'Guest worker society': Calls for major changes to Australia's migration system

A new report from the Grattan Institute says improving the "outdated" process for skilled migrant visas could help to solve many of the big challenges Australia faces.

Net migration to Australia plummeted during COVID-19, as borders snapped shut. Credit: James D. Morgan/Getty Images for Sydney Airport

KEY POINTS

• A new report has called for major changes to Australia's migration system.
• The Grattan Institute wants all migrants earning $85,000 to be eligible to stay here permanently.
• It says the migration system is "outdated".

Australia's migration system needs sweeping changes to stop the country becoming a "guest worker society" and squandering the benefits of skilled foreign labour, a new report says.

The Grattan Institute warns onerous visa requirements are making Australia less attractive to young "globally-mobile talent", while an over-reliance on low-skilled workers is undercutting wages and leading to exploitation.

The report, to be submitted to a parliamentary inquiry into Australia's migration system, urges the federal government to target the world’s "best and brightest" to improve sluggish growth, and smooth Australia’s path to a net-zero emission economy.

That includes abolishing programs which favour older migrants, and streamlining a system which it says prevents high-earning migrants from staying in the long-term.

Brendan Coates, Grattan's economic policy program director, said Australia's "complex ... outdated" rules had not kept pace with the rapidly-changing global economy, and were causing processing delays.

"The system doesn't make sense in today's world. We shouldn't be targeting permanent visas, allowing people to stay for decades, at shortages which tend to last a year or two," he told SBS News.

"A lot of the emerging occupations that we need to build skill in, areas like cyber security, are often not even classified as occupations by the [Australian Bureau of Statistics], because the jobs are too new."

'A much simpler system'

Key to the Grattan Institute's recommendations are significant changes to employer-sponsored visas.

Temporary skilled migration visas are currently only available to workers in certain occupations, provided they earn at least $53,900 a year.

Grattan is recommending allowing any employer to permanently sponsor migrants on more than $85,000 per, while making all migrants earning over $70,000 eligible for temporary sponsorship.

"Shifting to a world where we select skilled migrants on the basis of the wages they earn is going to result in a much simpler system, that better actually reflects whether people's skills are valuable or not," Mr Coates said.

Graph showing decline in net migration during COVID-19.

Mr Coates said that system, which Grattan estimates would boost Australians budgets by $125 billion over three decades, would give certainty to both parties; the employer would know an $85,000 salary would keep the worker they wanted, while the worker would have a clear pathway to permanent residency.

The report found migrants earning over $70,000 on arrival "tend to get big" salary increases over time. But those earning under that threshold tended to stagnate in low-skilled, low income sectors where exploitation is far more common.

While finding points-tested visas are "broadly working", the report calls for greater emphasis on the skills of secondary applicants - spouses and family members - who it said make up "roughly half" of permanent skilled visas granted annually.

"There are many more applicants than there are visas on offer. We should be prioritising either people who are single, or people in a couple who both have high skills," Mr Coates said.

The Business Innovation and Investment Program would also be abolished, the report saying its recipients are typically older and earn less than employer-sponsored migrants.

'Eroding trust'

The Grattan Insitute also warns expanding low-skilled temporary migration to plug worker shortages would undercut wages for low-earning Australians, deepen exploitation rife in industries which rely on it, and "erode public trust in our migration program".

Labor has pledged to have a registered nurse in every aged care centre each hour of the week by mid-2023, and expects migration to play a key role in meeting that target.

The report accepted the care economy may require an immediate increase on its intake of less-skilled migrants. But it urged the government to boost wages in the sector, which it said is the only solution to fixing shortages in the long-term.

"You may want to [boost migration] in the short-term, but it's risky. You increase the risk of exploitation for those workers, you risk suppressing the wages of Australia's low-paid, highly-feminised care economy workforce," Mr Coates said.

"And you take us further down the path towards becoming a guest-worker society."