News & Insights

Home Affairs Minister Clare O’Neil addressed the National Press Club (27 April 2023) in a speech outlining the Government’s ‘once-in-a-generation’ reform of the Australian migration system. The address follows the release (yesterday) of a 200-page report, the result of an extensive review of Australia’s migration system commissioned by the Minister in 2022. Coinciding with the address, a draft outline of the Government’s new migration strategy will soon be released, with a final strategy to be announced later in 2023 following consultation and collaboration.

Macpherson Kelley’s Migration team have compiled some key takeaways from the proposed system redesign that will ‘end a decade of ad-hoc and piecemeal changes’ and restore Australian values to the ‘heart’ of the system.

Restructure of the temporary skilled migration program

The draft outline of strategy proposes a system with three new pathways.

1. The first, will be ‘fast and simple’ streamlined tier for highly skilled and high earning workers needed to drive innovation and create local jobs.
2. The second, is a mainstream pathway for core skills, using evidence-based assessments to identify skills shortages.
3. The third will focus on low-wage essential industries, to create capped, safe, tripartite pathways for workers in key sectors such as care.

Increase the Temporary Skilled Migration Income Threshold (TSMIT)

The TSMIT is currently $53,900, the level it was frozen at almost 10 years ago in 2013. This figure is below the earnings of 90 per cent of Australia’s full-time workers, resulting in temporary skilled migrants being funnelled into low-wage jobs. From 1 July 2023, the TSMIT will increase to $70,000.

Raising the TSMIT is also part of the Government’s strategy to significantly lift the bar for international students, who are the dominant feeder into the permanent residency program, with 54 per cent of permanent residency visas being given to former international students. Stricter requirements for determining who can enter and study in Australia is a secondary part of this policy, which the Minister noted would be addressed in the coming weeks.

Pathway to permanent residency

As of the end of 2023, all skilled temporary migrant workers will have a pathway to permanent residency in Australia. This is not an expansion of the current capped program but allows those temporary migrant workers who have previously been denied an opportunity to apply for permanent residency, to be able to do so. The Minister noted this would have a positive effect on competition for permanent residency places and would stop skilled temporary migrant workers from being ‘left in limbo’ on subsequent temporary visas.

Other program changes

The address had a strong emphasis on fixing the ‘bureaucratic nightmare’ that currently exists, by simplifying the visa system and reducing the number of visa categories. The Minister also announced that the Points Test and occupation lists used to determine which skilled temporary migrant workers remain in Australia as permanent residents and, ultimately, citizens will be revamped. She noted that the current test ‘rewards persistence, not skills’ and boasted that the new data-driven approach could add tens of billions of dollars to Federal budgets and will boost Australia in the competition for global talent.

The new approach will see the new Jobs and Skills Australia body take on a formal role in the migration system for the first time, working with clear guidance and input from businesses and unions. The new focus will be on using data to ‘prove out’ where skills are needed, integrating the job market, training and education systems, and migration system to seek out skilled migrants and speak to them about relocating to Australia.

The Minister noted that further details would be announced in the coming weeks, addressing the exploitation of migrant workers, the reform needed in the aged care system, and the renewed focus on cooperation between the federal Government and the states and territories to properly address the housing crisis and shortages of skilled workers in regional areas.

Macpherson Kelley’s take on the changes

Overall, the increase in the TSMIT is probably overdue – however, there must be a carve-out for lower skilled occupations in areas of acute skills shortages. This is especially in regional areas and agricultural industries. In these industries, Macpherson Kelly is of the view that the Department o Home Affairs should defer to EBAs and Awards that would otherwise apply to Australian workers.

The reform of the skilled occupations lists is also long overdue. The skilled lists have not been changed for almost four years. Constant revisions will assist in addressing acute skills shortages.

Finally, any approach by the government to streamline the visa process and decrease processing times would be welcomed. Currently, we are seeing too much inconsistency in decision making and processing times. A more targeted approach to high skilled and high paying jobs will be essential in addressing Australia’s acute skills shortages.

If you have any questions about the incoming changes and how they will impact you or your business, reach out to our team to discuss your options.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.