Universities are calling on the federal government to streamline and simplify its migration processes to help attract the world's best researchers and drive economic growth.
In a submission to the government's migration review - launched by Home Affairs Minister Clare O'Neil in September - the peak body representing tertiary institutions said Australia was falling behind the rest of the world because of its complicated visa structures.
Research students are waiting up to three years for their visa processing outcome while less than a third of international graduates are using their post-study work rights in Australia.
Universities Australia head Catriona Jackson said despite Australia's tertiary institutions attracting scores of international students each year, just 16 per cent go on to become permanent residents.
She said the statistics were unsurprising given the system had barriers such as extended wait times, a lack of visibility on application status and little certainty for prospective students and staff.
"With around 100 visa subclasses, our migration system is overly complex and not fit-for-purpose," Ms Jackson said.
"It deters rather than encourages the talented people we need."
Universities Australia proposes that the government automatically grant temporary graduate visas to international students who finished their courses as well as improve reporting processes so people have up-to-date information about their application status.
The body also recommended establishing a priority system in Australia, similar to the United States green card, to encourage a more flexible migration system.
"It's time to hit the reset button and design a migration system that supports Australia's future," Ms Jackson said.
"The current settings are slowing the flow of skilled workers and researchers who drive our economy and progress and are holding back international students who make us stronger."
In an effort to address skills shortages across the nation, Ms O'Neil announced Australia would lift its permanent skilled migration cap to 195,000 places for this financial year, up from 160,000.
She also launched a comprehensive review of Australia's migration system which is expected to release a report by the end of February.
