Migration overhaul raises wages, cracks down on students as numbers surge

Australia is on track for a significantly higher migration surge than forecast as Home Affairs Minister Clare O’Neil introduces a suite of new measures to fine tune the nation’s intake, arguing she was not advocating for a “big Australia”.

O’Neil said the government would dramatically boost the minimum pay for temporary migrant workers, tighten the entry requirements for international student programs and overhaul the points test for skills in a global race for talent.

Home Affairs Minister Clare O’Neil says the migration system isn’t meeting Australia’s current and future economic challenges.Credit: Alex Ellinghausen

The government’s new strategy concedes net migration will be “significantly higher” than the 235,000 forecast in its October budget, with the government’s own housing finance agency assuming the figure could reach 350,000 in the 2022-23 financial year.

“What I have spoken about today is not about more people,” O’Neil told the National Press Club on Thursday.

“I’m not someone who advocates for a big Australia in this conversation … the focus of this task is not about more people, it’s not about a bigger program, and the likely impact of the changes that I have suggested here is probably a slightly smaller migration program over time.”

Her comments came as the federal Coalition accused the Albanese government of embarking on a “Big Australia by stealth policy”.

“It’s unplanned and not linked to the skills crisis that we’re seeing all around us,” Deputy Opposition Leader Sussan Ley said on Sky. “Now there’s a housing crisis, there’s a rental crisis, there is a lack of supply of somewhere to live crisis, it’s all over this country and Labor’s Big Australia policy is not going to solve it.”

O’Neil acknowledged the nation faced “genuine and significant” challenges providing affordable housing, but said the problems weren’t caused by migration.

“There are hundreds of thousands fewer migrants in the country now than we thought would be here, before the pandemic, and we still face very substantial difficulties with housing,” she said.

As international students return on COVID-era unlimited work rights, O’Neil said she would strengthen the requirements for study in Australia, and limit the hours students could work to 48 a fortnight.

She also announced the government would from July raise the wage floor for temporary skilled migrants from $53,900 to $70,000. Those currently employed on skilled migrant visas won’t receive a pay bump, but their employers will have to meet the new minimum wage when they apply for a visa renewal, or send the workers home.

By the end of this year, a cohort of 17,000 temporary skilled migrants stuck on the Coalition’s short-stream program will be given the option to apply for permanent residency.

O’Neil refused to put a figure to the government’s net migration strategy, saying she didn’t want policy questions to be reduced to the size of the population. But former top immigration official Abul Rizvi said without a number everyone was in the dark.

“The minister seemed to make it clear she expects migration to decline. What’s the level she has in mind? Over 10 years that makes a significant difference,” he said.

Adopting the mantra “skill up or sink”, O’Neil said visas for in-demand professionals would be expedited, while unions, businesses and the government would work together on solutions for aged care and childcare.

While the business community greeted the overhaul positively, Council of Small Business Organisations Australia chair Matthew Addison said questions remained about how industries such as hospitality, meat processing and hairdressing would meet critical worker gaps.

Australian Chamber of Commerce and Industry Chief Executive Andrew McKellar said streamlining the visa system “gives us a fighting chance to recruit the skilled workers Australia desperately needs,” but said they would be watching the rollout of the new minimum wage threshold to ensure regional businesses were not disadvantaged.

Restaurant and Catering Australia chief executive Suresh Manickam told the Australian Financial Review that the new wage base was “unworkable”, as award rates in restaurants top out at less than $70,000.

ACTU President Michele O’Neil welcomed reforms, saying that “for way too long, we have had a system where employers claimed skill shortages but often what it has been is a shortage of jobs with good wages and conditions, not a shortage of skills.”

She said the minimum wage threshold should be indexed.

Former senior public servant Martin Parkinson, who headed the review, said Australia now relied on 1.9 million people contributing to the national workforce who were not permanent residents or citizens.

“We’ve got an economy that can’t be supported by the size of the population,” Parkinson told media in a briefing. Government figures show temporary migration numbers in Australia have doubled in the past 15 years.

Under the overhaul, temporary migrants will be allowed to move between employers to reduce the risk of exploitation, Australia will more actively promote itself as a destination for prospective talent, and housing and service provision will be more closely aligned with the migration intake.

Speaking in Brisbane earlier on Thursday, Prime Minister Anthony Albanese said Australia needed to be less reliant on temporary labour.

“The truth is the migration system that we inherited is broken. There are over 1 million people waiting for visas in this country,” he said.

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