SACES has released the second of three reports as part of our research into national migration policy in the context of challenges facing economic and business development in South Australia, particularly for regional South Australia.

Our latest report takes a closer look at some of the concerns raised by business owners and representatives about ways in which the current design of the skilled migration system means that it cannot adequately assist South Australian businesses facing skills shortage, nor can it fulfill its potential to address South Australia’s ageing population.

The Australian temporary work and business investment visa systems present both opportunities and challenges for the SA business and education provider communities. The SA economy faces a triple challenge of population and labour force ageing, a disproportionate reliance on owner managers of unincorporated businesses with an old age structure, and regional depopulation. In combination, the three lead to, and accentuate, skill and more general labour shortages in particular, but not exclusively, in regional SA. These labour shortages affect semi and low skilled occupations as well as skilled occupations.

Our research found a number of aspects of the current migration system that did not meet the needs of the South Australian economy or South Australian firms, or where a ‘one size fits all’ approach to migration policy was inappropriate. Of particular concern are:

• Many businesses reported that the TSMIT was a significant barrier to using the migration system to address skills shortages.  The justification for the TSMIT is that it acts as a proxy for the skill level of a position, and that it ensures migrants have an adequate income.  However often quite large differences in wage levels and in the cost of living across regions of Australia mean that a single level for the TSMIT cannot fulfill its functions in all regions of the country.
• The Australia-wide uniform application of the TSMIT to subclass 457 visas systematically disadvantages businesses located in low wage regions, which is a feature that characterises much of SA.  Our research with businesses found that the TSMIT makes this visa sub class unusable for many regional SA business whose market salary rates are typically below this minimum level, meaning their vacancy cannot be filled by a 457 visa holder even if the employer would be willing to pay the TSMIT rate.
• The impending extension of this minimum salary rate to RSMS visas which, unlike 457 visas are used extensively by SA businesses, is likely to significantly worsen the supply of skilled workers to South Austalia, particularly for those businesses located in regional areas.
• The way in which the Department of Immigration defines occupations when assessing whether a job is eligible for a visa does not always reflect contemporary usage, and ignores other evidence such as the way in which occupations are defined in the training system.
• South Australia’s educational institutions currently recruit a large share of their students (and a larger share than other jurisdictions) from countries which are treated by the Department of Immigration and Border Protection as higher risk under the new student visa framework. Visa applicants from these countries must meet particularly stringent evidentiary requirements to demonstrate that they are a genuine temporary entrant, and can complete their course. If this discourages such students from applying, and/or results in student visa refusals, then South Australia’s share of international VET students (already disproportionately low) may fall further. and
• It was felt that business visas generally do a poor job of increasing the number of entrepreneurs in Australia, or in assisting retiring business owners find potential purchasers, and that the local business environment, and the national investment levels set for key streams of this visa made it even less suitable for South Australia’s needs.

The first report of the migration research project, released in early May, identified the key economic and business development challenges faced by South Australia in light of the federal immigration policy environment.