Business lobby’s visa scab grab intensifies

Ms Boyd said there needed to be more investment in resources for speeding up visa processing and simplifying the process for hiring a skilled worker from overseas…

Ms Boyd said it was to the benefit of small businesses to have more pathways to citizenship in place… “Wouldn’t it be great if we could increase their pathway to citizenship to enable that to happen more easily?…

There had been calls from industry groups for the ceiling on the migrant intake to be lifted to 190,000, where it was in 2018-19.

Australian Industry Group CEO Innes Willox said a restored focus on skilled migration was welcome, but it would not be enough to fill the labour and skill shortages.

“Business in particular will be hoping that this number can be raised as quickly as possible,” Mr Willox said in a statement.

Yesterday, Australian Chamber of Commerce & Industry’s (ACCI) CEO, Andrew McKellar, called for labour market testing pertaining to so-called Temporary Skills Shortage (TSS) visas to be waived and application processes to be streamlined so that employers can more easily hire foreign workers:

Numerous business owners said the [TSS] system was not fit for purpose, with applications that took months to complete at a cost of thousands of dollars being denied because the companies had not adequately proven they had tried to fill the jobs with Australians…

A government spokesman said its policies had ensured the nation’s economic recovery from Covid-19 had achieved record low unemployment rates…

A Department of Home Affairs spokesman confirmed more than 23,000 Temporary Skill Shortage visas had been approved since the border opened in November and only 2.5 per cent of visa applications had been refused…

Australian Chamber of Commerce and Industry chief executive Andrew McKellar called for labour market testing to be scrapped at least temporarily. “As the global race to attract skilled migrants heats up, we cannot risk getting left behind”…

The tune coming out of the business lobbies is always the same. They made exactly the same skills shortage arguments in 2002 to a Senate Inquiry, whereby they complained of “serious skill shortages and skill gaps” in Australia and warned that unless we did something about it – i.e. import a lot of workers – Australia’s economy would not develop and would simply end up going backwards.

Despite decades of record immigration, whereby literally millions of foreign workers were imported into Australia, business groups always want more.

But if skills shortages are so pervasive, then why is Australian wage growth still tracking at close to its lowest level in history? Something doesn’t add up.

Hand wringing over Australia’s anaemic wages growth hit fever pitch in the years leading up to the pandemic, with politicians, economists, the Reserve Bank and the media all shedding crocodile tears.

Now that workers finally have the upper hand, and wages pressures are beginning to manifest, the business groups, the media and government are hell bent on suppressing wages by rebooting mass immigration.

That said, I do agree with the ACCI that labour market testing requirements do not work as intended because they are little more than an administrative hurdle that can be easily gamed by employers.

My preference is to abolish labour market testing in favour of dramatically lifting the Temporary Skilled Migration Income Threshold (TSMIT) from its appallingly low level of $53,900, which was $8,500 (14%) below the median income of all Australians in August 2021 ($62,400), which includes unskilled workers (see below table).

Setting such a low TSMIT has explicitly incentivised Australian businesses to hire low cost foreign workers instead of local workers, as well as abrogated their need to provide training. Adopting the ACCI’s policy prescription would only make the situation worse.

In exchange for abolishing labour market testing, the TSMIT should be raised to the 75th percentile of weekly earnings (currently $85,852 p.a.) to ensure that employers only hire migrant labour to fill genuinely skilled professions and to maximise the benefits of skilled migration.

Sadly, the various business lobbies would never support lifting the TSMIT to actual skilled levels, since it would prevent them from hiring cheap migrant labour en masse, undercutting locals, and suppressing wages – which is their real motivation behind their incessant immigration scab grab.

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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