The Times Australia
Business and Money
The Times Real Estate

.

The states want a bigger say in skilled migration – but doing that actually leaves them worse off

  • Written by Brendan Coates, Program Director, Economic Policy, Grattan Institute
The states want a bigger say in skilled migration – but doing that actually leaves them worse off

State and territory governments have long wanted a bigger say in Australia’s migration system. But our latest report[1] shows states would actually be better off if the federal government no longer allowed them to nominate which skilled migrants they want.

Migrants selected by state governments for state and regional points-tested visas work in less-skilled jobs, and earn less over their lifetimes than other skilled migrants.

In the 2024–25 planned permanent intake, state and regional visas will account for 50% of all skilled visas[2].

State and territory governments say they use these visas to meet workforce needs and promote regional population growth, including by giving priority to international graduates from their local universities.

Some state and territory governments have created their own skilled occupation lists, and even operate their own points tests, to help select applicants for these visas.

But the system isn’t working well – and among the biggest losers are state governments themselves.

State governments select less-skilled migrants

State and territory governments routinely select less-skilled visa-holders, who score fewer points than skilled independent visa-holders.

For the skilled independent visa, the federal government typically selects the applicants with the most points.

But for state or regional points-tested visas, state and territory governments can nominate any applicant who scores more than 65 points.

And nominated applicants receive additional points – five points for a state visa, and 15 points for a regional visa. That means applicants can secure a state or regional points visa even if they score fewer than the minimum 65 points.

About 57% of successful recent applicants for a regional visa scored 65 points or fewer. That compares with 12% for independent points visas, and 30% for state points visas (after subtracting the points for a state or territory nomination).

State and regional points visa-holders earn less

Unsurprisingly, state and regional points visa-holders typically earn less. They generally work in lower-skilled jobs than other skilled migrants.

The typical regional points visa-holder earns A$24,000 less each year – and state points visa-holders A$6,500 less – than migrants selected via the skilled independent program.

State and especially regional points visa-holders also earn less, on average at each age, than skilled independent visa-holders who are also working in regional areas.

Many regional visa-holders struggle and few stay for long

For many years, governments have tried unsuccessfully to get migrants to remain in the regions by requiring them to live in regional areas when they arrive.

But pushing migrants to live in the regions for at least three years – a condition of the regional visa – often harms their long-term career prospects, and those of their families.

Spouses of primary regional visa-holders, in particular, earn less than spouses of other skilled visa-holders. They generally have worse employment outcomes.

And many regional points-tested visa-holders do not stay in the regions for long. One recent study[3] found about 50% of migrants who settled in outer regional, remote, or very remote areas had left within five years.

Whatever the merits of regional development policies, pushing skilled visa-holders to the regions appears a very expensive way of achieving them.

A woman mops a floor in a school.
Spouses of primary regional visa-holders generally earn less than spouses of other skilled visa-holders. Siyanight/Shutterstock[4]

State governments are among the biggest losers

Ironically, state governments are among the biggest losers from a system that empowers them to select less-skilled migrants for permanent visas.

Skilled migrants typically provide a large boost to government budgets over their lifetimes because they pay more in taxes than they receive in government services. About one-third of that boost typically accrues to state governments.

But the size of that budgetary boost rises the more skilled the migrants are who are granted permanent visas, and the higher incomes they earn.

Each primary applicant for the state and regional points visa streams boosts Australian government budgets by A$363,000 (in today’s dollars) over their lifetimes in Australia. That compares to an average of $489,000 for skilled independent visa-holders.

If state and regional visas were allocated to skilled independent visa-holders, the lifetime fiscal dividend from each annual permanent skilled migrant intake would be A$7.3 billion higher in today’s dollars.

State and regional points-tested visas should be abolished

The federal government should abolish state and regional points visas and expand the number of skilled independent points visas granted each year.

This change would ensure all points visas were ranked, with those getting the most points being more likely to be selected.

Together with our recommended reforms to the points test, this would result in Australia selecting a more skilled migrant cohort for the limited number of permanent skilled visas offered each year.

State governments would be among the biggest winners from our proposed reforms. Abolishing the state and regional points visas and reallocating those places to the skilled independent program would boost Australian government budgets by a combined $87 billion over the next three decades.

These gains would be invaluable for state governments grappling with the debt overhang from the pandemic, and the long-term budgetary costs of an ageing population.

These reforms wouldn’t affect the supply of essential workers, including in regional Australia, since only a small share of health and education workforces recently held state or regional points visas, including 1.1% of doctors, 2.2% of nurses, and 0.7% of other health professionals.

And these reforms would enable state governments to redirect public servants currently employed to nominate and process state-sponsored migrants, assisting with employer sponsorship[5] and attracting highly skilled prospective migrants to work in their state.

Our reforms would result in Australia selecting more-skilled migrants for the limited number of permanent visas available each year.

And state governments would be among the biggest winners.

References

  1. ^ latest report (grattan.edu.au)
  2. ^ 50% of all skilled visas (immi.homeaffairs.gov.au)
  3. ^ study (www.researchgate.net)
  4. ^ Siyanight/Shutterstock (www.shutterstock.com)
  5. ^ employer sponsorship (immi.homeaffairs.gov.au)

Authors: Brendan Coates, Program Director, Economic Policy, Grattan Institute

Read more https://theconversation.com/the-states-want-a-bigger-say-in-skilled-migration-but-doing-that-actually-leaves-them-worse-off-231927

SME Business News

Albanese government looking to acquire Rex Airlines if buyer can’t be found

The Albanese government will on Wednesday announce it is willing, as a last resort, to purchase the collapsed Rex Airlines, in its latest bid to prop up aviation services to regional and remo...

The Legal Battle Against IP Theft: What Businesses Need to Know

So you've formulated that million-dollar idea and you're ready to take your business to the next level. You were so excited to publicize your supposedly next big thing that you went on TikTok...

Top 20 SEO and Guest Post Services in Wyoming Helping Brands Expand Their Reach

Today’s business needs to have strong online visibility to grow and reach more customers. Guest post services and SEO services make it easier for the brand to rank higher on their search engine...

Everything You Need to Know About PLR Digital Products to Resell for Maximum Passive Income

In the ever-evolving digital product world, the concept of Private Label Rights (PLR) has emerged as a lucrative opportunity for entrepreneurs who aim to generate passive income. PLR digital prod...

The Times Features

Why You Need an Expert Electrician for Your Business’s Electrical Upgrades and Repairs

When it comes to maintaining and upgrading your business’s electrical systems, it’s essential to call in a professional. Electrical work in any commercial setting requires the ex...

Why Is It Crucial to Have a Building Inspection Done Before Buying a New Home?

Purchasing a new property is a big financial decision that can impact your future for years. Whether you are a first-time buyer or an investor, good or bad, it is essential to en...

Online Application for Sick Leave Certificate: Understanding When and How to Secure One

A sick leave certificate is an official document issued by a healthcare professional to verify an individual's inability to attend work due to illness. It typically includes the ...

A No-Fuss Guide to an Effective Beauty Routine

Taking care of the skin and appearance need not be complicated; it need not even consume your hours of time. Smart and simple approaches can give one that glow and fresh look witho...

Safe & Effective Tattoo Removal in Auckland – What You Need to Know

If you're looking for tattoo removal in Auckland, modern laser technology offers the safest and most effective way to fade or completely remove unwanted ink. Whether it's an outd...

Fleece-Lined Tights vs. Regular Tights: What’s the Difference?

When temperatures drop, choosing the right pair of tights can make a significant difference in comfort, warmth, and durability. Whether you wear tights for fashion, work, or outdoo...

Business Times

Albanese government looking to acquire Rex Airlines if buyer can’…

The Albanese government will on Wednesday announce it is willing, as a last resort, to purchase the collapsed Rex Airline...

The Legal Battle Against IP Theft: What Businesses Need to Know

So you've formulated that million-dollar idea and you're ready to take your business to the next level. You were so excit...

Top 20 SEO and Guest Post Services in Wyoming Helping Brands Expa…

Today’s business needs to have strong online visibility to grow and reach more customers. Guest post services and SEO servi...

LayBy Shopping