Jobs summit a chance to fix immigration and position Australia for the future

The Covid-19 pandemic has disrupted the workplace and changed how talent is attracted, retained and incentivised. But migration policy settings in Australia have not kept pace. Picture: NCA NewsWire/Bianca De Marchi

There’s a lot riding on next month’s Jobs and Skills Summit, with the competition for labour impacting businesses of all sizes and sectors.

Higher immigration levels alone will not solve this problem. The challenges are far more complex than many may realise.

But we have a once-in-a-generation opportunity to position our economy to grow in a difficult global environment.

There are three important steps the summit can drive to make Australia more competitive in the global talent market.

● First, change the tone of Australia’s immigration program.

Australia is one of the great migrant success stories of the world. Recent census data shows for the first time more than 50 per cent of residents were born overseas or have an immigrant parent. Permanent migrants who enter the country on temporary skilled visas have much higher incomes than those who enter on other temporary visas or directly through the permanent stream. Before the pandemic, 83 per cent of net overseas migrants were of working age, compared with 65 per cent of the existing population. In 2019, 82 per cent of new migrants were younger than 35, compared with 46 per cent of the Australian population.

This data underscores the importance of our student population to Australia’s future workforce needs.

During the Covid-19 lockdowns, many foreign students had their visas cancelled, or had to leave Australia, which in many cases meant the loss of significant sums of money, and a long separation from family and loved ones.

There will be no overnight fix for Australia to regain the confidence of the global student community. Our competitors have been quick to capitalise on the disruption to foreign students and have designed immigration programs that attract students to undertake studies in priority areas such as health and IT, building a pathway beyond their degree to obtain permanent residency.

This cohort must not be viewed as a commodity – students are an important component of building the next generation of skills and innovation.

● Second, align immigration reform to the current and emerging business environment.

Australia has a highly codified, rule-based legal and policy framework which is designed to reflect the government’s economic and social policies for Australia.

The 1990s saw the introduction of a range of measures to meet eligibility requirements for general skilled migration. In the intervening 25 years, there has been little change to the underlying rules that dictate who can come here and the circumstances under which they can work and live.

Our skilled migration program is too small, inflexible and too complex. It no longer aligns with how business engages with global talent.

An example of the disconnect between business need and migration program outcomes is the performance of the Global Talent scheme. The reality has fallen well short of expectations, with data showing that most of the people who applied under the program were either in Australia already, or would have qualified to migrate here via existing visa pathways.

The Covid-19 pandemic has disrupted the workplace and changed how talent is attracted, retained and incentivised. But migration policy settings in Australia have not kept pace.

Short-term answers centre on removing some of the obstacles to attracting and retaining skilled foreign talent to Australia. These include: labour market testing; visa decisions based on an outdated occupational-driven skilled migration program; and age cap restrictions to applying for permanent residence.

Removal of these barriers will provide a sugar hit, but won’t address the root cause of Australia’s underlying skills talent gap.

The evolution of hybrid work arrangements and the emerging importance of contingent workforce solutions has changed how work is delivered and the regulatory environment is yet to catch up.

The need for the corporate sector to drive productivity after nearly three years of low growth has seen an explosion of workforce mobility worldwide. This in turn has increased the risk of noncompliance with outdated and irrelevant regulatory requirements in areas such as immigration and taxation.

● Third, adopt a whole-of-government approach to population policy.

The absence of a population policy has seen meaningful immigration reform in Australia shoehorned into a narrow debate around the impact of attracting skilled foreign talent on real wages growth and unemployment levels.

A carefully crafted population policy can more effectively address targeted labour market requirements, such as attracting labour to locations outside Australia’s capital cities.

Additionally, a population policy is better equipped to address issues connected to the decision to migrate, such as housing, infrastructure, education and regional factors, which go beyond the visa decision.

Australia needs the Jobs and Skills Summit to help usher in a new generation of economic and labour market reform. We cannot afford a wasted opportunity.

Mark Wright is KPMG’s Australia migration leader.