Low-skill migrants a handbrake on Australia’s productivity

Australia’s broken migration system is flooding the country with low skilled workers, which is slowing economic productivity.

A larger proportion of jobs such as fruit picking are being done by migrants.

Australia’s broken migration system is flooding the country with low-skilled workers who are creating a drag on the economy, making conditions worse for everyone.

More than a decade of poor planning has led to a surge in migrants working in basic jobs with low productivity in industries such as agriculture and hospitality, which has contributed to Australia’s sluggish economic growth, according to new analysis produced by researchers e61 Institute.

At the same time, Australia’s “highly complex” visa system has reduced the country’s ability to attract workers with critical skills in global demand.

While migrants are often relied upon to fill jobs Australians are reluctant to take up, the system has become so skewed to lower-skilled workers that researchers concluded it has played “some role” in the country’s “productivity slowdown”.

This means the current migration system is putting a handbrake on wages, access to services and a better standard of living across the nation.

Australia is struggling to compete the other countries to attract skilled workers, such as doctors, with concerns raised about the complexity of the visa system.

Nearly one-in-three workers in hospitality are now migrants, compared to one-in-five in 2011, according to the report.

In agriculture, about one-in-four workers are migrants, up from one-in-seven 12 years ago.

Student and working holiday-maker visa holders are ­“increasingly likely” to work in less-productive businesses, the researchers said, which had “unintended negative economic consequences”.

The report suggested more migrants were being employed in less productive jobs because the “quality” of workers coming to Australia had “decreased”.

Home Affairs Minister Clare O’Neil has warned that uncapped and unplanned temporary migration is a “source of huge problems”.

They noted complaints from business that the visa system had become “harder to navigate”, making Australia a less attractive destination for skilled workers.

The report echoed a stark warning issued by Home Affairs Minister Clare O’Neil last month that uncapped and unplanned temporary migration was a “source of huge problems” in the economy.

The number of skilled permanent migrants coming to Australia has remained at about net-30,000 each year since 2005. But at the same time the number of temporary visa holders has exploded from one million in 2007 to 1.9 million today.

“This rather staggering shift in direction has happened without any real policy debate,” Ms O’Neil said in February.

“It happened not through thoughtful planning and strategy but by negligence.

“Are these 1.9m people bringing the skills and capabilities we need to drive our nation forward? We just genuinely don’t know.”

The federal government is undertaking a major migration review, which is designed to “rebalance” the temporary and permanent programs.