Australia’s skilled visa system temporarily suspended

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COVID-19 continues to put a knife through Australia’s immigration system, with the the skilled visa system to remain temporarily suspended until further notice:

Department of Home Affairs has advised the states and territories to put their programs on hold until further notice…

“The government is closely monitoring migration and visa settings to ensure they are consistent with public health measures, are flexible and do not displace job opportunities for Australians so that Australia can deal with the immediate and post-recovery impacts of COVID-19,” said the spokesperson.

The Department further stated that the ongoing impacts of the pandemic worldwide, both medically, socially and economically, will have a “significant influence on the shape of Australia’s Migration Program going forward.”

“The Australian Government is considering how best to shape the Migration Program into the future to drive economic growth and support job creation”…

“Skilled migration has not stopped, it has been temporarily suspended”

Explaining the reason behind the delay, Adelaide-based migration agent Mark Glazbrook said skilled migration will remain suspended until the federal government decides on the size and composition of the Migration Program which is set each year through the Budget process.

“But as the budget will now be delivered in October instead of May due to the COVID-19 pandemic, there has been no formal announcement about the 2020-2021 Migration Program year and as a result of that states and territories haven’t been advised about what their individual quotas are,” he said.

This is obviously a sensible move on a number of fronts.

First, not having foreign nationals arrive will lessen the potential spread of COVID-19 across Australia, given the quarantine failures experienced to date.

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Second, with the Australian economy facing its biggest decline since the Great depression, and labour underutilisation surging, allowing foreign workers to compete against locals for scarce jobs would only worsen the unemployment queues and further depress wages, smashing Australia’s working class.

Given the widespread rorting of Australia’s ‘skilled’ visa system, as evidenced by skilled migrants earning less than the general population and suffering higher unemployment:

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Integrity should be restored to Australia’s visa system by requiring all skilled migrants (both temporary and permanent) to be employer-sponsored given their far better employment outcomes – see below charts:

Skilled migrants should also be required to be paid at least at the 75th percentile of earnings (preferably higher), as shown below:

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Reforms along these lines would ensure that Australia’s skilled visa system is used sparingly to import only the ‘best of the best’, not as a general labour market tool to undercut local workers.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.