Damian Drum (Nicholls, National Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Migration, I present the committee's report, incorporating dissenting reports, entitled: Final report of the inquiry into Australia’s skilled migration program. I defer my position to enable the chair, Mr Leeser, to speak to this report.

Report made a parliamentary paper in accordance with standing order 39(e).

Julian Leeser (Berowra, Liberal Party) Share this | Link to this | Hansard source

[by video link] by leave—This report is about getting the skilled migration program ready for Australia's post-pandemic recovery, ensuring the program continues to serve Australia's needs. This inquiry was referred in February 2021, and in March we presented an interim report responding to immediate issues raised by the pandemic and how we might attract outstanding global talent to Australia.

With the onset of the COVID-19 pandemic, Australia shut its borders to the world. As a result, more than half a million temporary migrants left our shores. Many of those temporary migrants were skilled migrants. Net overseas migration continues to be in negative territory, with a further 77,000 people expected to leave Australia in the 2021-22 financial year. The lack of skilled migrants and near record low unemployment have resulted in major skill shortages in the Australian economy, impacting the viability of business. Even despite lockdowns, today's job ad figures are up 38 per cent on pre-COVID rates.

The committee received evidence of significant skill shortages emerging in the economy during the pandemic and the importance of skilled migrants in creating more jobs for Australians. Restaurateur Chris Lucas outlined the impact skill shortages are having on his business and its ability to create jobs. He told the committee:

We can't get the sushi chefs so we can't open the restaurant at all. Every sushi master that comes into the restaurant trains another five or six young Australian chefs, so it's starting to impact on our ability to train local people, to bring them up to local standard.

In order to address critical labour shortages during the pandemic, the government established the Priority Migration Skilled Occupation List, or PMSOL. In the interim report, the committee recommended that the government include a broader range of occupations on the PMSOL, including veterinarians, chefs and civil and electrical engineers. The government implemented these recommendations and have added more than 20 occupations to the PMSOL.

The final report builds on the interim report and seeks to place the skilled migration program in context. The final report considers whether the skilled migration settings are serving Australia's interests, and its tradition of being selective about who we take in, while ensuring businesses can get the skills they need. Skilled migration is one of the policy levers that governments can use to address skill shortages. Other levers include higher education, vocational education and employment services programs. Andrew Kotzur, CEO of Kotzur silo manufacturers in regional New South Wales, told the committee:

Migration, including skilled migration, is only one part—albeit an important one—of the solution. Business and government also need to work together to grow the skills base, to reduce other constraints—let's call that the red tape—and improve the productivity of our existing labour and capital assets. The inflexibility, complexity and cost of the current migration system means it is less efficient and less effective than it could be.

The committee found that there needs to be greater coordination of effort across governments and across jurisdictions to clearly identify and quantify labour shortages and put in place the most appropriate policy response to address them. The committee recommends the development of a national workforce plan led by a cross-jurisdictional interagency committee to provide a more comprehensive picture of workforce gaps in our economy.

Another key issue that emerged during the inquiry was the role of the skilled occupation lists that underpin Australia's skilled migration program. Such lists need to be more flexible and responsive to workforce shortages. It's become clear that the Australia and New Zealand Standard Classification of Occupations, better known as ANZSCO, which was never designed to be used for the skilled migration program, is out of date, not fit for purpose and should be replaced by an alternative system to be developed by the National Skills Commission.

The committee heard that businesses are missing out on skilled migrants who may choose countries where the pathway to permanent residency is clearer. Ron Curry, from the Interactive Games and Entertainment Association, told the committee:

The fact that these kinds of roles do not lead to permanent residency makes hiring senior and niche talent exceedingly difficult. The prospect of having to leave the country after a relatively short amount of time is less than enticing, in particular for the kind of senior talent that might've come with families.

The committee therefore recommends providing skilled migrants a clearer pathway to permanency but with conditions and length of time to permanency varying depending on skill level. The committee has addressed issues around the administration of the skilled migration program. We've recommended more incentives for migrants to move to regional Australia; encouragement for the brightest international students to remain to address persistent skill shortages; and streamlining processes and service improvements in the Department of Home Affairs.

I note that Labor have not dissented from this report, but they play politics in their additional comments. Labor's comments show they're not interested in regional Australia or the industries most affected by the economic impact of the pandemic. Labor remain divided on the 'no more migrants' dog whistling of Senator Keneally and the 'prioritise every non-economic migrant' of the member for Bruce. The coalition have spent years cleaning up Labor's mess. Labor's record on migration is bad, and we won't be taking advice from them.

Finally I want to take the opportunity to thank all my committee colleagues and everyone who has made a submission, assisted with a site visit or given evidence to this inquiry, as well as the secretariat and Annie Phillips from my office, for their work on this report. I commend the report to the House.

Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I'll keep my remarks as brief as possible but note that I'm speaking on behalf of the deputy chair and all other Labor members of the committee, and there is no opportunity in the Federation Chamber. At the outset, I thank the chair. I really want to make four points. Labor members agree with most although not all of the report, but that's not saying much. The first point is what a missed opportunity this report is. Australia has right now a once-in-a-generation opportunity to reform our migration program. The borders won't stay shut forever and neither should they, but, true to form, the government have squibbed it with this report. The report into skilled migration is a missed opportunity to rethink the program for when the borders open, to attract younger, highly skilled migrants and boost Australia's long-term economic prospects and wealth and get wages moving again. The recommendations, as outlined, are reactive, piecemeal administrative tinkering overall, lacking deep thought and real change—setting up a new committee, changing one coding system for another. People could well view this inquiry, at its worst, as a low-rent complaint shop run by the government to make it easier for employers to bring in migrants, yet doing nothing to boost Australian wages or our long-term national wealth.

Australia is a nation built great by migration—permanent skilled migration overwhelmingly—and that should continue. Yet the government has not taken this as an opportunity for any deep thinking. Most tellingly, the report is completely and totally silent on the most substantive, thoughtful submission we received, from the Grattan Institute. I don't agree with all their ideas, but at least it was a deep attempt to provide an intellectual rigour and evidence based argument to boost the economic value Australia gets from migration.

I do support most of the recommendations about regional migration. I think it was a bit of a cheap shot from the chair—whom I consider a friend and who is actually a terrific chair of this committee—to suggest that Labor is not supportive of doing more for regional migration. But the report fails to address the integrity concerns regarding the global talent investment visa, which has been described by a former deputy secretary of immigration as a cronies' dream. The Grattan Institute also raised concerns regarding this program. It needs evaluation.

The second point I want to make is that this report is a remarkable and blatant repudiation by government members of Peter Dutton's tenure as minister for immigration. It's a complete reversal of his changes to skilled migration and a vindication of Labor's criticism. I'll just point to three issues. Government members, rightly, have recommended restoring pathways to permanent migration. This is a huge shift in policy, ensuring that skilled visa holders can settle permanently in this country, send their kids to school, get an education, join their local community, start doing business and build careers. We heard from business after business, in regions and cities, how ridiculous it was that people could come here on some kind of permanent insecurity underclass program that leaves them vulnerable to exploitation and holds down wages. To their credit, the government members listened and rolled the former minister's changes. Secondly, they recommended fixing the confusion in the skills shortages lists, consolidating them back into one list and also, I hope, helping to deal with the lack of transparency about the rent-seeking mystery of who ends up on the list or not.

Thirdly—and this is my personal favourite—they recommended bringing back good old-fashioned customer service, having human beings available to liaise with industry and assist applicants with complex cases. OMG! It is long overdue but can only be achieved with additional resources, reversing some of the massive cuts—thousands of staff cut—by this government over many years, which the report conveniently fails to mention. It is constantly bemusing in committees, including this one, to watch government MPs get frustrated with public servants because they don't have the resources, yet they never take responsibility for the cuts that they've made. They fail to join the dots. The Public Service is not a magic pudding. It's a critical national institution that the government should invest in and not attack and cut.

Also—and I won't dwell on this—there have been the TAFE cuts. We need to invest more in the training system. TAFE is not doing its job. That's why we need migrants. That's what the evidence says. The government members never want to talk about the $3 billion of cuts to TAFE from Tony Abbott as Prime Minister onwards. If we could insert emojis into Hansard, at this point I'd choose the eye roll and the facepalm. It is disappointing but telling that government members did not rule out privatisation or outsourcing of the visa system, and it's disappointing that throughout the inquiry government members kept pushing for more foreign workers to be allowed in at the expense of stranded Australians. I acknowledge there's a skills shortage in many parts of the country; no question, that's what the evidence says. But what I don't accept is that we write a blank cheque to foreign workers at the expense of 38,000 stranded Australians. That's the equation and that's the trade-off that they don't want to acknowledge.

The third point is the most shocking revelation throughout the inquiry, and that is that no government department seems to know anything about or has done any analysis of the impact of temporary migration on Australian wages—nothing, zip, just blank looks. Home Affairs employment just looked confused. The Temporary Skilled Migration Income Threshold is the minimum salary you have to pay a temporary skilled migrant. It's been frozen for eight long years under this government, since the Prime Minister started off as the minister, at $53,900. It's a damaging freeze that's put downward pressure on wages, especially at the lower end of the market. Evidence was presented and there was significant media commentary throughout the inquiry. The Reserve Bank of Australia Governor talked about the impact of the migration program on wages. The McKell Institute issued a report. Freezing wages for eight long years creates not a floor in wages but a ceiling on wages for Australian workers and temporary work visa holders alike across several sectors, as the National Skills Commission data showed. The gap between the TSMIT and annual average wages is now $26,000. That's what happens when you freeze it. It's a gap of $26,000, which makes it far more attractive in many sectors to hire a temporary work visa holder, rather than an Australian worker—not everywhere, but in too many sectors.

Labor believes that Australia's post-pandemic migration program must deliver genuine highly skilled migrants, who are properly paid. It goes to the composition of the program. This is not an antimigrant comment. It goes to the composition of the program, which this report just didn't tackle. The committee, sort of to its credit, I think at the insistence of Labor members throughout the inquiry, was embarrassed into recommending a gradual increase in the TSMIT. That is a big shift, but it's not nearly enough. They've had a report from their own hand-picked expert since 2017, which they've failed to act on, saying raise and index the TSMIT. Significantly raising the TSMIT and ensuring its ongoing indexation would act as a safeguard against the types of temporary migrant worker exploitation and wage stagnation that have become systemic features of the pre-COVID labour market—deliberate features.

Predictably government members proposed to relax labour market testing in multiple places throughout the report. Labor members do not agree with the extent of the government's weakening of this important regime to ensure Australians always get a first go at jobs. We do acknowledge in the report—and this is a shift for us—the case in limited circumstances while the borders are closed for a change, and we pointed to those. It's not true to say what has been alleged by the government. But this is part of the Morrison government's ongoing push to undermine labour market testing, reducing incentives for business to employ Australian workers.

The final point is on international students. We welcome ideas to improve post-study work rights and pathways to permanency for the highest-performing international students in a critical skills shortage area. It's a little bit academic, given the state of the sector with the borders closed, but that's for another debate. We're especially pleased that the report acknowledges the situation of the current international student graduates, 485 visa holders, who are stuck offshore. Their visas are going to expire before they can use them. Labor members raised these issues with the department through the inquiry. These young people have made an investment in our country, and they were made a promise by our country of post-study work rights in return. With the borders closed, they're stuck offshore and there's no commitment—just radio silence from the government—to extend or allow renewal of the visas when they can safely come back. This is incredibly damaging to Australia's reputation in what was our fourth-biggest export sector, and denies Australia a proven source of highly skilled and well adapted young migrants. Australia can do much better by these graduates, and the government must urgently address this issue.

I thank the chair for the way he conducted the inquiry. As was noted, we agree with most of the recommendations, but they're a massive missed opportunity. I do not accept and strongly reject the characterisation that Labor is somehow anti-regions or anti-regional skilled workers. We've done our best in good faith to acknowledge those points, but the government have to acknowledge the trade-off with stranded Australians because of their failure to build quarantine facilities and failure to secure enough vaccines.

Damian Drum (Nicholls, National Party) Share this | Link to this | Hansard source

by leave—I would like to thank the chair, Mr Julian Leeser, for the work he did as chair of this committee. It's an important report and the inquiry certainly got out into the regions, which was worthy. Certainly the information that we were able to take in as evidence was very important when it came to putting the recommendations together. I would also like to thank my coalition colleagues and my Labor colleagues in this committee. As I think most people in this House would understand when it comes to skilled migration and unskilled migration, the Labor Party come from a long way away from where we need to be. When we talked to businesses and industries about the actual real need that we have, it was always a struggle to reach a medium where we could actually move forward with policy.

However, I think the report lands in a pretty good space. It talks largely about how we can make it easier in relation to areas such as market testing. Right now in Australia, when a business needs to get a sheet metal worker, a diesel mechanic or another specialist in, they have to advertise in print, and the print advertisement in the local papers costs thousands and thousands of dollars. They have to do that for 28 days. It's quite ridiculous, when you can simply go onto seek.com and see that there are 2,000, 3,000 or 4,000 vacancies for these positions.

We spent a lot of the time understanding why these provisions are in place, where we have to prove what everybody in Australia already knows: there is an incredible shortage in certain sectors in the employment sphere. Right now if you go online and pull up chefs, you will see that there are around 5,000 vacancies in Australia. There are about 3½ thousand vacancies for restaurant managers. Yet, if anybody wants to bring an overseas worker in for either of those two areas, they have to advertise for a month in their local newspaper, at a cost of thousands and thousands of dollars. It's ridiculous. When we put that to the Department of Employment, Skills, Small and Family Business, they rejected the idea that they should have a better understanding of the various sectors right throughout regional Australia or in fact metropolitan Australia. We made recommendations in that regard.

I think the real understanding is that the pathways to permanency provisions that we have put in place will benefit Australia greatly. There is the realisation that the employment situation in so many different sectors is completely different in regional Australia to what it is in Sydney, Melbourne and Brisbane. This goes to so many of the trades. Tradies can be expensive in Melbourne and Sydney, but at least you can get one. You put an advert in the paper or you go on seek.com and you fill that position relatively easily. In the regions, it's not like that, and this report highlights, through the evidence that we were able to receive, that disparity.

I again want to acknowledge the chair. I want to acknowledge the way that the Labor Party, even though they start from a long way away, have worked hard—Maria Vamvakinou, as the deputy chair, and Julian Hill—and come together to put the report in a way so that we can move forward and accept the report as a whole. I thank the committee for its work.