Key takeaways

Public perception tends to assume that Australia’s skilled migration system is synonymous with the Permanent Migration Program, ANU experts claim. They say that in reality, the program contributes very little to the introduction of new skills into the country.

Although it is formally capped at 185,000 places per year, around 30 per cent of this allocation is directed to the Family Stream. The remaining 70 per cent is designated for the Skilled Stream.

But that’s not the full story. Within the Skilled Stream, the majority of places are not granted to skilled primary applicants themselves, but rather to their partners and children.

When these secondary applicants are combined with the Family Stream itself, we see that more than 60 per cent of the Permanent Migration Program is comprised of family migrants rather than independent skilled entrants.

Meanwhile, there are misperceptions about other parts of our migration system.

It is commonly believed that temporary migrants, and in particular graduate visa holders, make little contribution to Australia’s stock of skills. Backpackers, for example, are widely perceived as engaging only in hospitality or farm labour, yet many also work in skilled roles.

The misreading of students, graduates, and working holiday makers obscures their actual contribution to the skilled workforce. A recent newspaper article claimed that the vast majority of graduate visa holders struggle to secure meaningful work and instead end up in low-skill jobs.

This is absolutely not the case.

According to the 2021 Census, more than half of employed graduate visa holders were working in the top three occupational categories – managers, professionals, and technicians and trades. Furthermore, more than a quarter of their partners were also employed in these highly skilled fields.

These findings indicate that the majority of graduate visa holders are successfully participating in skilled employment, contradicting the prevailing stereotype.

But many graduate visa holders face a structural barrier. They are often caught in a Catch-22: they cannot obtain permanent residence without skilled employment, but employers are reluctant to offer them skilled jobs without the security of permanent residence.

This circular dynamic prevents them from realising their full potential within the labour market. It is also worth looking at international students.

They represent the largest single group contributing to skilled employment, yet their role is almost entirely absent from current debates, particularly those focused on reducing student visa numbers. The working holiday stream is similarly misunderstood. It is a mistake to assume this consists solely of agricultural or hospitality labour, when in fact working holiday makers are active participants in occupations in the Skilled Stream.

These groups – international students, graduates, and working holiday makers – form a crucial pipeline into the most valuable component of the migration system: employer-sponsored permanent resident applications.

Employer-sponsored permanent migrants consistently deliver the strongest labour market outcomes, yet their numbers are constrained.

Reforming the permanent migration program is essential if Australia is to meet pressing labour shortages and sustain long-term economic growth.

The evidence shows that temporary migrants – students, graduates, and working holiday makers – are already the backbone of skilled employment growth, yet their role is overlooked and undervalued in policy debates.

By redefining the Permanent Migration program to focus on Skilled Stream primary applicants, government can restore coherence, reinforce employer confidence, and create clearer pathways from temporary to permanent skilled work. This shift would ensure that migration policy responds more effectively to the country’s long-term workforce and demographic challenges.