The Australia China Business Council (ACBC) submitted its review of Australia’s migration system to the Department of Home Affairs, and it has pointed to numerous pertinent issues that need to be evaluated.
Three major issues were considered in the review titled A Migration System for Australia’s Future; these were –
1. Australia’s need for skills and investment
2. The Significant Investor Visa (SIV) and
3. The Global Talent Program.
Australia’s need for skills and investment
As the report pointed out there is a significant skills gap with serious shortages in specialised fields. An estimated 35% of skill level-one professional roles (requiring bachelor degrees) are experiencing worker shortages. This was influenced by Australia’s border closures as a response to the COVID-19 pandemic and it highlighted the extent to which Australia is dependent on international skills to fill labour and skill shortages.
While the impacts have been particularly visible in hospitality serious shortages are also evident in fields closely linked to Australia’s future development as a sophisticated, internationally competitive economy. ACBC stated that empirical analysis shows that 87% of jobs now require digital skills, and that Australia will need 156,000 new technology workers to keep pace with this rapid transformation.
Talent shortages will constrain Australia’s ability to achieve the growth and transformation needed to maintain competitiveness in key sectors, and investment shortages will limit the ability for companies to grow to their full potential.
SIV’s should stay
Last year Home Affairs Minister Clare O’Neil suggested that the Significant Investor Visa (SIV or ‘golden ticket’) could be scrapped. However, the ACBC’s document stated that it was an important program that brings financial benefits for the Federal Government.
The (SIV) aims to attract investors who seek permanent residency in Australia. It is available for people who invest at least $5 million into complying investments over four years in Australia, subject to a rigorous screening process. Around 2300 visas were granted since the program’s inception. For the Australian Government, the program generates tax revenues. There is a high-level of transparency over investors’ tax obligations. Assuming a 5-7% annual rate of return, a $5 million investment will generate $250,000-$350,000 in taxable income each year. This tax contribution will increase over time mirroring the rise in value of these investments.
Evidence from fund managers shows that many of these visa holders make investments in addition to the required $5 million, given the convenience of investing in Australia while living here. This program important for Australia relative to larger economies, given our smaller population and more limited pool of investment funds. Chinese nationals accounted for 85% of the 2,300 significant investor visas granted since 2012.
Global Talent for Expansion
High-level talent from overseas markets brings not only technical and commercial skills, but also cultural background, networks, and links to marketing channels that help them succeed in international business. For a country with some 83% of exports destined for Asian markets, these links are important.
Following abolition of Subclass 132 Business visas, for people without prescriptive qualifications (ie qualifications directly related to their occupational field), the Global Talent Program remains the only remaining pathway for talented and skilled applicants to obtain permanent residence.
Competition for global talent is fierce and likely to become more so. Many developed countries offer comparable programs to Australia’s Global Talent Program. China itself, hitherto an exporter of talent, has identified the development and attraction of talent as a key issue in its economic future. The United States captures 40-50% of migrant inflows to all OECD nations, through visa programs targeted at talented individuals.
Australia migration policies need to take into account all these factors now that a new government is in place and one which is seeking to re-connect with the Chinese government in a more useful framework.
Photo by Bruce Röttgers