Australia’s Skilled Visa System: A Ponzi Scheme in Disguise, By James Reed

Australia's migration system is often sold as a solution to skill shortages, a way to bring in top talent to boost productivity and fill critical gaps. But dig deeper, and it's clear the system is broken, more Ponzi scheme than precision tool. As Leith van Onselen argues in Macrobusiness, the so-called "skilled" visa program is flooding the country with low-paid, often underqualified workers, undermining wages, straining infrastructure, and doing little to lift productivity. I will examine why this system is a "farce" and what needs to change.

Launched in December 2024, the Skills in Demand (482) visa program promised to attract high-calibre workers to roles Australians can't fill. It's split into two streams: the Core Skills Stream (minimum salary $73,150) and the Specialist Skills Stream ($135,000). Sounds good on paper, but the reality is a mess.

The Core Skills Stream, with its 456-job occupation list, sets the bar too low. At $73,150, the Temporary Skilled Migration Income Threshold (TSMIT) is nearly $17,000 below the median full-time wage of ~$90,000. This isn't "skilled" migration, it's a backdoor for low-paid workers in roles like retail or hospitality, where shortages are often exaggerated. Data from the Productivity Commission shows nearly half of the "skilled" stream includes unskilled family members, like spouses, who dilute the program's value. Worse, 43% of state-sponsored skilled migrants don't even work in their nominated fields, with many driving Ubers or cleaning homes.

The Specialist Skills Stream, with its $135,000 threshold, is the real deal, a genuinely high-skill visa. But it's overshadowed by the flood of Core Skills applicants, and processing delays (up to 84 days for 90% of Core Skills applications, far from the promised 7-day median) mean top talent is turning to faster-moving countries like Canada or the UK. Migration agents are sounding the alarm: "Genuine 482 visa applications should be processed in weeks, not months," says Peter van Vliet of the Migration Institute of Australia. These delays hurt businesses facing real shortages, but they're just the tip of the iceberg.

Why call it a Ponzi scheme? Because the system thrives on volume, not quality. Australia has added 8.5 million people this century, largely through "skilled" migration, yet high-skill shortages, like 30,000 engineers, persist. The focus on quantity over quality inflates GDP but tanks per capita productivity. As van Onselen notes, this creates a cycle: businesses rely on cheap migrant labour, avoid training locals, and suppress wages, all while infrastructure and housing buckle under population pressure. The result? Stagnant living standards and a productivity collapse.

The numbers tell a grim story. In 2023, 44% of permanent migrants worked below their skill level, earning 10% less than locals with similar qualifications. Graduate visas, ballooning to 222,190 in Q1 2025, are often a pathway to low-skill jobs for South Asian students chasing permanent residency, not education. Historical data on the old 457 visa shows 80% of applications dodged labour market testing, with roles like cooks and hairdressers dominating, despite no evidence of shortages. This isn't about filling gaps, it's about cheap labour and visa rorting.

A skilled migration system should target high-value workers who boost innovation and tax revenue. Instead, the Core Skills Stream floods low-wage sectors, reducing incentives for businesses to invest in automation or training. The Committee for Economic Development of Australia (CEDA) has flagged this as a driver of poor labor productivity. Meanwhile, international graduates with bachelor's degrees are often found in low-skill jobs years after arriving, a waste of potential that betrays the system's purpose.

The government's own data undermines its claims. Despite decades of high migration, wage growth remains flat, and productivity lags. The low TSMIT and lax occupation lists let employers bypass local talent, while bridging visas and secondary applicants inflate migration numbers without economic gain. It's a system that serves business lobbies, not the national interest.

Fixing this mess requires bold reform. First, raise the TSMIT above the median wage, say, $95,000, to ensure only high-skill workers qualify. Second, scrap the easily gamed occupation lists and make all visas employer-sponsored, forcing businesses to prove they can't find local talent. Third, prioritise the Specialist Skills Stream and fast-track its processing to attract real talent. Finally, tighten graduate and bridging visa rules to stop the backdoor residency racket.

These changes would deliver fewer, higher-quality migrants, easing pressure on housing and infrastructure while boosting productivity and wages. It's not rocket science, it's basic economics. A higher wage floor ensures migrants add value, not just numbers.

Australia's skilled visa system isn't just flawed, it's a betrayal of its own promise. By prioritising low-paid workers over true talent, it fuels a Ponzi-like cycle of population growth without prosperity. The government must act to restore integrity, focusing on quality over quantity. Until then, the system will remain a farce, short-changing Australians and migrants alike.

https://www.macrobusiness.com.au/2025/05/australias-skilled-visa-system-is-a-farce/

"Australia's 'skilled' visa system is a farce

The federal government launched a new skills visa in December, with the aim of attracting migrants who can make a significant contribution to the economy and fill roles where no Australian workers are available.

However, migration agents claim that processing times for the new visa are too long, hampering the ability of employers to recruit the skilled overseas workers they need.

"The core skills visa is meant to be processed within a median of seven days and the high-paid specialist skills visa is supposed to be finalised within 21 days on median", The Australian reported.

"Only 50% of applications for the core skills stream would be finalised within 43 days under current processing times, Home Affairs figures reveal, with 90% processed within 84 days".

Migration agents warn that Australia risks losing skilled workers to other jurisdictions because of the slow processing times.

"Some migration advice professionals are reporting delays of months and months for what should be our premium skilled temporary visa", Migration Institute of Australia chief executive Peter van Vliet said.

"Genuine 482 visa applications should be processed in weeks, not months. These delays are impacting them, their clients, but most importantly Australian businesses facing skills shortages and bottlenecks".

There are two visas under Labor's Skills in Demand (482) visa program.

The Core Skills Stream has an application fee of $3,115.00 and enables employers to import temporary migrants to work in Australia for up to 4 years or up to 5 years if you are a Hong Kong passport holder.

The job must be on the Core Skills Occupation List (CSOL), which includes 456 roles; the applicant must have at least one year of relevant work experience in your nominated occupation or a related field and must be paid at least $73,150.

The Specialist Skills Stream has an application fee of $3,115.00 and enables employers to import temporary migrants to work in Australia for up to 4 years or up to 5 years if you are a Hong Kong passport holder.

The applicant must have at least one year of relevant work experience in your nominated occupation or a related field and must be paid at least $135,000.

Wage levels, rather than easily circumvented regulations or inefficient skilled occupation lists, ultimately serve as the best guide to skills.

Australia's median full-time wage is currently around $90,000, which is dragged down by unskilled workers. Thus, the minimum wage threshold for 'skilled' migrants should be set above this level to ensure that Australia's skilled visa system is generally skilled.

Obviously, the Core Skills Stream fails this basic test, as the temporary skilled migration income threshold (TSMIT) is only $73,150, nearly $17,000 (19%) below the median full-time wage. The Core Skills Stream is really a lower-paid, lower-skilled visa.

By contrast, with a TSMIT of $135,000, the Specialist Skills Stream is a genuinely high-skilled visa and should be prioritsed by the government.

More broadly, lifting the TSMIT above the median full-time wage would deliver Australia a lower volume of highly skilled and paid migrants, reducing population pressures, raising productivity, and ultimately delivering more tax revenue per worker to the federal budget.

Ultimately, it is difficult to argue that a migrant is highly "skilled" when they are paid significantly less than the median full-time wage, which itself is pulled down by unskilled workers."