Business wants the benefit but not the burden

Due to the dwindling number of qualified temporary visa holders, corporate lobby groups are calling on the government to recruit skilled migrants – this approach would risk companies evading their obligations, writes Dr Abul Rizvi.

AT A BANKING CONFERENCE last week, business lobby groups were quick to demand an increase in skilled migration from the new Albanian government. Apparently, the labor shortage problem is “throttling” Australian businesses.

Qualified temporary entry

Every time modern Australia has faced severe skills shortages, we have seen the use of skilled temporary entry visas – the former subclass 457 and now subclass 482 – rise sharply and then fall back when the labor market weakens.

Peter Dutton's migration policies are helping to weaken the economy

This visa is demand-driven – it is not affected by any limit on the number of places in the permanent migration program. It can usually be granted much faster than a Permanent Skilled Visa and has therefore traditionally been favored by Australian employers.

Employers do not need to wait for any action from the Australian Government. After a period of employment of these temporary skilled migrants in Australia, employers can then sponsor them for permanent migration.

The graph below shows that the number of qualified temporary visa holders in Australia has been steadily declining since 2014. As of June 2014, there were over 195,000 qualified temporary visa holders in Australia. At the end of March 2022, there were just under 96,000 qualified temporary visa holders in Australia.

Source: qualified temporary entry

The initial decline in 2014 was due to a sharp weakening in the labor market when the Abbott government tried to dramatically tighten fiscal policy – hence the infamous 2014 budget to deal with the “debt and deficit disasters”. of the Labor Party.

The decline accelerated when then Minister of Immigration and Border Protection Peter Dutton abolished the old Subclass 457 visa and replaced it with the new Subclass visa. class 482.

It wasn’t, as some have suggested, just a name change. Dutton has made the Australian Skilled Temporary Visa uncompetitive internationally in a world where competition for skilled migrants will only intensify. It was a classic case of Dutton shooting Australia in the foot again.

The decline in the number of qualified temporary visa holders in Australia has continued during the pandemic, even though the Morrison government has stated that it continues to allow entry of qualified visa holders who are needed during the pandemic (per example, nurses).

With the reopening of international borders from December 2021 and corporate lobby groups calling for more skilled migrants, one would expect the use of skilled temporary entry to increase rapidly.

Source: qualified temporary entry

But the issuance of temporary visas for skilled workers abroad is only increasing very slowly (see graph 2).

While 9,825 offshore qualified temporary visas were granted in the period January to March 2022, this figure is still well below previous years and represents around half of the March quarter peak of over 19,000 visas this year. granted during the March 2011-2012 quarter.

Grants of qualified temporary visas in 2021-22 through the end of March 2022 were 20,988 and are unlikely to exceed 35,000 for the full year, down from 72,532 in 2012-13.

Surprisingly, more qualified temporary entrants left Australia in April 2022 than arrived there. Given the extent of reported skills shortages, Australian employers are simply not seizing the opportunity to recruit skilled temporary migrants from overseas as one might expect.

While this may be partly due to changes made to this visa by Dutton, this is not a sufficient explanation.

Business lobby groups would do well to guide their members on how to use skilled temporary entry to recruit the skilled migrants they need, perhaps with the help of recruitment firms or migration agents .

Increase the flow of permanent migration skills

But rather than increase the use of the skilled visas already available, business lobby groups continue to pressure the government to increase the flow of skills from the permanent migration scheme.

The chief executive of the Australian Chamber of Commerce and Industry, Andrew McKellar, is quoted as saying:

“It is entirely possible to increase the intake above this level, up to 200,000 as we have said over the next two years.

It’s unclear whether McKellar meant to increase the overall migration program to 200,000 or just increase the skill stream to 200,000.

Suppose he meant the more modest goal of a global migration program of 200,000 – which would still be the largest in our history.

Partner visas: another Dutton scandal

Chart 3 shows the permanent migration program since the mid-1980s. It highlights the reduction in the program after the 1990 recession and the increase in the migration program and the flow of skills under the Howard government from around 2001 before the program was reduced to around 160,000 per year by Dutton and Morrison.

The sharp drop in skill flow to less than 80,000 in 2020-21 was designed to make way for the Morrison government’s decision (under legal and political pressure) to eliminate the huge backlog of partner visas it seems that Dutton illegally designed. (This will likely be confirmed in an upcoming partner visa processing audit.)

Source: historical migration statistics

With the partner visa backlog eliminated in 2021-22, implementing a migration program of 160,000 in 2022-23 would require an increase in skill flow of approximately 30,000 to an overall level of 110,000 .

A global migration program of 200,000 people would require a skills flow of around 150,000 or an increase of 70,000 from the original planning level for 2021-22. What the corporate lobby groups don’t explain is how they want this raise to be granted.

Given the reluctance of employers to significantly increase the use of temporary employer-sponsored visas – which are the main starting group for permanent employer-sponsored visas – there would only be two possible ways of to obtain such an increase:

  • State/territory governments could significantly increase the number of migrants they appoint, including moving to appoint foreign migrants who do not have skilled employment in the relevant jurisdiction or a contract for skilled employment in the jurisdiction; and or
  • the government is reducing the pass mark for the points-tested qualified independent category – however, while this is doable (given the current high pass mark), a very large reduction in the pass mark would be required to get the numbers that business lobby groups want.
Visa changes target low-skilled jobs with few worker protections

Corporate lobbies seem to prefer governments bringing in skilled migrants through these mechanisms rather than their members recruiting skilled migrants directly from overseas. This is odd considering that corporate lobby groups are also calling on governments to get out of the way and let them handle things.

If governments bring in many more independent skilled migrants, employers can choose from the assortment of skilled onshore migrants that is opening up. If many of these skilled migrants do not get skilled jobs, corporate lobby groups will complain that governments are bringing in people with the wrong skills.

This approach deflects risk away from employers who can avoid the costs and employer obligations associated with employer sponsorship and pass those costs and risks onto governments and skilled migrants themselves – noting that skilled migrants do not have no access to social assistance for four years.

In the event of a sudden downturn in the labor market, these risks become extreme.

But of course, corporate lobby groups will never buy into this cost and risk shifting strategy.

Dr Abul Rizvi is an Australian freelance columnist and a former undersecretary of the Department of Immigration. You can follow Abul on Twitter @Rizvi Abul.

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