Luring more skilled foreigners, keeping fewer unskilled ones

The government has done a good job with this.

If our immigrants are more skilled, they'll pay more tax, usually over long careers before they retire and switch to receiving benefits. If immigration relieves a skills shortage, maybe in a particular location (say, welding in the Pilbara), it helps businesses grow so they can create more opportunities for Australians.

The announced changes won't greatly affect housing demand in the short term because, contrary to a popular assumption, the government has nothing like precise control over the number of people who arrive and leave each year. But it will have a bit more control after the reforms are implemented.

We have annual quotas for permanent residency visas, leading to citizenship, but mostly not for temporary visas. Those are the ones that immigrants generally arrive with, perhaps as a first step towards permanency or just to stay for a few years of work or study.

After the reforms are implemented, fewer people will be lingering on temporary visas. We'll be hustling them along to either permanency or departure.

The changes to permanent migration are probably the most important in the reforms, says Trent Wiltshire of the Grattan Institute, a think tank that does a lot of work on migration.

But take one particular temporary visa first, the one we used to call subclass 457. It's now the temporary skill shortage visa and is used when employers sponsor foreigners who have know-how that can't be found locally.

While its justification may be relieving temporary shortages, we can hardly imagine a better source of permanent new Australians. Its holders are people whose skills are so valuable that employers have gone through the cost and rigmarole of finding them overseas and arranging to get them into the country.

So the permit will now be rebranded as the skills in demand visa and in all its versions have clear pathways to permanency, increasing its attractiveness to those valuable foreigners. They will have much more freedom to move from job to job, so they won't be so exposed to exploitation.

All that should be in place by the end of next year. The government has already lifted the minimum wage for such visas from $53,900 to $70,000 - and quite properly, since the objective must not be to flood the country with cheap foreign labour.

More time will be needed for another big change, reforming our points system, the main way we assess whether a temporary visa holder should be allowed to stay permanently. An applicant gets points for such things as English proficiency, education level and experience in one of the skills on an official list.

But the government says some factors that offer points don't really indicate whether someone will prosper here, such as studying in regional Australia or having language translation skills.

For immigration purposes, "regional Australia" usually means anywhere outside of Melbourne, Sydney and Brisbane, the cities that we're trying to direct population away from.

The government also notes a Grattan recommendation for the points system to put more emphasis on the skills of the spouse or defacto of the primary applicant. If an application is really seeking permanent residency for two people, we'd better consider the qualifications of both.

While we want to clear a path to permanency for many people on temporary visas, we have a problem with others who are not doing well here but still not choosing to go home. Many have studied and graduated here with qualifications that turn out to have little value.

So the government plans, in one step, to raise the standard of the graduates so fewer are unsuccessful in looking for work. To get their original student visas, they'll need a higher level of English. And there will be more scrutiny of applications for study at so-called high-risk education providers, meaning schools that are less about educating and more about selling enrolment certificates for getting a visa.

Altogether, says Wiltshire, we'll have fewer students than we would have had under old policies, but they'll be better students.

Then the opportunity for lingering on temporary visas will be reduced, by limiting graduates' ability to hop from one to another. This phenomenon has been a big contributor to rising net migration: as new students have flooded in, fewer graduates have been leaving.

Now a graduate will get another student visa only if the new course builds on the previous one. So he or she won't be able to follow up a master's degree in accounting, for example, with a TAFE course in cookery.

It would have been better if that student had taken up cookery from the outset, if that was the skill that was in demand. And choosing to do so would have been easier if an apprenticeship had been available.

But we have no apprenticeship visa. The government says it will look at what it can do about that. It should do so quickly.

And what of the big numbers, annual net migration? The figure for 2022-23 is estimated at an astounding 510,000, far more than the government expected - yet still only catching up on the immigration pause of the pandemic years.

The forecast for 2024-25 is 250,000, similar to the years just before the pandemic. Thanks to this pretty good set of reforms, they should also be better immigrants.