Australia’s migration system is failing to attract the most skilled migrants; it is choked with bureaucracy and rife with rorting and exploitation.

This is the shorthand appraisal of the nation’s migration system produced by the first major review in decades.

The ‘Review of the Migration System’ final report, produced by former senior public servant Dr Martin Parkinson, lawyer and labour market expert Professor Joanna Howe and businessman John Azarias, found that Australia’s migration program was “not fit for purpose”.

It says the objectives of the program are unclear, and successive governments and policymakers have tried to fix things with piecemeal reforms that have not addressed fundamental underlying issues.

The report says there is a lack of data about migration to Australia, the system is not targeting the skills Australia needs and is open to exploitation. 

“Australia now has a migration program that fails to attract the most highly skilled migrants and fails to enable business to efficiently access workers. At the same time, there is clear evidence of systemic exploitation and the risk of an emerging permanently temporary underclass. Cumulatively, these factors erode public confidence,” the report said.

It says that while Australia has long had a focus on permanent residence in its migration program, there are now more than 1.8 million temporary migrants living in the country.

These people participate in the labour market and in many cases work in key sectors and in the delivery of critical services.

But many face “tangled and lengthy pathways to permanent residence”.

“They deserve clarity about their opportunities to remain. It is not in Australia’s national interest to maintain a large proportion of temporary entrants with no pathway to citizenship as it undermines our democratic resilience and social cohesion,” the report says.

It says the migration program has not kept pace with the impact of large and uncapped temporary migration on infrastructure, such as housing.

“We need a long-term horizon that supports stable and predictable population growth and allows more effective planning of infrastructure, housing and services to meet the needs of all Australian residents,” the report said.

The report identified exploitation of workers as an issue in temporary migration arrangements.

“Temporary migrant workers are vulnerable to exploitation and current settings for the TSS have heightened the risk of exploitation.”

“In considering the redesign of Australia’s migration system, it is incumbent upon us to seek to engineer-out opportunities for exploitation. For temporary migrants, exploitation presents the risk of harm beyond the loss of income or mistreatment itself,” the report said.

“For local workers, the exploitation of migrant workers in the form of wage theft can provide a competitive edge for unscrupulous employers, undermine local wages and conditions, and negatively affect workplace and community morale and cohesion. For the migration system as a whole, exploitation affects perceptions of Australia as an inclusive and welcoming society.” it said.

The report outlined five priorities for reforming Australia’s migration system: building Australia’s prosperity by lifting productivity, meeting labour supply needs and by supporting exports; enabling a fair labour market, including by complementing the jobs, wages and conditions of domestic workers; building a community of Australians; protecting Australia’s interests in the world, and; providing a fast, efficient and fair system.

It said these objectives would ensure the migration system will operate in Australia’s national interest.

The report also outlined a set of five “guardrails” to protect migrant workers’ interests.

Firstly, it recommended a ‘tripartite approach’, involving perspectives from industry, unions and government in determining the role of migration in meeting identified gaps in the labour market and delivering fair and efficient outcomes.

“The migration program must operate in the interests of employers and workers. They are the people who interact with the migration system every day. But migration must also serve the national interest which is not just the simple accumulation of these individual interests,” the report said.

Secondly, the report recommended a principle of ‘universality’ be adopted to make sure all skilled temporary migrants engaged in the labour market should be governed by the same regulatory framework while remaining flexible so as to include special cohorts of temporary migrants.

Thirdly, an ‘evidence-based’ approach to identify labour market needs was necessary, the report said, to connect domestic skills, training and migration.

“Addressing an identified and established labour market need is critical to ensuring public support for the migration program. Labour migration must complement – not supplant – local labour, and the link between wages and conditions must be understood,” the report said.

Fourthly, ‘mobility for temporary visa holders’ in the labour market was also identified as a guardrail in the report.

“Employer sponsorship, although enabling a temporary migrant to be employed on-arrival, has created the opportunity for exploitation in the labour market because it stifles the ability and willingness of an employee to report non-compliance with labour standards or to move to another employer,” the report said.

‘Integrity’ was the final guardrail identified.

“The migration system needs to be transparent and accountable so that users understand how their application is being managed, and why and how decisions are made,” the report said.

The report also identified ways to make the migration system help boost productivity, foster innovation, add to Australia’s skill base, and contribute to economic growth over the long-term.

It recommended recalibrating the migrants’ points test, taking a wider approach to attracting highly skilled migrants, focusing on women migrants and encouraging high potential international students educated here to remain.

But it said Australia only benefitted from migration if migrants were welcomed into, and able to contribute to, communities and work places.

“While most migrants do well, there is considerable lost potential and more that can be done, particularly to support migrant women, through settlement and other government services and supports, access to networks and local experience, and a more coordinated approach to skills recognition,” the report said.

On a positive note, the report said that migration had been critical to driving economic prosperity.

“From the mid-1990s to the mid-2000s, the share of skilled migrants in our annual intake doubled. This coincided with Australia’s economic miracle: from 1991 onward, Australia enjoyed the longest running period of continuous economic growth on record anywhere in the world,” the report said.

“Migration is a central element of Australia’s national identity. As a country, we actively seek new members of our community from across the world, welcoming a disproportionately large component of the world’s migration flows.

“The contribution of migrants has built the richly diverse, dynamic and multicultural Australia of today. It is no easy feat to incorporate people from all over the world into one country and for the end result to be socially cohesive and economically prosperous,” the report said.

And it said that into the future Australia faces challenges and opportunities in which migration could play a role.

“Stagnating productivity, geopolitical risks and an ageing population are all critical issues for government to address. Shifting to a clean energy economy will present many opportunities,” the report said.

“Migration will not solely help us address these problems or seize these opportunities, but a well-designed migration program is part of the solution.”