Australia must act now to increase our attractiveness to skilled migrants

While measures such as lockdowns and international and state border closures were extremely effective in halting the spread of COVID-19 when vaccination rates were low, they had an economic cost.

Deloitte Access Economics Research estimates that Australia’s economy in March 2022 was $153bn smaller than it would have been in a pandemic-free world. This is partly attributable to the ‘Fortress Australia’ policy that is expected to result in 900,000 fewer people living in Australia by-mid 2025 than expected pre-pandemic.

The disruption in the flow of migrants will result in lower economic growth by reducing overall demand in the economy. More significantly, it is driving the current skills shortage constraining business across the country, particularly in the fields of accounting, technology, engineering, advanced manufacturing and renewable energy.

Increasing our ability to attract high-skill workers must be a priority. A great place to start would be for the current government to commit to the former government’s promise to expand the skilled migrant stream’s share of the 160,000 places in the 2022-23 migration program. But to leave it there would be to leave the job half done.

We can’t make up for 18 months of next to no permanent migration – and nor should we. Immigration policy should never be just a numbers game. Our nation needs skilled migration that addresses population, participation and productivity. We need to frame this discussion in terms of the strategic skills we require as a nation to strengthen and grow our economy over the medium to long term.

The highest order priorities are to clearly signal to the world that Australia is open for business and work to streamline and accelerate our migration and visa process. Unfortunately, the current lengthy processing times of Australian visa applications is compounding the skill shortage challenge businesses are experiencing.

Businesses are losing skilled candidates due to the complexity of the Australian visa system and the lengthy time to mobilise individuals. Furthermore, with record-low unemployment rates, businesses are facing dire challenges in maintaining normal operations. In May, almost half a million jobs lay vacant and critical shortages in manufacturing, hospitality and transportation have resulted in businesses having to reduce work operations.

We need to act quickly. There are two practical steps the government can take to improve our skilled migration right now and have business consensus.

Firstly, the list of occupational classifications must be overhauled. Currently, every applicant for a temporary or permanent work-related visa must nominate an occupation from The Australian and New Zealand Standard Classification of Occupations (ANZSCO).

It seems fair enough – except for the fact that the ANZSCO hasn’t been significantly updated since 2013, when many of the nation’s fastest-growing jobs had barely been invented. According to ANZSCO, the top three fastest-growing jobs identified by LinkedIn in 2018 (customer success manager, data scientist, and full stack engineer) don’t even exist.

Consequentially, businesses on the cutting edge of the new economy like Atlassian and Canva say they face unacceptable complexity when attempting to fill roles crucial to our future – or are simply unable to do so.

Although the Coalition committed to updating ANZSCO in the last federal budget, it is clear the current system is not fit for our dynamic modern economy. ANZSCO must be replaced by a new occupation and skills identification system to offer more flexibility to adapt to emerging labour markets.

Secondly, we must make Australia a more attractive destination to highly skilled migrants by providing clarity around pathways to permanent residence. As beautiful as our beaches are, they won’t be enough to attract the in-demand workers we need unless they are sure they can build a life here.

From 1 July 2022, temporary and legacy skills shortage visa holders on the short-term list will be allowed a pathway to permanent residence if they meet certain criteria, with the pathway available for two years.

These changes are a start, but we need a pathway to permanent residence for all company sponsored temporary residents, if they choose. That is, the removal of the short-term and medium- and long-term lists, and a return to temporary and permanent company sponsored visas.

The lingering effects of COVID-19 mean that global migration remains subdued. We need to act to increase our attractiveness to skilled migrants – it’s a once-in-a-generation chance to ensure our economy can benefit from attracting the best and brightest.

Migration has been, and will continue to be, core to our successful development as a country.