Migration reforms receive mixed reviews
A wage threshold for temporary skills visas doesn’t make sense and should be replaced with an assessment approach, says CA ANZ.
The government last week announced a raft of changes to Australia’s migration system including an increase in the temporary skilled migration income threshold (TSMIT) from $53,900 to $70,000 from 1 July.
It is the first increase in a decade and follows a major review into the migration system.
Minister for Home Affairs Clare O’Neil said the increase was essential to ensuring the program “is a skilled worker program rather than guest worker program”.
The proposed increase of the TSMT to $70,000 is more reasonable than the $90,917 proposed by the ACTU, according to Chartered Accountants Australia and New Zealand.
CA ANZ said that if the TSMIT is to remain, a key principle is that it should not be too low which could leave workers open to exploitation and it should not be too high which would create worker shortages.
However, the accounting body said that assessment would be a more appropriate approach with a wage threshold “creating more barriers than it overcomes”.
“Assessment remains the best way of determining migrant quality and a migrant’s lifetime earnings potential,” it said.
“A wage threshold makes even less sense for temporary skilled migration, particularly if the purpose is genuinely 'temporary' versus a pathway to permanent migration. Skill shortages may arise in all sectors, regardless of wages. For example, healthcare and aged care workers don't earn high salaries but are in high demand.”
The Grattan Institute previously argued that an income threshold avoided the need for assessment as employers’ willingness to pay reflects their assessments of migrant capabilities.
CA ANZ disputed this position, stating that labour markets are sticky and do not always adjust quickly.
“For instance, accountants and other professionals take time to earn their stripes, which may keep a lid on the wages they command until they do,” it said in its submission to the review.
CA ANZ said that while migrant exploitation is gravely concerning, there were better ways to address this.
Unions NSW welcomed the proposal to increase the TSMT to $70,000, stating that it was a positive step that would help drive up wages.
“The government should go further by requiring migrant workers to be paid 30 per cent above the median annual wage for their occupation,” said Unions NSW secretary Mark Morey.
“This would encourage employers to only hire migrants when they have genuine workforce shortages.”
Unions NSW has also welcomed a proposed reform to give migrants more flexibility to move employers and enforce their workplace rights.
“Allowing migrants to change employers is an important reform that will help prevent exploitation and improve working conditions,” he said.
With Australia facing the second highest skills shortage in the world, and with accounting shortages still near record levels, CA ANZ group executive advocacy and international development Simon Grant said he hopes the proposed reforms “will prioritise the skills we need by opening new pathways to attract and retain global talent".
The shills shortage has been identified as the most immediate and pressing issues for accountants and auditors.
“As the Skills Priority List will become increasingly important in migration, it is important the list properly recognises the ongoing shortage of and demand for accounting, audit and finance professionals which will only increase as the workforce ages and retires,” said Mr Grant.
“Accounting bodies have advocated strongly for the focus of Australia’s skilled migrant intake to be on quality rather than quantity, for the criteria used to assess migrant quality to be reviewed, for improved recognition of overseas qualifications and prior learning, and for clearer pathways to permanent residence for skilled migrants and graduates, and we are glad the draft strategy reflects this,” Mr Grant added.
“One of the ways we can better support the work readiness of recent and prospective migrants is by making available the Professional Year Program for Accounting (Accounting PYP), or a version of it,” Mr Grant said.
The Accounting PYP is a work readiness program, approved by the Department of Home Affairs and available to international students with an accounting degree from at least two years of study at an Australian university, which delivers better employment outcomes and could also be adapted for other areas of skills shortages.
About the author
