A Coalition government would abandon a longstanding Howard-era target for a two-thirds share for skilled migrants in an effort to slash permanent migration by 25%, or 45,000 people, next year.
The shadow immigration minister, Dan Tehan, confirmed that if elected he would not touch the family stream intake and would instead dramatically cut skilled visas in an effort to lower permanent migration from 185,000 in 2024-25 to 140,000 in 2025-26.
The permanent migration target would increase to 150,000 in the following two years, and then 160,000 after that, he said.
“What we’re going to do in the first instance is we’re going to reduce the skill migration level,” Tehan told ABC radio.
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The parent and “other family” categories of the permanent migration program – representing 8,500 and 500 people, respectively this year – can be capped, while partner and child visa numbers depend on demand as they are protected by law.
Holding the family stream of the permanent migration steady at a planned 52,500, skilled migration would drop from 132,200 to 87,200 next financial year, according to the Coalition plan.
Outside two years affected by pandemic border shutdowns, that would be the lowest number of skilled permanent migration in 20 years. It would come at a time when the country continues to battle a severe shortage of skilled workers in key areas, including health and construction.
The share of the skill stream would drop from 71% to 62% next year, also the lowest in about two decades, outside Covid-19 years.
Abul Rizvi, a former deputy secretary of the immigration department, said Tehan’s comments represented a sharp break from what had been a bipartisan approach to heavily favour the economic and fiscal benefits of skilled migration.
“He’s either accidentally or deliberately abandoned the two-thirds [skilled to] one-third [family] balance that Howard established and which the Labor party said they would stick to as well,” Rizvi said.
Rizvi said the Coalition had previously “belted” Labor on maintaining that ratio, “and now, just in a quick radio interview, it’s gone”.
There was also the question of which components of the skilled stream the Coalition would cut.
The easiest visa to cut would be the “skilled independent” category, Rizvi said. But that accounts for fewer than 17,000 people in this financial year, and the biggest occupation is nursing.
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“Are you really going to cut nurses? That would be brave, minister,” Rizvi said.
Presuming the Nationals would not allow a cut to the 33,000 regional migrants, that would leave a fight with businesses to slash the 44,000 planned employer-sponsored visas this year, or a stoush with the states over their 33,000 skilled permanent migrants.
KPMG’s chief economist, Brendan Rynne, said in a tight labour market businesses were still struggling to get the right workers.
Rynne said skilled migrants brought new knowledge and knowhow and so made the economy more productive.
“I can understand what they [the Coalition] are trying to achieve, but we don’t want it to come at the cost of productivity growth.”
Rynne said skilled migrants also tended to be younger and through the years contributed more in taxes than they cost in public services – in other words, they were a net benefit for the national budget.
Rizvi said the hit to the budget would be “meaningful” and likely run to the hundreds of millions of dollars.
“If you cut the skill stream by 45,000, you must find the offsetting savings,” he said.
