Senate Select Committee on Temporary Migration hits and misses

The report from the senate on temporary migration was released last week and came with many recommendations to Australia’s visa system. It did not contain itself to temporary visas, but also their pathways to a permanent visa, and related industrial relations.

The findings spanned many months since the Senate resolved to report on the impact temporary migration has on facets of Australia back in December 2019 and before the wider public had even heard of COVID-19.

Temporary visas are a category of visas consisting of many different visa subclasses that encompass a wide range of purposes: tourism, study, work, and cultural exchange, to name a few. Therefore, the remit of the report is extensive especially when they devote a chapter to transitioning to a permanent visa.

With 40 recommendations, three would see the landscape of Australia’s visa system changed considerably.

Abolishing specified work for second and third working holiday visas

While set to be phased out for UK nationals as part of the fresh Australia-UK Free Trade Agreement, a key recommendation is to abolish the 3-month specified work requirement for the Working Holiday Maker (WHM) program: the subclass 417 – Working Holiday visa and subclass 462 – Work and Holiday visa. Specified work is necessary to have been performed while holding these visas to meet one of the requirements for a second WHM visa.

In its place the Seasonal Worker Program (SWP) and Pacific Labour Scheme (PLS) under the subclass 403 – Temporary Work (International Relations) visa would be the primary source of low and semi-skilled labour for agriculture, along with the new agricultural visa expected to commence this month.

The rationale for its removal includes instances of worker exploitation of this vulnerable cohort and more emphasis on cultural exchange instead of labour exchange. Given the great disparity of culture long recognised by policymakers between Australia’s major cities and regional areas, one wonders whether this rite of passage and experience in non-metropolitan Australia is in fact facilitating cultural exchange with a markedly different Australia.

Increasing the Temporary Skilled Migration Income Threshold (TSMIT)

The TSMIT is used for multiple visas as a floor on earnings a nominee must earn to be nominated for a temporary or permanent visa. This applies to the:

• Subclass 482 – Temporary Skill Shortage visa,

• Subclass 494 – Skilled Employer Sponsored Regional (Provisional) visa,

• Subclass 186 – Employer Nomination Scheme visa, and

• Subclass 187 – Regional Sponsored Migration Scheme visa.

It is also used for the subclass 189 – Skilled – Independent visa under the New Zealand stream as a minimum taxable threshold unless an exemption applies.

While the TSMIT is “designed to protect lower-paid Australian jobs and ensure skilled migrants can support themselves while in Australia”, just how the TSMIT is calculated and increased is not known. The increases since it was frozen in 2013 do not appear to be in line with any acceptable measure, such as Consumer Price Index (CPI) or average wage increases. The committee recommends the TSMIT is increased to what it would have been if it had not been kept to the current $53,900 in 2013.

Where the committee is at odds with the regulations is where it states that the “frozen” TSMIT, on page 183, “allows employers to be able to employ temporary visa holders on a lower wage than Australian workers, undermining the attractiveness of employing Australians over temporary visa workers.”

There are two very big issues with this assertion.

The first is that the TSMIT is a separate requirement to the Annual Market Salary Rate (AMSR), which is shockingly not mentioned anywhere in the report. The AMSR is the requirement for all employer-sponsored visas mentioned above that a nominee’s earnings must be at least what the employer does or would pay, an equivalent Australian worker (Australian citizen or permanent resident) employee. The AMSR is beholden to an industrial instrument or enterprise bargaining agreement where these apply to the position, and must be referenced according to the instrument. For many of the lower-paying occupations, the award is the real wage floor and this must also be above the TSMIT.

For 482 and 494 visas, once the corresponding visa is approved and the sponsored worker has commenced their employment, the AMSR becomes a sponsor obligation, as previously explained.

The second is the obvious financial disincentive. Employers must pay certain application fees to sponsor a temporary worker, such as the Skilling Australia Fund Levy which can be substantial for small and medium enterprises.

Restoring a pathway to a permanent visa

One of the biggest concerns for skilled workers holding temporary visas is the pathway to a permanent visa. Except for those with access to the grandfathering arrangements due to be repealed in March 2022, for holders of 482 visas in the Short-Term stream who are not located in a regional area and therefore are likely to be able to be sponsored for a 494 visa, a successful nomination for a 186 visa is impossible.

The policy for this was to entice skilled workers to regional Australia to alleviate congestion in Australia’s major cities. While a noble objective, this is a supply-side issue in the hands of employers. Skilled migrants fill positions, and if these are in the cities, attempting to entice them to regional areas will not be an effective incentive when they are sponsored by an employer in a major city.

The restoration of a pathway to a permanent visa, a reference to removing the need to be nominated in an occupation on the Medium and Long‑term Strategic Skills List for a 186 visa under the Temporary Residence Transition stream, would provide at least hope to those whose current outlook is to repeatedly apply for 482 visas where possible unless they can find employment in a regional area.

With net internal migration to regional areas at an all-time high in 2020 spurred no doubt by COVID-19, lockdowns, and the changing nature of work, the policy change of removing access to a 186 visa based on an occupational list under the Temporary Residence Transition stream, which has its own compliance checks, might be a reasonable suggestion.

Should a reform such as this happen, we may even see the pathway do without the need for an employer to nominate at all, as one submission suggested. This would be similar to how 494 visa holders can transition to a subclass 191 – Permanent Residence (Skilled Regional) visa without a nomination.

Along with the above, the general clarion call for visa simplification and access echoes previous reports. The report recognises that previous recommendations have a habit of not being implemented. The Government Senators’ dissenting report, which criticises the report’s industrial relations reforms as pursuing the opposition Labor Party’s political agenda, along with the Australian Green’s additional comments, shows how politicised Australia’s skilled immigration policy has become.

One major consideration given current times is whether Australia will receive anywhere near the same number of temporary visa holders in the post-pandemic world. As many Australians are currently in lockdown while other countries and regions have opened up considerably: the United States, the United Kingdom, and Europe to name a few, the sheen of Australia being such a great destination for international students, tourists, and WHMs may start to tarnish. Some state and territory leaders should take note…