Australia’s “broken” migration system encourages 1.8 million guest workers to be “permanently temporary” due to strict caps on permanent migration, a landmark review has found.
The migration review, to be released on Thursday by the home affairs minister, Clare O’Neil, calls for “major reform”, warning that fixing Australia’s migration system “cannot be achieved by further tinkering and incrementalism”.
While it is still unclear how much of the review the Albanese government will adopt, a section released before O’Neil’s appearance at the National Press Club indicated it would be pushed to ditch skills lists, allow more workers in caring occupations and tackle long wait times for family visas.
The review called for “smooth and predictable migration” to better enable planning of infrastructure.
It noted that while “successive governments” had imposed caps on permanent migration – currently 195,000 – “the temporary migrant cohort has been demand driven and has doubled in size since 2007 and now stands at 1.8 million people”.
It was “hard to conceive” that Australians would willingly agree to a system “akin to guest-workers seen in some other countries”, the review said.
The review said the rise in “permanently temporary migration” had “caused harm to Australia and to migrants, and undermined community confidence in the migration system”.
“There has been a reduction in clear pathways to permanent residence for key cohorts (particularly students).”
In opposition Labor was extremely critical of temporary migration but the alternative, a boost to permanent migration, would be politically difficult, as the Coalition has ramped up attacks on the government for pursuing a “big Australia”.
The review found skills lists and employer sponsorship programs “are outdated and lack a strong evidence base”.
It warned Australia was at risk of falling behind in “growing international competition for highly skilled migrants”.
“There is evidence of growing labour shortages in lower paid occupations, particularly in the care sector.
“Australia lacks an explicit migration policy focusing on lower paid workers and has taken a piecemeal approach that is not meeting our needs or protecting vulnerable migrant workers.”
The review found “widespread evidence that temporary migrant workers are exploited” and the salary threshold for employer-sponsored visas was “too low”.
Lifting the pay floor for temporary skilled migrants from $53,000 to $91,000 was one of the central demands of unions at the jobs and skills summit, but employers resisted in favour of an increase to about $60,000.
The review also flagged the potential to abandon labour market testing, concluding that “the current approach to determining labour market need is insufficient to ensure migrant workers are used to complement and not displace domestic workers”.
The review found family reunion was “an important component of a strong and stable community” but wait times mean parents can take up to 40 years to join their children on a permanent basis in Australia.
Australia needed to do more to realise the “unrealised potential” of migrants, including better recognition of their skills and facilitating labour market participation and social ventures.
“The migration system is neither fast nor efficient and is often perceived as unfair,” the review said, with complexity adding to user costs and incentivising the use of migration agents. It called for an improvement in IT and communication systems at the Department of Home Affairs.
In January Guardian Australia revealed a boom in arrivals to Australia was set to see a significant increase in net migration, which Treasury officials later confirmed would amount to 650,000 more migrants this financial year and next.
The shadow immigration minister, Dan Tehan, seized on the revelation to accuse the Albanese government of pursuing a big Australia “by stealth”.
On Tuesday the opposition leader, Peter Dutton, warned the “biggest surge in the history of our population … will put even more pressure on transport, on classrooms, on hospitals and on other services”.
