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Skilled migrants brought in on temporary visas to fill shortages will get a boost to minimum pay rates every year under a government proposal that businesses say will progressively starve them of workers while smaller operators call for carve-outs to help them compete.
Specific visa pathways for childcare and disability workers are also being contemplated to bolster numbers in the staff-strapped industries, according to a leaked circular provided to unions and industry groups as part of a broad migration overhaul to be announced later this year.
Skilled migrants will get an annual increase to their minimum pay under a government proposal, but small businesses have called for exemptions for certain industries, like hairdressing.Credit: iStock
The government significantly increased the base pay of skilled migrants in July, from $53,900 to $70,000, to turn the tap off on temporary, cheap labour flooding the economy and contributing to an underclass of vulnerable, exploited workers. It had the dual aim of curbing the net migration level, which was 454,000 in the year to March.
The discussion paper proposes annually indexing the temporary skilled migration income threshold, or TSMIT, as well as the high wage threshold for specialist migrants “to maintain the relative position of the thresholds within the wage stack, and to maintain the integrity and original intent” of each migration pathway.
The migration reforms will create a three-tiered system for temporary workers, which includes a lower-income stream for frontline industries such as aged care; a core pathway for in-demand skills, to which the TSMIT applies; and a specialist stream for highly sought-after and highly paid professionals.
Australian Council of Trade Unions president Michele O’Neil backed the annual increase to skilled migrants’ base pay, noting the previous threshold had been set in 2013, “which led to a growing number of skilled migrants employed on low wages”.
“Indexation of the TSMIT will mean the threshold value will not erode over time, reducing the likelihood of undercutting local workers’ wages and the exploitation of migrant workers,” she said.
Former immigration department deputy secretary Abul Rizvi said the TSMIT “absolutely” needed to be indexed for multiple reasons, including to prevent skilled migration being used as a tool to suppress wage growth.
But Council of Small Business Organisations Australia chief executive Luke Achterstraat said his organisation was strongly opposed to annually lifting the TSMIT, until “a significant amount of time has passed” and a review had been conducted to show the already increased new threshold was working.
“It’s going to price out a significant number of employers,” he said.
Home Affairs Minister Clare O’Neil is overseeing an overhaul of the migration system.Credit: Alex Ellinghausen
The council is also pushing for small business carve-outs where they say the average earnings are well below the income threshold, including for hairdressers and beauty therapists.
“COSBOA submits that where evidence from labour market insights is provided, exemptions from the TSMIT should be granted,” Achterstraat said in a letter to Home Affairs Minister Clare O’Neil.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said indexing the threshold during an acute shortage of workers would worsen the situation for employers.
“While it is reasonable for the threshold to be reviewed, automatic indexation will remove some of the government’s options to handle current tightness in the labour market,” he said.
The government declined to comment.
The discussion paper doesn’t say whether the annual increase to the core stream would be tied to the wage price index or another measure, such as the national minimum wage increase. It says the upper threshold of the pay range within that pathway would be increased at the same time, but that limit is yet to be set.
The government is piloting a system of labour agreements between aged care providers and unions to bring in lower-earning migrants to fill jobs in the short-staffed industry. Immigration Minister Andrew Giles recently signalled he is open to expanding similar pathways into other industries in need.
The discussion paper says there is a “strong understanding” migrant workers will be needed in the medium term to fill shortages in essential industries, despite moves made to improve wages and conditions in those sectors, including Labor’s bargaining reforms.
According to the paper, the government has begun to examine what specific migration streams for the care economy would look like.
“For example, these arrangements would be sector-specific, given the different skill and labour needs across aged care, child care and disability care,” the paper says.
McKellar said the government “must continue to create migration pathways for all severely depleted sectors”.
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