RYNNE, Dr Brendan, Partner, KPMG

WRIGHT, Mrs Belinda, Partner, KPMG

Committee met at 09:04

CHAIR ( Mr Leeser ): Good morning. I declare open this public hearing of the Joint Standing Committee on Migration. In accordance with the committee's resolution of 24 July 2019, this hearing will be broadcast on the parliament's website, and the proof and official transcripts of proceedings will be published on the parliament's website. I remind members of the media who may be listening on the web of the need to fairly and accurately report the proceedings of the committee. I welcome representatives of KPMG. Do you have comments to make on the capacity in which you appear.

Dr Rynne : I am KPMG's chief economist.

Mrs Wright : I lead KMPG's national immigration practice.

CHAIR: Although this committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and, therefore, has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make a brief opening statement before we proceed to discussion.

Dr Rynne : Thank you very much, Chair, for the opportunity to provide an opening statement. As a leading professional services firm, KPMG Australia is committed to meeting the requirements of all of our stakeholders, not only the organisations we audited advise, but also employees, governments, regulators and the wider community. We strive to contribute to the debate that is shaping the Australian economy and welcome the opportunity to provide a submission to the committee's inquiry into Australia's skilled migration program and to appear before the committee today.

In August last year, KPMG was one of the first to model the impact of the COVID-19 pandemic on Australia's population and economy. KPMG's economic modelling found that in a scenario where borders were restricted for two years and Australia's population dropped by one million, real GDP would be $117 billion lower in 2029-30 on an ongoing basis than it would have been had COVID 19 not triggered a slowdown in immigration. In addition, household disposable income—a better measure, we believe, of material living standards than is GDP—would be $80 billion lower as a result of COVID 19's effect on immigration, or more than $2,800 for every man, woman and child in Australia.

In addition to the long-term impact of a lower population level, the short-term impacts are real and are being experienced across Australia. While there have been some temporary COVID schemes to facilitate the entry of seasonal and Pacific work visa holders, more could be done, and we would like to see a wider package of concessions be developed to help address the immediate shortfall of workers in regional Australia. This would include the temporary removal of labour market testing for employer sponsored streams, older age limits and lower English-language requirements for workers applying for temporary visas or permanent residency in regional areas.

Secondly, several countries and the International Air Transport Association, IATA, are developing vaccine passports. We would advocate that the government conduct a review into how we could apply a health-risk-based approach to international travel based on vaccination status. We appreciate that this could further disadvantage lower income nations, so it is vital this is combined with working with our international partners to increase and speed up vaccination distribution to those countries.

In the longer term, it is vital that skilled migration into Australia is increased. We are proposing a range of improvements to the global talent scheme and the business innovation and investment visa categories so that they are adaptable and responsive to market changes.

The current lengthy processing times and program restrictions are a disincentive to investors who want to start or acquire an interest in an Australian business. We recommend a review of salary caps, age thresholds, turnover requirements and other criteria, to make them more flexible and appropriate for newer industries, such as fintech and agtech, and sectors like education. To attract a larger cohort of skilled migrants from Hong Kong, a visa class that provided additional concessions could also be considered.

Looking a few years ahead, the lack of international student intake during the COVID pandemic will significantly impact our economy, and these are the skilled workers of the near future. So we would urge you to consider a range of measures to make Australia more attractive, including making post-study work rights easier and last longer and adding further permanent residency points to those post-study work rights, especially where both the course and post-study work rights are in an area of skills shortage. We could introduce an accelerated pathway-to-residency program for regional students, based on updated skills lists.

KPMG welcome the committee's interim report recommendations, including the need for streamlined labour market testing, the expansion of the Priority Migration Skilled Occupation List and improvements in visa processing times—all measures we supported in our submission to the inquiry. KPMG was also pleased to see the 2021-22 budget's focus on on-shore visa applications and highly skilled migrants in the employer-sponsored business innovation, investor and global talent programs.

We welcome the federal government's decision to include external and internal auditors and accountants to the Priority Migration Skilled Occupation List earlier this week. The Australian Public Policy Committee, which represents the largest six audit firms in Australia, advocated for the inclusion of these professions, following an April 2021 survey by CA ANZ that found there were 888 vacancies for experienced auditors in Australia—roles which, despite significant recruitment effort, were proving difficult to fill with domestic talent. The trust provided by audited financial statements is fundamental to the operation of Australia's capital markets and, hence, the operation of the Australian economy. So it was critical that these occupations were included, and we thank the government for acting swiftly.

Today I am happy to take questions in relation to the modelling work we undertook in relation to the economic benefit of migration, and I will defer to my colleague Belinda Wright about technical aspects of the migration program.

CHAIR: Thank you so much, Dr Rynne and Mrs Wright, for being here and for your evidence and opening statement and your submissions. I want to take you to the issue of international students and your recommendation 2, because I am particularly interested in looking at the role that international students might play in helping to fill skills gaps after they've graduated. So can you give me a bit of a sense of: at the moment, what is the permanent residency pathway for somebody who is an international student? What post-study work rights do they have? If you had an international student and you were advising them, what would you say to them as to the rights they have now? Then we might go through some of the things you have recommended here.

Mrs Wright : The visa pathway for an international student, once they've graduated, would be to apply for a subclass 485 visa, which is the graduate skilled visa. This visa allows the individual to gain additional work experience or to continue study, to be able to then make a pathway under the 189, which is the general skilled migration. The general skilled migration program essentially is an expression of interest. It is a points based system, and you're waiting until you are invited by the government to lodge a visa application. This has been a change in the transition of international students into permanent residency, whereas, previously, the program allowed international students to apply straight for permanent residency on the basis of meeting the requirements. The introduction of the expression of interest does put some uncertainty there for international students in terms of being able to transition to permanent residency once they have actually met the requirement.

CHAIR: They have their graduate visa for how many years before they need to apply for the 189 or to put in an expression of interest for the 189 if they take that path?

Mrs Wright : The 485 visa is approved for two years and that allows them normally to get the additional points. To meet the points test for the 189, they would be relying on work experience or English-language ability and it gives them that extra time to get additional points to meet the points test.

CHAIR: Explain why you made the points that you've made in recommendation 2 around making post-study work rights easier and last longer and further PR points for those who have post-study work rights and accelerated pathways. Can you just explain why you have made these recommendations? What's the problem you are seeking to solve?

Mrs Wright : The issue for international students is that it's not easy for them to find skilled employment once they have graduated from university. So obtaining the necessary work rights might need longer than the two-year work requirement that's on that visa. It is quite difficult to obtain a graduate position when you don't hold permanent residency status in Australia. So, finding that placement can take longer than 12 months, which then would only allow them an additional 12 months to get the additional work experience required to apply for permanent residency.

CHAIR: There's a view that we should be trying to attract the best and brightest who've studied here to stay here, particularly to fill skills shortages that we have in our economy, whether they are skill shortages that we are experiencing right at the moment or whether they are skills shortages we experience in more normal times. What would you say to that? And what sort of incentives might you put in a student visa program to encourage those people who are at the top of their class, as it were, who we'd really like to stay here?

Mrs Wright : I think there needs to be a review of the general skilled migration program and the actual expression of interest and the way that they are allocated points. The points are based on age, English-language ability, whether or not they've studied in Australia, the number of years of experience, spouse—things like that. Perhaps there could be other areas—in terms of their results, their achievements at university—which would then allow them to get additional points, or even consideration of removing the points system and doing it more on the basis of legislative criteria. So if you've studied in Australia for a period of two years and you achieved a certain requirement, then you would have a faster pathway to permanent residency. At the moment, the way that the system works is that you have all international students in one bucket and everyone needs to meet the points system, and the expression of interest is based on the skill requirement of Australia at the time of the invitation. If you had a pathway for a particular skill set or industries or occupations, where if you were studying in a particular occupation, you studied for at least two years in an Australian bachelor qualification and you have superior English, then you have a fast pathway to permanent residency. At the moment, it's just too big a pool, where one scenario fits every international student, whereas it could be broken up into different segments based on skill set, occupation and qualifications.

CHAIR: Do you think a student's performance at university is something that should be taken into account when offering them the opportunity for a visa that might have PR pathways? For students who have done very well, should we advantage them in some way?

Mrs Wright : I think we should, because we are trying to attract the brightest and the talent and they are obviously competing against students who have Australian permanent residency and who might be getting graduate programs, whereas 485 visa holders or international students wouldn't be granted those opportunities. I think there needs to be a bridge or some type of endorsement through the immigration program that allows these individuals to get placements in Australian businesses.

CHAIR: Your third recommendation looks at the issue of regional Australia and the need to attract people to regional Australia and some additional concessions that can be made. As you know—I think you made mention of it—within the interim report we made some recommendations about labour market testing concessions and so on. What other concessions should be in place for regional Australia to particularly attract migrants to regional Australia?

Mrs Wright : When we talk to some of our clients who own operations in regional areas, they say that there is a genuine skills shortage, that it's very difficult to attract talent into regional areas. The current requirement, especially for labour market testing, is quite restrictive for employers, having to advertise for roles. The roles are advertised, and we have examples where roles have been advertised for 12 months and remain unfilled. But having that legislative requirement to make sure that you've advertised in three different locations, making sure the date fits within the four months—it just adds that additional—

CHAIR: What if we said to employers in regional areas that they would need to advertise only, say, every 12 months? Would that be a—

Mrs Wright : That would be welcomed, yes.

CHAIR: What about English-language requirements for regional Australia? What should we do there?

Mrs Wright : I think the English-language requirement should be reduced, to be able to attract individuals out to regional Australia. At the moment, for certain occupations, if you're looking at an IELTS result, you need at least seven in each of the four components. Perhaps that could be reduced down to six or 6.5, which would attract especially international students, who require the higher points for English. If there was some type of concession for them to receive a lower English score and then move to a regional area, that would be quite a positive move and we'd see a lot more international students moving out into regional areas for employment.

CHAIR: What sort of age limit do you think would be a good one to have for regional areas?

Mrs Wright : I think up to 55.

CHAIR: Do you have anything to say about the regional certifying bodies and the role they play in relation to whether the salary offered is a market salary for the region? Do you have anything to say about them at all—whether they play a positive role or otherwise?

Mrs Wright : I do believe that it is positive. Our interactions with the regional bodies have always been positive. I think their intention is to make sure that their regions have the skilled workers that are required, and I think they play an important role in that program.

CHAIR: I now want to go to recommendation 7, which is the KPIs for visa processing. Can you identify for the committee the challenges that you're seeing and why you'd suggest the implementation of KPIs for processing times?

Mrs Wright : With the traditional employer sponsored visas—the 485 visas—there is a standard processing time, and that can vary anywhere between three and four months, which isn't realistic when an organisation needs to have talent on the ground. In terms of being able to have those visas granted in a shorter period of time, the sponsor needs to be an accredited sponsor, which is a very positive step from the government. Those processing times can be anywhere from 24 hours to three weeks. So, there have been some incentives in relation to that, but that's just under the 485. With some of the other visas that are available, it feels a bit like lodging an application and then sitting in a pool and waiting for your luck, for the application to come out. If we were able to have some KPIs and streamlining of the way applications are coming in and a little bit more transparency in regard to how applications are triaged within the Department of Home Affairs, it would give the community a lot more confidence in our immigration program.

CHAIR: Let me move to PR issues around the employer sponsored visas. You'll have seen some of our recommendations in the interim report about PR options. We also have to acknowledge issues, in the 457 days, around the way in which people were using those visas. How can we provide better PR pathways without having the consequences that we saw with the 457 visas?

Mrs Wright : I think the introduction of the two occupation lists was a dramatic change from the program of the 457 to the 485. I think limiting individuals' potential to apply for permanent residency is something that needs to be revisited. Currently, as you may be aware, if your occupation falls in the short-term list then there is no pathway to permanent residency. But that impact on those individuals also has an impact on the organisations in Australia. The organisations that we work with are telling us that they are unable to find highly skilled individuals wanting to come to Australia, because they are restricted to being in Australia for only two years, with a possibility of renewing for another two years, and then they would need to depart Australia after the four-year period. When an organisation looks at attracting and retaining individuals, they're not bringing people into the organisation with an end date of four years. So the current program doesn't support what the businesses actually need in terms of filling these skilled roles, because you have those two occupation listings and it is based on the recommendations of what Australia needs at that time.

So my recommendation would be to revisit the two occupation lists, remove the skilled occupation list and have one occupation list, similar to the old program, or continue to do a review of the skilled occupation list. If you look at the medium- to long-term list compared to the short-term list, the occupations are quite limited. We could do an actual review of those lists—and I understand that there have been recommendations to do that review, and it was meant to be done every six months but hasn't been completed—have a look at the occupations and listen to organisations with regard to occupations. I think this comes back a little bit to the ANZSCO codes as well, and I know there are a lot of recommendations with regard to review of the ANZSCO codes because they're so outdated.

I want to provide you with an example. We work with a particular organisation which is unable to find skilled multimedia specialists in Australia. When you look at the definition of 'multimedia specialist' in the ANZSCO code, it comes under 'marketing specialist', which is on the short-term list, because it's such a broad position. But there are so many different specialisations of marketing specialist. This particular organisation, which normally gets its talent from the UK and the US, is no longer able to attract this talent into Australia. The other issue we have is that the syllabuses at the universities do not cover the multimedia subjects that are required for them to have graduates. So our client is doing a number of things. They're working with the universities to look at how they can get Australian graduates into these roles. In the meantime, this organisation still needs to be able to rely on foreign workers, but they're not able to do that, because the occupation is on the short-term list and they're not able to attract people who are going to come to Australia just for a two-year period. So I think there needs to be a whole review of the occupation lists and it needs to go hand in hand with the review of the ANZSCO codes as well, because they're just too broad.

CHAIR: Just one last question before I hand over to colleagues. What would you say to a scenario where we adopted your idea of consolidating the lists into one and we said that a worker's skill level would determine the length of time for pathway to permanency or the number of hoops they needed to jump over? What would you say to do to an idea such as that?

Mrs Wright : I would welcome that. I think at the moment, with the 485 visa, there were caveats that were put in place. That's been quite successful. So, for example, management consultants need to be paid a certain amount of money, the organisations need to have a certain number of employees, and the companies need to have a certain amount of turnover. I think I would welcome a program that offers permanent residency to a wider group of individuals but has different requirements for the different skill sets.

CHAIR: Deputy chair.

Ms VAMVAKINOU: Chair, I dropped out for a little while and I don't know whether you asked about vaccine passports.

CHAIR: I didn't, so please do.

Ms VAMVAKINOU: A lot of this is very pertinent discussion, but the whole issue of international borders and vaccine passports is going to become critical. I know you've made some references to it. Are you able to give us some indication of how you might suggest a practical and efficient way forward for accommodating entry to Australia for skilled migrants, but also for others, and how that relates to vaccine passports and how that may work?

Dr Rynne : I think first and foremost that any response we give needs to be couched in the context that, ultimately, we still need to listen to the health advice to ensure the health and safety of all Australians with regard to opening up our borders. However, look at the way international travel is now operating out of the United States, for example, and also out of the United Kingdom, which is probably a better example because, as I understand it, it is classifying visitors to the United Kingdom on a traffic light scheme basis. Then, depending on your own vaccination status, the approach that you as an individual need to take—in terms of getting COVID-19 testing, pre and post, and isolating either in a deemed immigration facility or in your own home—seems to be sensible, certainly in my opinion, as a way forward for Australia to open up its borders and allow the processing of skilled migration to recommence in an orderly fashion.

Ms VAMVAKINOU: I've looked at those matters in the UK and the United States and even in Europe. If we don't have a coherent process, which does involve different types of quarantine, my view—and you might agree or disagree—is that we really aren't going to be able to go forward in resolving a lot of our issues with skilled migration and any other types of migration.

On the issue of vaccines, I'm not aware of the situation in some of the countries we've referred to, but it was suggested to me the other day that the United States would not be providing entry to people who are vaccinated with AstraZeneca, for example. I don't know if that's true, but, if we were to go into a situation where the type of vaccine became an issue, how would that impact on us?

Dr Rynne : Again, thank you for the question.

Ms VAMVAKINOU: It might be a hypothetical.

Dr Rynne : Yes, it is. Unfortunately, I'm not a medical doctor, so it's difficult for me to comment on the efficacy of the vaccines, but my understanding is that, no matter what vaccine you receive, your level of coverage means that the negative health outcomes for you as an individual diminish—more with some vaccines than with others, but they diminish. What doesn't change, though, is the capacity for transmission of COVID-19, regardless of what vaccine you've taken.

Ms VAMVAKINOU: Yes, that's right.

Dr Rynne : So I'm not sure what would be the purpose of differentiating entry based on what vaccine you take or what that would achieve. If all the vaccines still don't limit the transmission of COVID-19, I think what is much more important is the quarantining process that is then implemented, depending on where you've come from and your own vaccination status.

Ms VAMVAKINOU: I agree with you. I just wanted to go one step further with this. Obviously, a lot of our skilled migration and, indeed, our international students come from our neighbourhood. Some of those countries, particularly Nepal and Sri Lanka and possibly even India, are struggling at the moment with COVID and vaccination. To what extent—I think you've made reference to this—should we be involved in assisting with vaccination in the developing world because that would also be important to our broader migration? Is that correct?

Dr Rynne : Yes, it's certainly our view that Australia, as a wealthy developed country, should continue to support those low- to middle-income countries with their vaccination rollout and support them by providing vaccines as gifts. That would seem eminently sensible for Australia to do, as the good global citizen that it is.

Ms VAMVAKINOU: But we would also be assisting them because they are source countries for our international students and our skilled migration. I see here a quid pro quo or a link with our ability to assist in their vaccination so that their people then can, possibly through a system of vaccination passports or other things, come to Australia in greater numbers than at the moment.

Dr Rynne : I think our general proposition is that Australia supporting vaccinations in low- to middle-income countries, or poorer countries, should be universal, as opposed to picking individual countries.

Ms VAMVAKINOU: Sure. Thank you.

Mr ALEXANDER: In regard to what was said earlier by Mrs Wright: in the lag time that it takes students to find work—a year or so, possibly—while their visa clock is ticking, should we be looking at ways of being more proactive and finding ways, when students are actually studying, to introduce them to prospective employers and to start that engagement with that pathway to employment? That would also give us the opportunity to market Australia as a desirable place to remain for some time.

Mrs Wright : Yes. I think what you have suggested is something that we should be exploring. If you did a survey of international students, you'd find they all have part-time jobs in areas that are not related to their areas of study. If we were able to include some type of incentive or program during their international study to allow them to find skilled employment once they've graduated, I think that would be very much welcomed.

Mr ALEXANDER: Could we have on site at universities some sort of pop-up job search centres?

Mrs Wright : We could. I'm not familiar with what is available at the universities at the moment, but there's no reason we wouldn't be able to have some employment opportunities and some centres within the universities that are tasked with helping international students transition into the workforce.

Mr ALEXANDER: It would appear ideal that, if a student is studying a certain thing and wanting to work in a certain area, rather than spending their time doing the type of work they might be doing—especially during their holidays—they could actually be having some work experience, possibly with a future employer in their area of endeavour. It would seem that we need to be more proactive rather than separating the study and the work, as seems to be the case at the moment.

Mrs Wright : Yes. That's correct. The graduate skilled visa is very separate from the student visa. A student visa is very prescribed in regard to the conditions that the student needs to adhere to whilst they're in Australia studying. As soon as they graduate and they're on a 485 visa, there is no requirement for them to work in their area of study. There is no compliance that's related to employment or to transitioning into the workforce. Essentially it just allows individuals to remain in Australia for a two-year period. If they're unable to transition to permanent residency, then they need to depart Australia. I feel as though, in our recommendations, there needs to be a review of that post-work study visa so it encourages individuals to work in their skilled occupation. I think there needs to be a review of that particular 485, to look at some type of incentive for individuals trying to locate work in their area of study. Perhaps that could be a change to that visa stream.

Mr ALEXANDER: Thank you, both for attending today and for your submission. It really is worthwhile.

CHAIR: Thank you, Mrs Wright and Dr Rynne. If we've got any further questions, we'll put them in writing. If we've asked you to return to us with anything, could you do so by 9 July. You'll be sent a copy of the transcript and will have an opportunity to request corrections to transcription errors. Thanks for your attendance today.