Australia’s skilled visa hoax exposed again

For years, MB has highlighted the deep flaws in Australia’s purported ‘skilled’ visa system, which accounts for around two-thirds of Australia’s planned migrant intake:

Our concerns has been based upon three main flaws, specifically:

  1. The overwhelming majority of migrants under the skilled stream are not actually skilled;
  2. Those that have arrived in Australia have overwhelmingly gone into areas that are not experiencing skills shortages; and
  3. The pay rates attached to skilled visas are appallingly low and undercut Australian workers.

Regarding the first flaw, the Productivity Commission’s 2016 Migrant Intake into Australia report revealed that around half of Australia’s skilled migrant intake is comprised of family members (spouses and children) of the primary skilled applicant, thus meaning that only around 30% of Australia’s planned migrant intake is actually ‘skilled’:

…within the skill stream, about half of the visas granted were for ‘secondary applicants’ — partners (who may or may not be skilled) and dependent children… Therefore, while the skill stream has increased relative to the family stream, family immigrants from the skill and family stream still make up about 70 per cent of the Migration Programme (figure 2.8)…

Primary applicants tend to have a better fiscal outcome than secondary applicants — the current system does not consider the age or skills of secondary applicants as part of the criteria for granting permanent skill visas…

Regarding the second flaw, the Department of Jobs & Small Business produces an annual time-series database tracking skills shortages across occupations. This database shows that since the mining construction boom ended in 2012, skills shortages across managerial and professional occupations have run below the 32-year average:

This is important because three-quarters of visas handed out under the skilled stream under both the permanent and temporary programs are for managerial and professional occupations, which are already well supplied with workers.

The failure of Australia’s ‘skilled’ visa programs to alleviate genuine skills shortages arises because almost any occupation is eligible for visas, and skilled occupation lists have no requirement that the occupations are actually experiencing skills shortages.

Accordingly,  ‘skilled’ visas are being used by employers to access foreign workers for an ulterior motive, namely to undercut local workers and lower wage costs.

This incentive to employ cheap foreign labour has been exacerbated by the federal government’s appallingly low salary floor for temporary skills shortage (TSS) visas. This salary floor has been set at just $53,900 since 2013-14, which is $19,000 below the median full-time Australian salary of $72,900 (comprising both skilled and unskilled workers).

Not surprisingly, then, the actual pay rates for ‘skilled’ workers is below the population as a whole, according to the Department of Home Affairs’ Continuous Survey of Australia’s Migrants. This survey revealed that the median full-time salary 18 months after being granted a skilled visa was just $72,000 in 2016, below the population median of $72,900. This is an appalling result given the population median includes unskilled workers, which drags the nation-wide median full-time salary down.

With this unsavoury background in mind, SBS News published an interesting case study highlighting why Australia’s skilled visa system is a hoax.

The SBS article profiles a Pakistani family that migrated to South Australia on a permanent state-nominated ‘skills shortage’ visa, only for the primary visa holder to deliver food for six months before finally gaining work in the highly oversupplied mechanical engineering field:

When Pakistani migrant Ishtiaq Ahmed was considering a destination to call home for his young family in Australia, Adelaide was at the top of his list…

The 32-year-old moved to Adelaide in 2017 with his wife Zartaisha Kanwal and child and soon later found work in mechanical engineering on a subclass 190 Skilled Nomination Visa…

When Mr Ahmed first arrived in Adelaide he had to work odd jobs, including delivering food, for six months before he landed a job in his trained profession as a mechanical engineer.

This case study meets the first two flaws identified above.

First, the primary ‘skilled’ visa holder has brought over three unskilled dependents on a permanent basis – a wife and two children.

Second, the skilled visa holder has arrived in South Australia to work in an area – mechanical engineering – that is already way oversupplied with qualified workers.

Proof of this is documented clearly in the Department of Employment’s latest skills shortages report for South Australia. This report shows that there were 94 applicants per job vacancy in mechanical engineering in 2019, with 81 qualified applicants per vacancy:

• The average number of applicants increased significantly in 2019 (94.0), compared to 2018 (20.4).
• The average number of suitable applicants per vacancy was relatively unchanged in 2019 (1.2), from 2018 (1.1)…
• The average number of qualified applicants per vacancy increased in 2019 (81.4) compared to in 2018 (17.6).
• The reasons why applicants were considered unsuitable included:
○ Applicants lacked skills and experience in technical fields in specific industries
○ Applicants lacked basic soft skills including being able to work in a team and communication skills
○ Applicants were not considered an appropriate ‘fit’ for the organisation’s culture and values.
• Employers required applicants to have a tertiary qualification, a bachelor degree specialising in mechanical engineering field and most employers required a minimum of two to five years experience.
• Employers found it difficult to recruit experienced Mechanical Engineers in specialised fields that required five to ten years experience and met specific industry requirements.

Clearly, by enticing foreign labour into areas that are already oversupplied with workers, it undercuts local workers and supresses wage growth.

In order to stop the rorting, the wage floor for temporary and permanent skilled migrants should lifted to the 80th to 90th percentile of earnings, or indexed to double the median wage.

This would ensure that Australia’s visa system is used sparingly by employers to recruit only the highest skilled migrants. It would also prevent employers from undercutting local workers and encourage them to provide training

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. Can you do an article on construction deaths?

    19 Oct 2019

    Southbank construction workers injured in cement truck pump explosion – ABC

    Tradies in Japan must be doing something other than dying at apartment construction sites because the unemployment rate in Japan is very low.

    Police say two men were taken to the Alfred Hospital in a serious condition and two others are in a stable condition at the Royal Melbourne Hospital.

    They were helping to build a vertical slum to house foreigners who work for illegal wages and pay no income tax!

    Tradies in Japan probably switched to driving trucks and working in warehouses because there is no need to build new apartments in a nation that has had a shrinking population since 2009.

    • reusachtigeMEMBER

      Maybe if you delivered Uber eats for a while you’d eventually work your way up into a paying job like this hard working new Australian did!

    • The Tradie’s Union is owned by the Labor party, where mentioning immigration is taboo. You ain’t gonna hear anything about this.

      Besides, with the new Indonesian and Chinese FTA’s, builders can now contract Chinese and Indonesian tradies and pay overseas low wages, so the problem will soon go away for locals, who can then find safer jobs delivering Uber Eats.

      • John Howards Bowling Coach

        What new Chinese FTA? The FTA with China was signed several years ago. The Indo FTA yet to be signed.

        But you are correct for some unknown reason an agreement on trade contains a massive amount of concessions (on our part) for immigration and foreign workers

  2. The United Kingdom government has effectively privatised its visa application system with a dodgy private company that has been given quasi government status to cash in on fees, corruption and graft.

    https://www.vfsglobal.co.uk/in/en#latest-updates_o=Article%20Date,Descending

    When the Grenfell Tower, run by slumlords to cash in on mass immigration and open boarders (no questions asked), went up in flames and killed 72, afterwards the trick was to divorce mass immigration and declining standards and services from such lethal consequences.

    https://en.wikipedia.org/wiki/Grenfell_Tower_fire

    It has also been a real problem to divorce knife crime, acid attacks, snatch and grab robbery, youth crime in general and increasing pressure on the NHS and growing community disenchantment with the open boarder policy with the EU from where much of it started. The belief that free movement, financial deregulation and predatory opportunism should go hand in hand was an idea that came from the Blair Labour government – dressed up as diversity, vitality and vibrancy plugged right into neoliberalism and crass opportunism. This pack of fools grossly underestimated the flow of migrants from eastern Europe by a factor of more than 10-20 depending on how you calculate it, then told everyone that “you have no choice – get used to it – racists”.

    The UK has suffered social vandalism because the government itself got out of the business of regulation and protecting the values of the nation state by allowing markets and open boarders to drive public policy – and then blamed the people of the country for rejecting the consequences.

    A little known fact is that Tony Blair could have regulated immigration to the UK over the key 7 year period when floods of people arrived – just like Germany did. He lied that he was not able to. One has to wonder about why…?

    Australia is on course for its own Grenfell Tower and a BREXIT-type upheaval that will destroy the party duopoly. It is my hope that some of our ex-PMs will wander in the same purgatory of political exile and community opprobrium. After all, they are criminals and shysters deserving of our phlegm, contempt and long memories.

    They too have told us that we have no choice…racists.

    The idea that the nation state should be run by people and industries that profit from endless flows of people coupled to downgraded standards where large tides of humanity are exploited as economic units is despicable. This is what we have become in Australia and both the ALP and LNP are traders in this misery.

  3. Clearly, by enticing foreign labour into areas that are already oversupplied with workers, it undercuts local workers and supresses wage growth.

    why would anyone think this is not what our leaders political and economic want?
    we closed all of our manufacturing and started importing all stuff from oversees because cheaper is better,
    we outsourced all the services that could have been outsourced because cheaper is better
    now it’s time to depress prices of what’s left by importing cheap labour because cheaper is better

    • Of course, cheaper is better. Cheaper input costs result in globally greater competitiveness.

      The problem is that Strayans don’t think that cheaper is better, especially for land prices.

      • in minds of Australians land is not an input but ultimate output – goal and meaning of all other activity

  4. If there are any technical problems with the bipartisan mass migration program to destroy Australia, Alan Tudge’s new National Population Centre will be onto it quick smart. Hint: Sarcasm.

    • Straya has been living beyond its means for decades and yet there has been little realization of that. Back in the late 1980s and the early 1990s, there was a wide spread realization that Straya needed to transform its third world-esque commodity-based economy to a diverse one with depths. It was a hard path to take because, gulp, the transformation required ingenuity, hard work and entrepreneurship, among other qualities.

      Alas, before Straya could complete its transformation, the China-led commodity boom arrived, and Straya quickly went back to its roots, undoing the transformation that had been taking shape.

      The rest is history.

      After the commodity bust, Straya has been desperately trying to hold onto the now rapidly falling living standards that have been built on quicksand.

    • the goal of all of Australian elite is to, at the end when all the money gets made and country gets totally destroyed, move to some other nicer place

  5. I work at a hospital and almost all the nurses there are indian Philippine or nepali brought in to lower nurse wages with the odd spattering of local nurses

    It’s crazy

    Well known catholic hospital brand

  6. He did well to score a ‘mech eng’ gig. Most never break away from delivering Uber Eats. I’ll wager that his pay hasn’t increased materially.

  7. Is it just me, or is there some kind of rule in Sydney that permits these unskilled migrants to ride their electric bikes with cube food delivery backpacks on footpaths at 30KM/H with complete immunity from the Police?

    I had to forcefully stop one who almost hit me dead on (they seem to think it is Mumbai and bad luck to any pedestrian who does not scamper at the sight of them) and direct him off the footpath and onto George Street yesterday arvo. I can tell you he wasn’t happy about it – actually tried to get the front wheel back up onto the footpath after I placed it in the gutter. I told him to be thankful the bike was still upright with air in its tyres and not to push his luck. Eventually the message sunk in….

    Now I don’t doubt that he was on about 1/50th of my wage, but this idea of imposing Indian style street and footpath conditions onto locals for the sake of Scummo’s grand plan to prevent recession deserves to be crushed where ever it is encountered. I will go so far as to say that migrants who come here to do this sort of work and break every local regulation they encounter are as culpable as everyone else in the criminal syndicate that controls the whole filthy enterprise, up to and including Scummo and Fraudenberg. To hell with sympathy. They can have as much as society gives me, which these days is 2/5th of fvck all. Cvnts.

    • I’ve almost been ko’d by one of them as well.
      Interestingly, driving home from Top Ryde one Friday night around 9:30pm, going along Concord I saw 10 of ’em in the space of a kilometre, LEDs flashing etc. Mate of mine, who was half cut, exclaimed “How many of these barstewards are there, this is becoming ridicluous!” I said, welcome to the new Australia.

    • billygoatMEMBER

      @paint it black
      Yes the same rules don’t apply in Melbourne.
      Common practice for vibrant delivering drivers & student commuters to ride foot paths – free range. Be raaaayist to fine them

      • Ever seen John St Cabramatta, or Macquarie St Liverpool.

        If you fined everyone who double parked in these streets, the government would collect another 9 figures per month.

        Fining rampant traffic violations in Cabramatta stopped, because it was racist.

  8. This bloke might be different, but my experience over more than three decades has been that the majority of “professionals” from the subcontinent couldn’t tell their ar$es from holes in the ground, and food delivery is about all they’re capable of.

  9. When I was working up at the Ichthys LNG Project, I once caught a taxi back from Coles to the motel where the company had us staying. It turned out the driver, from India had a masters degree in electrical engineering. I knew my company was looking for electrical and mechanical project engineers to work on the power plant, a project engineer is NOT a design engineer, but a ticket clipping role once held by a para-professional. He offered to pay me money to get his CV to the company recruiters in Perth. I said don’t worry about that and provided him with the email addresses of the HR people. Then he attempted not to bill me for the taxi ride, I refused his generosity and paid the fare. They never phone interviewed or hired him. but INSTEAD hired an another electrical engineer (Indian) who they flew out from the Middle East. WTF???
    I am pretty sure there was some sort of a kick back system going on between overseas UK accented HR recruiters, UK accented local external recruiters, and internal recruiters. Possibly not a bag of cash, but instead airfares to overseas holiday destinations, fuel cards etc.
    Shortly afterwards, someone realised they had overstaffed the project engineers on the power plant, it wasn’t the overseas engineers who got the flick, it was the engineers from Perth and Brisbane with a couple of years experience who got the flick.

    Engineers Australia has got to be the greatest sellout EVER of its rank and file membership of any professional organisation.

    • billygoatMEMBER

      @Thallus
      100% on Engineers Australia
      Somewhat ironically a Spanish engineer on vibrantia visa was incensed at cost to repeatedly apply for paper work. Apparently got to have 2-3 cracks at it and pay through the nose each time:)

    • Australian Computer Society might challenge Engineers Australia for “greatest sellout EVER of its rank and file membership of any professional organisation”. Migrant Skills Assessment is their core business.