Australia’s migration system is in need of major reform and must expand permanent pathways for workers, a significant new review says, underlining the concerns of business groups who say application processes are too complex and that long-term staff shortages can’t be filled by domestic workers alone.
The review, helmed by senior public servant Martin Parkinson at the request of Home Affairs Minister Clare O’Neil, will reportedly call for a wholesale reframing of Australia’s migration system when it is released on Thursday.
It describes the current system as “broken”, according to numerous reports, with its authors arguing the fix won’t be achieved by continual “tinkering and incrementalism”.
Among its chief concerns is the limited scope of Australia’s permanent migration system, which has resulted in the number of temporary working visa holders doubling to 1.8 million since 2007.
Since coming to power in 2022, the Labor government has expanded the permanent migration cap from 160,000 to 195,000, but the report suggests more should be done to address a cohort of “permanently temporary” workers striving in Australian workplaces without a clear path to long-term residency.
It will say the nation risks becoming uncompetitive on the global stage if it does not offer the right incentives to the best and brightest workers to live and work in Australia.
This includes students, who may miss out on productive careers in Australia because the migration system is not equipped to welcome them in the long term, the report says.
Other inefficiencies mean highly qualified overseas workers are shuffled into work below their skill set.
Separately, the review states that both employee sponsorship programs and skill lists are no longer fit for purpose, as neither system is currently geared towards overarching long-term priorities like Australia’s net zero emission targets or the need to build sovereign capabilities.
The review will find a federal government that appears willing to carve away at a set of rules it has long described as out-of-step with the needs of both workers and the economy.
Speaking to ABC’s 7.30 on Wednesday night, O’Neil described a “horrendously complex system that makes it really hard to bring high-skill workers into the country who will lift the productivity of everyone around them.
“But on the other hand, we have made it far too easy for companies to bring in workers who will work low-wage jobs and be very vulnerable to exploitation.”
The Department of Home Affairs has already begun the work of slashing the skills lists it inherited, having shut down the Priority Migration Skilled Occupation List, a lockdown-era initiative from the Morrison government, designed to fill workplace holes left by the nation’s closed border policy, in November last year.
That particular list was “outdated” due to the removal of travel restrictions, the Department of Home Affairs said at the time.
Speaking on 7.30, O’Neil suggested the broader skills list system is untenable.
“It’s archaic because it relies on a really detailed definition of occupations and especially when we have something like the tech sector, where the description of jobs changes really quickly,” she said.
“Basically, you write the list and it’s out of date the next day.”
O’Neil is set to address the National Press Club on Thursday, where she is expected to expand on the government’s plans for migration reform.
Small business representatives have long called on Australia’s migration system to become more flexible and attuned to the needs of local employers.
Sandy Chong, the owner of Newcastle’s Suki hair salon and chief executive of the Australian Hairdressing Council, welcomed recent efforts to boost visa processing speeds to clear a backlog of applications.
But she said the government’s latest response should also consider SME leaders who may not have the time or funding to secure the talent they need through the current framework.
“There seem to be good things happening, and when I’ve heard [O’Neil] before, I’ve been really happy with her thinking,” Chong told SmartCompany.
“But of course, I just hope that our industry is not dismissed. With any of these changes that are going to be announced, I hope they’re all positive for small business.”
Hairdressers have faced a decades-long skills shortage, Chong said, with a welcome flow of apprentices insufficient to meet the sector’s ongoing needs.
Expanding pathways to permanent residency would help salon owners, she added, given the benefits workers from overseas can provide.
“We put in our time, our money, and our energy into a lot of individuals who really want to stay in the country,” she said.
“They’re valuable to our businesses and then they have to go.”
One solution would be amending the 482 Temporary Skills Shortage visa, which provides a maximum of four years’ residency, to include a pathway to full residency, Chong said.
Any replacement to skills lists should consider hairdressers, she added, given the sector’s long-running fight to be recognised as an immigration priority.
Broader amendments to pay thresholds should also be weighed against the needs of small businesses, she continued.
Currently, the Temporary Skilled Migration Income Threshold, the minimum amount an employer can pay an overseas worker, is set at $53,900.
Chong said lifting that figure to $90,900, the threshold put forward by the Australian Council of Trade Unions, would make it even harder for businesses to find the right staff and could “wipe out our industry.”
The hairdressing sector is not the only small business representative to advocate for migration policy reform.
In a March submission to the Parliamentary Joint Standing Committee on Immigration, the Australian Small Business and Family Enterprise Ombudsman said cutting red tape will improve the nation’s competitiveness.
“Simplifying or removing unnecessary requirements within the migration system may make Australia more attractive to international workers while reducing the difficulty and cost of navigating the system for small business owners,” the Ombudsman said.
The Human Rights Law Centre has also advocated for expanded pathways to permanent residency, saying that outcome can greatly benefit employees.
“People are stuck on dead-end visas, with no way to make a permanent home in Australia,” the organisation said Thursday.
“Predatory bosses exploit this uncertainty to get away with stealing the wages of workers, threatening people with visa cancellation and deportation.”
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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