of the engineering labour force. These statistics confirm that the unemployment rate (or un-utilised engineering resources) was low in all jurisdictions in the 2006 census.

Table 1: The engineering labour force, geographic distribution of key parameters

State orTerritory Men Women Total Men Women Total Men Women Total

NSW 30.7 3.7 34.4 3.0 5.5 3.3 82.5 74.3 81.6Victoria 24.6 3.1 27.7 3.2 5.4 3.5 82.6 74.9 81.6

Queensland 15.3 1.3 16.6 2.0 4.3 2.2 82.3 75.3 81.7WA 10.0 0.9 11.0 1.8 3.9 2.0 84.8 74.5 83.8SA 5.8 0.5 6.2 3.0 6.5 3.3 80.1 70.8 79.3

Tasmania 1.3 0.1 1.4 2.7 5.3 2.9 74.4 65.8 73.8NT 0.7 0.1 0.8 0.9 0.0 0.8 92.5 80.3 91.5

ACT 1.7 0.2 1.9 1.7 4.9 2.0 81.4 76.9 80.9Australia 90.2* 9.8* 100.0 2.7 5.2 2.9 82.7 74.8 81.9

Source: ABS, 2006 Population Census Tablebuilder* Other territories included in the total but not shown separately

Share of LF (%) Unemployment rate (%) Participation rate (%)

Since 2006, Engineers Australia has included several questions relating to skills shortages and attendant recruiting difficulties in its annual engineering salaries survey. The results of these surveys have been consistent with official statistics on the engineering labour market as shown in Figure 1.

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Figure 1: The proportion of respondents that experienced difficulties recruiting engineers in the past 12 months

Figure 1 shows that the engineering unemployment rate tracks very closely with the proportion of employers experiencing difficulties recruiting engineers. It shows that in the lead up to the GFC, over 70% of employers experienced engineering recruiting difficulties. In the depths of the GFC



over half of all respondents were still experiencing these difficulties. Since then this proportion has started to increase once more as the engineering unemployment rate has fallen.

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Figure 2 provides the connection between the census results in Table 1 and contemporary circumstances; it shows that there is a broad distribution of engineering skills shortages across jurisdictions. Shortages are particularly acute in the resource States of WA and Queensland but are almost as acute in NSW with Victoria and SA not far behind.

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Figure 3: Engineering specialisations and difficulties recruiting engineers

Civil Structural Electrical Mechanical Chemical Electronic, IT, etc Environmental Mining



Table 2: Unemployment rates for engineering specialisations in the census

Specialisation Degree Diploma All LF Share qualified qualified qualifications (%)

Engineering & RelatedTechnologies NFD 2.5 2.6 2.6 42.5

Manufacturing Engineering 4.4 4.8 4.5 0.6Rest of Manufacturing Engineering 4.7 5.4 5.3 1.6

Chemical Engineering 3.1 6.6 3.3 2.3Mining Engineering 1.8 1.7 1.8 1.6

Materials Engineering 3.1 2.4 2.9 1.8Rest of Process & Resource Engineering 4.0 3.2 3.6 1.4

Automotive Engineering 4.9 2.2 2.7 0.1Rest of Automotive Engineering 0.0 5.5 5.5 0.1

Mechanical Engineering 3.1 2.9 3.0 7.4Industrial Engineering 5.1 3.4 4.5 0.5

Rest of Mechanical & Industrial Engineering 4.8 4.5 4.5 0.3Construction Engineering 3.7 0.0 3.7 0.2

Structural Engineering 2.7 3.3 2.9 0.5Building Services Engineering 0.0 0.0 0.0 0.0Water & Sanitary Engineering 0.0 0.0 0.0 0.0

Transport Engineering 3.7 0.0 3.7 0.1Geotechnical Engineering 2.4 0.0 2.4 0.1

Ocean Engineering 0.0 0.0 0.0 0.0Rest of Civil Engineering 2.5 2.3 2.4 8.1

Electrical Engineering 3.1 2.5 2.9 7.0Electronic Engineering 4.1 3.3 3.7 2.8Computer Engineering 4.3 7.3 4.8 1.5

Communications Technologies 6.5 3.5 5.1 2.2Rest of Electrical & Electronic Engineering 5.6 2.9 3.6 8.6

Aerospace Engineering 2.2 2.4 2.2 0.6Aircraft Maintenance Engineering 0.0 2.3 2.3 0.6

Aircraft Operations 3.1 2.9 2.9 3.5Rest of Aerospace Engineering .. 0.7 1.2 0.2

Maritime Engineering 5.4 2.3 2.9 0.6Rest of Maritime Engineering 3.3 3.7 3.6 1.4Environmental Engineering 3.8 6.1 3.9 0.4

Biomedical Engineering 4.6 0.0 4.3 0.2Rest of Other Engineering 4.6 1.2 2.4 0.9

All specialisations 3.0 2.9 2.9 100.0Source: ABS, 2006 Population Census Tablebuilder

Table 2 shows that except for a small handful of engineering disciplines, low unemployment rates (low levels of un-utilised resources) were characteristic of a wide spectrum of disciplines, including those on the SOL. Figure 3 shows that the broad pattern of discipline related recruiting difficulties remains very similar to that prevailing in 2006. Finally, Figure 4 shows that the most acute recruiting difficulties have been experienced in respect to engineer level 3 and level 4. Engineers at level 3 typically have 14 to 18 years of experience in engineering practice depending on whether employment is in the private or public sectors and engineers level 4 typically have 22 to 24 years of experience in engineering practice depending on sector.



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Figure 4: Engineering levels and difficulties recruiting engineersLevel 1 Level 2 Level 3 Level 4 Level 5

The points test for Australia’s skilled migration program has been amended to provide points recognising Australian and overseas work experience thus offsetting the previous bias in favour of relatively young and inexperienced engineers. However, there is more that needs to be done in this area. This section has substantiated the view that there are widespread specialisation, experience level and locational imbalances in the Australian engineering labour market. Australia’s domestic production of engineers is insufficient to cater for recent and expected levels of demand. Even with record levels of immigration and in the midst of the GFC, these imbalances persisted. This evidence supports the continuation on the SOL of existing engineering occupations.

3. Is there evidence of non-metropolitan imbalances in the demand for and supply of skills in the medium to long term?

Table 3 provides background statistics relevant to this question. The Table shows the distribution of the engineering labour force between Australian jurisdictions, between major and other urban areas in a jurisdiction and the remainder of the jurisdiction and shows the unemployment rates in each of these areas as a measure of un-utilised engineering resources. The distribution of the engineering labour force substantially reflects the distribution of Australian settlement. In most jurisdictions there is a heavy concentration of the engineering labour force in major urban areas with relatively small shares located in smaller urban areas and the remainder (largely rural and remote) parts of the jurisdiction. The main departures from this pattern are Tasmania which has a relatively even distribution of its engineers and Queensland and WA which have much higher shares of their engineering labour forces located in smaller urban areas.



Table 3: The distribution of the engineering labour force throughout Australia and associated skills utilisation

Jurisdiction State LF as % of Australia Location % of State labour force Unemployment rate (%)NSW 34.4 Major urban 85.4 3.3

Other urban 9.3 2.6Rest of State 5.3 3.1

Victoria 27.7 Major urban 85.7 3.6Other urban 8.8 2.5Rest of State 5.5 2.6

Queensland 16.6 Major urban 74.7 2.3Other urban 16.1 1.6Rest of State 9.2 2.4

WA 11.0 Major urban 78.7 2.1Other urban 15.6 1.5Rest of State 5.7 2.3

SA 6.2 Major urban 82.3 3.5Other urban 10.1 2.0Rest of State 7.7 2.8

Tasmania 1.4 Major urban 35.7 3.0Other urban 39.0 2.9Rest of State 25.3 2.7

NT 0.8 Urban 92.7 0.7Rest of State 7.3 4.3

ACT 1.9 Major urban 99.4 2.0Rest of State 0.6 0.0

Source: Derived from ABS, 2006 Population Census TableBuilder The key point here is not the distribution of engineers but rather the high utilisation of engineering resources (low unemployment rates) throughout Australia irrespective of location. While it was the case that unemployment rates in the resource States of WA and Queensland were lower than elsewhere, unemployment rates were very low across the board. Drawing on the evidence discussed above, since the Census the unemployment rates in Table 3 will have moved in line with the influence of the GFC and the subsequent recovery and in line with government and private sector infrastructure announcements. Engineers Australia believes the exceptionally tight engineering labour market shown in Table 3 is indicative of the present with the greatest pressures being felt in resource States and jurisdictions with robust infrastructure activity.

4. Are there any occupations which require formal licencing or registration arrangements in order to practice/perform in their occupation?

At present there is no uniform regulatory system covering engineers in Australia. Engineering services are regulated by a number of different Acts, regulations, by-laws and orders-in-council. Many of these relate to the building and construction industry. The only jurisdiction where engineers must be registered to provide professional engineering services unsupervised is Queensland. Unless an engineer in Queensland is formally registered, the only way they can provide engineering services is under the supervision of a registered engineer.



To be registered in Queensland an engineer must demonstrate what are known as Stage 2 competencies. Completion of an accredited course in engineering in Australia demonstrates that an individual has met Stage 1 competencies. Stage 2 competencies require that an individual demonstrates that as well as having completed an accredited course in engineering, they have acquired the necessary work experiences, professional competences and continuing professional development to practice engineering unsupervised. The Queensland system is a co-regulated one in which the Queensland Government is responsible for legislation and its administration, including disciplinary action as appropriate and professional associations, primarily Engineers Australia, assess the educational qualifications and professional competence of individuals seeking registration. Engineers Australia accredits university courses in engineering in Australia in line with competencies agreed in international accords that are audited every five years. The accreditation process is now being extended to registered training providers. Engineers Australia has advocated formal registration of engineers in line with the Queensland arrangements for many years. In the absence of uniform registration of engineers in Australia, Engineers Australia, in concert with Consult Australia, the Institute of Public Work Engineers, Australia and APESMA, supervises the operation of the National Engineering Registration Board (NERB). This arrangement provides for members of Engineers Australia and non-members to demonstrate the necessary professional competences to practice engineering unsupervised and to communicate this to the general public through their inclusion on the register. Within Engineers Australia, members demonstrate that they have acquired the necessary standards of professional competence by becoming Chartered Engineers. Engineers Australia provides the facilities and the means to enable its members to acquire this status. Members who do so qualify for registration in Queensland and for inclusion on the register of the NERB. Non-members of Engineers Australia can acquire this status by using the facilities of the NERB to demonstrate professional competence. So far as skilled migration is concerned, Engineers Australia is the relevant assessment authority for nearly all the engineering occupations on the SOL. The assessments conducted of the qualifications of potential skilled migrants are Stage 1 assessments, that is, qualifications are assessed in line with the competencies used to accredit Australian engineering courses. Under the revised points test, points are awarded to recognise Australian and overseas work experience and Engineers Australia has extended its assessments of qualifications to now include assessment of work experience for the purpose of the work test. This assessment is not equivalent to a Stage 2 competency assessment and the two should not be confused. Even though a prospective skilled migrant has extensive work experience, once in Australia the individual concerned will need to satisfy Stage 2 competency to become Chartered if a member of Engineers Australia, or if a non-member to register with the NERB. Both routes are voluntary. In Queensland, to practice engineering unsupervised, registration is mandatory and to be registered Stage 2 competency is also mandatory. Professional registration is on the COAG Reform agenda and Engineers Australia continues to strongly advocate for a uniform system of co-regulation, similar to the Queensland system, for Australia.



5. Is your employment sector expected to be impacted by any medium to long term trends which will impact upon demand and/or supply?

See the remarks in the previous section of the registration of engineers providing unsupervised engineering services.

6. Are there any occupations in new and emerging areas within engineering that are not currently captured adequately by ANZSCO?

An emerging area of engineering likely to become important over the medium term is mechatronics engineering. Mechatronic engineering is a multi-disciplinary field that combines mechanical engineering, electronic engineering, computer and software engineering and control and systems design engineering. Mechatronic engineers design and build automatic and intelligent systems to monitor the operations and integrity of plant that operate all year round. All modern aircraft, cars and appliances rely on mechatronics. Engineers Australia believes that mechatronic engineering is becoming increasingly important and demand for them will grow with the development of the digital age. Australia has several accredited courses in mechatronic engineers but domestic production of graduates, as is the case in engineering generally, is insufficient. At present mechatronic engineering is covered by ANZSCO 233999 engineering professionals nec, together with other engineers that are not grouped elsewhere. Engineers Australia believes that mechatronic engineering should be allocated its own ANZSCO code and considered for inclusion in the SOL.

skilled occupation list 2012 - updated

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