Australian Labor Party members
This report is a missed opportunity to rethink the skilled migration program to attract younger, highly skilled migrants and boost Australia’s long-term economic prospects and wealth.
Overall, the recommendations are reactive, piecemeal administrative tinkering, lacking significant policy reform. At its worst, people could well view this inquiry as a low-rent complaints shop run by the government, to make it easier for employers to bring in migrants yet doing nothing to boost Australian wages or our long-term national wealth.
Australia has, right now, a once in a generation opportunity to reform our migration program. The international borders won’t stay shut forever, nor should they. Australia is a nation built great by migration – namely, permanent skilled migration, and that should continue.
But the unprecedented and sudden impact of Covid-19 on Australia’s immigration program provides an opportunity to reshape the size and composition of Australia’s migration program to ensure it best supports Australian workers, creates jobs, and gets wages moving again.
The Morrison Government has not taken the opportunity for reform offered either by the Productivity Commission, or the closure of the borders during the pandemic.
This report is also a remarkable and blatant repudiation by Government Members of Peter Dutton’s tenure as Minister for Immigration, recommending a reversal of many of his changes and vindication of Labor’s criticisms. These include:
restoring pathways to permanency in the migration program (recommendation 7) and ensuring skilled visa holders can settle permanently, to send their children to school, to get an education, to join their local communities, to start doing business, to build careers;
addressing confusion from the multiple skills shortage lists by consolidating them back into one list (Recommendation 4) and the lack of transparency about why certain occupations end up on the lists (Recommendation 3); and
bringing back good old-fashioned customer service in the form of human beings available to liaise with industry and assist applicants with complex cases (Recommendation 13). This is long overdue but can only be achieved with additional resources, reversing some of the massive cuts to budgets and staff the Government has made over many years and which the report conveniently fails to mention.
It is disappointing but telling that Government Members did not rule out privatisation or further outsourcing of the visa system in recommendation 12.
Labor Members are pleased that the Committee was persuaded to recommend an increase to the Temporary Skilled Migrant Income Threshold (TSMIT) which has been frozen for eight years. The report does not go far enough however in acknowledging the damage this freeze has done and the downwards pressure on Australian wages that has resulted and is too weak in its recommendation for change. This is discussed in detail below.
Predictably, Government members propose to relax Labour Market Testing in multiple places throughout the report. Labor Members do not agree with the extent of the Government’s weakening of this important regime to ensure Australians always get a first go at jobs. This is part of the Morrison Government’s ongoing push to undermine labour market testing. The Government moves continue to reduce incentives for businesses to employ Australian workers.
There is only a limited case to allow some reforms to labour market testing while the borders are closed, such as outlined in recommendation 15 and for intra-company transfers.
It is astounding that no attention is given in the Committee’s report to the Grattan Institute’s submission and appearance at a public hearing.
Labor Members do not agree with all of the recommendations of the Grattan Institute, however, it was at least an attempt to provide an intellectual rigour and evidence-based argument for reform to boost the economic value that Australia gets from the skilled migration program. It is telling that there is no mention of, analysis of or response to this significant piece of work and its challenging recommendations anywhere in the Committee’s report, aside from the fact they appeared.
Throughout the inquiry including in the Interim Report government members sought to open up the Priority Migration Skilled Occupation List (PMSOL) to numerous additional occupations, with little acknowledgment that this would come at the expense of 38,000 stranded Australians abandoned overseas by the Government. The PMSOL provides an automatic travel authorisation to exempt recipients from border closures, meaning every person who comes in under the PMSOL takes a precious quarantine place from a stranded Australian, or the partners and family of Australians.
It has been constantly bemusing throughout the inquiry to watch Government MPs get frustrated with public servants explaining they do not have enough resources to undertake critical work, yet fail to join the dots and take any responsibility for the Government’s decisions to cut resources. The public service is not a magic pudding – it’s a critical national institution that the Government should steward and invest in, not attack and cut.
Similarly, Government MPs express frustration at the failure of the training system in many areas yet take no responsibility for having inflicted billions of dollars of cuts since Tony Abbott was elected Prime Minister.
The report also fails to address the integrity concerns regarding the Global Talent Investment Visa which has been described by a former Deputy Secretary of Immigration as “a cronies dream”. The Grattan Institute also raised concerns regarding this program.
The Department refused to properly answer questions from Labor members or provide transparency as to who is being selected for this visa and why. At a minimum, a proper and transparent evaluation of this program should be undertaken urgently to ensure integrity and to demonstrate that the maximum economic value is being achieved.
Raising the TSMIT
Since 2014, the TSMIT has been frozen at $53,900, creating not a floor in wages, but in effect a ceiling on wages for Australian workers and temporary work visa holders alike across several sectors.
Further, the gap between the TSMIT and annual average wages of $26,000 has made it far more attractive to hire a temporary work visa holder, rather than an Australian worker.
Labor believes that Australia’s post-pandemic migration program must ensure that it delivers genuinely highly-skilled migrants who are properly paid. It should add to the growth of the Australian economy and its composition should ensure that it enhances real wages and GDP per capita.
Skilled migration should complement and enhance Australia’s existing skills base, which should be strengthened with far more investment in our training system, which has been savagely cut under this Morrison Government. A properly designed migration program weighted towards valuable skills and with safeguards such as a higher and indexed TSMIT can achieve this.
Significantly raising the TSMIT and ensuring its ongoing indexation would act as a safeguard against the type of temporary migrant worker exploitation and wage stagnation that had become systemic features of the pre-COVID labour market. Iwt is also important to note that the 2017 report which Government MPs rely upon in the recommendation explicitly considered and recommended against providing lower wages in regional areas.
Labor believes that a properly designed skilled migration program which attracts genuinely highly skilled and properly paid can add to growth and demand without placing downwards pressure on wages, most importantly at the lower end of the labour market.
Further comments
Recommendation 1 proposes a ‘dynamic national workforce plan’. This sounds nice and is unobjectionable, however it highlights the failure of the Government after 8 years to get labour market analysis right. The National Skills Commission was established with great fanfare by the Government, and should be responsible for this work, and it’s a sign of the Government’s failure that the Committee makes this recommendation.
Recommendation 2 proposes scrapping ANZSCO codes to underpin skilled migration lists and replacing it with a new, “more flexible” system. A myriad of issues were identified with ANZSCO and reform is urgently needed. The situation has been exacerbated by the Government’s budget cuts to the ABS and failure to provide adequate resources to update the list.
However, the proposal to simply scrap the current list and develop a new system is ill-defined, uncosted and has not adequately considered unintended consequences or the efficacy and cost-benefit of pragmatic alternatives raised by submitters. For example: urgent targeted updates to ANZSCO in priority areas; use of the ‘4-digit’ code level instead of the rigid 6-digit occupation code; and addition of additional ‘not elsewhere classified’ occupations to the skills lists.
An entirely new system may ultimately be the best approach however it is premature to be clear that such a significant change and investment is necessary and that the current system cannot be made to work better.
Recommendation 3 proposes that the Government develop accepted definitions of acute skills shortages and persistent skills shortages. This is welcome, and may go some way to improving the transparency with respect to how certain occupations end up on the list and concerns regarding lobbying and pressuring of Ministers by vested interests.
Recommendation 5 proposes when the pandemic is over that the PMSOL be replaced by an Acute and Persistent Skills Shortage List. The only purpose of this list would appear to be to provide priority processing, as the other purpose of the PMSOL – to provide an automatic travel authorisation to exempt recipients from border closures – would be redundant.
Recommendation 6 states the obvious – that skills shortage lists should be regularly reviewed. That would of course require adequate resources for the public service to do this work and a reversal of damaging cuts to funding and staffing caps.
Recommendation 10 proposes welcome changes to post study work rights and pathways to permanency for the highest performing international students studying and working in critical skills shortage areas.
The report acknowledges the situation of current international student graduate visa holders (485 visa) who are stuck outside Australia. As raised by Labor Members in the public hearings, these people made an investment in Australia and were made a promise of post study work rights in return. However with the borders closed thousands remain stuck offshore, with no commitment from the Government to extend or allow renewal of their visas. This is damaging to Australia’s reputation and denies Australia a proven source of highly skilled and well adapted young migrants. Australia can do better by these graduates and the government must urgently address this issue.
Recommendation 11 proposes greater enabling of intra-company transfers for executive employees of multinational companies to Australia where necessary to expand operations in Australia, with exemptions from labour market testing and subject to integrity measures. There was relatively little evidence received to substantiate the recommendation although Labor members are not opposed to examining changes in this area, subject to ensuring it does not open up another rort that disadvantages Australians workers.
Ms Maria Vamvakinou MPMr Julian Hill MP
Deputy Chair
Mr Steve Georganas MPSenator Raff Ciccone