Two new reports are calling on the Australian Government to target large numbers of young skilled migrants to support Australia’s economic recovery from the impacts of the COVID-19 pandemic.

The Grattan Institute and demographer Simon Kuestenmacher have both released research-based papers calling for a new focus on younger skilled migrants.

The Grattan Institute says highly skilled younger workers should comprise the majority of Australia’s migration post-pandemic.

Facing worker shortages as a result of the country’s closed borders, the reports say the rethink – while drastic – is necessary to boost the Australian economy post-pandemic.

The Grattan Institute report titled, ‘Rethinking permanent skilled migration after the pandemic’, says that the COVID crisis is an opportunity to “reset our skilled migration to favour young, high-skilled workers that bring the biggest economic benefits to Australia.”

Grattan Institute Economic Policy Director Brendan Coates, says that post-COVID, Australia should shift away from taking older workers with less proficiency in English, as well as abolish the Business Investment and Innovation Program, a scheme that allows people to operate a new or existing business in Australia.

Instead, the government should focus on boosting the number of skilled worker visas, which would supercharge the economic benefits of the skilled migration program.

“Historically, skilled migration has been working really well for us,” Mr Coates said.

“But changes in the permanent intake recently have shifted us away from selecting younger skilled people who earn high incomes in the labour market,” he said.

The report suggests that focusing on a more skilled workforce would yield significant economic benefits; it could result in nearly $4 billion in extra personal income tax receipts alone over the lifetime of each yearly migrant intake.

It comes as the latest figures from The National Skills Commission reveal that difficulty recruiting — particularly for highly skilled employees — has hit a new peak since the start of the pandemic.

It found that many businesses are struggling to find suitably-qualified staff to fill all the roles that are available, with 54 per cent of recruiting employers reporting having trouble filling vacancies in April of this year.

The report says other reforms, including paying skilled migrants more and making employer-sponsorship available for workers in all occupations provided they earn above $80,000 a year.

This would better target visas to people with the most valuable skills, and simplify the sponsorship process for firms and migrants, the report suggests — not to mention boost fiscal dividends by at least another $9 billion from each yearly intake.

“When we reopen the borders, Australia should unashamedly select permanent skilled migrants for their long-term economic potential,” the report says.

It says skilled migrants tend to be younger and earn higher incomes than native born Australians and generate a fiscal dividend for the nation because they pay more in taxes than they receive in public services and benefits over their lifetimes.

Meanwhile demographer Simon Kuestenmacher says Australia’s population will be one million less in 2022 than expected pre-pandemic. But hidden behind this statistic is a huge opportunity to create more vibrant CBDs and better quality buildings.

“Prior to the COVID-19 pandemic, Australia was adding up to 400,000 extra people to our population every year. We needed housing and we needed it fast,” Mr Kuestenmacher said.

Melbourne added one million residents between 2007 and 2017, followed by Sydney (806,000), Brisbane (449,000) and Perth (415,000). When time is of the essence there are two “tried and tested” housing delivery methods: large residential towers near job centres in the inner city and large green-field projects near the urban fringe.

“Then COVID hit and, all of a sudden, instead of plus 200,000 or 300,000 net new migrants we have minus 100,000 – that’s a big change,” Mr Kuestenmacher said.

“The implications start with demand for dwellings, but the impact is uneven. The overwhelming majority of our migrants are young – either international students or skilled migrants in their 20s and 30s – who make the move to Australia before they start a family,” he said.

“These migrants don’t need three or four-bedroom houses. They are looking for apartments close to their work or study. Take away these migrants and demand for one- and two-bedroom apartments just evaporates.”

The consequences are playing out around the country but are stark in Melbourne where an estimated 4,000 apartments are for sale or vacant in the city centre.

“The residential sector will have to reinvent itself – and one of the most obvious things to rethink is who lives in apartments,” Mr Kuestenmacher said.

The reports release come amid the federal government’s parliamentary inquiry into Australia’s skilled migration program, which is due to report back by July of this year.

Read the full Grattan Institute report here: https://grattan.edu.au/report/rethinking-permanent-skilled-migration-after-the-pandemic/