To All Employers - A Rise In The Temporary Skilled Migration Income Threshold Could Be Here Soon

Immigration News

In a report from the September 2022 Jobs and Skills Summit, the Australian Government has declared a plan to address the skills shortage and strengthen the migration system.

The Government has stated they will "increase the permanent Migration Program planning level to 195,000 in 2022-23 to help ease widespread, critical skills shortages, as well as provide $36.1 million in additional funding to accelerate visa processing and resolve the visa backlog."

But in a Grattan Institute article written by Brendan Coates and Tyler Reysenback, they claim "there are plenty of opportunities to make Australia's migration program work better, rather than just making it bigger … The number of migrants is just one part of migration policy – just as important is which migrants we choose."

For permanent skilled visas, they suggest targeting wages, not shortages. The Grattan Institute believes the best way forward is to "target migrants who can fill high-wage jobs rather than specific occupations." They argue that "if Australia introduced a wage threshold of $85,000 a year (for permanent skilled workers) – the equivalent of median annual full-time earnings … (they could) instead focus on what matters: the wages employers are willing to pay to workers."

The Government's 2022 Jobs and Skills Summit report states that they will progress work to "raise the Temporary Skilled Migration Income Threshold (TSMIT) following broad engagement on equitably setting the threshold and pathway for adjustment."

So, the question is, what should the new TSMIT be?

Since 2013 the Temporary Skilled Migration Income Threshold has been frozen at $53,900, which is 80% lower than the earnings of full-time Australian workers.

The Grattan Institute is pushing for an increase of the threshold for temporary sponsored visas to a minimum of $70,000, "while allowing employers to hire temporary skilled migrants into any job, provided they are paid the same as equivalent Australians doing similar jobs."

The Australian Council of Trade Unions (ACTU) proposed increasing the threshold to around $91,000, while the Australian Chamber of Commerce and Industry chief executive Andrew McKellar said, "Raising the income threshold to not more than $60,000 would be more realistic … Ideally, there should be more flexibility in setting thresholds that are tailored sector by sector, and skill level by skill level."

Former Immigration Department deputy secretary Abul Rizvi said, "a minimum salary makes sure people are not being exploited and we are getting legitimately skilled people." And Dr Joanna Howe, Associate Professor in Law at the University of Adelaide, said, "A higher TSMIT in and of itself isn't enough to ensure that these workers are protected in the labour market … There does need to be verification that the job offer and the payment amount is commensurate to what an Australian worker would receive in that job."

Treasurer Jim Chalmers said it was time for a "conversation about the best level" the TSMIT should be set at "to make sure that we're not undercutting Australian wages as we responsibly bring people in to fill genuine skill shortages".

In a joint media release with Minister for Immigration Andrew Giles, Minister for Home Affairs Clare O'Neil announced a comprehensive review of Australia's migration system to be reported by the end of February 2023.