New Report on The Effects of Temporary Migration – A Timely Objective Economic Analysis (Australia)

Fragomen in Australia, part of the world’s largest sole practice law firm focussing on immigration law and Australia’s single biggest immigration law firm and consultancy, is delighted to support the Committee for Economic Development of Australia (CEDA) in the publication of its research report looking at the Effects of Temporary Migration in Australia released 15 July, and the series of events across Australia showcasing this report.

The importance of this research and its timing should not be underestimated. Australia seems to be at a crossroads in terms of public debate, and policy making as it relates to population and migration. During the years of the Howard government, and the Labor governments that succeeded them, the economic benefits that are linked to population growth and immigration, were broadly accepted, even though they were not regularly discussed.

Now, in the global context of rising nationalism and protectionism in many countries, as well as the issues of wage stagnation, unaffordable housing and congestion in some of Australia’s biggest cities, public debate has steered towards population growth – and migration – being responsible for these ills, with migration becoming an increasingly sensitive issue. 

As we have observed the debate here in Australia and overseas, we have seen that many contributors conflate the permanent and temporary migration programs, and may make conclusions without objectively understanding or analysing the economic data.  With questions about how an increasingly more restrictive and complex migration policy has been formed against economic data and analysis as well as pressure from interest groups, we welcome CEDA’s efforts in delivering an objective analysis to better inform the debate and to ensure that future temporary migration policy positions and rhetoric are appropriately challenged.

While significant attention in the public discourse is placed on Australia’s Permanent Migration Program, much less focus is given to temporary migration, despite the fact that there are more than 2.3 million people currently in Australia holding some sort of temporary visa.  The report discusses in detail a number of different temporary visa categories; however there are some key points in relation to temporary skilled visas which I believe are worth highlighting further.

The report notes the highly cyclical labour market needs in Australia and illustrates why Australia has a temporary skilled visa program.  The program seeks to address skills shortages but in way that does not undermine the local labour market or present a barrier to suitably skilled Australians securing these jobs.  The ongoing tension between these two objectives has resulted in frequent reviews of the program, leading to what the report terms as a ‘constant state of flux’.  This can have the effect of creating uncertainty for business as well as the individual visa holders.  Fragomen regularly receives this feedback from our corporate clients and our Government Relations practice continues to represent this to the authorities.

A second issue relates to the changing nature of skills shortages.  As occupations change, with the increased mechanisation and digitalisation of work, the framework that has been chosen to underpin the skilled visa program is not able to keep up.  To apply for a visa in the skilled program, an employer must nominate an occupation on one of the skill shortage lists.  Occupations are classified into such lists by referring to the Australian and New Zealand Standard Classifications of Occupations (ANZSCO).  Designed primarily for statistical purposes and last updated in 2013, ANZSCO fails to reflect the significant changes to many occupations as well as new occupations that simply did not exist at the time the ANZSCO was conceived or updated. 

The final point is the question of Labour Market Testing.  In a demand driven system, based on regularly reviewed skill occupation lists, the question posed by the report is whether both a skill shortage list and labour market testing should be required.  Similarly, the requirement to conduct labour market testing for Intra Company Transferees (ICT), or for incumbents in a position, are both counter intuitive.  From a practical perspective, the highly technical nature of the labour market testing requirements has imposed a significant layer of red tape on business, and has delayed the ability to sponsor workers quickly.  This has the potential to undermine Australia’s global competitiveness, and can result in multinational companies making the decision to take their business elsewhere.  Fragomen works with many large multinational organisations, for many of whom exposure to overseas operations for its staff is an essential part of a career pathway; and Australian employees have the same opportunity, with benefits being brought back to the company – and Australia – when the employee returns to home base.  The LMT framework, while including some concessions for ICTs, still requires evidence to be provided that a ‘suitably qualified Australian’ was not able to be found to perform the nominated role.  This fails to take the unique nature of ICT transfers into account.

In combination, these and other factors can mean that employers find the framework excessively complex to navigate and keep abreast of the ongoing changes, and this is why obtaining sound transactional and strategic advice is essential to successfully manage the temporary skilled visa program.