Australia’s Migration Program: A Broken System in Need of Reform, By Tom North and Paul Walker
Australia's migration system is failing to deliver on its promises, mired in inefficiencies, contradictions, and legal inconsistencies. Far from being a streamlined engine for attracting skilled workers to meet the nation's economic needs, the Permanent Migration Programme is clogged with family visas, delivers few genuinely skilled workers, and undervalues the critical role of temporary migrants. Professors Peter McDonald and Alan Gamlen, in their incisive critique published by 360info, lay bare these systemic flaws and propose bold reforms to restore coherence and confidence in the system. This piece explores their arguments, delves into the root causes of the program's failures, and examines the proposed solutions to align migration with Australia's long-term economic and social goals.
At its core, the Permanent Migration Programme is marketed as a tool to bolster Australia's skilled workforce, with an annual cap of 185,000 places. However, the reality is starkly different. Only about 12% of the program consists of genuinely new skilled workers arriving from overseas. The majority of the so-called Skilled Stream is dominated by family members, spouses, children, and other dependents, who account for over 60% of permanent visas when secondary applicants are included. This skews the program away from its stated goal of addressing skill shortages and toward family reunion, which is not the program's intended focus.
The real drivers of skilled labor in Australia are temporary migrants, international students, graduate visa holders, and working holiday makers. Over the past three years, 84% of the increase in skilled migrant employment has come from these groups, who are filling critical roles in high-skill occupations such as managers, professionals, and tradespeople. For instance, census data reveal that over half of graduate visa holders work in high-skill fields, debunking the myth that they are relegated to low-skill jobs. Even working holiday makers, often stereotyped as transient farmhands or bar staff, are increasingly taking up skilled positions, particularly in countries like the UK and Ireland under new agreements.
Yet, these temporary migrants face significant barriers. Graduate visa holders, for example, are caught in a frustrating "Catch-22": they need skilled work to secure permanent residence, but employers often require permanent residency to offer skilled positions. This inefficiency wastes talent, hampers productivity, and undermines the very purpose of migration as a tool for economic growth.
The construction sector vividly illustrates the migration program's shortcomings. Australia faces a critical shortage of 130,000 tradespeople, including bricklayers, carpenters, and electricians, which exacerbates the nation's housing supply crisis. In 2023-2024, the Permanent Migration Programme delivered a mere 166 tradespeople, a negligible contribution to closing the gap. By contrast, the temporary skilled stream brought in over 5,000 tradespeople in 2024-2025, but even this falls short of demand.
The most effective pathway for addressing these shortages is employer-sponsored visas, which consistently deliver strong labour market outcomes. However, these visas are constrained by the program's cap, with nearly 100,000 applications pending in 2024-2025 against only 44,000 available places. Employers, accustomed to a 98% approval rate, now face delays and refusals, eroding confidence in the system. Without reform, this bottleneck risks collapsing trust in the migration program entirely.
Compounding these issues is the program's contradictory treatment of family visas. The Migration Act (Section 87) explicitly states that partner and child visas cannot be capped, yet they are included within the annual 185,000-place limit, creating backlogs of around 100,000 applications and wait times of 15-25 months. This not only causes hardship for families but also exposes the government to legal and reputational risks, as capping these visas may be unlawful.
The inconsistency is particularly glaring when comparing the treatment of partners of Australian citizens versus those of new skilled migrants. The latter receive permanent residence quickly, with lower fees and fewer requirements, while Australian citizens' partners endure long waits and stricter scrutiny. This inequity strains relationships and, in some cases, drives skilled Australians to leave the country rather than remain separated from their loved ones.
The government's messaging further muddies the waters. The migration program is presented as both "capped" at 185,000 places and "demand-driven," a contradiction that undermines its credibility. In reality, the cap restricts the ability to meet employer demand for skilled workers while simultaneously failing to honour the legal requirement for uncapped family visas. This incoherence frustrates employers, migrants, and citizens alike, leaving the system vulnerable to criticism and distrust.
To address these failures, McDonald and Gamlen propose a fundamental overhaul of the migration program. The centrepiece of their reform is to redefine the Permanent Migration Programme to focus exclusively on Skilled Stream primary applicants, separating skilled migration from family migration. This would achieve several key objectives:
1.Clarify Policy Purpose: By prioritising skills, the program would align with its stated goal of addressing labour market needs, rather than serving as a de facto family reunion system.
2.Increase Skilled Migration: Freeing up places currently occupied by family visas would allow more employer-sponsored and other skilled workers to enter, directly addressing shortages in critical sectors like construction.
3.Respect Legal Obligations: Moving partner, child, and secondary family visas outside the cap would ensure compliance with the Migration Act, eliminating backlogs and reducing hardship for families.
4.Restore Confidence: A predictable and efficient system would rebuild trust among employers, ensuring that skilled migration pathways remain viable and responsive to economic needs.
Humanitarian and parent visas would remain capped, but the overall impact on Net Overseas Migration (NOM) would be minimal. Most skilled migrants are already in Australia on temporary visas and thus counted in population statistics; granting them permanent residence would not significantly alter NOM figures. The recent spike in migration was driven by reduced departures during the pandemic, not excessive arrivals, and departures are expected to rise from 2027 as temporary visas expire.
Australia's migration system is at a crossroads. Its current structure, inefficient, contradictory, and potentially unlawful, fails to deliver the skilled workers the country needs while creating unnecessary hardship for families. By refocusing the Permanent Migration Programme on skills, recognizing the critical role of temporary migrants, and treating family visas as truly demand-driven, Australia can create a migration framework that is transparent, effective, and aligned with its economic and social priorities.
https://indiannewslink.co.nz/australias-migration-programme-falls-short-of-promises/
"Peter McDonald and Alan Gamlen
Canberra, Australia, September 10, 2025
Australia's migration programme has failed to deliver what it promises.
It brings in relatively few genuinely skilled workers, while favouring family migration.
Australia's permanent migration system is incoherent, inefficient and in parts unlawful.
It delivers few new skilled workers while being clogged with family visas that, by law, should not be capped at all.
Meanwhile, temporary migrants – students, graduates and working holiday makers – carry the real weight of supplying skilled labour yet are undervalued.
However, the migration programme is simultaneously presented to the public as both "capped" and "demand-driven"—a contradiction that undermines its credibility.
It needs two fundamental reforms: recognising the central role of temporary migrants in the skilled workforce and separating skilled migration from family migration while redefining migration as primarily about skills, not family reunion.
Overlooked reality: Temporary migrants drive skilled employment
Public perception often assumes that skilled migration equals the Permanent Migration Programme. In truth, the opposite is the case.
The permanent intake is capped at 185,000 people per year, of which around 30% is earmarked for family visas. Even within the Skilled Stream, the majority of visas do not go to skilled workers but to their families. Counting family and secondary applicants together, more than 60% of permanent visas are, in fact, family-related. Double the amount officially claimed.
Meanwhile, the share of genuinely new skilled arrivals from offshore is tiny, just 12% of the programme. The rest are already in Australia on temporary visas.
The real engine of skilled migration is temporary entry, not permanent.
Over the past three years, 84% of the increase in migrant skilled employment has come from temporary migrants, especially international students, graduates and working holiday makers. These groups now underpin growth in high-skill occupations such as managers, professionals, and trades.
The value of student and graduate temporary migration has been misrepresented.
Contrary to claims that they mostly end up in low-skill jobs, census data show that over half of graduate visa holders work in high-skill fields. Their partners also contribute strongly.
Working holiday makers, stereotyped as farmhands and bar staff, increasingly take up skilled positions.
Yet these students and graduates face constant barriers.
Graduate visa holders often find themselves in a "Catch-22" situation: they cannot get skilled work without permanent residence, but they cannot secure permanent residence without skilled work. This wastes talent and lowers productivity.
Construction industry labour shortages highlight the problem
The stakes are especially high in construction. Australia faces a shortage of 130,000 tradespeople, with shortages of bricklayers, carpenters, electricians and other trades fuelling housing supply bottlenecks.
In 2023-2024, the permanent programme delivered just 166 tradespeople, negligible against national needs. By contrast, more than 5,000 entered via the temporary skilled stream in 2024-2025.
Even this is insufficient to close the gap.
The only viable strategy is a dual one: expanding domestic apprenticeships while also increasing the skilled migrant flow. For the latter, employer-sponsored visas are the most effective pathway.
They consistently deliver the strongest labour market outcomes. Yet they face growing demand and shrinking supply within the capped permanent programme.
Working holiday makers are increasingly filling gaps, especially under new agreements with the UK and Ireland. But as more take up skilled work, they too add pressure to the already overloaded employer-sponsored permanent visa system.
Failure to deliver skilled labour demand leads to a collapse in confidence.
At the heart of the problem is the government's failure to match employer-sponsored demand for permanent skilled visas, which is surging. In 2024-2025, nearly 100,000 applications required processing, with only 44,000 places available. Employers who are used to a 98% approval rate now face inevitable delays and refusals. Confidence in the system could collapse unless made predictable and efficient.
A key factor in the delays is that while family visas are officially described as demand-driven, partners and children of Australians are legally entitled to them under the Migration Act; in practice, they remain capped within the annual planning limit. That creates backlogs, hardship, and potentially unlawful administration.
For years, partner visa lodgements have far outstripped grants, creating queues of around 100,000 applications. Families endure waits of 15-25 months. Relationships strain. Skilled Australians sometimes leave the country rather than remain separated from loved ones.
The inconsistency is stark: partners of new skilled migrants (counted as secondary applicants) receive permanent residence immediately, with lower fees and fewer requirements, while Australian citizens' partners wait years, pay more, and face stricter tests.
The law, however, is clear: partner and child visas cannot legally be capped under Section 87 of the Migration Act. Continuing to treat them as capped exposes the government to reputational and legal risks.
A coherent reform: separate skill from family migration
The solution is to redefine the Permanent Migration Programme to include only Skilled Stream primary applicants.
This reform would (a) sharpen policy purpose: The permanent intake would be clearly about skills, not family reunion (b) boost skilled migration: More places would be freed up for employer-sponsored and other skilled workers (c) respect legal obligations: Family visas would be processed on a truly demand-driven basis, in line with the Migration Act (e) restore confidence: Employers could trust that skilled migration pathways would remain predictable and efficient.
Humanitarian and parent visas would remain capped, while partner, child and secondary family applicants would move outside the programme cap.
Net Overseas Migration and the Numbers Game
Critics may worry that such reforms would blow out migration numbers. In reality, the impact on Net Overseas Migration (NOM) would be minimal.
Most permanent skilled migrants are already in Australia on temporary visas and so are already counted in population statistics. Granting them permanency changes little in NOM.
The recent spike in migration numbers was largely due to fewer departures during the pandemic, not excess arrivals. Departures are now climbing again and will accelerate from 2027 as large cohorts of temporary visas expire.
Chasing short-term migration targets is as irrational as capping demand-driven visas. Migration is shaped by different arrival and departure streams, most of them uncontrollable.
At best, migration can be guided like inflation, managed within a band.
Next steps: restoring clarity and confidence
Reform is overdue. By refocusing the permanent programme on Skilled Stream primary applicants and treating family visas as truly demand-driven, Australia can restore coherence to its migration framework. This would strengthen pathways from temporary to permanent residence, ensure skilled shortages are addressed, and rebuild employer confidence.
Such reforms would not inflate migration numbers but would make the system more transparent, lawful and effective in meeting Australia's long-term economic and social needs.
Professors Peter McDonald and Alam Gamlen are respectively Emeritus Professor of Demography and Professor at the School of Regulation of the Australian National University, Canberra."
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