During the course of this inquiry, the Committee received a large volume of evidence relating to the needs of regional communities in relation to migration. This chapter outlines the major issues raised in a pre COVID-19 environment.
Throughout the inquiry, the Committee was told of the deep support for migration in Australia’s regions, and the vital role migrants play in boosting population growth and supporting regional economies by filling gaps in the Australian workforce.
The Regional Australia Institute (RAI) underscored the importance of migration to regional communities, noting that over nine million people live in regional areas, and that it ‘contributes one third of total national economic output’. As such, regional Australia’s ‘future prosperity is critical to the future of the nation’.
In terms of the contribution of migrants to regional population growth, RAI stated that:
While the Census data does not identify the year of arrival of migrants, it does show that people who are born overseas and move to Australia are vital for the sustainability of regional Australia. Census figures show that, for many small towns, international migrants have been their only source of population growth.
RAI further noted that there was a shortfall in the number of international migrants settling in Australia’s regions:
Despite the importance of international migration to Australia’s population, overall only around 15 per cent of the international migrants that arrived in Australia between 2006 and 2011 settled in a regional area. Regional Australia is not getting its share of international migration and is therefore not fully benefitting from the value that migration can bring.
In its submission, RAI told the Committee that not only does migration contribute to ‘population growth’ and ‘can revitalise the local community’, it ‘is also vital for filling jobs in regional Australia’.
Additionally, RAI elaborated on how migration can assist to revitalise regional communities:
Migration has also been shown to contribute to the creation of jobs, with many studies quantifying the impact of migrants on entrepreneurship and job creation in a specific town/region as well as across Australia.
The Australian Local Government Association stated:
International migrants provide stability to communities in regional Australia by offsetting population decline and the departure of young adults, as well as being essential to meeting work force shortages. Some regional areas are already experiencing population growth and overseas-born residents are a significant, and in some cases, the only contributor to that growth. Regional migration can be a win-win scenario for new arrivals and host communities in the regions.
Wagga Wagga City Council provided an example of some of the social benefits that regional migration brings:
Wagga’s multicultural community has developed and supported highly successful events such as Fusion, which is a multicultural street festival and the region’s biggest outdoor live music festival. It combines the music, food and culture of our community. In addition to Fusion, the diverse community has helped Wagga become a more progressive society through our Refugee Week, sporting clubs, Spring Jam, and Mardi Gras events.
Broadly, the Committee received significant evidence that it was becoming difficult to employ migrants in regional areas to meet labour shortages, endangering the ability of businesses to maintain their operations. The matters raised below provide a summary of the evidence received in relation to the issues perceived as causing these difficulties.
Many of the submitters and witnesses to the inquiry were of the view that the Australian and New Zealand Standard Classification of Occupations (ANZSCO) list is currently severely out of date and requires immediate review and regular and timely updates.
For example, the Australian Chamber of Commerce and Industry (ACCI) noted that ‘one of the pillars of labour market statistical infrastructure’ is the ANZSCO, which is maintained by the Australian Bureau of Statistics (ABS). According to ACCI:
Despite major changes to the economy and jobs, including new jobs driven by technology as well as changes to the level of skill needed in certain jobs, ANZSCO has only been reviewed and revised twice (2009 and 2013) since its introduction.
Business SA echoed these concerns, stating that ‘there have been major changes to the economy and job market’ since 2013, and that ‘without regular reviews, this list will not reflect technological progress and the changing nature of jobs’.
Business SA told the Committee about how the lack of review of ANZSCO has impacted regional business:
These classifications make it hard for small businesses, especially in the regions, the effectively navigate the migration system and access the skills they need.
Both the ACCI and Business SA summarised the views of many submitters and witnesses in calling for the ABS to conduct regular reviews of ANZSCO so that changes due to technological progress and changes in the job market can be adequately reflected in the occupation lists associated with skilled migration.
Temporary Skilled Migration Income Threshold
The Temporary Skilled Migration Income Threshold (TSMIT) was another matter that was raised regularly during the course of this inquiry.
According the to Department of Home Affairs, the TSMIT is designed to ensure that overseas workers are paid no less than an Australian worker would if they did the same job in the same location. At present, the TSMIT is set at $53,900, and in order to qualify for a skilled visa, an employer must both demonstrate that an overseas worker will be paid a salary higher than the TSMIT, and in accordance with the annual market salary rate for that occupation. The Committee heard that this caused particular problems in some regional areas where some skilled jobs have salaries below $53,900.
The Government of South Australia summarised the view put by many submitters on the TSMIT:
Where an employer can’t fill a vacancy locally, nationally set conditions like the TSMIT can make it unappealing to fill the vacancy with a migrant instead. In some industries, the TSMIT substantially exceeds the highest award wage, making it expensive and unlikely that the employer will use the migration system to address the workforce shortage. This only has a deleterious effect on regional productivity.
The ACCI argued that the TSMIT should be adjusted to reflect market conditions in regional areas:
To reflect differences in the market pay and the cost of living between cities and regional Australia and to assist in minimising the difference in the market rate of pay between an overseas worker and an Australian worker doing the same role, the TSMIT as an income floor should be 10 percent lower for regional areas (defined as work outside the capital city metropolitan areas of all states and territories).
Skilling Australia Fund levy
Another issue in relation to the employment of overseas workers that was regularly raised by those who engaged with this inquiry is the Skilling Australia Fund (SAF) levy.
The SAF levy is collected by the Department of Home Affairs on submission of an application to nominate a skilled overseas worker, and costs between $1,200 and $7,200 depending on the size of the business and the length of the nomination. The SAF is administered by the Department of Education, Skills and Employment, and is designed to increase the number of apprentices and trainees.
The Regional Australia Institute noted that the costs of sponsorship of skilled workers ‘can be prohibitive for small and medium sized businesses’, and that in addition to costs such as the TSMIT and migration agent fees, paying the SAF levy at point of application ‘effectively put the possibility of sponsoring skilled workers… beyond the reach of many small regional businesses’.
Similarly, the Migration Institute argued that the levy ‘is a deterrent or financial barrier for regional employers’. It stated that ‘the negative impacts arising from the SAF levy could be significantly reduced if:
the levy is waived for regional sponsoring employers;
it is collected only once a nomination has been approved rather than on application; and
it is refunded in all cases where a nomination has not been approved.
Many other submitters agreed with the need to reform the SAF levy.
Designated Area Migration Agreements
According to the Department of Home Affairs, a Designated Area Migration Agreement (DAMA) is ‘a formal agreement between the Australian Government and a Designated Area Representative (DAR) to fill recognised labour shortages in a designated area’, and is ‘used to provide tailored solutions to regions where there are skills gaps and shortages that cannot be met by Australian workers’.
At present, there are seven DAMAs in place:
Northern Territory, with Immigration NT as the DAR;
The Goldfields, Western Australia, with the City of Kalgoorlie Boulder as the DAR;
Great South Coast, Victoria, with the Warrnambool City Council as the DAR;
Adelaide City and Regional South Australia, with Immigration SA as the DAR for both;
Orana, New South Wales, with Regional Development Australia Orana as the DAR; and
Far North Queensland, with the Cairns Chamber of Commerce as the DAR.
DAMAs can provide concessions to the standard requirements of employer sponsored skilled migration, including on issues such as the occupation and skills lists, the age requirements, salary requirements, English language thresholds, and pathways to permanent residency.
Some of the evidence received by the Committee on this issue was supportive of the flexibility provided to regional areas by the negotiation of DAMAs. For instance, the Government of South Australia stated that DAMAs ‘serve as an excellent example of how bilateral approaches to migration policy can meet regional migration needs’.
In regard to the two South Australian DAMAs specifically, the Government of South Australia told the Committee that:
They will enable South Australian employers to sponsor skilled overseas workers under the Temporary Skills Shortage visa – labour agreement stream in occupations listed in the DAMA, for positions they are unable to fill with local workers. Employers experiencing skills and labour shortages can apply to the Government of South Australia for endorsement to enter into a DAMA labour agreement with the Australian Government. This enables employers to sponsor skilled and semi-skilled overseas workers with more flexible requirements than are available via the standard skilled visa programs.
Conversely, some submitters to this inquiry noted that early feedback on DAMAs had not been uniformly positive. The ACCI summarised the views put forward by its membership:
Early feedback suggests that small and regional businesses find that DAMAs are not a silver bullet and the cost to employers is prohibitive and the process of nomination lengthy. The DAMA itself has not made the migration process simpler for the sponsoring business. Businesses often require assistance from a migration agent to navigate migration processes, which can be costly.
Similarly, Business SA noted that while it was supportive of DAMAs, they represent an ‘extreme and lengthy administrative burden for employers’, given the application process requires:
Application to Immigration SA for endorsement;
Application for a labour agreement;
Application for the nomination;
Application for the visa.
Furthermore, Business SA stated that the costs of a visa under the Adelaide DAMA ‘have been reported as high as $15,000, which is a significant cost for a small business or a business that requires multiple employees’.
The Office of the Australian Small Business and Family Enterprise Ombudsman also noted the ‘onerous and difficult’ application process for Labour Agreements under a DAMA, stating that:
The six month assessment and approval processes represent a major barrier to small businesses who are, in many cases, responsive to immediate market demand and don’t necessarily have the resources of knowledge to apply for Labour Agreements under a DAMA.
Labour Market Testing
Another matter that was regularly raised in relation to barriers to employers for sponsoring skilled overseas workers was the requirement to conduct labour market testing.
Mr Mark Glazbrook discussed labour market testing in the context of DAMAs specifically, arguing that the process of demonstrating that the position cannot be filled by an Australian could be simplified:
When the state government started going through the negotiation process to get access to the DAMA, one of the things they had to do was provide evidence of labour market requirements. That's essentially testing the market to see what occupations are in demand as part of their submission to the federal government. The second part of the application process, once there's the operational DAMA, is that a business needs to apply to the state government to get access to the DAMA process by being endorsed. That requires a business to go through labour market testing.
Mr Glazbrook stated that, despite already having been assessed twice, the labour market was then tested a third time:
Once they're endorsed and they want to nominate and lodge a visa application for someone, the same business has to go through labour market testing again. You have three stages of labour market testing that cover different stages of the application process. Surely the labour market testing is only required once to cover the whole process, or maybe less often to cover processing time frames.
However, in relation to temporary visas, Mr Glazbrook stated that labour market testing ‘is very important because it shows that someone isn’t being brought into the country to replace a local workforce’. In this regard, Mr Glazbrook argued that labour market testing is ‘important to the structure of the [migration] program’.
Business SA noted the ‘significant delays’ incurred by business in needing to ‘demonstrate that a position or positions cannot be filled locally before applying to sponsor a migrant through a temporary visa’, stating:
While Business SA is not arguing that employers should not have to justify why they need to employ a migrant worker, Governments still need to be mindful of how all the additional requirements and associated paperwork impact upon businesses, particularly small to medium sized employers and industries where it is well known that there is a shortage of workers. Business SA also notes that the 2014 Independent Review into the integrity of the subclass 457 visa recommended that labour market testing be abolished, based on its unreliability and ineffectiveness.
New regional visas
The Committee received a range of views on the new regional visa classes introduced in November 2019. These visas are:
Skilled Employer Sponsored Regional (Provisional) visa (subclass 494), which is an employer sponsored visa requiring migrants to live and work in a regional area for three years before being eligible for permanent residence; and
Skilled Work Regional (Provisional) visa (subclass 491), which is a state and territory sponsored visa which requires migrants to live and work in a regional area for three years before being eligible for permanent residence.
In addition to these measures, students on the post graduate study visa and the Working Holiday Maker visa were offered an additional year if they live and work in regional Australia.
The Australian Chamber of Commerce and Industry characterised the introduction of these visas as ‘positive’, due to the need for holders to demonstrate they have lived and worked in a regional area. Similarly, the National Farmers Federation called it a ‘constructive’ change.
The Australian Capital Territory Government told the Committee that, in relation to the subclass 491 stream specifically:
The ACT currently seeks a commitment from migrants to live in Canberra for at least two years from visa grant. It is anticipated that the requirement under the provisional subclass 491 stream to live and work in regional Australia for at least three years and Canberra’s attractive regional area offering a good lifestyle and employment prospects may encourage nominated 491 visa holders to stay.
Conversely, the Committee was also told these visa classes put regional areas at a disadvantage. The Government of South Australia noted that ‘the new regional visas eliminate any option to receive immediate permanent residency in regions, but these options are still available in Sydney, Melbourne and Brisbane’.
Others, particularly migration agents, told the Committee that some aspects of these new visas, particularly in relation to pathways to permanent residency, would potentially reduce the number of applications for specific regional visas. Mr Mark Glazbrook argued that the lack of an option that includes immediate permanent residency would act as a disincentive for potential migrants to apply. Instead, applications would be directed into other visa classes that were not specifically directed at boosting regional migration.
An issue that was also raised in relation to regional visas was the definition of ‘regional’. At the same time the new regional visas were introduced, ‘regional’ was reclassified as including anywhere in Australia outside Sydney, Melbourne and Brisbane. Witnesses from regional or rural areas with small populations raised the challenge of attracting migrants where capital cities like Perth, regional centres like Mount Gambier, and small towns like Katanning in Western Australia are all in direct competition with each other for migrants despite the vast difference in population size, amenities, services and resources.
For example, at a public hearing, Kalgoorlie Consulting Services told the Committee that:
When we’ve got skill shortages in regions like Kalgoorlie and we’re competing for our migrants with places like Perth and the Gold Coast, it is extremely hard to even attract that group of people to our communities.
Kalgoorlie Consulting Services noted that while both Perth and Kalgoorlie have skill shortages, as a smaller community, ‘two or three people in a town can make such a big difference’, and that the approach needs to be ‘more targeted’ and take community requirements into account:
We need to prove that, for these types of visas, ‘regional’ doesn’t mean you should be eligible for all the regional visas. At the moment, a regional area is targeted as open to all the regional visas – the regional [subclass] 494 and the student visa exemptions. So, perhaps rather than having a regional area and giving everybody access to all the visas, have a look at whether Perth is going to have the 494 option.
For many new migrants in regional areas, accessing employment, transport, English language tuition and other settlement services can be very challenging.
Many submissions to this inquiry raised the perceived lack of settlement services available to migrants in regional areas.
Settlement Services International (SSI) noted the variation between regions in terms of ‘settlement capacity’, which refers to the ability of a place to meet the basic housing, employment, health and education needs of migrants.
Regional migration policy at all levels is constrained by a poor understanding of relative settlement capacity in different regions. This undermines the establishment of effective national, state and local policy settings as well as preventing targeted investment to overcome barriers to settlement and retention of migrants in regional communities.
Ms Jean Phillips, a volunteer with decades of experience assisting migrants to settle in Katanning, Western Australia, told the Committee that funding for settlement services is a huge problem in some areas:
We are not a regional centre. We have the migrants and the refugees, but the funding goes to Albany or Narrogin. It has been this way for many years. It means that we do the work and that they get the funding. For example, Rainbow Coast, Albany, get the money for the migrant services office in Katanning, but even when paid help is available the staff work set hours and do not leave the building.
In her evidence, Ms Phillips and Ms Kerry Palmer, another Katanning volunteer, noted that volunteers like them worked hard to fill the gaps in availability of settlement services. By undertaking activities like assisting with English language lessons, driving new migrants to medical appointments and work, assisting with access to welfare payments, enrolling children in local schools, and a vast range of other activities, the volunteer sector in many regional areas plays a vital role in ensuring a smooth settlement process where there is an absence of government funded services.
Tatiara District Council in South Australia called for greater investment by federal and state government in ‘regional communities to support settlement and capacity building work provided by organisations like the Australian Migrant Resource Centre, local government, community groups and businesses’.
The Committee notes that the availability of suitable housing stock varies considerably from region to region. At the hearings in South Australia, the Committee heard that, particularly in smaller communities, housing availability could present a real issue.
An example of this regional variation was raised by Regional Development Australia Limestone Coast (RDALC), which stated that while housing availability was not an issue in Mount Gambier, it presents a ‘particular challenge’ across the northern region of the Limestone Coast.
Similarly, Tatiara District Council stated that housing in its council area ‘is inadequate to meet needs’. When questioned on the reason, Tatiara District Council stated that:
Because we are essentially in a small country town, so the capital gains are not the same as you would get in Adelaide or Melbourne or a larger city. That is the difficulty in attracting capital investment. The ongoing returns, of course, are a good one, but the capital gains are not there. That is why the market is not working, so it needs some sort of incentive, whether it is funding support or something else.
It proposed a state-federal partnership and community housing initiatives to develop ‘long-term affordable rentals, rent-to-buy home ownership pathways, and shared appreciation and shared equity home ownership schemes’.
Tourism Accommodation Australia raised the shortage of housing stock in some regional areas:
A factor compounding the issue of attracting a regional workforce is the shortage of long-term housing stock available. The rise of unregulated short-term accommodation through online platforms such as Airbnb and Stayz is having a negative impact on the availability of affordable housing options in regional areas. This is acutely felt during peak tourism periods when increases in unregulated short term accommodation removes stock from the long-term housing market. In popular regional destinations businesses have been forced to provide accommodation or subsidise the cost due to the lack of low cost housing options available to seasonal workers, adding to operational costs.
Tourism Accommodation Australia stated that, in their view, this issue could be addressed through the establishment of an ‘effective regulatory framework on unregulated short term accommodation’.
The Committee acknowledges that the issues discussed above and a range of other issues were raised during the course of this inquiry. In this regard, it sincerely thanks all who made submissions to this inquiry or appeared as witnesses at the public hearings, and encourages all involved to continue to advocate for the economic and social future of Australia’s varied and vibrant regional communities.
The Committee is also very grateful to those who hosted the Committee on its site visits in South Australia on 18-20 November 2019. These visits were immensely valuable to the Committee, and it was highly instructive to observe first hand the excellent work being undertaken by the business and volunteer communities in settling migrants to Australia in regional areas.
The inquiry has resulted in a large volume of excellent evidence. The range of strategies and proposals discussed in the evidence to this inquiry provide a valuable resource for anyone interested in examining issues relating to regional migration and settlement in Australia.
Given the uncertainty caused by the COVID-19 pandemic, and its associated economic and social impacts, the Committee does not seek to draw conclusions or make recommendations on the matters raised in this report. To do so at such a time would be premature.
As the public hearings were curtailed Committee members did not have the opportunity to interrogate or fully consider much of the evidence received, some of which expressed conflicting views. Some members of the Committee hold concerns regarding some of the proposals raised.
However, throughout the course of this inquiry, the issues discussed in this report were raised consistently and the current circumstances offer government an opportunity to consider whether or how these issues may be addressed in a post COVID-19 world.