When Australia’s borders reopen to migrants there is an opportunity to change the makeup of people accepted to work and live in our nation permanently.

Australia is simply not attracting the right migrants — the ones who pay economic dividends — according to a Grattan Institute report that calls for a complete rethink of immigration policy.

It says in 2019-20, 194,400 people were added to Australia’s population via migration.

In the months leading up to March 2020, about two million people arrived in Australia each month, including returning Australians and short-term visitors.

In the year since, less than 260,000 people have arrived in Australia – just 23,000 per month on average.

Grattan’s report argues that if we want to innovate our businesses, grow the economy and slow the rate of our ageing population, we need to stop taking older migrants with poor English language skills.

Instead, the report suggests simplifying the sponsorship process and taking younger, skilled migrants, while also paying them higher wages.

It would be a drastic change, but one that would have helped 31-year-old Turkish-born skilled worker Cem Deniz Sahin.

Permanent migration to Australia dives

From the beginning of Australia’s mass migration system after World War II until the 1990s, permanent visas were granted to new migrants arriving in Australia.

Thereafter migration policy shifted to not just offer permanent visas, which are now capped, but to also allow people to come to Australia on temporary visas, which are largely uncapped except for limits on working holiday visa grants for some countries.

That shift has seen the number of permanent visas drop.

Australia’s permanent migrant intake is currently capped at 160,000 visas a year, down recently from 190,000 a year. The Commonwealth also grants a further 13,750 permanent visas via a separate humanitarian program.

Permanent migration determines who stays in Australia long term, and skilled migration accounts for the largest share of the permanent intake.

In 2020-21, Australia’s permanent skilled migration program has 79,600 places allocated, down from 125,000 places on average over 2013 to 2018.

The total size of the permanent skilled migrant intake remains at 79,600 places for 2021-22.

Meanwhile, the number of temporary visa holders in Australia has grown dramatically. It has roughly doubled from about 500,000 in 2007 to about one million currently.

Skilled migrant intake has gone in the ‘wrong direction’

The Grattan Institute’s economic policy program director, Brendan Coates, says recent federal government decisions have taken Australia in the wrong direction

“Historically, skilled migration has been working really well for us,” he says.

“But changes in the permanent intake recently have shifted us away from selecting younger skilled people who earn high incomes in the labour market and towards older people with poor English language skills that ultimately bring less to the Australian community.

“Those fiscal costs are really large — we’re giving up a large amount of tax revenue that people would otherwise pay to contribute to the federal budget in the long run.”

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