Australia's future migration system
In response to the Discussion Paper for the Federal Government’s migration policy review released in November 2022, CEDA’s paper outlines future trends that Australia’s migration system will confront, the principles that should guide the future system and policy recommendations in line with these principles.
Australia's future migration system

Australia’s migration program has delivered significant economic and social benefits over recent decades. Despite these benefits, the COVID-19 pandemic has highlighted the gradual deterioration of the system’s performance and the need for modernisation.

This will be critical to the continuing success of both the migration program and the economy. Australia faces growing skills demands at the same time as the population is ageing. But as our analysis shows, we are not alone and will face growing competition for the best global talent from a range of countries. The migration policy review is therefore timely to address current shortcomings and set the foundation for continuous improvement of the system.

Australia's future migration system

Jarrod Ball
Chief Economist, CEDA

In the past, migration has often been politicised, with benefits downplayed and risks magnified to drive a divisive debate. This has led to a revolving door of reviews and ad hoc changes. 

CEDA would like this review to mark a change from this pattern, by giving governments a blueprint to sensibly pursue continuous improvement of the migration system. This also means strengthening community support for the program – being direct about its benefits and importance, but also managing its impacts beyond the border through effective planning, settlement and labour-market policies.

CEDA’s seven recommendations centre on improvements to the skilled-migration program, along with additional actions to improve the governance of the system. We have prioritised actions to get the system operating more effectively in the short term, which also offer ways to test new approaches for the longer term.

To facilitate efficient skilled-migration flows, we propose a temporary skilled-migration program that is focused on three risk-based streams: a low-risk, high-wage stream through intra-company transfers; an enhanced temporary-skill-shortage main stream; and an essential skills visa. This should be complemented by policies that get the most out of our permanent skilled-migration program – reducing skills mismatch through a skills-matching register and policy changes such as reducing the newly arrived residents’ waiting period. 

Greater benefits can also come from family migration over time. The initial focus should be on reducing applicant costs and delays. Australia should also assess the viability of a family-skilled visa. The United States and other jurisdictions have demonstrated that these family links often provide a strong foundation for rapid and effective entry into the labour market.

Australia will also need to better manage the interaction between the temporary- and permanent-migration systems, to provide the consistent pathways to permanent residency that all stakeholders agree are necessary. This requires stronger action on temporary-migrant exploitation, along with greater transparency when setting the permanent-migration program each year. CEDA also believes that temporary migrants who have been in Australia for a decade or more should be offered a path to permanent migration as a matter of course.

This review should not be a case of “one and done”. The Federal Government should legislate for an eminent panel to undertake a strategic review of the migration system every five years, formulating a strategy that prioritises and guides reform and improvement in the system for that five-year period. This would bring a coherent strategy to more detailed policy reviews, and institutionalise continuous improvement across political cycles. CEDA also makes recommendations to improve visa processing, including benchmarking and reporting against KPIs for visa-processing times.