Australia will join the global competition for highly skilled professionals by changing its immigration policy for the first time in a decade, with the first step set to be taken next month — ensuring higher pay for newly arriving temporary visa holders.
“If ‘populate or perish’ described Australia’s challenge in the 1950s, ‘skill up or sink’ is the reality we face in the 2020s and beyond,” Home Affairs Minister Clare O’Neil said recently, stressing the need to update the country’s immigration system. She was referring to the slogan that came to describe the country’s immigration policy more than half a century ago.
The government now has a series of changes ready to keep Australia attractive to immigrants and to become competitive in the global race for next-generation technologies. That first step has to do with something called the temporary skilled migration income threshold (TSMIT), which companies must guarantee before the government issues a temporary skilled visa. The threshold on July 1 will be raised to 70,000 Australian dollars ($47,000), up from the current A$53,900.
More than 90% of full-time workers in Australia make more than the current TSMIT. By ensuring that companies pay foreign workers higher salaries, the government intends to prevent businesses from filling jobs with low-wage immigrants. In order to improve the situation in which many immigrants are stuck in temporary visa status, the government plans to allow all temporary skilled visa holders to apply for permanent residency by the end of this year.
In another step, cumbersome visa application processes will be simplified. This will be done by whittling down “the hundreds of visa categories and subcategories,” according to O’Neil. This is expected to shorten the amount of time needed to obtain a visa. The government will also try to make it easier for highly skilled professionals to quickly obtain visas.
Meanwhile, the government plans to introduce a more stringent “point test” to screen permanent residency applicants that will emphasize skills which could contribute to the future national interest. The guarantee of higher pay for temporary foreign workers has alarmed some restaurateurs and other service sector business owners. They say the higher wages will mean higher costs for them. Suresh Manickam, CEO of Restaurant & Catering Australia, told local media that family-run and other small restaurants will be most affected by the move.
Food and Beverage Services is the top hirer of temporary residents. The industry in 2022 employed 112,700 of them, according to the Australian Bureau of Statistics. According to local media, the measures could reduce the number of immigrants who work at low wages by up to more than 30,000 annually. This estimate is based on how employers are expected to react when they have to guarantee drastically higher salaries before their workers can renew their visas.
Australia had over 1.6 million temporary visa holders as of August 2021, 95,600 of whom held a temporary skilled visa that is usually valid for two to four years. The government also expects the number of immigrants to decline as a result of the reforms.
As consumers fight higher living costs by tightening their purse strings, businesses are finding it difficult to pass on their rising costs in the form of higher prices. With the unemployment rate already at a nearly 50-year low, the service industry could be facing a more serious labor shortage.
Nikkei Asia
