Is the Australian visa reform heading the wrong way
"Abolishing the Business Investment and Innovation Program and boosting the number of skilled worker visas would supercharge the economic benefits of Australia’s skilled migration program and result in nearly $4 billion in extra personal income tax receipts alone over the lifetime of each yearly migrant intake."
This is the outcome of a report by the Grattan Institute of Australia released a week ago. According to the report the Federal Government has recently moved policy in the wrong direction by shifting the composition of the permanent skilled intake towards older and less-skilled migrants. The Business Investment and Innovation Program visa-holders bring fewer benefits than skilled migrants selected through other streams, because they are older, speak little English, and earn lower incomes in Australia. As a result, more than one-in-four permanent skilled visas are now allocated to boosting business investment and to the unproven Global Talent program. They say these changes should be reversed because they have reduced the lifetime fiscal dividend from each annual intake of permanent skilled migrants by at least $2 billion.
The report is sceptical about the new Global Talent initiative, which utilises a Distinguished Talent visa and prior to November 2019 was representing insignificant portion of the migrant intake, but expanded rapidly over the past 18 months. Its value is still being assessed and the proposal is that until there is available data on its benefits it should be scaled back.
The reports says that when Australia reopens the borders, the visa programs should unashamedly select permanent skilled migrants for their long-term economic potential. Skilled migrants are younger (significant part of the intake is made out of the 25 to 33 year old applicants). They are often highly skilled in their occupation and earn higher incomes than the typical Australian. Consequently, the assessment is that they generate a fiscal dividend for Australians because they pay more in taxes than they receive in public services and benefits over their lifetimes.
Other reforms suggested include making employer-sponsorship available for workers in all occupations provided they earn above median full-time earnings of $80,000 a year. Such a change would better target visas to people with the most valuable skills, and simplify the sponsorship process for firms and migrants. And according to the report it could boost the fiscal dividends by at least another $9 billion from each yearly intake. Thus, the proposal made is that the number of skilled worker visas – allocated via employer-sponsorship and the points-test – should be expanded. For the same reasons the points-tested visas should no longer be restricted to occupations identified as having skills shortages. The arguments in support are that it is not possible to objectively identify skills shortages and that in fact stakeholders' lobbying is driving these lists.
The report titled Rethinking permanent skilled migration after the pandemic by Brendan Coates, Will Mackey and Grattan fellow Henry Sherrell (one of Australia’s leading experts on migration policy) examine various way to improve the migration system to ensure that it delivers the greatest benefits for Australia and is the first of a series of Grattan reports to be produced on the topic of Australian migration.
Watch this space for further changes as the Australian Government continues to amend the migration policies to respond to the trends of the local economy, political agendas and the interests of Australia.
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