Migration important to SA regions

A major report on Australia’s population and the impact of immigration policy published by the Federal departments of Treasury and Home Affairs in April posed some pertinent questions for future research.

The report – Shaping a Nation, Population growth and immigration over time – asks, in part, whether the “current patterns of spatial distribution of population in Australia are sustainable?” It adds: “If not, what levers are available to Government to alter the spatial distribution of the Australian population and how should these be used?”

These issues were, in fact, at the heart of a comprehensive analysis by the SA Centre for Economic Studies (SACES) last year which looked at “the potential benefits of reforming migration policies to address South Australia’s needs”.

We found that Australia’s migration policies were not working and that recent changes to the visa regime, which came into effect in March 2018, might actually be detrimental rather than beneficial for SA employers, particularly in regional areas.

We made a series of recommendations with reform of the visa system being one of social-economic levers that could be pulled to good effect.

But first, some background.

SACES was commissioned by ten SA organisations¹ to explore national immigration policy in the context of challenges facing economic and business development in South Australia, particularly in the State’s regional areas.

We found that: “Despite the focus on filling positions from domestic sources, and the relatively high unemployment and underemployment rates in South Australia, many businesses, particularly those in regional areas, report that they struggle to find suitable skilled and semi-skilled employees, and so are forced to turn to the migration system. However, these businesses also report that the current migration system does not meet their needs.” ²

With population growth linked to economic growth, it seems that Australia’s migration policy and the manner in which it is being implemented is not contributing to the development of regional SA.

It’s a view borne out by the Treasury-Home Affairs report which says that migrants have, outside the capital cities, contributed 26 per cent of the population growth in regional Australia in the twenty years to 2016. But not in South Australia. In fact, quite the contrary.

“The only exception to an increasing migrant population (in regional Australia) was in outback SA where the migrant population fell 20 per cent even as the total population declined by less than 1 per cent,” the Treasury-Home Affairs report says.

SACES discussions with employers across a wide range of business activity identified a number of shortcomings in the previous and recently revamped visa regime.

The Temporary Skilled Migrant Income Threshold (TSMIT) and the occupation lists are experienced as barriers to the hiring of migrant labour in the absence of suitable local labour supply. TSMIT stipulates a minimum market rate of pay for a job vacancy to be filled by a 457 visa holder, with this minimum level above the going market salary rate of many occupations with supply shortages in regional SA.

The occupation lists (of positions open to migrants) too have been criticised for not reflecting the needs of South Australian businesses, in this case through failing to match job titles with job contents. As a result, in-demand occupations are missing from them.

At the same time, there is a mismatch between the semi- and low-skill needs of many regional businesses in SA and immigration’s focus on skilled labour.

We made fourteen recommendations for changes to the visa regime that would address these shortcomings and benefit SA employers.

Our principal recommendation was that a new, ‘regionally-focussed’ visa class be created, based on the recently abolished 457 Visa and its successor, the Temporary Skill Shortages (TSS) Visa.

The ‘Temporary Regional Visa’ – as we termed our proposed replacement visa – would provide for incomes that reflected local labour market conditions; allow access to a greater range of occupations, including those requiring lower skill levels; facilitate greater pathways to permanent residence, and exempt regional employers from the new training levy if they met good practice training benchmarks for their industry sectors.

Other recommendations included restoring the regional flexibility of the Regional Sponsored Migrant Scheme, improving post-study work rights for vocational training graduates, updating and expanding occupation skills lists and enhancing the accessibility of the Business Innovation and Investment Program.

We encourage the Federal Government to consider the SACES recommendations which could make Australia’s international migrant visa system more responsive to changing economic environments and support economic growth to the benefit of employers, employees and the State as a whole.

The three SACES reports examining Australia’s migration policies can be found here.

¹ Migration Solutions, Thomas Foods International, RDA Murraylands and Riverland, Shahin Enterprises, Local Government Association of SA, Education Adelaide, Population Institute of Australia, Urban Development Institute of Australia, Property Council SA and BDO Australia.
² All comments in italics are taken from The Potential Benefits of Reforming Migration Policies to Address South Australia’s Needs, Reports 1-3, 2017

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