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Migration Reforms May 2023


Late last week Minister Clare O’Neil gave an address to the National Press Club, outlining the Government’s proposed changes to Australia’s skilled migration framework.

The Government has a big job ahead of them if it is to deliver all of the outlined reforms, and these changes are not going to happen overnight. There is still a lot of development and consultation to occur however the Minister did confirm a couple of firm changes, as noted below.

Confirmed changes from Minister O’Neil’s announcement

  • There will be a permanent residency pathway available for all STSOL visa holders by the end of 2023; and
  • From 1 July 2023 the Temporary Skilled Migration Income Threshold (TSMIT) will increase from $53,900 to $70,000 per annum. This salary threshold will apply to all new nominations lodged after that date and is the first increase to TSMIT since 2013.

The vision

Minister O’Neil advised that the Government’s proposed changes will represent a once in a decade overhaul of a migration system that is currently failing to deliver for Australia and its skilled migrants.

Minister O’Neil acknowledged that the current migration program is failing to prioritize the skilled migrants Australia needs.  The proposed new framework is being designed to deliver a system that is easy to navigate, that delivers the right outcomes, and is one that aligns with Australia’s values of integrity, fairness and inclusion.

The four key elements of the proposed reforms are as follows:

1. Prioritising the people Australia needs to enhance our economic prosperity & security

  • Creating a new three-tiered temporary migration framework, with potential removal/ relaxation of the Labour market testing criteria for high wage earners (salary for this group to be advised). There will be three streams: specialized highly skilled, mainstream skilled and essential skills
  • Developing fast and simple pathways for the specialized highly skilled workers that Australia needs to drive innovation and build jobs for the future.
  • Reforming the points test applied to the independent skilled visa framework, ensuring better outcomes across the program and better employment outcomes for this cohort.

2. Making it simple and efficient for employers and migrants

  • Reducing complexity through delivery of a simplified program supported by facts and data – including an overall reduction in the number of visa subclasses.
  • Addressing the visa backlog while making the system faster through investments in IT, data and people capabilities.
  • Switching to monthly employer fees and charges for small business rather than making that large investment upfront (reference to when the SAF training levy will be collected).
  • Establishing a formal role for Jobs and Skills Australia (JSA) and establishing an avenue for tripartite feedback between JSA, Home Affairs and the Training & Education Department to ensure labour shortages are effectively identified and addressed.

3. Delivering better outcomes for Australians and migrants post arrival

  • Providing greater certainty for temporary migrants in relation to permanent residency pathways.
  • Giving more power to States and Territories to identify their specific needs for migration and building better infrastructure to attract people to Australia.
  • Seeing Australia’s return to being a destination of choice for International students, while ensuring that students are genuinely here to study by tightening the requirements and quality assurance of education providers.
  • Reducing the time international students spend on bridging visas by easing the path to graduate visas.
  • Reforming policy settings that drive exploitation.

4. Restoring Australia’s values of integrity, fairness and inclusion

  • Improving post arrival monitoring and enforcement of equitable wages and conditions to prevent exploitation.
  • Strengthening the regulation of registered migration agents.
  • Ensuring migrants have clarity on their prospects for permanent residence, providing clearer pathways for temporary skilled visa holders and ending the cycle of ‘permanent temporary residence’.
  • Driving stronger inclusion of all migrants in Australia’s economy – streamlining skills recognition to help more migrants enter the labour market at a level commensurate with their qualifications and ensuring greater workforce participation for family members.

These focus areas are all welcome and reflective of some of the recommendations made in our previous submissions to Government. 

We are looking forward to further details being released over the coming months – as it is always the details that matter most.  While changes are long overdue, it is good to see the Government taking time to ensure what will hopefully be a well-planned program, which can simultaneously support the needs of Australia’s business and migrant communities.

Next Steps and updates

We are currently reviewing the final Review of the Migration System report delivered to the Government by Dr Martin Parkinson, Professor Joanna Howe and Mr John Azarias.  The panel has delivered a broad range of recommendations for the future direction of the migration system and we will provide further details on this shortly via webinar and an additional detailed client alert.

What you can do now

As outlined, the TSMIT which is applied to the 482 and 494 visas will be increasing to $70,000 base per annum, from 1 July 2023 and will apply to all new applications from that date. We do not yet know if this will be applied retrospectively to unfinalized nominations already lodged.

For any positions you have where the salary is below the new TSMIT, you will need to consider whether an increase in salary is suitable, noting that the salary rate provided to sponsored workers must also align with the salary provided to equivalent Australian workers performing the same role, in the same location and at the same level, so adjustments would effectively need to be considered for all employees in the same position.

We are expecting the Government will provide details on how this will be implemented prior to 1 July, and we will provide a further update as details become known.

It appears that the $70,000 TSMIT would apply to the ‘mainstream’ skilled category under the eventual new framework, so it may be that concessions will need to be made available for occupations included in the ‘essential worker’ category until such a time as the new, full framework has been released.

Connect with us

If you have any questions in the interim, please reach out to the team. We look forward to bringing you more detail.