CEDA CEO update: 29 March 2021

Today CEDA is releasing our latest research report A good match: Optimising Australia's permanent skilled migration, which focusses on ensuring we are attracting the right talent to Australia to meet emerging skills needs, an issue I know many CEDA members are concerned about.

The role of migration in Australia’s economic and social development is an issue CEDA has been examining for a number of years and this report really drills into how we can improve the current system to better match the skills of migrants with the needs of business and industry. Based on discussions with members across a range of forums, it is clear that skill needs are front of mind for many CEDA members and that many are finding it challenging to access they skills they need even at this early stage of our economic recovery. 

Our analysis shows that 23 per cent of skilled migrants are experiencing skills mismatch, that is, working at a job beneath their skill/education level. A good example would be an engineer or similar working as an Uber driver or a postgraduate physics degree holder working as a barista. 

Permanent migration has been key to Australia’s economic development over the last century and Australia’s points-based skilled migration system has become the envy of advanced economies around the world. While the system overall has worked well, it is concerning that in a system increasingly designed to strictly target in-demand skills, so many are experiencing skills mismatch.

Our exclusive analysis of Department of Home Affairs survey data and Bureau of Statistics wages data found this skills mismatch cost at least $1.25 billion in foregone wages between 2013 and 2018.

This money would otherwise have been spent by migrant workers in the economy and contributed to federal and state budgets as taxes. Long-term mismatches also create even bigger economic losses through lost productivity, innovation and unfilled skills shortages in critical sectors. 

The system has also been slow in responding to emerging skill needs. Occupation classifications which are used to determine in-demand skills have not been updated since 2013, so skills such as data scientists, which until 2019 were not even listed, are now slotted into a classification along with lobbyists and electoral officers. And occupational caps placed to stagger the entry of skilled migrants means it is hard to keep up with rapidly emerging skills needs. Data from CEDA member SEEK, shows there is a sizeable gap between job vacancies and available candidates for data scientists. It is precisely in these areas of rapidly emerging opportunity that we can least afford to lag in the competition for talent. A system that does not help us access critical skills when we need them means we will be unable to keep up with global competition. 

While the government has recognised and responded to this challenge, it has adopted a band-aid approach. 

Our report recommendations would deliver a more nimble and responsive system with better results for both migrants and employers seeking key skills.

CEDA’s report makes four key recommendations: 

• The Federal Government should set up a new government-regulated online skills-matching jobs platform. Permanent skilled migrants could register their skills on it, and accredited employers could hire migrants from within the platform. It would initially apply to a small segment of the skilled migrant intake. This would be a really transparent way of improving the system, and because of its transparency, would increase confidence in the system. 
• The ABS should update the codes that define the occupations facing skills shortage. This is to ensure that migrants with cutting-edge skills can come to Australia.
• To retain community confidence, the Federal Government should be more transparent about how it assesses whether occupations are included on skilled occupation lists. Two options include: Releasing the Department of Employment’s analysis behind the lists occasionally, and establishing an independent committee similar to the UK’s Migration Advisory Committee to advise on the occupation lists. 
• The Federal Government should cut the Newly Arrived Resident’s Waiting Period for unemployment payments from four years back down to six months, to give permanent skilled migrants a better chance to find the right job. Research suggests that increases to this waiting period since the late 1990s have made the skills mismatch among skilled migrants worse. And it’s brought only modest savings to the federal budget.  

Australia is confronting its first period of net negative migration since World War II. This will drag on economic growth and exacerbate the long-term headwinds of an ageing population. 

As our rate of net migration growth begins to turn positive again in 2022, the skilled migration system must be recalibrated to support existing and emerging industries, while also retaining community confidence by ensuring skills are well targeted and the system is transparent and responsive.   

In addition to the report link above, you can also read the media release and my opinion piece, listen to our policy snack podcast explainer or watch a short video featuring our Senior Economist Gabriela D’Souza discuss the report findings.

You will notice that the report content on the website is now more dynamic and interactive. This is part of the upgrades that we have been rolling out to offer new and easy ways to access CEDA’s content. I am keen to hear your feedback on our new approach.    

Programming update – check out the events in your state

In other CEDA news we are really starting to get back in the swing of things with our events and have added a significant number of events to our programming schedule recently and are particularly focussed on providing some great face-to-face opportunities in each state.

I’ve had the opportunity to get out and about and talk to business leaders and policymakers in the last few weeks and I know members are keen to do the same.

Over the next eight weeks we have 14 face-to-face events with a mix of public events and Trustee briefings across NSW, Victoria, Queensland, WA and SA. They kick-off tomorrow with our event, Western Sydney: what next for the Aerotropolis.

Complementing these are our virtual roundtables and livestreams with a further seven scheduled during this period including our AI: innovation in action livestream on Wednesday. You can still register here.

You can view all our upcoming events here.

In further exciting programming news, last week we welcomed Jo Lilley as our new Director of Content Programming. As previously mentioned, Jo comes to CEDA from Macquarie Group and prior to that EY. Jo has some exciting ideas for driving strategic, thought-provoking conversations through CEDA’s event program so you can expect to see and hear more from her and our programming team in the future.  

If you want to reach out to Jo with any ideas or suggestions you can email her here. 

Watch

As mentioned above, you can watch a short video on the CEDA migration report with CEDA Senior Economist Gabriela D’Souza here.

Also, if you missed our livestream last week, look out for the video to be posted this week from our Net zero: jobs and opportunities in a climate positive future event with Professor Ross Garnaut AC.

Read

Check out a new opinion article from ANU Centre for Aboriginal Economic Policy Research Visiting Fellow, Michael Dillon, who considers the potential for codesign to drive meaningful change in Indigenous policy. 

Listen

Keeping with the migration theme, check out our latest policy snack explainer on skilled migration. 

Members

A big welcome to our new member Open Minds and thank you to our renewing members:

New member

Open Minds

Renewing members

National

Australian Petroleum Production and Exploration Association (APPEA)

Commonwealth Treasury

Plenary Group

Westpac

Corporate
Flinders University

Governance Institute of Australia

Infigen Energy

Maroondah City Council

RAC (WA)

St John of God Health Care

The Star Entertainment Group 

Workskil Australia

Business
Adelaide Convention Centre

Cannings Communications

City of Prospect

GWI

Michael Johnson & Associates

The Big Issue Australia

Wilderness School

Looking forward to catching up at a face-to-face event soon.  

Melinda Cilento