According to The AFR, Prime Minister Scott Morrison will use today’s AFR Business Summit to announce a reboot of Australia’s immigration program that will use temporary visas to fill roles in lower paid professions like nursing and aged care:
[Morrison] suggests that once migration resumes, it will be adjusted to meet the needs in areas of burgeoning demand such as nursing and aged care, where not enough local workers can be found.
“We must re-look at the role that temporary visa holders play in meeting our economy’s workforce requirements, where Australians do not fill these jobs”.
Interestingly, the most recent skills shortage report from the federal government showed there was no shortage of nurses prior to the COVID-19 pandemic:
While there were differences by specialisation, in 2017-18, employers generally filled their nurse vacancies with relative ease. In 2017-18, 72% of nurse vacancies were filled and there was an average of 7.2 applicants per vacancy. These results are fairly consistent with those experienced over the previous three years (see Figure 1)…
The supply of nurses has increased in recent years, with nursing graduate numbers and nurse registrations at historically high levels.
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Therefore, why is Scott Morrison claiming that there is a shortage of nurses requiring an influx of temporary migrants?
Moreover, what about the immorality of stripping developing nations of their medical personnel?
Allowing an influx of temporary skilled workers post-COVID will have the effect of holding down wages – as it did over the past decade – by swelling labour supply and eroding workers’ bargaining power.
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One only needs to look at the appallingly low Temporary Skilled Migration Income Threshold (TSMIT) for so-called Temporary Skills Shortage (TSS) visas. This TSMIT has been frozen at the ridiculously low level of $53,900 since 2013-14. This was $3,300 (6%) below the median income of all Australians ($57,200) in 2019, which included unskilled workers, according to the Australian Bureau of Statistics (ABS):
Median Australian weekly earnings were 57,200 in 2019, according to the ABS.
Therefore, the low TSMIT explicitly incentivise employers to hire cheap migrant workers over locals, as well as abrogates their need to provide training.
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The solution to so-called labour shortages is actually pretty simple: allow wages to rise. This will have two broad impacts. First, it will encourage workers into that profession, thus eliminating the shortage. Second, it will encourage employers to stream-line their operations or adopt automation to save on labour costs (boosting productivity in the process).
If Scott Morrison had any integrity, he would require all skilled migrants (temporary and permanent) to be paid at least at the 75th percentile of earnings (see above table).
Setting a higher salary threshold for migrant workers would ensure that the skilled visa system is used sparingly by businesses to employ only highly skilled migrants with specialised skills. And it would stop businesses from abusing the visa system to undercut local workers and eliminate the need for providing training.
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Of course, we all know that visa integrity is not the purpose here. Scott Morrison wants another influx of “cheap” labour to lower costs and boost profits for his business-owning mates.
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.
