Are you aware that minor tweaks to Australia's skilled migration visa system could boost the economy by $84 billion?

In this article, we explore the current issues with Australia’s points-tested skilled migration visa system and discuss proposed reforms. These changes have the potential to significantly increase the long-term earnings of visa holders, benefiting Australia’s economy by $84 billion over the next 30 years.

We'll cover the key problems with the current system, the potential benefits of reform, and the suggested changes to make the points-tested visa system more effective.

What is the Points-Tested Skilled Migration Visa System?

Australia’s points-tested skilled migration visa system awards points to potential migrants based on factors such as age, English proficiency, education, work experience, and marital status. These points assess an applicant’s ability to successfully integrate into Australia’s community, with minimal reliance on social services. A higher points score increases the chances of receiving an invitation to apply for a visa in one of three streams: the Skilled Independent (subclass 189) visa, Skilled Nominated (subclass 190) visa, or Skilled Work Regional (Provisional) (subclass 491) visa.

The system awards a maximum score of 130 points, with 65 points as the benchmark for an invitation. However, with only 800,000 points-tested visas available over the next decade, competition is fierce, and 65 points may not be enough.

Why is it Important?

Skilled migrants contribute significantly to Australia’s economy, diversity, and productivity. However, flaws in the current system prevent it from maximizing these benefits. For instance, an applicant’s partner’s skills are not equally rewarded. Reforming the system is crucial for fostering a sustainable economy where both the applicant and Australia can thrive.

Key Problems with the Current System

1. The Points Test Does Not Reward the Most Skilled Migrants

The points test should prioritize migrants likely to make the most significant economic contributions to Australia. Factors like education, English proficiency, and work experience are strong indicators of long-term earnings, benefiting the government through higher tax revenue and lower reliance on social services.

Case Study: Unrewarded Skills

Consider Raj, a software engineer with a master’s degree from India and fluent in English. Despite his qualifications, the current system allocates him only 70 out of 130 points. As a result, Raj might lose out to candidates with less relevant experience but who have accumulated points through other, less impactful criteria.

Analysis: Reforming the points allocation to focus more on critical factors such as education, skills, language proficiency, and partner’s skills would ensure that the most economically beneficial migrants are selected, maximizing the positive impact on Australia's economy.

2. The Points Test Includes Unnecessary Points

Some points are awarded for characteristics that do not predict long-term success, such as studying in Australia or completing a ‘professional year’ in fields like accounting, IT, and engineering. These factors do not significantly enhance employability or earnings.

Case Study: Studying in Australia

Emily earned extra points for her Australian qualification and for studying in a regional area. However, research shows that skilled migrants who studied in Australia earn around 10% less than those with equivalent qualifications from abroad.

Analysis: Removing unnecessary points and focusing on high-value skills and experience would create a more effective points system, helping to attract highly skilled migrants who are likely to succeed in the Australian job market and contribute significantly to the economy.

3. Many Skilled Migrants Are Ineligible for Points-Tested Visas

Currently, points-tested visas are limited to specific skilled occupations deemed in shortage, excluding many highly skilled workers from other fields who could significantly contribute to the economy.

Case Study: Occupational Limitations

Jane, a highly skilled cybersecurity analyst, is ineligible for a points-tested visa because her occupation is not listed as a shortage. However, many migrants work in different high-skilled jobs once they obtain permanent residency, suggesting that broader occupational eligibility could be beneficial.

Analysis: Opening points-tested visas to all high-skill occupations would allow Australia to attract and retain the best global talent. Expanding the occupation list would also address contemporary issues like low fertility rates, requiring specialists such as IVF experts, an occupation not currently listed as a shortage.

Proposed Reforms

1. Increase the Maximum Points Available

Raising the points cap from 130 to 500 and awarding more points for higher degrees, excellent English skills, and skilled spouses would ensure a more comprehensive assessment of a migrant’s potential contribution.

Case Study: Higher Points for Higher Skills

Viraj, an engineer with a PhD and excellent English proficiency, scores higher under the reformed system due to the increased points for his educational background and language skills in Hindi, as India is one of Australia’s key trade partners.

2. More Granular Points Based on Age

Offering more specific points based on an applicant’s age would better reflect their long-term economic potential.

3. Abolish Unnecessary Points

Eliminating bonus points for studying in Australia, regional study, professional years, and specialist education qualifications would streamline the system to focus on genuinely impactful criteria.

Case Study: Focus on Relevant Skills

David, who completed a professional year in IT but has lower language proficiency and no substantial work experience, no longer gains unnecessary points, ensuring that candidates with more relevant qualifications and skills are prioritized.

4. Focus on High-Skill Employment

Awarding points for only the first two years of high-skilled employment experience and high-paying Australian work experience would highlight candidates who have proven their capability in the Australian job market.

5. Broaden Occupational Eligibility

Opening points-tested visas to all high-skill occupations and setting a minimum points threshold would ensure that Australia can attract top talent across various fields.

Final thoughts

Reforming Australia’s points-tested skilled migration visa system by addressing its flaws can significantly benefit the country. By rewarding the most skilled migrants and eliminating unnecessary points, Australia can attract top global talent and boost its economy.

Implications

Implementing these changes could increase the long-term earnings of visa holders and add $84 billion to the government budget over the next 30 years, enhancing productivity and economic growth.

Need Assistance?

If you need assistance with understanding the points-tested skilled migration visa system or navigating the proposed changes, contact our experienced immigration lawyers today. We are here to help you achieve your migration goals and contribute to Australia’s prosperous future.

References:

• Schedule 6 of the Migration Regulations 1994

• Section 92 and 93 of the Migration Act 1958

• Migration (LIN 19/051: Specification of Occupations and Assessing Authorities) Instrument 2019

• https://www.sbs.com.au/news/article/the-84-billion-question-to-reform-the-skilled-migration-points-tested-visa-system/ib7zxvdbw

Note: The information provided in this article is meant for general informational purposes only and should not be interpreted as legal advice. Although we strive to provide accurate and useful information, the nuances of Australian immigration law demand personalised advice from legal professionals. Given the dynamic nature of migration regulations, it is essential to consult with experienced immigration experts for up-to-date insights tailored to your individual circumstances. We strongly advise seeking professional guidance to navigate the complexities of Australian immigration law effectively and to achieve the most favorable outcomes for your immigration journey.