The Australian Productivity Commission has today released a report that recommends significant changes to the country’s skilled migration system. The report proposes several amendments to the design of temporary and permanent skilled migration visa programs to improve the composition of the migrant intake and increase the productivity and well-being of the country.
The proposed changes aim to improve job matching and the lifetime fiscal outcomes of migration, which could result in a positive productivity dividend in the medium term. The current skilled migration system already provides a positive productivity impact, but the Commission believes that its suite of reforms would further enhance this.
The Commission has suggested several specific actions that the Australian Government should take to improve the skilled migration system.
Firstly, they recommend abolishing the Business Innovation & Investment visa program and facilitating temporary migration for individuals with genuine plans to start a business in Australia. They suggest pathways to permanent residency should be based on a revised Skilled Independent visa that is evaluated based on a points test that better accounts for income levels and age.
The Commission also proposes removing current list-based restrictions for employer-sponsored temporary and permanent skilled visas and setting an income threshold well above the Temporary Skilled Migration Income Threshold (TSMIT) rate. The report outlines income threshold for the employer-sponsored permanent visa should increase with age, and at a certain older age, individuals would no longer be eligible for this visa.
In addition, the Commission recommends removing current list-based restrictions for the Skilled Independent visa and awarding additional points for ongoing employment in Australia according to income level, with different income benchmarks for different age groups. They suggest that the points system should be updated regularly based on research, with points being awarded for factors associated with fiscal and employment benefits.
The Commission also suggests introducing a pilot of a special permanent visa subclass for occupations in human services sectors that are largely funded by the government, such as aged and disability care. Recommending the pilot should only be implemented if these sectors are facing significant and enduring labour shortages that are weakly responsive to wage increases. Further, the visa subclass should be subject to the current TSMIT and require that the applicant remain employed in the relevant sector for four years.
Other proposals include amending settings for temporary skilled migration to increase their duration to six years, increasing the duration of stay for graduate visa holders with Bachelor and higher-level degrees to five years subject to proof of ongoing employment above a set wage threshold, and amending settings for employer-sponsored temporary and permanent visas to allow workers to switch employer sponsors, including a short period of unemployment to look for a new sponsor.
Overall, the proposed changes would be complex and far-reaching, requiring extensive consultation and management of system integrity risks. Determination of age and income cutoff points in skilled visas and further development of the points-based system would also be required. However, if implemented successfully, the changes could result in a more targeted skilled migration system that better aligns with Australia’s economic needs and improves the overall well-being of migrants and the country.
The report acknowledges the complexity of these reforms but argues that they are necessary to improve the productivity and well-being of both migrants and Australian citizens.
It will be interesting to see if these recommendations, or similar, will also appear in the final report of the current ongoing inquiry ‘A Migration System for Australia’s Future .’ That remains to be seen, along with if any of the Productivity Commission’s recommendations are to be adopted by Government.
What is certain though, is change is yet again on the horizon for Australia’s migration program.