Australia’s skilled migration system should be overhauled to favour younger migrants and the business investment visa should be scrapped, the Grattan Institute has argued, predicting the changes would lead to billions of dollars in savings each year.
The report, released on Monday, said the government’s move to allocate more places to the business investment and global talent streams “went in the wrong direction” by taking permanent spots away from skilled working visa applicants, who are more likely to be younger and higher-earning over the long term.
More than one-in-four permanent skilled visas are currently allocated to boosting business investment and attracting international talent, the independent think-tank said.
It was revealed in Senate Estimates last week that the government had increased the planning levels for employer-sponsored visas by 1,500 places, skilled independent visas by 1,000, and the regional category by 1,950, while the number of business innovation and global talent spots dropped by 2,500 and 4,000 places respectively.
“When we reopen the borders, Australia should unashamedly select permanent skilled migrants for their long-term economic potential,” said Grattan Institute economic policy program director Brendan Coates, who co-authored Monday's report.
“Skilled migrants tend to be younger, have more skills, and earn higher incomes than the typical Australian – so they generate a fiscal dividend for Australians because they pay more in taxes than they receive in public services and benefits over their lifetimes.”
Business Innovation and Investment visas are available to people who operate businesses in Australia, with applicants likely to be older, while the Global Talent visa targets migrants who are internationally recognised in their profession.
The Grattan Institute said the Business Innovation and Investment visas should be abolished as there were few investors “financing projects that would otherwise not occur”.
Meanwhile, the value of the Global Talent visa - which was drastically expanded from a pilot program to 11,000 places in 2020-21 - is “unproven”, the report said.
But while the report called for the number of employer-sponsored and points-tested skilled worker places to be expanded, it also recommended a number of changes to the program.
They include scrapping the skill shortages list - which prioritises potential migrants in certain professions - and increasing the minimum earning threshold for employer-sponsored visas in all occupations from $53,900 to $80,000 a year.
These changes would better target people with the most valuable skills and could boost the budget by at least $9 billion each year, the report said.
“One positive from the COVID catastrophe is the unique opportunity for Australia to reset and improve our skilled migrant intake,” Mr Coates said.
“Our report shows how we can seize this moment to make Australia an even better place – for those of us who already live here and for those who aspire to come here.”
The federal budget, released earlier this month, revealed the government’s prediction that international borders would remain closed until mid-way through 2022.
The migration program will also remain capped at 160,000 places in 2021-22, with treasury estimates suggesting it will take at least another two years for migration to return to pre-pandemic levels.
Australia is set to lose another 96,600 people in net overseas migration this financial year, after migration fell to negative levels for the first time .
