As many countries struggle with skills shortages, Australia is no different, and will have to compete to be the destination of choice for the right migrants to fill our labour gaps. To do this, the federal government revealed during the Jobs and Skills Summit that our Permanent Migration Program planning level in FY23 was being raised from 160,000 to 195,000, alongside additional funding to accelerate visa processing, and visa changes to attract and retain more students.
In particular, this increase in the permanent migration planning level is focusing heavily on building our permanent skilled migrant levels, which took a much harder hit than family stream visas over the pandemic. Of the increased planning level, an additional 9,000 places have been allocated to regional visas and 11,000 to state and territory sponsored visas, while health care and tech are expected to see some of the largest industry gains.
Chart 1: Australia's permanent skilled migration arrivals, 2008-09 to 2022-23
But, while the program planning level is important, it assumes that at least 195,000 suitable skilled and family migrants actually want to come to Australia. And while this may have been true before the pandemic, it’s not necessarily the case anymore. Permanent visa applications in FY21 were at only 60% of pre-pandemic levels, with 158,000 visa applications lodged in FY21 compared to 269,000 applications in FY19.
Significant visa delays, costly application fees and increasing competition from other countries are all potential factors in this decline. In particular, countries such as Canada, the UK, Germany and New Zealand are currently ramping up their migration policies and pulling away potential migrants from Australia.
Canada (one of our top competitors for incoming migrants) is on track to exceed its 2022 immigration target of granting permanent residency to more than 430,000 people, while simultaneously seeing record high numbers of immigration applications. The country is placing particular emphasis on converting temporary visas to permanent visas, signalling to future temporary migrants there are strong pathways to permanent residency available.
Indeed, Canada has been pushing for increased migration since 2015, whereas Australia has seen its permanent migration intake moderate from FY17. This early and strong stance on immigration reflects a broadly pro-immigration view in Canada (particularly across its political parties). However, like Australia, visa backlogs remain an issue in Canada, with a new taskforce assembled in June to work through the backlog.
The United Kingdom is also seeing significant increases in the number of visas granted. In FY22, more than 331,200 work-related visas were issued – a 72% increase on FY19 levels. This increase is partially due to Brexit where, from January 2021, EU nationals were required to apply for entry visas. However, non-EU work-related visas also rose by 55% in FY22 compared with FY19, signifying strength in the demand for UK visas. The increase coincides with several new work visa types launched in 2022, such as the High Potential Individual visa, Global Business Mobility visa and the most recently announced Scale-Up visa.
New Zealand has also recently announced a suite of measures aimed at revitalising and streamlining its immigration system. Measures include providing median wage exemptions to particular sectors, temporarily doubling numbers under the Working Holiday Scheme, and extending visas to retain labour already in the country. A new temporary work visa was also announced in July (the Accredited Employer Work Visa), which replaces existing temporary work visa categories and simplifies the application process for business sponsors.
Germany announced legislative changes in July, which makes it easier for migrants already in the country to remain, including an additional year for eligible applicants to meet requirements for full residency, and easier pathways for foreign workers to bring in their families.
With migration policy changes occurring around the world, Australia is engaged in a global war for talent. Our competitors are not sitting still, and without the right (and timely) responses, we are further at risk of losing this important battle.