Businesses call for ‘low wage’ option after migrant worker pay hike

The Business Council of Australia is calling on the federal government to establish a new lower-wage migrant worker category to urgently fill critical labour shortages.

The BCA has outlined the need for a ‘new lower-wage approach’ for sectors where wages typically fall below the Temporary Skilled Migration Income Threshold but are facing dire workforce challenges, such as hospitality. Picture: NCA NewsWire / David Mariuz

The Business Council of Australia is calling on the federal government to establish a lower-wage migrant worker category to ­urgently fill critical labour shortages, after the minimum wage for temporary skilled migrant workers was hiked to $70,000.

The peak business group has outlined the need for a “new lower-wage approach” for sectors where wages typically fall below the Temporary Skilled Migration Income Threshold but are facing dire workforce challenges, such as hospitality, food manufacturing and processing.

The recommendation is outlined in a report on migration which also calls for reforms to student visas, four-year timeframes for temporary visas and streamlining of labour market testing.

Home Affairs Minister Clare O’Neil increased the TSMIT from $53,900 to $70,000 last month as part of a push to fix the “broken migration system”.

The BCA has warned that historic low unemployment – estimated to be at 3.5 per cent – and the change in TSMIT will ­“exacerbate workforce shortages” which international students would not be able to fill.

“For this reason, we believe there is an urgency in establishing the new lower-wage approach for in-demand jobs that fall below the TSMIT threshold,” the BCA ­report says.

“This should be targeted at specific occupations with wages below the TSMIT that are in critical shortage, with appropriately strengthened safeguards including specific labour agreements between the employer and the government. This may include jobs in the hospitality sector, and in areas such as food manufacturing and processing.”

The BCA also criticised the “explicit promotion and embedding of specific unions” in aged care, with the Albanese government requiring providers to sign a memorandum of understanding with a union to secure foreign workers. “The Aged Care Labour Agreement … shifts the balance beyond protection of low-paid workers, to the explicit promotion of specific unions,” the BCA says.

“We do not agree that it is ­appropriate for the involvement of a union at a workplace level where they currently may not have a presence, or for the imposition of pro-union requirements on a business beyond what they may have already negotiated and agreed as part of their enterprise bargaining process.”

The report warned of the impact of lifting the TSMIT and the Pacific Australia Labour Mobility Scheme, which will affect ­regional areas in particular.

The BCA voiced support for the three-tier temporary labour migration approach outlined in the migration strategy, which includes a high-salary cohort, a mid-level cohort above the TSMIT and a lower-wage cohort for sectors grappling with persistent shortages.

The BCA warned Australia has slipped from first choice for skilled migrants in 2019 to fourth in 2023, while ranking as the 12th most desirable destination for entrepreneurs and fifth for students.

The report criticised the government for failing to outline a threshold for a high salary, proposing a $98,000 annualised salary and warning that a figure that was too high would exclude “high-talent early career ­workers”.