Fixing temporary skilled migration: a better deal for Australia

by Brendan Coates, Henry Sherrell, Will Mackey

15.03.2022 report

Australia should reset its temporary skilled migration program to lift Australians’ living standards, attract global talent, boost the budget, and reduce exploitation of workers.

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The present program is unpopular with the public, squanders many of the potential benefits of temporary skilled migration, and enables unscrupulous employers to exploit workers.

Australia has the worst of both worlds when it comes to temporary skilled migration policy. It should redesign the program, to make it easier to sponsor the high-skilled migrants that Australia badly needs and ensure public support for migration is not undermined.

The key is to stop sponsoring low-skill, low-wage temporary skilled migrants, which would allow the program to be expanded for employers to sponsor more high-skill, high-wage temporary skilled migrants.

Employers are limited to sponsoring workers in occupations classified as ‘in shortage’. But it is practically impossible for the federal government to identify skills shortages in a timely way. The current approach also opens the door for employers to sponsor many low-wage workers.

Today, more than 50 per cent of sponsored workers earn less than the typical full-time Australian worker, up from 38 per cent in 2005.

In future, temporary skilled migration should be restricted to higher-wage jobs. High-skilled migrants also bring more knowledge and ideas, and they pay more in taxes than they receive in public services and benefits.

A new ‘Temporary Skilled Worker’ visa should replace the existing Temporary Skill Shortage visa.

Employers could use the Temporary Skilled Worker visa to sponsor workers in any occupation, provided the job paid more than $70,000 a year (substantially higher than the current threshold of $53,900) and the worker was paid at least as much as an Australian doing the same job.

Under the Grattan plan, the number of full-time jobs eligible for temporary sponsorship would rise, not fall – from 44 per cent to about 66 per cent.

The new visa would grant a person the right to remain and work in Australia for up to four years. There would be no restriction on renewal, and there would be a clear pathway to permanent residency.

The new visa should be made portable, so temporary skilled migrants could more easily switch sponsoring employers should they find a better job once in Australia. This would also enable migrants to flee unscrupulous employers.  

The Government should crack down on bad-faith employers who mistreat their workers. The Department of Home Affairs should conduct more random audits, to ensure employers are paying sponsored workers what they were promised. 

In the lead-up to the 2022 federal election, both major parties should commit to this better-targeted, streamlined temporary skilled work visa. It offers a better deal for all Australians.

We would like to thank the Scanlon Foundation for its generous and timely support of this project.