Australia’s new Trump-style rules miss mark

In Sydney last weekend, United States Vice-President Mike Pence hailed the close economic ties linking the US and Australia. In fact, currently, America’s chief export to the Antipodes seems to be bad ideas.

Last week, on the same day US President Donald Trump took aim at the H-1B visa programme in the US, Australian Prime Minister Malcolm Turnbull abolished Australia’s own skilled-worker visa programme, which he criticised for disadvantaging Australian workers. A replacement system will impose new limits on who can work in Australia and for how long, and will narrow the pathway to permanent residency.

Mr Turnbull later raised Australia’s citizenship requirements, too, imposing tough English-language standards and proposing a test to judge whether applicants share “Australian values”.

The new measures are misguided in at least three ways. First, they address a nonexistent problem. Outside of a noisy minority, Australians — nearly 30 per cent of whom are foreign-born — are unusually open to legal immigration. Australia faces neither the same illegal immigration challenges as the US, nor Europe’s problems with integrating migrant communities.

The government estimates that 90 per cent of overseas-born Australians have good English skills. As for the just-scrapped visa programme — whose numbers had been declining and which covered less than 1 per cent of the labour force — there is no real evidence it had any negative impact on wages and employment of Australian workers.

Second, the changes do not solve the problems that do exist. In some cases, unscrupulous employers have exploited visa holders, paying them less than legally required and forcing them to work under unhealthy conditions. Regulations already forbid such abuses, but the issue is enforcement, which the new rules do not address.

While the government has eliminated some job categories where foreign labour obviously was not required (say, goat farmers), hundreds of others, from chefs to marketing specialists, remain on the list.

Most important, Australia is wasting a huge opportunity. The country cannot dig treasure out of the ground forever; it needs to shrink its dependence on commodity exports and foster more innovative, knowledge-based industries. Skilled migrants, who have been shown globally to raise labour productivity, income levels and GDP, could dramatically help in that process.

Rising xenophobia in the US and the United Kingdom — two of Australia’s main competitors for highly- skilled migrants — is likely to drive away thousands of foreign students, academics and entrepreneurs.

One might have expected many of them to consider moving Down Under. Instead, under the new rules, anyone on a temporary visa (be they CEOs or university lecturers) will be unable to stay on for more than four years.

A better strategy would address the few visa abuses directly. Forcing companies to pay far more to sponsor immigrants would dissuade them from seeking to import cheap labour. Investing that money in hiring more labour inspectors would lead to better enforcement of the rules.

And restoring faith in the system might give Mr Turnbull and other politicians the courage to affirm what most of their constituents already believe: Immigrants have enriched Australian society. BLOOMBERG