As a trade-oriented economy, Australia has always sought strong and been successful in attracting investment and international talent due to our high quality of life and economic stability. Our appeal has been further enhanced by our increasing cultural diversity which reached an inflection point in 2021 when more than half of Australia’s residents – or their parents – were born in another country.
Despite its strong recent trajectory of immigration, Australia’s two-year border closure has resulted in a 50-year low in unemployment and 500,000 job vacancies, which has placed significant strain on local companies and given pause to some international companies’ future plans to enter and invest in Australia.
To address the shortages, the National Job Summit in September resulted in permanent migration visas being increased from 160,000 to 195,000 places for 2023 and injected more than AUD $36 million to fast-track back-logs in visa processing.
These are promising signs but Australia will need to do more as other markets also send equally strong policy signals to encourage overall migration with a focus on working-age foreign talent. For example, Canada announced in 2022 that it intends to lift its immigration intake to over 430,000 people per year in 2023 and rise further to 450,000 in 2024.
Treasury’s annual population statement, released in mid-January, noted that despite an increase in net inflow migration, the numbers are not expected to fully offset the lost population growth, with Australia expected to remain smaller and older than would have otherwise been the case.
The short-term competition will also be compounded by long-term population projections. For example, January saw reports of China’s population falling for the first time in 60 years. What this tells us is that the fight for talent is not just a short-term post-pandemic blip but is instead structural.
Beyond the headline intake figures, the markets who will attract internationally mobile workers will be those who can make the strongest case in offering better and more valuable work, lifestyle, and permanency.
More precisely, the fight for talent will centre around those markets who can sharpen their visa programmes including targeted visas focused on specific skills, further smoothing visa application processes and costs, better recognition of overseas qualifications, and a clearer pathway to permanent migration.
Once again, other markets have begun making swift policy changes on their visa programmes. In August, Singapore introduced a new work pass allowing foreigners earning at least S$30,000 a month to start, operate and work for multiple companies in the country at the same time. In October, Hong Kong unveiled a new two-year visa for high income earners, the extension of employment visas to three years and the removal of preference to hire local professionals.
Knowing this, the Australian Government is completing an immigration and visa review next month and has already earmarked a shift in focus from short-term visas towards permanent migration and has increased the number of places available for skilled migrants from 79,600 to 142,400.
The February review is also likely to reveal a raft of additional measures that will go far beyond the headline visa number increases. These include moving away from employers needing to sponsor people based on a set occupation list in favour of wage levels a job will attract. Doing this will remove bureaucratic delays, and is in keeping with what Singapore has done. We also expect reforms to incentivise international students to stay longer.
These measures are all positive and a step in the right direction.
There are many things that also remain in Australia’s favour for talent attraction: we offer strong economic stability off the back of 32 years of uninterrupted growth. And unlike other markets that may see a global contraction and softening labour market in 2023, Australia’s growth is expected to continue. Australia also does not run up against infrastructure capacity issues like school and housing.
But it’s all meaningless unless Australia can both develop a comprehensive and coherent narrative incorporating these proof points and ensure it reaches the audience in the markets where we seek to attract talent.
Right now, our sense is that Australia is not making these signals strong enough meaning we risk being drowned out by other markets making similar claims.
Multinational companies, seeking Asia expansion, will prioritise locations for their regional head office and treasury centre based on their confidence to hire the right talent directly there, or be adequately serviced by their ecosystem of suppliers. Australia has a unique opportunity to re-state its case.
Tackling its visa programme and then strongly projecting a joined up narrative abroad will further cement Australia’s success in attracting international talent in 2023 and the wider investment benefits that come with it. By addressing these issues we’re not just solving for now but for the future, as challenges around talent are here to stay.
This article first appeared in The Australian on Monday, 3 February, 2023.