The Government’s Migration Strategy falls short of serving Australia's interests

The Budget, like the Government's Migration Strategy, is being pitched as serving Australia's interests now and in the future.

What the 2024-25 Federal Budget means for migration

With a forecast increase in unemployment to 4.8%, a weaker budget position for the next three years, and budget deficits forecast until 2034, some are speculating that the Budget has been crafted for an early election.

What is missing are real measures to deal with critical skilled and workforce shortages, which will impact many of the Government’s announcements.

The Government’s Made in Australia business and critical infrastructure Incentives, which are focused on renewable hydrogen, critical minerals, green metals, low-carb and liquid fuel and clean green manufacturing, are laudable.

The Government’s Housing Reform Investment initiatives to build 1.2 million houses over five years (when we’ve never built this many houses before), including building to rent, are unlikely to be achieved, even with the initiative to beef up vocational training. We do not have the workforce we need in the building and construction sectors, even with the industry initiative regarding vocational training. Government housing initiatives can also distort the market and exacerbate workforce shortages in the building and construction industry, as has been the case with Infrastructure projects.

The $1.8 billion Compliance Cyber security initiatives to deliver “safer and more efficient government services for all Australia,” including the ambitious REDSPICE and MyGov and the $187.4 million funding to the ATO to help victims of cybercrime, with another $288.1 million going into the Digital ID scheme, all aim to protect Australia. But where are the tech experts coming from when we don’t have enough of our own?

Australia's Migration Program planning

Australia’s Migration Program planning considers Australia’s economic, labour, population, and social cohesion needs.

Migration is a key component of Australia’s recovery in the post-COVID environment. Government initiatives must be considered in conjunction with developing Migration Program settings, which require consideration of Australia’s changing migration needs and how migration can best support these.

Migration significantly impacts Australia’s population growth, taking account of the Intergenerational Report, which details the demographic and population challenges Australia will face in the next 40 years.

It predicts a doubling of 65-year-olds, a tripling of 85-year-olds, a sixfold increase of centenarians, a declining population, and tax base and burgeoning healthcare and services-related costs.

The residential home aged care sector face dire workforce shortages. The Government’s Labour Agreement measures introduced in May 2023 do not address Australia's ageing population's significant and growing workforce needs now, let alone into the future.

The Minister of Home Affairs, Claire O’Neil, acknowledged in her address to the National Press Club on 27 April 2022 that Australia’s migration program has contributed to 30 years of economic prosperity, the longest period of any country in the world.

The Minister for Skills and Training, Brendan O’Connor, in his address to CEDA (Committee for Economic Development of Australia) on 13 December 2022, stated that Australia faces “widespread skill shortages in almost every industry pose one of our greatest economic challenges in decades. Wherever you look, there are skill gaps.”

The Government’s Migration Strategy aims to reform the migration system and to drive greater economic prosperity and restore its integrity.

Australia is a vast continent with a small population and a workforce of some 14.1 million.

Initiatives to upskill and train the Australian workforce are not enough to meet Australia’s economic and social needs.

The Government’s projects announced in the Budget, in some cases, take years to progress, and workforce planning and capacity continue to be critical.

Otherwise, the housing reforms and Made in Australia may only be aspirational initiatives.

The Budget’s migration announcements do not contain great reform, but they do vary on the current migration system themes.

Here are some of the measures that will impact immigration:

1. As part of the Australia—India Migration and Mobility Partnership Arrangement (MMPA), a new Mobility Arrangement for Talented Early Professionals Scheme (MATE) program will be launched for Indian nationals from 1 November 2024. This program will provide a pathway for 3000 Indian graduates and professionals aged 18 to 30 with knowledge and skills in target fields of study to live and work in Australia for up to two years.
   • There will be a $25 pre-application ballot charge and a $365 application charge, which will be indexed to the consumer price index in future years.
2. As part of MMPA, the validity period of subclass 600 Business Visitor visa for Indian nationals will increase from three to five years.
   • This measure will raise the government an additional $435 million, which will increase to $70.9 million over five years from 2023–24.
3. The Government will introduce a visa pre-application (ballot) to help manage the capped Work and Holiday (subclass 462) visa program from China, Vietnam, and India from 2024–25.
   • The ballot charge of $25 (indexed to the CPI in future years) will help manage program demand and application processing times for these countries while increasing receipts by $4 million over five years from 2023–24.
4. The budget includes a significant investment of $505.9 million over five years to deepen Australia’s engagement with Southeast Asia. This initiative includes improving visa access and extending the validity of business visas for ASEAN countries and Timor-Leste.

Migration Program planning levels

Migration significantly impacts Australia's population growth and requires consideration of Australia's labour force, including the unemployment rate, participation rate, employment-to-population ratio, and underemployment rate.

It also requires consideration of industry needs, real GDP, and CPI increases.

The Government has predicted a small budget surplus of 9.3 billion in 2023–24. GDP is forecast to increase from 1.75% in 2023–24 to 2% in 2024–25. Inflation to reduce from 3.5% in 2023–24 to 2.75% in 2024–25; the unemployment rate is projected to increase from 4% in 2023–24 to 4.5% in 2024–25.

The Migration Program falls within visa categories, which include:

• Skilled
• Family
• Special Eligibility

Following the closure of Australia's borders, the migration program was distorted because some 2.2 million people remained in Australia as temporary visa holders, many looking for a means to stay.

Since then, the Government has pursued migration reforms focused on streamlining both employer-sponsored temporary and permanent entry visas as ongoing workforce and skill shortages undermine Australia's global competitiveness and economic recovery post-pandemic.

Australia also needs to maintain its attractiveness as a migration destination as Australia competes with and lags other high-income countries in the competition for talent.

The 2024–25 permanent Migration Program planning level has been set at 185,000 places, of which 132,200 places (about 70%) are in the Skill stream. This aims to support skills in demand.

From 2025–26, the Government will extend the Migration Program planning horizon from one to four years and maintain 70% of the places for the Skill stream to help address Australia's long-term skill needs.

This measure is estimated to decrease receipts by $70 million and payments by $102.7 dollars over the next five years from 2023–24.

The Government will also introduce a new National Innovation Visa to attract exceptionally talented migrants and replace the Global Talent Visa and the Business Innovation and Investment Visa.

The Government is also reviewing the points tests used for certain skilled visas, including the Skilled Independent visa (subclass 189) and Skilled Nominated visa (subclass 190).

To address workforce shortages, the government will reduce the work experience requirements for the Temporary Skill Shortage (Subclass 482) Visa from two years to one year for all applicants from 23 November 2024.

The Migration Program planning levels need to consider onshore pipelines, delivery capacity, and flexibility to help us guard against continuing uncertainty.

The Government’s actions are estimated to reduce net overseas migration by 110,000 people over the forward estimates from 1 July 2024.

Budget Paper No.1 forecasts that net overseas migration will be half from 528,000 in 2022–23 to 260,000 in 2024-25, with a reduction to 255,000 in 2025–26 and 235,000 in 2026–27 and 28.

The Government has announced additional spending for:

1. $1 billion over five years from 2023–24 to establish and support the new Administrative Review Tribunal (ART), replace the Administrative Appeals Tribunal (AAT), and address court backlogs caused by an increasingly high number of applications for judicial review of migration decisions.
2. $1.1 million over two years from 2023–24 to improve visa access and provide long-validity business and frequent traveller visas for ASEAN countries and Timor Leste.
3. $18.3 million over four years from 2024–25 to further reform Australia's migration system, including $15 million to be spent on information and education activities regarding workplace safeguards, protection and compliance measures related to migration laws and $1.9 million for a data matching pilot between the Department of Home Affairs and the ATO to compare income and employment data to mitigate exploitation of migrant workers and the abuse of Australia's labour market and migration system.
4. The Leaving Violence Program (LVP) will be extended and expanded to temporary visa holders experiencing violence in a pilot to 30 June 2025 at a cost of $152.3 million.
5. Staffing of agencies in 2023–24 and 2024–25 to rebuild service delivery capacity and capability, including resources for Services Australia to remediate the impacts of under-resourcing, reduce backlogs and wait times, and improve visa processing capabilities.
6. The establishment of the National Cyber Security Coordinator will strengthen managing and recovering from major cyber incidents across the economy. Additional investments in the Counter Foreign Interference Taskforce will support work to help disrupt foreign interference and espionage threats to Australians at home.

Australia continues to experience skilled and workforce shortages in critical industries such as health, education, trades, manufacturing, green energy, aged care, and technology amid historically low unemployment rates.

Australia’s migration system continues to experience negative sentiment, with the influx of migrants blamed on the housing shortage, the rental crisis, and increased demand adding to inflationary pressures.

This is a short-term view that scapegoats migration and does not take account of the significant economic benefit migration has to our economy and nation-building. Some commentators argue that, but for migration, Australia would now be in a recession, and others state that we are already in a per capita recession.

With ongoing workforce shortages, a national debt of some $940 billion, inflation, the ongoing cost-of-living crisis, and the halving of overseas net migration, we have yet to see what this budget’s economic outcome will be.

Regardless of the Migration Program planning and Migration Strategy reforms, Australia is one of the best-placed economies in the world to manage the economic challenges we face. Learn more about our migration services team.