(Image: Private Media/Tom Red)

Just as the government was recently releasing its Intergenerational Report spelling out, yet again, the need for higher productivity, more migration and higher participation to protect us from the consequences of an ageing population, it was busily undermining its message.

On July 1, changes to the allocations and priorities of the government’s skilled migration program commenced, in which — according to then population minister Alan Tudge last year when he announced them — “priority within the skill stream will be given to Global Talent [visas], the Business Innovation and Investment Program (BIIP), and Employer-Sponsored visas”. That included the doubling of the number of BIIP visas to 13,500 in the 2020 budget and the tripling of Global Talent visas to 15,000.

The BIIP category means that 13,500 people a year will in effect be able to purchase a visa for long-term residency in Australia — and a pathway to permanent residency — if they can bring enough assets with them, on the basis that they will be bringing additional innovation, business skills and investment into the country.

As a report by Grattan Institute in May demonstrated, however, the scheme is a colossal failure. For a start, it’s a solution in search of a problem — Australia does not lack for capital, being now a net exporter of capital due to our massive superannuation system. A visa scheme to encourage investors to move to Australia thus looks like a 1980s solution to the days of “horror foreign debt” headlines. And the “investment” brought by visa holders mainly goes into retail and hospitality businesses, rather than areas where Australia business has traditionally been weak or lacked innovation.

The results of the scheme, the Grattan authors demonstrate, are abysmal, both within the terms of the scheme itself and for the priorities we are supposedly pursuing in the context of an ageing population.

Investor visa holders are much older than other skilled visa holders, with the great majority between 35-54 compared to 15-34 for skilled visa holders. More than a quarter of investor visa holders are considerably older than 37-38, the average age of Australians.

And contrary to the rationale for the scheme, visa holders earn much less than other skilled visa holders — a median income of $25,000 compared to one of $64,000 in 2016 — and work less, with half of visa holders not participating in the workforce. They are less well-educated, with just 10% holding a postgraduate degree compared to a third of skilled visa holders, and 60% having no degree at all. Investor visa holders also bring in more than twice as many secondary applicants — family members — as other skill categories.

And remember there’s an opportunity cost to each of these visas that brings in a less educated, lower-earning, older migrant — we lose a younger migrant more likely to be skilled and to be participate in the workforce. That’s why the Grattan report recommends dumping the visa category entirely.

Unlike the investor visas, there are no points requirements around assets to meet for the Global Talent category — as the Grattan team of Brendan Coates, Henry Sherrell and Will Mackey points out, the category has virtually no criteria beyond vague adjectives like being “exceptional” or “international recognition”, to be judged by bureaucrats, and that they will readily find employment, preferably at a salary above $153,000 (although that isn’t a requirement) and are from ten target sectors. Home Affairs also uses an expression of interest process to filter applications or nominations — companies can nominate people for visas, even without committing to employ them.

The Global Talent category began as a trial in 2019 and is so new there’s little data on which to base any assessment, but that hasn’t stopped the government massively increasing it. The program is reminiscent of the migration program of the pre-Robert Ray era, when ministers and the department had almost unlimited discretion about who was allowed to enter Australia. And beyond the high level of discretion, Home Affairs devotes considerable resources to assisting applicants in their application process, adding to the cost burden.

As always, best to ignore what the government says about its policy priorities, and look at what it does.