Economic modelling undertaken by CEDA in its latest research report has found that immigration to Australia has not harmed the jobs and earnings of local workers.
CEDA’s report, Effects of temporary migration, examines the impact of immigration and recent trends in temporary migration including temporary skilled migration, CEDA CEO, Melinda Cilento said.
“There are currently around two million people in Australia on temporary visas including students, working holiday makers, skilled workers and New Zealand citizens. This is a significant number that should be well understood, transparently managed and appropriately factored into community planning,” she said.
“CEDA’s report has found that migration to Australia in recent decades has been positive for the labour market, and the outcomes from temporary skill migration were particularly positive,” Ms Cilento said.
“CEDA’s analysis shows that temporary skilled migration is critical in delivering benefits to business, the economy more broadly and to the existing workforce.
“However, concerns about the impacts of temporary skilled migration have been raised consistently resulting in frequent changes to the scheme, including most recently the abolition of the 457 visa class.
“Our research has found that key concerns around temporary skilled migration, such as impacts on local workers as a result of visas such as the 482 and its predecessor the 457, are unfounded.
“The average base salary for a skilled temporary visa holder is quite high at $95,000, meaning these workers are unlikely to undercut local employment terms and conditions.
“In addition, they are a small group, with temporary skilled migrants of working age accounting for less than one per cent of Australia’s labour force.
“However, often unpredictable change to this visa category has come at the cost of undermining the ability of business to undertake workforce planning with certainty.
“At a time when more businesses are finding it difficult to source the skills they need, strengthening and providing greater transparency and certainty around temporary skilled migration would support business investment and productivity.
“Temporary migrants also contribute to the economy by paying taxes and spending in the communities in which they live, increasing demand for goods and services and supporting local economic activity and jobs.”
Ms Cilento said while CEDA’s research confirms the positive impact of temporary skilled migration it was important to ensure that the broader community had confidence in the system and that the training levies paid by businesses recruiting skilled migrants were being effectively used to build in demand skills locally.
“CEDA’s report recommends changes to improve transparency and efficiency in the temporary skilled migration system to deliver the dual benefits of improving community confidence in the system and ensuring business can access the skills they need,” she said.
“Skilled migration supports business investment and productivity which are vital for keeping our economy strong.
“Incomes in Australia have been stagnant and lifting productivity can help lift incomes across the community.”
Ms Cilento said there are actions that can be taken immediately to improve the system and make it easier for businesses to get the skills they need now and in the future:
Increasing transparency of data and methods used in determining professions for the skilled occupation list;
Ensuring occupation codes used to assess skill shortages align with evolving labour trends to ensure temporary skilled migration is responsive to emerging skill needs;
Introducing a dedicated path for intra-company transfer of employees to Australia; and
Better aligning the Skilling Australia Fund Levy to alleviate the skill shortages driving the need for skilled migration.
“If CEDA’s recommendations are implemented, the system will be more responsive to the needs of the economy. It will also reduce reliance on low quality instruments like labour market testing to ensure that genuine skills shortages are being filled,” she said.
Ms Cilento said as a mid-sized economy far away from global markets, the importance to our economic success of free movement of goods, services, investment and skills can’t be understated.
“Australia will continue to need temporary skilled migration to fill periodic and emerging skill shortages,” she said.
“We need to make it easier for business to import the best global talent and expertise, and Australia’s temporary skilled migration system is our gateway for global talent.
“Temporary migration also lifts the skills of the broader workforce through the transfer of knowledge and expertise and by introducing new skills, in some instances enabling Australia to build critical new workforces, for example the growing cyber security industry in Australia.”
Additional recommendations in CEDA’s report include:
Establishing an independent committee to undertake analysis and consultation on the formulation of skilled occupation lists, mirroring the model used in the UK.
Tasking the Productivity Commission with a review of the temporary skilled visa program on a regular cycle every three or five years.
Moving the point of levy collection to the visa approval stage rather than visa nomination.
“Improving predictability of the scheme and increasing understanding among the wider community of the benefits to all Australians, will help deliver a fair and efficient system,” she said.
Ms Cilento said other key findings of the report include that only 16 per cent of those on student visas stay permanently, while temporary skilled visas have provided a de facto path to permanent residency for a significant proportion of those migrants.
“This ‘try before you buy’ approach to permanent residency is a positive for the individual and Australia,” she said.
“Both the individual and the employer have the opportunity to see if the ‘fit’ is right before making a longer term decision.
“Recent changes to the 482 visa, previously the 457 visa, may have disrupted this de facto pipeline and it will be worth monitoring the impact this has on the quality of temporary skilled visa holders over coming years.”
The launch of this report will be followed by events across Australia on the following dates:
Sydney 23 July | Melbourne 24 July | Adelaide 26 July | Brisbane 31 July | Perth 31 July