Easing my Migration hangover

July 1, 2022
Myer Lipschitz

Today is New Year’s day in Australian migration terms. 1 July marks the commencement of a new immigration year and just as we do for the calendar year, we look back on the year that’s been and speculate on the year that lies ahead.

The phrase that best sums up the past year has been “skills shortage.” According to a recent statistic:

1. There are more than 423,000 job vacancies.

2. Unemployment rate is at 3.9% – the lowest it’s been since 1974.

3. One third of businesses are struggling to find workers because of a lack of applicants and a lack of skills, and it affects almost every sector of the economy, acting as a significant constraint on business growth.

The obvious solution is to increase migration. As a hangover from the pandemic we had a net outflow of 88,800 people for the 2020 – 2021 financial year, and the government needs to increase the annual migration quota from 160,000 permanent resident visa places to at least 220,000. Whilst this may appear to be a significant increase, we used to have a migration quota of 190,000 until the previous Coalition government (Liberal and National parties) reduced the quota to 160,000 in March 2019 to reduce the congestion in the three major cities, Sydney, Melbourne and Brisbane.

They didn’t have to do this because Australia already had a regional migration program which encouraged skilled migrants to move to regional parts of Australia (anywhere outside of Metropolitan Sydney, Melbourne and Brisbane) which essentially involved candidates in certain occupations having to move to regional areas to have a pathway to secure permanent residence.

Unfortunately, immigration policy is often drafted and implemented for the purposes of gaining votes, not necessarily what is in Australia’s best interests.

Fortunately we have a new Labor government and Labor governments are traditionally more migrant friendly than Coalition governments. This might seem a bit incongruous because one would normally assume Labor governments to be more closely aligned with trade unions but it’s not the case.

Increasing migrant flows isn’t only about increasing the quota, visas still need to be processed and processing times on the part of the Department of Home Affairs have lengthened quite dramatically. It takes anything from 30 days to 15 months to process a temporary skill shortages visa (temporary Work Visa). It’s the worst I’ve ever seen.

We are expecting processing times to improve now that the problem has received such publicity. Department of Home Affairs and Australian Border Force staff that were previously focused on processing Covid related travel exemptions are now being redirected to visa processing, and accordingly we are expecting faster processing times.

Whilst the annual migration quota hasn’t increased as yet, the proportion of the immigration quota devoted to skilled migration has, reverting back to the pre-pandemic level of two thirds “skilled” versus one third “other”. This will result in significant quota increases for skilled independent visas that are based on a points system and don’t require state nomination, as well as those state nominated visas.

Most of our clients overseas who don’t have offers of employment in Australia tend to rely on these visa classes, and the beginning of the immigration year heralds new lists of occupations to be produced by state and territory governments (there are eight of them).

The severe skill shortages in Australia and the increased quotas will result in a more diverse spread of occupations appearing on state nomination lists with more places available per occupation.

It’s also going to result in increased competition on the part of state and territory governments to secure skill sets that are in worldwide short supply and is going to be interesting to see the competition between states in this regard.

Traditionally state governments have imposed additional requirements to secure state nomination, usually giving preference to those scoring higher points but often introducing other factors such as number of years of skilled work experience in the nominated occupation, English-language scores and whether applicants are living and working onshore (within a particular state) or offshore (overseas).

Preference has often been given to those living and working in a particular state because they have already demonstrated their commitment to that state, but it’s going to be interesting to see how competitive each state is going to be when producing their lists of occupations and the criteria for obtaining a visa.

Because Australia has always been such a desirable migration destination, there hasn’t been a shortage of applicants in the past and state governments have been able to dictate the criteria. But skill shortages are a global issue and not only will states be competing against each other, most Western countries such as United States, Canada, United Kingdom have competitive immigration programs often with less red tape and faster processing times than Australia.

It’s going to be an interesting immigration year and whilst I nurse my hangover from the immigration year that’s been, I am filled with hope and optimism for the year ahead driven largely by the fact that at last we have a government that recognises the need for migration and the contribution that migrants bring to Australia, as well as the recognition on the part of employers and state and federal government officials for the need for skilled migrants to Australia.

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