On 3 February 2021, the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs, the Hon Alex Hawke MP, referred an inquiry into Australia’s skilled migration program to the Committee.
The terms of reference included consideration of both short-term and long-term matters relating to skilled migration in Australia. The Committee decided to produce an interim report on the short-term considerations relating to Australia’s skilled migration program.
The Committee has not yet completed gathering evidence for this inquiry, and will present a final report to the Parliament once the process of gathering evidence is completed.
This interim report focuses on the following terms of reference:
The purpose of the skilled migration program and whether it is meeting its intended objectives, including:
If any immediate adjustments are necessary in the context of the future of work and pandemic recovery; and
Australia’s international competitiveness in attracting entrepreneurs, venture capital, start-ups, and the best and brightest migrants with cutting edge skills.
Skilled migrants in Australia
The Department of Home Affairs (Home Affairs) outlined the impact of the COVID-19 pandemic on Australia’s migration program:
COVID-19 has significantly impacted migration to Australia due to international travel restrictions, weaker labour markets domestically and globally and disruption to supporting services (such as English Language testing, biometrics, health and character checks).
One aspect of this impact is a reduction in the number of temporary visa holders in Australia. Home Affairs stated that:
Overall, if we look at temporary visa holders in Australia, the figure on 20 March 2020 was just short of 2.3 million, and the figure as at 14 February  is just short of 1.8 million, so there was a reduction of just over 500,000 in that period.
Of those temporary visa holders remaining in Australia, New Zealanders comprise a large portion, 658,000 out of 1.77 million. Additionally, of those who left due to the onset of the COVID-19 pandemic, New Zealanders were the least affected, with only a 2.7 per cent reduction in New Zealand visa holders resident in Australia.
According to Home Affairs, while the future of the migration program is difficult to forecast, Australia is well positioned as a migration destination as its response to the pandemic has been viewed positively:
This presents an opportunity for elements of Australia’s skilled migration program to proactively attract entrepreneurs and startups as well as exceptionally talented individuals and high yield companies that will make a significant contribution to Australia.
Home Affairs outlined that the 2020-21 Migration Program skilled migrant stream:
… has been set at 79,600 places for skilled migrants, prioritising visa cohorts with medical and other skills to support the pandemic response, and that drive economic growth and investment, and provide critical skills to support recovery. The three priority categories within the skill steam for 2020-21 are the:
Business Innovation and Investment Program (13,500 places);
Global Talent Program (15,000 places); and
Employer Sponsored Program (22,000 places).
Available visa classes
Employer Sponsored Visas (or employer nominated visas) are available for when employers are unable to source Australian citizens or permanent residents to fill workplace vacancies. Potential sponsors are required to meet a series of prerequisites to ensure that overseas workers complement, rather than displace, the local Australian workforce.
There are two distinct visa categories within the Employer Sponsored Visas:
Temporary Skill Shortage (TSS) visa (subclass 482), which permits employers to seek sponsorship of an overseas worker for a period between one to four years in a specific occupation for a specific employer. However, it is necessary to note that in many cases workers within the medical profession are exempt from working for a specific employer.
Employer Nominated Scheme (subclass 186), which permits employers to seek sponsorship of overseas workers to live and work on a permanent basis in Australia, in addition to facilitating the transition process from a TSS visa (subclass 482) to a subclass 186 on a permanent basis.
The TSS visa (subclass 482) has a lower cost, has a visa validity of up to 5 years depending on the stream, no age requirement and a different level of English proficiency. The ENS (subclass 186) has a higher cost, is for a permanent visa, has an age requirement of up to 45 years (unless exempt) and the English language requirement is at least competent.
The Skilled Employer Sponsored Regional (Provisional) visa (subclass 494) permits employers in designated regional locations to seek sponsorship of a skilled overseas worker for a period of five years to address known labour shortages.
Regional employers are required to seek workers in occupations that are listed on the skilled occupation list, or through a labour agreement with the Australian Government.
Skilled migrants who have held the Provisional visa (subclass 494) for two years and worked on a full-time basis for at least 12 months in a specific regional location are eligible to apply for the Skilled Regional visa (subclass 887). Subclass 887 allows successful applicants to permanently reside in Australia.
In November 2020, subclass 494 visa holders became eligible for permanent residence under the Permanent Residence (Skilled Regional) visa (subclass 191), where a skilled worker can provide proof of residence in a designated regional location for at least three years and have a taxable income above a specific threshold.
The Skilled Independent visa (subclass 189) is a permanent visa for workers who pass or satisfy the skilled migration points test, and have been subsequently invited to submit an expression of interest for subclass 189.
New Zealanders who hold a New Zealand Special Category visa (subclass 444) that have been living in Australia for at least five years and arrived before February 2016 are able to transition to subclass 189.
According to Home Affairs, the points test assesses the eligibility of a skilled worker based on the following criteria:
Skilled employment experience;
Specialist education qualification;
Study in an Australian educational institution;
Completion of a professional year in Australia;
Holding [a] recognised qualification in a credentialed language community;
Spending time studying in regional Australia; and
The skill qualifications, age and English language abilities of the applicant’s partner.
State and Territory nominations for skilled migrants
There are three visa types which allow state and territory nominations for skilled migrants:
Skilled Work Regional (Provisional) visa (subclass 491);
Business Innovation and Investment Program (BIIP); and
Skilled Nominated visa (subclass 190).
The allocation and distribution of the three visas across each of the states can be found in Table 1.1:
Source: Migration Program Planning Levels, Department of Home Affairs website, <https://immi.homeaffairs.gov.au/what-we-do/migration-program-planning-levels> accessed 4 March 2021.
The Skilled Nominated visa (subclass 190) is categorised as a permanent visa which permits successful applicants to live, work and study in Australia on a permanent basis. Applicants are required to submit an expression of interest to apply for the program following the receipt and confirmation of nomination from a state or territory government.
Similar to the Skilled Independent visa (subclass 189), applicants must satisfy the skilled points tests, meet the necessary English language proficiency standards and fulfil skills, health and character checks.
The Skilled Work Regional (Provisional) visa (subclass 491) permits state or territory-sponsored overseas workers to reside and work in a designated regional location for a period of five years. Subclass 491 also allows workers to submit an application for permanent residency after holding this visa and living and working in a designated regional location for at least three years.
The Business Innovation and Investment (Provisional) visa (subclass 188) enables successful applicants to conduct and engage in business and investment-related activity in Australia. Applicants are required to submit an expression of interest to apply for the program following the receipt and confirmation of a nomination from a state or territory government.
There are five streams within the Business Innovation and Investment (Provisional) program:
Business innovation stream, for applicants with a net total of $800,000 in personal and business assets, who intend to operate a new or existing business in Australia and are nominated by a state or territory;
Investor stream, for applicants who intend to invest $1.5 million and are nominated by a state or territory;
Significant investor stream, for applicants investing $5 million for at least four year[s], who are nominated by a state, territory or Austrade;
Premium investor stream, for applicants investing at least $15 million for the life of the visa, who are nominated by Austrade; and
Entrepreneur stream, for applicants who have a funding agreement for at least $200,000 with a third party to carry out entrepreneurial activity in Australia.
Furthermore, the Business Innovation and Investment (Permanent) Visa (subclass 888) is made available for workers already under the provisional (subclass 188) stream who satisfy a series of investment, business and entrepreneurial requirements.
The third and final visa category under the Business Innovation and Investment Program is labelled the Business Talent (Permanent) visa (subclass 132) which includes:
Significant Business History stream, for applicants with:
A net value of at least $1.5 million;
An annual business turnover of at least $3 million;
Total net assets of at least $400,000 as the ownership of one or more qualifying businesses;
And have been nominated by a state or territory government; and
Venture Capital Entrepreneur stream, for applicants who have funding of at least $1 million from an Australian venture capital firm, and who have been nominated by a state or territory government.
The Premium Investor, Significant Business History and Venture Capital Entrepreneur visas will be closed to new applications from 1 July 2021.
Global Talent Program
The Global Talent Program is designed to target individuals with specialised and exceptional skills within growth industries.
Within the Global Talent Program, there is a Distinguished Talent visa category (subclass 858) which seeks to attract individuals with an international calibre and a globally recognised record of exceptional and outstanding achievement in a specific profession – such as in the arts, sports, academia and research areas.
The Distinguished Talent visa targets an additional seven critical sectors:
Space and advanced manufacturing;
Energy and mining technology;
Advanced digital, data science and Information Communication Technology.
Applicants for the Distinguished Talent visa (subclass 858) are required to submit proof of evidence that they are internationally recognised and have outstanding achievement in their fields. Applicants are required to be nominated by an individual or organisation in Australia within their fields of expertise.
Individuals who wish to apply for the Global Talent Visa Program are required to:
prove they are internationally recognised with evidence of outstanding achievements
still be prominent in their field of expertise
provide evidence that they would be an asset to Australia, in their area of expertise
have no difficulty obtaining employment in Australia or becoming established in their field
have a recognised organisation or individual in Australia nominate them as global talent, in the same field as the applicant.
There is also the requirement to meet a high standard and demonstrate ‘an exceptional track record of professional achievement’. Places are also available to PhD graduates, and certain PhD students.
Candidates should also have the ability to attract a salary at or above the Fair Work high income threshold of $153,600.
Successful Global Talent visa applicants receive permanent residency.
Since the inception of the Global Talent Program in 2019, 4,309 visas were granted out of a total of 5,200 places in the first year.
Skills shortages attributed to border closures
The COVID-19 pandemic caused border restrictions to be implemented as a control and containment measure to halt the virus’ spread. These measures impacted the ability of Australia’s skilled migration program to operate at its full potential.
Over the past 12 months, the unprecedented impact of international and state and territory border closures in Australia has created major concerns as existing skills shortages across many industries were exacerbated and new shortages emerged.
According to Home Affairs, COVID-19’s impact on the delivery of the 2019-20 Migration Program, including the aftermath of travel bans, limited the arrival of both temporary and permanent migrants to Australia. Visa processing was affected by the limited capacity with which clients or applicants were able to participate in necessary health checks and English language proficiency assessments.
Consistent with Home Affairs findings, the Australian Bureau of Statistics (ABS), in their latest release titled ‘Overseas Arrivals and Departures, Australia’ demonstrated that short-term arrivals in Australia were down 80.7 per cent on the previous year, with 7.6 million fewer arrivals.
Australia has had a series of migration projections which have been significantly altered as a result of the COVID-19 pandemic.
The Productivity Commission in 2016 projected that Gross Domestic Product (GDP) per person in accordance with the ‘business as usual’ migration scenario to be 7 per cent higher in the year 2060 in comparison to the zero Net Overseas Migration Model (NOM) scenario. The 7 per cent growth associated with the ‘business as usual’ migration model is no longer viable due to the effects of the pandemic. Dr George Tan, Professor Andrew Taylor and Professor Ly Tran expand on these models further:
Although Australia’s NOM in the last decade often sat above 200,000 people per annum, the impact of COVID-19 was clear in 2019-20 as it decreased to around 184,000; the lowest in the last five years. In 2020-21 NOM figures are expected to be -71,600 with forward estimates projecting another year of negative NOM (-21,600) in 2021-22 before increasing to just over 200,000 in 2023/24.
Further on skilled migration, Dr George Tan, Professor Andrew Taylor and Professor Ly Tran’s submission provided the following statistics:
The impact of the pandemic can be seen through decreases sustained across various permanent skilled migration categories in the 2019-20 program outcome which delivered 140,366 places, a 12.4 per cent decrease of 29.082 places allocated to permanent skilled migration in the 2020-21 migration program level. The decrease in temporary migration is greater with a 26.5 per cent decrease (-2.34 million) in the number of temporary visa grants in the same period with visas (tourist and visitor visa grants) making up the majority of this loss.
The Chamber of Commerce and Industry Western Australia (CCIWA) highlighted the following results from their December 2020 Business Confidence Survey:
1 out of 3 (35 per cent) businesses identified skilled labour shortages as the largest barrier to growth over the coming year, including 52 per cent [of] businesses in the resources sector; and
2 out of 3 (67 per cent) construction and retail businesses rely to a ‘high’ extent on the success of WA’s mining industry.
The Australian Chamber of Commerce and Industry (ACCI) expanded on CCIWA’s data by indicating the following results:
Industries heavily impacted by the crisis, including hospitality, have reported severe chef shortages across the country but particularly in regions, a position reinforced by the mining industry which is unable to attract chefs to mining sites even with lucrative packages; and
Job vacancies reached 254,000 nationally in November 2020, higher than they have been at any point in the last 10 years.
According to Business NSW half of businesses in NSW are currently experiencing a skills shortage. Their data shows that the largest shortages were identified in the following industries:
Agriculture, Forestry and Fishing (71.4 per cent);
Construction (67.9 per cent);
Manufacturing (60.6 per cent); and
Accommodation and Food Services (57.4 per cent).
Business NSW reported the difficulty in filling positions in the following occupations:
Automotive mechanics; and
Business NSW stated that in the Accommodation and Food Services Industry, businesses have reported severe shortages for front and back-of-house staff.
Some 60 per cent of businesses in NSW reported that filling experienced positions was harder than filling entry-level ones. Business NSW provided the following reasons:
51 per cent reported that shortages were due to applicants not having the right skills, capabilities, qualifications or experience
33 per cent attributed their skills shortages to the JobSeeker rate being too high
29 per cent reported that applicant’s wage demands were too high.
ACCI proposed that pre-exiting skills shortages will continue to increase in specific industries as a result of border closures and having fewer skilled migrants, particularly within the construction, hospitality and advanced manufacturing sectors.
Temporary visa concessions
To combat the skills shortages attributed to border closures, Home Affairs introduced temporary visa concessions in April 2020 to support visa holders, temporary, provisional and former holders, impacted by the onset of the pandemic.
These concessions also include current skilled-related visa holders who are seeking permanent residency and have been subsequently disadvantaged by the consequences of COVID-19. Home Affairs summarises the temporary visa concessions for skilled visas from the period commencing April 2020 until February 2021 in the following table:
Temporary Skill Shortage (TSS, subclass 482) and Temporary Work (Skilled) (subclass 457) visa holders who have been stood down, but not laid off, are able to maintain their visa validity.
Businesses are able to reduce the hours of TSS and 457 visa holders without the person being in breach of their visa condition.
A Priority Migration Skilled Occupation List (PMSOL) was introduced with 17 occupations, based on advice from National Skills Commission (NSC) and other Commonwealth departments. It prioritises migration for people with critical skills through employer sponsored visa programs.
Concessions made available for eligible Skilled Regional (subclass 887) visa applicants, including:
Eligible visa applicants who lodge a visa application outside Australia are taken to have lived in a specific regional area for six months and worked full-time in a specified regional area for three months.
Eligible visa applicants in Australia are taken to have worked full-time in a specified regional area for three months.
Concessions made available for eligible Business Innovation and Investment (Provisional) visa (BIIP, subclass 188) holders, including:
Visa holders negatively impacted by travel restrictions are able to apply for a permanent BIIP visa (subclass 188), with time spent offshore as a result of COVID-19 counted towards their residence requirements.
Business Innovation stream visa holders are able to access a second extension stream.
Applications for a permanent BIIP visa are allowed to be made by former provisional BIIP visa holders whose visa ceased when travel was restricted due to the COVID-19 pandemic.
Under specific circumstances some Investor stream visa holders are allowed to access their investment without forfeiting their pathway to permanent residence.
Strengthened labour market testing for employer sponsored visa applications was introduced, by requiring businesses to advertise vacancies on jobactive before engaging overseas workers.
Eligible 887 visa applicants who are offshore can be granted a visa.
Concession made available for TSS and 457 visa holders who apply for the Temporary Residence Transition (TRT) stream of the Employer Nomination Scheme (subclass 186) and the Regional Sponsored Migration Scheme (subclass 187) visa pathways, including:
Exempting loss of earnings due to COVID-19 from the high income threshold for age exemptions for applicants over the age of 45.
Allowing periods where a worker has been temporarily stood down, been on unpaid leave or had their hours reduced to count towards the relevant employment history requirements.
Taking a practical approach to time of application [of] English language requirements where testing centres are closed due to COVID-19.
The occupation of Social Worker was added to PMSOL based on advice from the NSC.
TSS and 457 visa holders who have not made their initial entry to Australia or have returned home due to COVID-19 are eligible for a Visa Application Charge (VAC) waiver should they lodge a new visa application.
Source: Department of Home Affairs, Submission 16.1 (Attachment 4.1), pp. 15-16.
These temporary visa concessions provide various ways through which Home Affairs sought to alleviate the effects of border restrictions on skills shortages. Critical to this was the introduction of the Priority Migration Skilled Occupation List which identified specific occupations that were considered to be critical to Australia’s pandemic economic recovery. More information on the PMSOL can be found in Chapter 3.