Australia should abandon skills shortage lists and labour market testing in favour of granting temporary visas for all jobs earning more than $70,000, the Grattan Institute has argued.
Australia’s temporary migration system is delivering the “worst of both worlds”, with employers bringing fewer high-skilled workers in while those earning as little as $53,900 are vulnerable to exploitation, the thinktank argues in a report released on Tuesday.
The Turnbull government overhauled the temporary skilled visa system in 2017, dividing jobs with skills shortages into streams that granted two- or four-year stays.
Critics said the move severed the pathway to permanent residency and citizenship for some in a bid to boost Australian jobs.
Temporary migration remains unpopular in Australia, with Labor and unions complaining pre-pandemic that more than one million temporary visa-holders have work rights, contributing to lower wages in Australia.
The Grattan report, by Brendan Coates, Henry Sherrell and Will Mackey, said that use of temporary skills shortage visas had become “more costly and less certain”.
Workers on the visa declined from 110,000 in 2014 after the mining boom to just 60,000 in 2021, accounting for one in every 200 workers in the workforce.
Instead, industries such as aged care reliant on overseas-born workers tend to employ permanent residents, New Zealanders and international students.
The report noted that more than half of those on the temporary skilled visa now earn less than the typical full-time Australian worker, a problem exacerbated by the fact the low-income threshold to access the visa has remained frozen at $53,900 since mid-2013.
“Employers are sponsoring a growing number of low-wage workers with few skills,” it said.
The report argued it is “practically impossible to quickly and reliably identify skills shortages in individual occupations”.
“Instead, temporary sponsorship should be reserved for higher-wage jobs in any occupation. Targeting higher-wage migrants will better address most genuine skills shortages that emerge.”
The Grattan Institute called for a new temporary skilled worker visa, granting a right to work in Australia for four years, with no restriction on renewal and a clear pathway to permanent residency.
With a threshold of $70,000, some 66% of jobs would be eligible for temporary sponsorship, up from 44%.
The report argued that labour-market testing – the requirement to advertise a job in Australia before filling it with a visa-holder – is “superficially appealing” but “unworkable in practice”.
It suggested the process had become a “complicated box-ticking exercise” that doesn’t add much to local employment because “no government official can assess whether an employer has made a genuine attempt to hire an Australian worker first”.
The report argued workers on the temporary skilled visa are particularly vulnerable to exploitation because the visa is tied to their sponsoring employer and they must leave Australia within 60 days if they stop working for them.
It proposed that workers are able to change employers into any job earning above the threshold, with 90 days to remain in Australia to find a new job if they become unemployed.
“This would enable migrants to walk away from employers who mistreat them.”
The report also called for labour agreements, which permit sponsorship for lower-wage jobs, to be abolished.
The Grattan Institute called for a crackdown on bad-faith employers who mistreat their workers, with the home affairs department to conduct more random audits.
It also suggested a number of employer-friendly reforms to: replace all upfront costs with a $1,000 nomination fee and ongoing monthly fee based on the number of workers sponsored; and grant accredited employers sponsoring high-wage workers faster five-day visa processing.
In August a Liberal-controlled parliamentary committee recommended an overhaul to the skilled migration program to give temporary workers and some international students clearer pathways to permanent residency in Australia.
The report also called for a relaxation of labour-market testing requirements, which prompted backlash from Labor which warned this would prevent Australians having the first shot at a job.
