I move:

That this bill be now read a second time.

The Migration Amendment (Visa Capping) Bill 2010 amends the Migration Act 1958 (the Act) to give the Minister for Immigration and Citizenship greater power to effectively manage the migration program.

The number of places in the skilled migration program available to applicants who are not sponsored by an employer continues to decline, as the government’s priority is to support demand driven—that is, employer sponsored—migration. At the same time, the number of pending applications continues to grow as the demand for general skilled migration visas exceeds the number of places available in the program.

The general skilled migration visa program has also become dominated by applicants nominating a limited number of occupations even though there are some 400 occupations that are acceptable for general skilled migration purposes. This has made it difficult for the program to deliver the broad range of skills needed in the Australian economy and the Australian labour market.

In the 2007-08 program year, of the 41,000 general skilled migration visas granted, more than 5,000 went to cooks and hairdressers. Further, there are currently 17,594 valid applications which have been made by people nominating their occupation as a cook or hairdresser which have not yet been finalised.

This matter is currently being addressed through priority processing arrangements. Under these arrangements, applicants that are sponsored by an employer, nominated by a state or territory government authority, or have an occupation which is in critical demand in Australia have their application processed before other applications.

However, these arrangements alone do not address the problem of large numbers of valid applications that continue to be made by applicants who are not sponsored and who are nominating occupations that are not in demand. Currently there are 147,000 primary and secondary applicants for general skilled migration visas waiting in the pipeline for a visa decision.

To address these issues, the bill proposes to introduce a power by which the minister may cap visas and terminate visa applications on the basis of certain characteristics.

Currently, the Act gives the minister the power to make a legislative instrument in a certain class or subclass to cap visas and terminate applications for that class or subclass. The proposed amendments will enable the minister to cap visa grants and terminate visa applications based on the class or classes of applicant applying for the visa.

In particular, the proposed amendments will allow the minister to make a legislative instrument to determine the maximum number of visas of a specified class or classes that can be granted in a financial year to visa applicants with specified characteristics. Similar to the current power, the amendments will also allow the minister to treat outstanding applications for the capped visa as never having been made.

Characteristics that may be specified include the occupation nominated by the applicant, or the time at which the applicant made their application. The characteristics will be objective, and relate to information that is provided to the department when an application for a visa is made.

The characteristics that will be specified will depend on the purpose of the particular determination to cap and terminate visa applications and will be consistent with Australia’s international obligations. For example, if the determination is made for the purpose of limiting the number of applicants in the skilled migration program with the same nominated occupation, then a cap would be placed on applications which nominate that particular occupation.

To terminate a visa application is different to a decision to refuse a visa application. When an application is terminated it is taken not to have been made. Applicants who are affected by a cap will have their visa application charge refunded to them. Further, a visa application which has been terminated is not subject to merits review.

The amendments proposed in this bill not only provide a power to cap general skilled migration visas and terminate general skilled migration visa applications but are broad enough to allow other classes of visas to be capped. This provides the government with a tool for the targeted management of all aspects of the migration program which will be available as the need arises.

The exception to this will be protection visas. The minister cannot make a cap and terminate determination in relation to protection visas.

However, the primary policy imperative of the proposed amendments is to allow the minister to end the ongoing uncertainty faced by general skilled migration applicants whose applications are unlikely to be finalised because their skills are not in demand in Australia.

The proposed amendments will better address Australia’s skills shortages by limiting the number of general skilled migration visas able to be granted to applicants whose occupations are in oversupply, thereby leaving more spaces in the program available to applicants whose occupation is in demand.

This will allow the Australian government to deliver a skilled migration program that is more tightly focused on high-value skills that will assist in meeting the medium- to long-term needs of the Australian economy.

The government’s intention is to establish a realistic balance between providing the skills Australian employers need and ensuring the maximum opportunities for Australian citizens and permanent residents in a changing employment market.

This amendment is just one in a package of reforms the government is currently making to the skilled migration program to ensure that it is able to target skilled migrants with the high-value, nation-building skills that Australia needs.

This bill represents an important step in achieving the government’s objectives of a flexible skilled migration program that can be adapted to the economic and business cycle and the needs of Australian business and industry.

Debate (on motion by Mr Robert) adjourned.