Possible reform directions

Key findings and proposed measures (in blue)

Potential impact on employers, skilled workers, or other migrants

Develop a clear migration strategy to guide Australia over coming decades

• Australia must (1) adapt its migration program to a range of social, economic, geopolitical, and environmental challenges including an ageing population, moving to a greener economy, and competition with other countries desiring to attract highly skilled migrants.
  
  
• Four service industries – Health Care and Social Assistance, Professional, Scientific and Technical Services, Education and Training, and Accommodation and Food Services – will make up the highest growth in employment.
  
  
• A disconnect between visa products managed by different departments has led to an excessively complex migration system without clear objectives. The government should (2) ensure a single area of government, with deep expertise, is charged with coordinating and stewarding the migration system.
  
  
• More data is needed to properly evaluate the migration system’s performance and migrant outcomes. The government should (3) develop an evaluation plan eg. appoint an Evaluator-General and (4) develop a data strategy to better support program outcomes.

• A shift towards the Panel’s recommendations would see the government prioritise visa programs that attract younger workers and higher skilled migrants (especially in innovation and tech industries) to boost productivity and address skill gaps.
  
  
• The migration program would focus on meeting short-term labour shortages while facilitating skills transfer to the local workforce.
  
  
• The recognition that visas are overly complex is welcome, but not new. Hopefully the push for improved data gathering and simplifying processes will result in clearer requirements and quicker visa decisions.

Redefine how Australia determines the size and composition of the migration program

• The government should (5) move to planning migration over a long-term time horizon (eg. 10 years). This sets expectations for businesses and provides certainty to both locals and migrants.
  
  
• Australia relies on the annual permanent migration cap to manage migrant numbers. This is a poor indicator of overall migration flows, given that temporary migration now plays a larger part in Australia’s population growth (about 13% of Australia’s labour market). Demand-driven migration (visas with no caps eg. student and graduate visas) aren’t considered in migration planning.
  
  
• Imbalances between the demand and supply for labour and/or for goods and services may lead to negative outcomes for the economy and local communities. The government should (6) plan migration based on net overseas migration (which accounts for both permanent and temporary residents).
  
  
• Too many, often conflicting, objectives for regional and state/territory visas. The definition of ‘regional’ frequently changes, often intended to slow population growth in capital cities instead of addressing the specific needs of regional areas.
  
  
• National occupation lists do not address the needs of specific regions; visa settings are overly restrictive; current visas provide limited access to lower paid labour, particularly in the agriculture and tourism sectors; and the SAF levy is seen as expensive for regional employers (often small businesses). Australia should (7) work across government – and with states and territories – to consider how best migration can help meet place-based objectives, particularly in regional Australia.

• If demand for temporary visas exceeds a certain cap, the government might consider introducing new eligibility restrictions or suspend applications. This could make obtaining student, graduate, or other demand-driven visas more difficult.
  
  
• For prospective regional migrants: Visa requirements may become more flexible. This includes relaxing age limits and income requirements, as well as residential requirements where migrants must live in a certain region for several years.
  
  
• For regional businesses: Consideration may be given to make SAF levy payments more palatable.
  
  
• Improved data sharing and better coordination between Federal and State governments should simplify existing regional visa programs.

Better target permanent skilled visas to maximise economic outcomes and remain internationally competitive

• Australia’s competitiveness for skilled migrants is affected by ease of application, visa costs, assessment costs, levies on employers, and the possibility of reuniting with family.
  
  
• Permanent Employer Sponsored and Skilled Independent programs perform well ie. provide economic benefits to Australia. Additionally, Employer Sponsored direct entrants are least likely to be exploited.
  
  
• Most permanent visas are provided for less highly performing visas – State and Territory nominated visas, regional visas, and other niche visas, including the Business Innovation and Investment Program (BIIP). The government should (8) revisit the allocation of places across the permanent skilled program, especially the size and role of the BIIP.
  
  
• The points test used to select skilled migrants is not designed to identify applicants with the best potential to contribute. The government should (9) recalibrate the points test to select migrants with high human capital who will make the greatest long-term economic contribution.
  
  
• There should be more incentives for attracting younger highly skilled migrants. Eg. creating a non-sponsored temporary offering that includes broad eligibility criteria (eg. degree studied) and an accelerated pathway to PR for those who have demonstrated success in the Australian labour market. The government should (10) consider changes to the existing Global Talent visa to improve clarity in the selection criteria and remove the need for nomination.

• A revised points test and re-allocation of permanent visas would benefit migrants applying for Permanent employer sponsored, Significant Investor, and Global Talent visas. There will be more emphasis on an applicant’s potential to contribute economically.
  
  
• The following groups of skilled migrants would be prioritised and likely offered accelerated PR:
  • In-demand skills eg. a mid-30s STEM professional who earns $300,000 a year at a large global technology company;
  • High human capital: those with desirable human capital attributes, not necessarily related to specific skills needs eg. a 26-year-old graduating with a PhD from a top global university;
  • ‘Exceptions cases’: those who do not ‘fit the mould’ but have specific exceptional characteristics eg. an older prize-winning academic.
    

Be led by the evidence in temporary skilled migration

• Australia needs to improve the quality of temporary visa programs – particularly the Temporary Skill Shortage (TSS) and Graduate visas – to access higher quality applicants for permanent migration.
  
  
• Migration policy focusing on lower paid workers can have negative effects on the local population’s employment and wage outcomes. But there are also growing labour shortages in lower paid occupations, particularly in the care sector.
  
  
• TSS:
  • About 105,000 TSS visa holders (5% of temporary migrants)
  • Migrants working in health, ICT and mining have much higher incomes than those working in agriculture, hospitality, and tourism.
    
    
• Employer-sponsored temporary visas:
  • Obtaining a visa is complex, costly, and slow. Employers must apply to be an approved sponsor; satisfy occupation lists, mandatory labour market testing, and TSMIT; pay sponsorship charges, including the Skilling Australia Fund (SAF) levy.
  • Some argue the SAF levy is too expensive for small businesses. The Panel did not accept this, seeing overseas recruits as substitutes for employers investing in the employment and training of domestic apprentices and trainees.
    
    
• Skilled occupation lists are outdated and not evidence based. Skills recognition is complicated, expensive, and lengthy. Requirements are inconsistent across states and territories.
  
  
• Labour market testing does not identify true labour market needs and causes unnecessary delays. The government should (12) remove the requirement for labour market testing.
  
  
• Jobs and Skills Australia (JSA) already adequately identify genuine areas of skills shortage. The government should (12) Rely on the expertise of JSA to identify labour needs and market salary rates and provide deep insights and input in a way that links migration with skills and training, (13) renew and strengthen the role of the Ministerial Advisory Council on Skilled Migration (MACSM) as a tripartite advisory body and (14) draw on advice of the JSA to further inform this tripartite approach.
  
  
• TSMIT needs to be updated – it has not been indexed since 2013. There has been a drift towards lower average wages, particularly in the TSS. The government should (15) increase the Temporary Skilled Migration Income Threshold (TSMIT), index it to the Wage Price Index, and consider the adoption of age adjusted thresholds.
  
  
• Regional visa programs are ineffective at encouraging migrants to settle in regional Australia. Better planning, housing, infrastructure, and service provision is needed.

• For employers: While the proposal to remove labour market testing is welcome and would represent a significant decrease in administrative work, there were no concrete steps for revising the SAF levy other than to review its effectiveness. Good news though: there was no proposal to increase it either.
  
  
• Occupation lists: There is a strong sense that existing occupation lists - the Short-Term Skilled Occupation List, Medium and Long-term Strategic Skills List, and Regional Occupation List - do not reflect current or anticipated skill gaps. In the future, fast-tracked occupation lists, more exemptions, or a simpler consolidation of lists could eventuate, particularly for in-demand skills.
  
  
• Skills that are transferable across occupations – such as reasoning capability and communication – were recognised as being more relevant to longer term labour market success. It will be interesting to see whether this translates into concrete policy that moves away from selecting applicants based on narrowly defined ANZSCO occupations.
  
  
• TSMIT:
  • The most immediate effect of the review was an increase to TSMIT from $53,900 to $70,000. Employers who hired employees with salaries less than the new TSMIT have had to adapt to this significant increase, although nominations lodged before 1 July 2023 will only need to meet the old TSMIT of $53,900.
    
    
  • The possibility of age-adjusted TSMIT (ie. varying salary thresholds according to age) would introduce some flexibility and benefit younger migrant workers with less experience, but high potential to develop.

Adopt principles and guardrails to manage risk in temporary skilled migration

• There is widespread evidence that temporary migrant workers are exploited. Risk of exploitation and a migrant’s capacity to report it are driven by power imbalances between employers and migrants, including restrictions on a visa holder’s ability to change employers and dependence on employers for eventual pathways to permanent residence (PR).
  
  
• (16) Risk-based regulation of temporary labour migration was recommended, with three tiers or cohorts of workers:
  • 1. A ‘light touch’ high salary cohort, who have relatively low risk of exploitation due to their inherent agency;
  • 2. A ‘mid-level cohort’ (above the TSMIT, below the high-salary threshold of Cohort 1); and
  • 3. A lower wage cohort in sectors experiencing persistent shortages and who are most at risk of exploitation and displacing Australian workers with similar skills. Applications from this cohort should be highly scrutinised with increased post-arrival monitoring.
    
• The government should also (17) allow temporary migrant workers to move from their current employment to find work with another employer within the same sector or job family. 
  
• Compliance measures that reduce the risk of worker exploitation include (18) [requiring] all employers of temporary visa holders to register that employment through a light-touch process; those with a history of serious workplace breaches would be deregistered and ineligible to employ visa holders.
  
  
• High upfront costs present a barrier to small businesses in being able to recruit workers from overseas. The Panel recommended (19) employer fees and charges to be paid monthly, rather than up-front, to facilitate mobility between employers and increase access for small business by reducing up-front costs.
  
  
• The government should educate migrants on their rights, including (20) [providing] migrant workers with targeted training on workplace laws and conditions based on the Pacific Australia Labour Mobility (PALM) scheme model.
  
• The government should (21) improve post-arrival monitoring and compliance including through coordination with the tax system, using tax file numbers (TFN) and single-touch payroll. More frequent data sharing arrangements would support timely investigations into issues of concern. It would help prevent cases of ‘bait and switch’, ie. a migrant enters Australia on the promise of a high wage but ends up being paid a lower one.
  
  
• The Panel proposed an evidence-based tripartite approach through a reformed Ministerial Advisory Council on Skilled Migration (MACSM) with representation from industry, unions, and government and an independent chair. It would determine how migration can meet gaps in the labour market, supported by expert advice from JSA.

• The government wants to balance economic prosperity with strong protections for migrants.
  
  
• Flagged for implementation soon: Temporary visa holders could have up to 6 months to move from their current employment to find work with another employer. There is no confirmed date for this change, but it’s a move in the right direction. Workers would have more flexibility and be better placed to remedy exploitative work conditions.
  
  
• Emphasis on evidence-based assessment of labour market needs should lead to more flexibility and efficient visa processing. Temporary visa holders would be able to move more readily to a new job without requiring a new visa.
  
  
• Employers would benefit from the removal of labour market testing, more flexible occupation lists, and monthly (instead of up-front) fees. If implemented, employing a temporary sponsored migrant would be a speedier, less costly process.
  
  
• Allowing monthly fees should enable more employers to sponsor workers, creating a more competitive market for migrant workers.
  
  
• Strong emphasis on compliance:
  • Employers would be scrutinised under a more robust compliance framework, particularly if employing lower wage workers or if they have a history of non-compliance. Practices such as the deduction from wages of benefits-in-kind would be targeted.
  • Other helpful measures include helping migrants apply for a TFN; stronger regulation of migration agents; scrutinising the practices of labour hire companies.

Resolve and avoid ‘permanently temporary’ migration

• The Panel focused on PR pathways for temporary skilled visa holders (i.e. TSS and Temporary Graduate).
  
  
• Access to permanent and temporary skilled visas is intended to be limited to migrants in highly skilled occupations (ANZSCO levels 1-3) and with salaries above the TSMIT. However, Australia has a large migrant workforce (approx. 1.8 million as of 31 December 2022) outside of these programs, including students, working holiday makers, New Zealand citizens and Bridging visa holders. In most cases, there is no independent assessment of labour market need for this employment.
  
  
• Currently, a ‘permanently temporary’ underclass of lower paid guest workers exists. This is due to:
  • temporary migration rising substantially since 2007, while permanent places have remained stable and limited in number;
    
  • fewer pathways to PR for key cohorts (particularly students). In 2017, pathways to PR were significantly constrained with the introduction of the TSS visa, which includes a short-term visa with no pathway to PR;
    
  • longer temporary stays (e.g. to graduates), including through issuing more bridging visas (especially during COVID-19). The government should (22) review the drivers that have created a continuing ‘permanently temporary’ cohort with a view to ensuring future cohorts do not emerge.
    
  • Social cohesion can be undermined if the pace of migration is greater than the time it takes for migrants to settle, integrate, and become part of the community.

• Strong emphasis on giving migrants more certainty of PR as soon as possible, while balancing the need to prioritise highly skilled workers.
  
  
• ‘Permanently temporary’ migration has risen due to proportionally fewer pathways to PR for temporary visa holders. If the government implements the Panel’s recommendations, hopefully this trend will be reversed and PR for prioritised skilled migrants will be less onerous to obtain.
  
  
• While labour shortages in certain lower paid jobs were acknowledged, increasing PR pathways for this cohort would reduce the number of places available for highly skilled migrants. It is a complex problem with no straightforward solution.
  
  
• The Panel recommended maximising pathways to PR for temporary skilled migrants in particular (e.g. TSS, or potentially other lower-paid migrants). However, how the government would assess which occupations should be prioritised for PR remains to be seen.

Restore the Working Holiday Maker program to its original intention

• Re: the Working Holiday Maker (WHM) program, the Panel proposed the government (23) ensure the primary focus of the Working Holiday Maker program is cultural exchange and does not operate to tie migration outcomes to the performance of work. Subject to Australia’s obligations under trade and other international agreements, consider limiting Working Holiday Maker (WHM) visas to one year.
  
  
• The 88-day work requirement to create eligibility for a second or third WHM visa was found to be a key driver of exploitation.

• If the recommendations are implemented, the WHM program would likely be wound back – most significant is the suggested 1-year limit on WHM visas.
  
  
• The reasoning is that the WHM visa should be for short-term work only; workers who want to stay longer should apply for explicit employment-related pathways.

Review approach to Parent visas

• Family reunion is an important component of a strong and stable community. However, migrants can wait up to 40 years to have their parents join them in Australia permanently.
  
  
• Partner and Child programs are demand-driven and not subject to an annual ceiling. However, the allocation of places for the Parent and Other Family visas has been tightly capped for many years.
  
  
• This has created huge unmet demand and a growing backlog of applications. Between 2010 and 2022, the backlog of Parent visa applications increased from about 35,000 to 120,000, with some visa applicants facing wait times of 30 to 50 years.
  
  
• The Sponsored Parent (Temporary) visa (SPTV) was introduced in 2019 to relieve pressure on the permanent categories. However, they have not significantly reduced demand for Parent migration.
  
  
• While about 24 per cent of Parent visa holders provide childcare to their grandchildren, which may provide some economic benefits, this also comes at a significant cost to Australia’s fiscal position.
  
  
• The Panel proposed the (24) introduction of a Parent visa lottery to prevent further application backlogs like Canada and New Zealand. Responsibility for post-arrival support would rest more heavily with the sponsor.
  
  
• To support the continuation of a parent’s ties with their home country, the Panel suggested (25) introducing a cheaper, more attractive temporary visa product for parents that might in the long term replace a permanent parent program. The visa would only allow shorter stays eg. 12 months within an 18-month period but could be used multiple times over 10 years and for a longer total period in Australia over the life of the visa.

• Wait times for parent visas have always been extremely long. Allowing people to apply for a visa that will probably never come seems both cruel and unnecessary.
  
  
• Completely removing access to PR for parents may be considered, given it would likely result in savings and substantially reduce the cost of a long-term temporary visa product, making it accessible for a larger cohort. While likely to be contentious, this approach might provide cheaper, fairer, faster, and more certain access to a form of family reunification than is currently available.
  
  
• A parent visa lottery would further increase access to temporary parent visas by reducing the immense backlog of applications. If introduced however, the government would need to consider carefully how a lottery system would apply to existing applicants.

Strengthen international student outcomes and transitions

• The Student visa program has not delivered on its potential. International students struggle with the transition into the labour market post-study and are often employed below their skill level. It is a similar situation for qualified Temporary Graduate visa holders.
  
  
• Where there are strong entry-level programs (e.g. graduate programs), work-integrated learning (WIL), unpaid internships and work experience, all graduates see better outcomes.
  
  
• Several submissions suggested the Genuine Temporary Entrant (GTE) could be replaced by a new Genuine Student (GS) criterion, which would require the applicant’s main migration purpose to be study in Australia.
  
  
• Problems with the cap on working hours:
  • It inhibits opportunity. Currently, unless they are an approved element of the student’s course, unpaid work (including WIL, internships, and work experience) is all counted towards the cap on working hours. International students are forced to choose between undertaking paid work or taking advantage of opportunities that could enable better success in their field of study and transition into the labour market post-study.
  • It is a key driver of exploitation. Unscrupulous employers can threaten to report the student for exceeding the cap to ensure their compliance with unfair wages or conditions.
  • The Panel proposed to (26) review the Student visa working hours cap, including whether unpaid work-integrated-learning, internships and work experience are counted towards the cap.
    
    
• Problems with graduate visa processing arrangements:
  • Employers aren’t confident that an international student will have access to a graduate visa with work rights.
  • This is because student visa holders are unable to apply for a graduate visa until after they have graduated, and processing typically takes 5 months but can be up to thirteen months.
  • Prospective employers often make graduate offers to students before they have completed their studies, putting international students at a distinct disadvantage. The Panel recommended (27) providing a Temporary Graduate visa automatically upon study completion.
    
    
• For some, the length of the graduate visa is not long enough to obtain the accreditation/work experience necessary to transition to PR, even if they graduate with a qualification in an area of identified labour market shortage.
  
  
• To better support international students to demonstrate their potential in our labour market, the Panel proposed to:
  • (28) Align the duration of the Temporary Graduate visa with the time required to identify high potential graduates who will succeed on a permanent skilled visa. Within these parameters, minimise the time former students can remain in Australia on a temporary basis.
  • (29) Explore options to provide a certain and direct permanent residence pathway for a very narrowly defined group of students.
  • (30) Align the English language requirements of the Student and/or Graduate visas with skilled visa English language requirements.
  • (31) Move from the Genuine Temporary Entrant criterion to a Genuine Student test

• Several recommendations, if implemented, would be positive for student visa holders by making transition to the labour market easier. In particular:
  • Providing graduate visas automatically to student visa holders upon study completion. This would offer more certainty for employers that students will have work rights.
  • Allowing enough time on a graduate visa to obtain necessary accreditation or work experience for PR. This would help high potential graduates more easily transition to a permanent work visa later.
  • A review of the cap on working hours. While there are some good reasons for limiting student work hours (ensuring student visas are focused on their education rather than used as a backdoor into the lower paid labour market), it would be a positive development if unpaid work that is part of a student’s course were not counted towards the cap.
    
    
• The Panel emphasised that more certain pathways to PR should be provided to students who can demonstrate they are highly likely to succeed if they were to remain here permanently.
  
  
• Replacing the GTE requirement with a new GS requirement may help ensure students come to Australia primarily to study:
  • In an environment where Australia provides graduate work rights, and some students can stay permanently, the GTE requirement has been criticised as being arbitrary.
  • Re-focusing the criteria on study could address the problem of student visas being used simply to gain access to the Australian labour market (creating ‘permanently temporary’ visa holders) or to establish residence for other purposes. At the same time, it would also recognise part-time work that supports genuine study.

Unlock all migrant potential

• Temporary migrants largely do not have access to services or supports. This impacts their ability of to succeed while in Australia. The government should consider whether providing temporary migrants – particularly skilled migrants – with access to some forms of support could help speed up and maximise the labour market contribution of these migrants. The Panel proposed to (32) revisit the scope of settlement and integration support programs, with a view to making them more responsive to local differences in settlement location, and migrant need.
  
  
• The Newly Arrived Resident Waiting Period NARWP limits access to various social supports and is meant to incentivise early economic self-sufficiency among migrants. While the NARWP creates significant savings for the budget, there is little data or analysis on its impacts on migrant outcomes. The government should (33) review the Newly Arrived Resident Waiting Period (NARWP) to help improve government understanding of the impacts of this policy measure on migrant outcomes.
  
  
• Furthermore, the government should (34) invest in social enterprises and others that focus on the drivers of migrant economic integration, including for cohorts who face particular barriers in the labour market (e.g. migrant women, and humanitarian entrants).
  
  
• Skills recognition can take many years. Lack of consistency between the outcomes of a skills assessment required to satisfy a visa requirement and the requirements for occupational licensing can leave a skilled migrant in labour market limbo – where they have been allowed to migrate to Australia but are unable to work in their chosen field. The government should (35) lead alongside states and territories a strategy to oversee efforts to streamline skills recognition, particularly for those occupations that can deliver the most benefit to Australia.
  
  
• The Panel recommended Australia improve the efficiency of skills recognition by 1. Considering pursuing international mutual recognition of occupational licences from a broader range of countries and 2. Driving greater synchronisation between skills assessments and licence/registration processes.

• The proposed measures would lead to an improved skills recognition system that provides more certainty in pathways for migrant workers and enables skills recognition in a timely and affordable manner.
  
  
• Additional complex issues often arise for skilled migrants, including that some of them:
  • Are highly skilled in an occupation that does not translate well to the Australian context, or skilled in an area where there is little labour market demand;
  • have a qualification or training that is regarded insufficient to meet Australia’s quality or safety standards, even with a bridging course, or at an age or stage of life (e.g. having caring responsibilities) that makes the opportunity cost of re-training in Australia particularly high.
  • More efficient and effective skills recognition processes might not solve all the above problems.

Improve and restore clarity to the role of migration in international relations

The government should (36) examine visa processing arrangements for South-East Asia and the Pacific, to ensure we are presenting a welcoming face to our region, while balancing risk.

Invest in policy, service delivery and enabling capabilities

• Inefficient migration system: The migration system is neither fast nor efficient and is often perceived as unfair. Current and potential migrants and businesses find the system unnecessarily complex. ICT systems lack flexibility and responsiveness, and new technology has not been adopted.
  
  
• Australia’s current visa processing ICT systems are 20-40 years old. The Department has also struggled due to a siloed approach to ICT upgrades and an underinvestment in other capabilities.
  
  
• As a result, businesses are waiting longer to fill labour shortages, and potential migrants become disengaged during the burdensome processes.
  
  
• Most low-risk integrity and compliance issues could be automated. Visa processing officers could then focus on the more risky or difficult cases that require manual intervention. The government should (37) invest in the Department of Home Affairs’ capability to deliver the migration system, including through ongoing investment in ICT systems, technological adoption and data capabilities.
  
  
• Policy and legislative complexity: Migration legislation is complex and difficult to navigate, reflecting the complexity of policy settings. This complexity raises user costs:
  • Prospective migrants might be deterred from migrating to Australia.
  • Resulting wait times can be damaging when small businesses are trying to fill a role quickly, in the context of a short-term labour shortage.
  • Complexity can prevent reform being implemented quickly or – sometimes – at all, including limiting the capacity to automate assessments.
  • Successive governments legislating changes to re-instate their intended position has at times contributed to complexity in the form of unnecessary inconsistency in requirements and definitions between visas.
    
    
• The Panel views the current legislative framework as broadly fit for purpose and recommended the government (38) undertake a phased program of legislative review and reform. This would focus on areas of legislation identified as not meeting Australia’s needs or that present valuable scope for simplification or modernisation.

• Reforming ICT systems and identifying areas where complex visa policy could be simplified represents a monumental task for the Department and one that would take significant time.
  
  
• If successful, decision making would be more efficient, providing migrants, families, and employers with quicker decisions on visa applications. Small businesses needing to fill roles quickly in the context of a short-term labour shortage would benefit greatly.
  
  
• Many of the visa policy approaches identified by the review could support a reduction in the number of visa products and the complexity of requirements within those products. There may also be scope to remove some visas that are no longer active or that are effectively duplicate products (such as separate visas for onshore and offshore applicants). However, a significantly reduced number of visas without associated simplification of policy settings will not result in a less complex system.
  
  
• Rising global competition for highly skilled migrants should galvanise action to upgrade systems and enact reform.