Approach to reform

9.13 The focus of the Terms of Reference for this Inquiry is on Commonwealth legislation and related legal frameworks that impose limitations or barriers that could discourage mature age people from participating in the workforce or other productive work. The ALRC has formed the view that the failure by an applicant to obtain a skilled visa, whether as a result of being barred from making an application or being unsuccessful, is not primarily a limitation or barrier to their participation in the workforce, but rather is a barrier to entry to Australia for the purposes of work. In light of this, the ALRC considers that it would extend beyond the scope of this Inquiry to make proposals for reform in this area.

9.14 However, during the Inquiry to date, stakeholders have raised a number of issues of general concern discussed below.

Should age limitations be increased or removed?

9.15 As a general matter a number of stakeholders supported either an increase in the age limitations for GSM and employer-sponsored visas to 55 years,^[26] or their removal altogether.^[27] Some stakeholders expressed the view that age restrictions are ‘lagging behind the eligibility criteria in many OECD countries’ and highlighted the economic advantages of mature age workers.^[28]

9.16 The Government of South Australia argued that, as age limits for qualification for the Age Pension increase, ‘so too should age limits under skilled migration programs increase to reflect current realities and expectations of the working age population’.^[29]

9.17 In addition, as the effects of ‘ageing populations and declining fertility rates’ are felt worldwide, it is likely that global competition for skilled migrants will intensify.^[30] The Brotherhood of St Laurence submitted that age restrictions create

risks of losing the global competition for older workers, losing potential knowledge and skills. The existing age restrictions on migration should be reviewed with reference to international developments (eg in the OECD) and the overall contribution that older migrants could make to productivity.^[31]

9.18 The ALRC acknowledges these concerns. However, if the policy goal of the skilled migration program is to maximise lifetime earnings and therefore contribution, on the basis of DIAC modelling it appears that the age limit of 50 may be appropriate in order to achieve that goal. It is also ‘difficult to argue that the barriers to entry based on age should be removed all together, given the valid public policy function that they serve’.^[32] Nonetheless, the ALRC suggests that, in light of the views expressed above, it may be appropriate for DIAC to consider the role of age as a criterion in the skilled migration program.

Age and the structure and operation of the skilled visa program

9.19 In addition to the overriding limitation set by the scope of the Inquiry concerning the making of proposals for reform in this area, and arguments around the policy function of age as a criterion in assessing visa applications, the ALRC considers that the structure and operation of skilled visas may mean that reform is unnecessary. For example, there is no age restriction on the increasingly used 457 visas and age restrictions under the GSM and employer-nominated visas are offset to a certain degree by the operation of the points test and the exemptions to the age restriction.

9.20 The age limit and the points test for GSM visas reflect the ‘level of benefit to the Australian workforce and economy expected of persons entering Australia’ under the GSM stream of the migration program.^[33] The structure of the points test therefore makes provision for highly skilled and capable mature age workers, up to age 50, to meet the pass mark. As no points are awarded for age where the applicant is aged 45–49, applicants in that age bracket ‘will have to have outstanding results in other areas in order to meet the pass mark’.^[34]

9.21 The exemptions allow migrants in a range of professions, outlined above, to be exempted from age restrictions. This appears to strike an appropriate balance between valuing the skills and experience of mature age workers in line with the underlying objective of filling labour and skills shortages.

Australian labour supply and market

9.22 A number of stakeholders recognised the important role of migration in filling labour and skills shortages, but expressed the view that the Government’s priority ‘should be on training and assisting Australian workers, including older workers, to find employment before looking to fill the gaps through migration’.^[35]

9.23 Stakeholders such as Olderworkers highlighted the existing barriers facing Australian mature age workers in obtaining employment;^[36] and the Australian Council of Trade Unions emphasised the need for ‘genuine labour market testing before employers can sponsor overseas workers’.^[37]

9.24 In addition, the Australian Industry Group stated that it ‘does not believe that raising age limits should be a priority’, and noted that:

without a significant increase in the overall intake (and more than proportional increases in immigration of younger people), raising the immigration age limits would detract from the benefits that immigration has in ameliorating the impacts of our ageing society.^[38]