It’s time for a skilled visa overhaul

At the same time as Australia’s business groups are arguing for a real cut in the minimum wage, they are reportedly in a state of “despair over sluggish immigration flows”:

Australia’s visa system needs an overhaul to accelerate skilled labour flows…

Over the past decade, excluding 2021, permanent long-term visitor numbers averaged 162,000 during the first three months of the calendar year, and peaked at 219,000 in 2019. This year the number is 126,000…

“Businesses are reporting significant barriers to getting the skilled workforce they need to operate at full capacity,” said Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry…

“To make the skilled migration system more accessible and responsible, we need to open employer sponsored migration up to all skilled occupations,” Mr McKellar said.

“As the global race to attract skilled migrants heats up, we cannot risk getting left behind”…

So far this year, business groups have demanded:

  • Uncapped access to temporary migrant workers and the abolition of labour market testing so-called Temporary Skills Shortage (TSS) visas.
  • Speedier and cheaper visa application processes.
  • Doubling of the permanent skilled migration intake to 200,000 a year to make up for ‘losses’ over the pandemic.
  • Tax incentives, Medicare benefits and free flights to prospective temporary migrants who choose Australia.

The tune coming out of the business groups is always the same. They made similar skills shortage arguments in 2002 to a Senate Inquiry, where they complained of “serious skill shortages and skill gaps” in Australia and warned that unless we did something about it – i.e. import a lot of workers – Australia’s economy would not develop and would simply end up going backwards.

So, we got two decades of record immigration, whereby literally millions of foreign workers were imported into Australia, and the nation’s wage growth plummeted to record lows.

Yet, the ‘skills problem’ supposedly remain with the business lobby continuing to sing exactly the same tune as it did two decades ago: Australia must quickly import hundreds of thousands of workers or risk going backwards. History doesn’t repeat, but it sure does rhyme.

Give businesses migrant workers on one condition

I have no problem with Australian businesses importing migrant workers, provided they are paid well above the median full-time salary (currently $83,000, according to the Grattan Institute).

All the federal government needs to do is set the migrant wage floor at the 75th percentile of median earnings, which was $94,120 as at August 2021 according to the ABS (see table below). Then let businesses have at it.

Australian median income

Setting the migrant salary threshold at this level would ensure that Australian businesses only hire foreign workers to fill highly skilled professions, while also eliminating the need for labour market testing or maintaining bogus skilled occupation lists.

By raising the quality bar, these reforms would reduce immigration flows, which is what Australians want, while maximising benefits to the economy and federal budget.

Business groups want Work Choices 2.0 instead

Sadly, we all know the business lobby would never support such reforms as they would undermine its goal of suppressing wages to maximise profits.

The business lobby instead wants an expansion of the pre-COVID mass immigration model, which as Alan Kohler explained was “largely an industrial strategy designed to suppress wages and to protect the project they had to crush unions”.

Basically, they want the immigration system to deliver WorkChoices 2.0.

Unconventional Economist

Comments

  1. Fishing72MEMBER

    Is “Workchoices” the poster child for euphemistic corpo- speak?

    Simultaneously meaningless and masking it’s true evil intent. Like calling a brand of sniper rifle “Life Choices”.

    Perfection.

  2. $94,000 is still too low. Anyway, if Jim Chalmers takes over Treasury, the greedy employers on his speed-dial will get everything they want, and local workers will be offered economists’ platitudes.

    The only glimmer of hope is the very low net migration, year to March 22. Perhaps the live warm bodies would rather go to Canada or NZ. Perhaps they are simply defeated by the Digital Passenger Declaration.