Attract top-end skilled staff to improve our productivity

In light of the declining ratio of productive workers to retirees as our population ages, set out in Treasury’s intergenerational reports, the government’s overhaul of skilled migration will serve the national interest.

Global competition for skilled, mainly young and well-qualified workers with language proficiency is intense. They are valuable contributors to productivity, especially at a time of skill shortages.

Two of the main recommendations in the migration report by Martin Parkinson, a former secretary of Treasury and the Department of Prime Minister and Cabinet, will boost Australia’s attractiveness to high-flying newcomers.

The report, A Migration System for Australia’s Future, recommends that from July, the minimum wage threshold for those entering on temporary skilled worker visas will be lifted from $53,900 to $70,000.

Home Affairs Minister Clare O’Neil said the decision a decade ago to freeze the temporary skilled migration income threshold – the minimum salary an employer sponsor must pay to any temporary skills shortage visa holder – meant it was now below the earnings of 90 per cent of Australia’s full-time workers. That is unrealistic and unsustainable.

The proposed policy will also clear barriers to permanent residency for international students after they finish university studies. The report highlights the problem of long waiting times for graduate work visas contributing to some of the best and brightest international students not staying in the country. Streamlining bureaucracy, including visa applications, is always worthwhile to boost efficiency.

Australia is experiencing a historic surge in migration as working holidaymakers and international students return following Covid border closures. As we reported in March, three million people among our 26 million population are permanent migrants who have arrived since 2000, with the largest contingent coming from India. And with the vast majority of those permanent migrants – 87 per cent – living in capital cities, with 56 per cent of them in Greater Sydney and Greater Melbourne, growing the skills base has important implications for housing policy and infrastructure development, such as transport, healthcare and schools. The surge will also affect the May budget, Jim Chalmers has said.

Ms O’Neil said the reforms outlined on Thursday were “not about more people” coming into the country. By the end of this year, she said, “all temporary skilled workers will have a pathway to permanent residency. This does not mean an expansion of our capped permanent program … It simply means that a group of temporary workers who had been denied even the opportunity to apply for permanent residency will be able to do so … We want to increase competition for permanent resident places and ensure we don’t leave more workers in limbo, bouncing from visa to visa.’’

The strategy won an important tick from the Tech Council of Australia. Chief executive Kate Pounder said the reforms would help bridge Australia’s tech talent gap, which led to the nation losing out to the rest of the world. She also said the skills shortages were concentrated in highly technical roles requiring years of experience.

“Our existing system is slow and uncompetitive compared with other nations vying for tech workers, and that means we’re losing out to the rest of the world,” she said. “We are also pleased to see the government will prioritise making the system more responsive. Companies are currently restricted to bringing in skilled migrants that are on outdated occupation lists that don’t include new or emerging jobs in tech, such as product managers and UX designers.”

Nationals leader David Littleproud said he supported “encouraging signs’’ in the proposed overhaul but stressed new arrivals should be encouraged to live and work in regional areas. The report acknowledges that migrants are less likely than Australians to live outside major cities, yet regional visa programs, and the migration system in general, have not been effective in encouraging migrants to settle in the regions. It states: “Migration should be part of a holistic approach to addressing regional population and labour needs. Better planning, housing, infrastructure and service provision will make regions more attractive to both Australians and migrants.’’

Nor will the changes solve every labour shortage. On Thursday, Ms O’Neil admitted that Australia may not have enough nurses to fulfil Anthony Albanese’s promise to have a registered nurse present round the clock in every residential aged-care facility.

“Our ageing population will demand more workers in health and aged care than our domestic population can supply,’’ she said. The report also found that Australia lacked an explicit migration policy focusing on lower-paid workers, and had taken a piecemeal approach that was not meeting the nation’s needs or protecting vulnerable migrant workers.

Temporary skilled migration has a role in the economy, but the report is surely correct when it says Australia does not want to become a nation of “permanently temporary residents’’. The report has much to offer in providing a strategy for attracting skilled newcomers who will commit to our nation.