More permanent qualified visas are a big deal. The government is moving in the right direction
The migration did not evaluate a mention in Treasurer Josh Frydenberg’s budget speech. But the increase in permanent skilled intake in Australia that Home Secretary Alex Hawke announced on budget night is a big problem, and one that will make things better for Australians.
The government is changing the makeup of the permanent admission of skilled migrants to Australia for 2022-2023, returning to visas with a history of selecting the youngest migrants best placed to succeed in Australia. At the same time, the total number of qualified visas on offer will rise to 109,900, about 30,000 more than the 2021-22 planning levels.
Like the 2021 report of the Grattan Institute Rethinking permanent skilled migration shown, people who obtain a permanent skilled visa for Australia typically live and work here for many decades. This means that political decisions affecting who gets a visa first can have cumulative effects over many years.
But more changes are still needed to fix Australia’s migration agenda, including scrapping some visa programs that don’t make economic sense and simplifying the sponsorship process for businesses and migrants.
There is a big increase in skilled worker visas
The number of skilled worker visas – awarded through employer sponsorship or points testing – rises to 91,652 in 2022-23, from 50,900 this fiscal year.
This stems both from the increase in the number of visas and from the change in composition described above. Employer sponsorship will increase by 8,000 for a total of 30,000 permanent skilled visas, and the points-tested Skilled Independent category has tripled to 16,652 visas.
Migrants selected under these programs are highly skilled and generally earn higher incomes than Australians of the same age.
They also generate a much greater economic benefit for the Australian community. For example, Treasury estimates top employer-sponsored permanent visa holders pay $557,000 more in taxes than they receive in public services and benefits over their lifetime. Top independent qualified visa holders are paying $386,000 more in taxes than they can expect to receive in return.
Business investment visas reduced
Australia’s “buy a visa” program, the poorly functioning Business Innovation and Investment Program (BIIP), has been cut from 13,500 visas to 9,500. It should be abolished.
Few investors finance projects that would not otherwise materialize. Few offer a keen sense of entrepreneurship that will benefit the Australian community, as they tend to be less skilled and speak little English.
Research from the Grattan Institute shows that people who get this visa are older and earn significantly less than other skilled migrants.
Treasury research published in December 2021 showed that each primary visa holder costs Australian taxpayers an average of $117,000 over their lifetime in Australia, due to them paying less tax than their levy on government services and benefits .
The government’s decision to cut the Business Innovation and Investment Program and reallocate places elsewhere will potentially save taxpayers about $1 billion on this year’s inflow alone. This is a valuable gain for a government grappling with the long-term costs of the pandemic and an aging population.
The reduced Global Talent Program
The Global Talent visa program for highly skilled professionals has also been reduced from 15,000 to 8,448 places.
Attracting global talent is a laudable goal, but the mechanisms used to select migrants for the program remain untested. There are few rules – candidates don’t need a sponsoring employer or a firm salary offer – and the rules that do exist are often arbitrary and difficult to administer. We don’t know who is selected or what their earnings are.
Until a more solid assessment is conducted, reducing this visa is a good idea.
What the government should do next
The federal government has committed to reviewing the lists of occupations that dictate the jobs eligible for skilled migration visas. He should just scrap them. These lists of professions are cumbersome, vulnerable to lobbying and ineffective.
Instead, employers should be subject to a $70,000 wage threshold for sponsor workers on a temporary visa and $80,000 to sponsor workers permanent visa. Sponsored workers should be paid the equivalent of what Australian workers are paid, to prevent wages from being undermined.
Read more: It’s time for Australia to abandon its bureaucratic list-based approach to temporary work visas
These changes would better target visas to people with the most valuable skills and simplify the sponsorship process for businesses and migrants.
Point-based visaswhich assess potential migrants on the basis of their age, qualifications, skills and English proficiency, should be subject to independent review to ensure they prioritize younger workers and more qualified.
Points should only be awarded to characteristics that suggest a candidate will be successful in Australia. Although state- and regional-nominated visa holders do better than investors, they still earn significantly lower incomes than employer-sponsored or self-employed visa holders.
Australian migration policy debates tend to focus too much on the size of admission, and not enough on who we choose. But while it may not have grabbed the headlines on budget night, our skilled migration program just took a big turn for the better.