A new report from the Grattan Institute has called for the federal government to overhaul Australia’s permanent skilled migration program once the international borders have reopened.
The paper, authored by Brendan Coates, Henry Sherrell, and Will Mackey, noted that recent commonwealth decisions have moved the composition of the permanent skilled intake away from younger, more skilled migrants. This is despite these migrants generating a fiscal dividend for Australians.
More permanent skilled visas are being allocated to the Global Talent Program and the Business Investment and Innovation Program (BIIP), which the report claims could ‘reduce the lifetime fiscal dividend from each annual intake of permanent skilled migrants by at least $2 billion’.
“BIIP visa-holders bring fewer benefits to Australia than skilled migrants selected through other streams, because they are older, speak little English, and earn lower incomes,” it said.
“The Global Talent Program, introduced as a pilot of 1,000 visas in 2018-19, has expanded rapidly to a planned 11,000 visas in 2020-21. Yet its value remains unproven.”
Coates, Sherrell, and Mackey have called for the ‘unproven’ Global Talent Program to be scaled back and the BIIP to be abolished, which they said could boost the lifetime fiscal dividend from each year’s migrant cohort by at least $3.7 billion.
The report has recommended that the government require the Department of Home Affairs to improve the administration of permanent skilled-worker visas and accelerate processing times.
It noted that about 75% of permanent employer-sponsored visas take between five and 13 months to assess from application to decision, compared to 75% of Global Talent applicants being processed within two-and-a-half months.
Skilled-worker visas, which are allocated through either employer sponsorship or the points-test, should be tweaked and expanded to ‘boost the lifetime fiscal dividend from each annual cohort by at least another $9 billion’, the report recommended.
“Permanent skilled-worker visas should no longer be targeted at skills shortages. Instead, permanent skilled-worker visas should be targeted at younger, higher-skilled migrants who are best placed to benefit the Australian community in the long term,” it said.
“Points-tested visas should be independently reviewed to ensure they prioritise younger, higher-skilled workers. Points should be allocated only for characteristics that suggest an applicant will succeed in Australia.”
The report recommended that employer-sponsored visas be made available for workers in all occupations, provided they earn at least $80,000 a year.
“This would better target visas to people with the most valuable skills, and simplify the sponsorship process for firms and migrants,” it said.
Under a reworked skilled-worker visa system, existing administrative mechanisms should be retained to prevent fraud and underpayment, the paper said. However, it suggested that skills assessments — which ensure workers are able to perform jobs for which they claim to be qualified — be performed by public servants rather than third-parties.
“Some of these third-parties have a conflict of interest, particularly member-based organisations. An alternative approach would be to have skills assessments performed within the bureaucracy,” it said.
“This would help policy makers to glean information about how people gain qualifications and experience for the purposes of migrating to Australia. Bringing skills assessments in-house would be a large and initially expensive undertaking, but the information gained would greatly assist the National Skills Commission to better understand the link between the labour market, skills, and qualifications.”