Australia saw a population surge of 651,200 people last year, primarily due to an influx of foreign students and temporary workers. This unprecedented rise, driven by 550,000 migrants, has put significant strain on housing and social services. The Albanese government views this as an anomaly, noting that a similar population increase last occurred over a century ago when soldiers returned from the Great War.

 

In response, Labor’s new migration strategy, launched last December, aims to pivot from this record inflow to more sustainable levels for the rest of the decade. The focus is shifting to fewer temporary visa holders and more permanent settlers, emphasizing skilled over low-wage, less-educated workers. The government is also striving to restore the integrity of a complex system frequently exploited by criminals and savvy operators.

Key Changes and Challenges

One of the critical tools in this strategy is the permanent migration program, which has historically paid dividends when well-executed. Australia’s policy has shifted towards skilled migration since the 1990s, moving away from the “populate or perish” mantra.

A significant element of this system is the points test, used since 1979 to determine who gets permanent residency and citizenship. This test allocates up to 145 points based on age, English proficiency, education, and work experience. However, critics argue that the test produces bizarre outcomes, such as equal points for vastly different educational backgrounds or sharp point reductions for minor age differences.

Systemic Flaws and Reform Efforts

The points test has seen only minor adjustments since 2012, and last year’s migration review highlighted its inadequacies in effectively distinguishing between candidates. Many applicants score maximum points on core criteria, leaving less beneficial factors to determine rankings. This has led to a rise in “permanently temporary” migrants, who linger in the system trying to accumulate additional points.

The review called for greater clarity for migrants about their prospects for permanent residency. It also highlighted how the current system’s complexity and confusing signals hinder effective policy execution. Manipulation of the system, such as moving between regions to meet criteria, further complicates the situation.

Employer and Sectoral Involvement

A significant portion of permanent skilled migrants is selected through the points test, covering the Skilled Independent (subclass 189), Skilled Nominated (subclass 190), and Regional Skilled Work Provisional visa (subclass 491). Employer-nominated or Global Talent visas account for the remaining skilled stream places.

Recent statistics show that 63% of permanent residency grants were to individuals already on temporary visas. The largest groups among skilled migrants come from India, China, and Nepal, with fewer than half being primary applicants.

Government and Expert Perspectives

The government is committed to putting permanent migration at the forefront of policy. There is a push to recalibrate the points test to give more weight to English proficiency and education, which have shown to yield better labor market outcomes. Critics suggest removing points for state or territory nominations due to lower earnings among government-sponsored migrants.

Experts advocate for a system where employer selection plays a more significant role, ensuring that migrants meet skill needs effectively. Proposals also include limiting points for work experience due to the difficulty in assessing its quality and exploring models with greater employer involvement.

Future Directions

The Grattan Institute estimates that Australia will offer around 800,000 points-tested visas over the next decade. They argue for awarding more points to highly educated applicants and those with strong English skills. Their recommendations include abolishing state and regional points-tested visa programs in favor of a single points-tested visa, which could provide substantial economic benefits.

The Albanese government’s efforts to reform the migration system aim to create a more sustainable and skilled migrant intake. By addressing systemic flaws and focusing on permanent migration, the government seeks to enhance the economic and social fabric of Australia, ensuring long-term benefits for the nation.