Australia should offer migrants better English-language training and recognise international qualifications if it wants to boost productivity and tackle critical skills shortages, a new report has recommended.
As debate over the size of the country’s migration program rages, and economists fear a decline in productivity could further erode living standards, the Committee for Economic Development of Australia found Australia was not making the most of skilled migrants to plug gaps in key industries.
Warning that there are “big costs” from not making the most of migrant’s skills, the report found people who’d moved to Australia between two and six years ago were earning 10 per cent less than their Australian-born counterparts, equating to more than $4bn in foregone wages each year.
The biggest losers were female migrants with a postgraduate degree, who earned on average 31 per cent less than Australian-born women in the workforce with similar education levels.
CEDA senior economist Andrew Barker said more work needed to be done to close that wage gap, and that weak English skills and a lacklustre approach to recognising migrants’ skills, paired with discrimination, was having an impact on the entire workforce.
“Many (migrants) still work in jobs beneath their skill level, despite often having been selected precisely for the experience and knowledge they bring,” he said.
“Ensuring migrants can use their skills within their first few years in Australia is crucial to addressing ongoing skill shortages across the economy.”He said the government should expand funding for existing English programs.
Currently, the government funds the adult migrant English program, which is designed primarily for family and humanitarian migrants.
The report found only about 15 per cent of skilled migrants use the program to fill gaps in their English ability.
“Given our funding that English ability is even more crucial for the employment outcomes of highly educated migrants, the government should consider additional funding for this program,” the report said.
“The expectation that skilled migrants will be able to settle into Australia without any help is unrealistic.”
The report also recommended the government improve its recognition of foreign qualifications and experience, and require occupational regulators to explain any decision not to recognise a migrant’s foreign qualifications.
The report comes after the Albanese government in December released its migration strategy, which introduced a new “skills in demand” visa with one pathway specifically to attract migrants with specialist skills to work in sectors such as technology and energy.
The government also announced its intention to “lift the standards” for international students, with higher English language requirements to come into effect for students wanting to study in Australia.
In his new report, Mr Barker said the government should also consider giving greater weight to the skills and work experience of partner applicants to skilled migration visas, to improve the employment and wages of female migrants.
“While training and upskilling local workers is crucial, in an economy facing widespread worker shortages and low unemployment, we must do more to ensure we can access the right skills at the right time and get the right people into the right jobs,” Mr Barker said.
“By reducing skill shortages and boosting productivity, our recommendations can deliver a win-win through a stronger, more productive economy and greater wellbeing among migrants.”
The report’s final recommendation was to work to reduce labour-market discrimination against migrants.