Accounting may be removed from the priority list for skilled migrants, the federal Employment Department has indicated.

The department says there are now too many unemployable accounting graduates.

“Vacancy levels are now at their lowest since the (job index) began in 2006 and there is no sign of an upturn,” the department said in a submission to this year’s review of the skilled occupation list.

This list is vital to the hopes of overseas students hoping to use an Australian qualification to get a permanent residency visa as a skilled migrant.

The 2014 list is expected to be announced by the Immigration Minister this month will take effect from July 1.

Notwithstanding the advent of post-study work rights, using an accounting qualification  as a path to permanent residency was still “an important incentive” for Australian universities recruiting fee-paying students, according to Monash University academic Bob Birrell.

“Should accounting be removed from the skilled occupation list, it’s likely to have a significant impact on enrolments and will probably arrest the pick-up that we’ve seen in the past year or so,” he said.

In 2012, overseas students made up 61 per cent of the total student load in accounting. Submissions to the 2014 review of the skilled occupation list are yet to be made public.

A joint submission on the skilled occupation list from CPA Australia and the Institute of Chartered Accountants Australia is at odds with the department’s assessment.

“Labour market conditions for accountants are tight and getting tighter,” the accounting bodies’ submission says.

“Accountants are projected to rank amongst the most highly sought after occupations over the short, medium and longer term. The labour market outcomes for migrants are positive.”

But the Employment Department said there was a serious mismatch between graduates and the jobs available.

“There are around 34 applicants per vacancy, on average, who hold accounting qualifications but are regarded by employers as being unsuitable,” the department’s submission says.

Employers have complained of former overseas students whose English and communication skills are reportedly not up to scratch.

The Employment Department said there were 62 per cent fewer job ads for accountants in the year to October 2013 than in the year to July 2008.