It will certainly be interesting to see if the migration review report supports the recommendations made by the Productivity Commission’s, Productivity Inquiry 2023 ‘Advancing Prosperity 5-year Productivity Inquiry report’. Volume 7 of the Productivity Commission’s inquiry details reform options with regards to skilled migration.
If the Productivity Commission were to have their way, Australia’s one size fits all migration program would prevail, appearing to be at the cost of regional migration concessions. This follows previous reports (in particular the 2016 Migrant Intake into Australia report) which recommend the skilled migration program focus on highly skilled and higher paid migrants, rather than lower skilled lower paid migrants. Something which was discussed in the 2021 BDO Econsearch report.
The Productivity Commissions report (volume 7) pertaining to migration is concerning for regional and low population growth areas. If the Productivity Commission’s recommendations are implemented, this will have further detrimental impacts to South Australia’s migration outcomes and the use of the Australian migration program to address current and future workforce needs.
Of note, there is no reference to regional migration, regional migration outcomes or regional concessions other than the following “arguments that the thresholds should be different across regions are not compelling”, despite differing salaries paid in the regions.
Should there be a regional dimension?
There has long been a concern to meet the skill needs of regional Australia. These can be different, as evident during the resources boom, when there was an imperative to attract skilled labour to remote areas, and for professions like general practitioners that can be in short supply in some regional areas. However, arguments that the thresholds should be different across regions are not compelling:
- Shortages are often resolved through high wages. A floor for an employer-sponsored visa can readily be exceeded and so the proposed thresholds do not bind in that instance.
- Regional areas have long been served by visa streams other than employer sponsorship — such as working holiday makers for temporary migrants — which can relieve the needs for certain types of transient lower-wage workers. International students in regional universities can also provide labour in areas where there are regional universities.
- Regional skill shortages are often due to barriers to geographic mobility other than visa status.
To summarise some other key points of the report:
- Lifetime fiscal impact continues to be a strong Productivity Commission theme focused on highly skilled highly paid migrants being the focus of the migration program.
Increasing minimum salary level, recommendation 7.2 is also concerning…
‘The Australian Government should remove current list-based restrictions for employer-sponsored temporary and permanent skilled visas and set an income threshold well above the Temporary Skilled Migration Income Threshold rate. The income threshold that applies to temporary migration should be lower than for permanent. The income threshold for employer-sponsored permanent visas should increase with age.’
… as many regional roles and remuneration will be lower than the increased minimum salary level. If we see an increase to $70,000 or $75,000 for a temporary visa and higher ($85,000) for a permanent employer sponsored visa, many businesses and industries will be unable access the migration program to address current and future workforce demand.
- Lower age for permanent migration:
‘There is a strong case that age restrictions should apply to any sponsored permanent migration visa’.
‘To improve fiscal impacts, permanent migration settings should aim to attract younger migrants.’
…this is of particular concern for highly skilled and experiences role requirements in industries such as Defence, for example, an area of growth in South Australia
- Productivity Commission recommendation (7.6) states:
‘The Australian Government should amend settings for employer-sponsored temporary and permanent visas to better allow workers to switch to competing employer-sponsors including by permitting a short period of unemployment while looking for a new sponsor.’
All in all, whilst these findings are disappointing, they are not surprising given the Australian migration program’s shift to a higher skilled, higher income / higher lifetime tax contribution methodology. Further, this shift is at the direct expense of regional and low population growth jurisdictions, as evidenced by recent migration lodgements and outcomes trends and the distribution and settlement patterns of migrants which includes access to the South Australian Designated Area Migration Agreement (DAMA) and the current use of temporary employer sponsored migration in South Australia which currently sits at 2.4% of the national program.