Home Affairs Minister Clare O'Neil announces major changes to migration system

Home Affairs Minister Clare O'Neil announced two major changes ahead of next month's federal budget as well as a wider tranche of draft reforms in her address to the National Press Club on Thursday.

The first major change will increase the temporary skilled migration income threshold from $53,900 to $70,000 from July 1, after it had remained at the 2013 level for almost a decade.

The second change will create a pathway for temporary skilled migration workers to become permanent residents as from the end of the year.

"This does not mean an expansion of our capped permanent system. It does not mean more people," Ms O'Neil said.

"It simply means that a group of temporary workers who had been denied even the opportunity to apply for permanent residency will be able to do so."

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The Review of the Migration System review, released Thursday, found the skilled migrant program was not targeting the right people and was failing to retain international students after they graduate.

Led by former Treasury secretary Martin Parkinson, the review offered 38 possible areas for reform, including a temporary graduate visa for international students after they complete their studies.

Ms O'Neil released a draft migration strategy for public consultation designed to fix a system that she described as "suffering from a decade of genuinely breathtaking neglect".

"It is broken. It is failing our businesses, it is failing migrants themselves. And most importantly, it is failing Australians," Ms O'Neil said.

"If populate or perish described Australia's challenge in the 1950s, skill up or sink is the reality we face in the 2020s and beyond.

"Today, we aren't bringing in the talent we need, and we aren't making the most of the talent we've got."

The draft outline of the Australian Migration Strategy proposes a streamlined three-tiered skilled migration system to simplify overly complex processes to make Australia more attractive for skilled overseas workers.

This would include a highly-skilled stream with fast turnaround times and minimal requirements to be met.

A middle stream would cover the bulk of the applications and be determined by priority areas identified by Jobs and Skills Australia.

The final stream would be for lower-skilled workers where there are major labour shortages.

"One of the reasons there is so much exploitation is because we have allowed low-wage migration programs to operate in the shadows, for example, through exploitation of our international student visa system," Ms O'Neil said.

"That has allowed areas of the economy that rely on these workers to become either highly vulnerable to exploitation, or subject to chronic, ongoing labour shortages that put huge pressure on existing workers.

"Instead of pretending that some students are here to study when they are actually here to work, we need to look to create proper, capped, safe, tripartite pathways for workers in key sectors, such as care."

Other draft reforms include creating a new area in the Department of Home Affairs, which would work alongside Jobs and Skills Australia to identify the skills needed in the economy.

The changes also propose reducing the number of visa categories as well as establishing a monitoring system to enforce wages and conditions to detect and prevent exploitation and tougher regulations for migration agents.

Ms O'Neil outlined a "slow and crazily complex" system weighed-down in a "bureaucratic nightmare", with hundreds of visa categories and subcategories so complicated a diagram "would look like a tangled bowl of spaghetti".

"Remember that other developed countries are competing for the same migrants that we really need. For aged care nurses, engineers and tech experts, complexity and delay can put them off Australia altogether," she said.

"Australia's migration system has become dominated by a very large, poorly designed, temporary program, which is not delivering the skills we need to tackle urgent national challenges.

"And, that program created the essential ingredients for exploitation of migrant workers."