Profound Impact of Federal New Policies

In the past few weeks, a series of major policy announcements have been released one after another, overwhelming the Australian public. The Reserve Bank of Australia introduced a Monetary Policy Committee, the latest Defense Strategic Review was launched, the existing immigration system faced its biggest challenge in thirty years, the National Disability Insurance Scheme (NDIS) underwent significant reforms, and the government planned to allocate 10 billion USD to a housing fund… With new budget forecasts indicating a surge in the costs of the NDIS, people are growing increasingly concerned about the sustainability of the federal Labor Party’s policies.

For those advocating for significant reforms in the welfare system, encountering setbacks can be disheartening. There is a mix of expectations for effective management and implicit suggestions for taking certain actions, all interwoven together. However, the one thing that seems to be missing is a clear answer.

The Immigration System on the Verge of Collapse

The comprehensive review led by the Former Secretary of the Australian Government Departments of the Prime Minister and Cabinet Martin Parkinson has shed light on various issues concerning Australia’s immigration system. These issues include Australia’s reliance on temporary migrants, skill shortages and nursing deficits, immigration backlogs, and the aging information technology systems within the Department of Home Affairs. The review has presented a strong case for comprehensive reforms to prevent Australia from becoming a “perpetual temporary resident” nation. The 200-page report recommends reforms to the skilled migration program, student visas, and employer-sponsored visas, outlining necessary actions to ensure Australia “harvests opportunities and manages challenges” over the next 20 years. The report highlights that the current immigration system is neither fast nor efficient and is often perceived as unfair.

This review is hailed as the largest immigration review since the 1988 “FitzGerald Report.” It represents a comprehensive critique of the immigration system and a potential thorough reform, rather than what Minister of Home Affairs Karen Andrews referred to as “temporary” changes. Since the Howard government, Australia has not set a limit on the number of temporary visas, resulting in a faster growth rate of temporary visas compared to permanent visas. Over the past 15 years, the number of temporary migrants has doubled. However, there is no clear pathway for temporary visa holders to obtain permanent residency, leading to a series of visa “hops” before potentially gaining permanent residency, if at all. The review suggests that Australia could become a labor society similar to post-World War II Germany or Switzerland. This not only harms Australia and immigrants but also undermines community confidence in the immigration system.

While the review acknowledges that skilled migration helps bridge skill gaps and promotes productivity growth, it finds that the points-based system used to select skilled migrants has not been effective in identifying the best applicants. The report describes the skilled occupation lists as “outdated” and lacking a “strong evidence base.” As international competition for high-skilled migrants intensifies, Australia is at risk of falling behind other countries without more innovative and attractive visa categories and services. The Australian immigration system has been patching up issues for a while, but it has now reached the brink of collapse. Mere patchwork is insufficient in this critical state; significant reforms are needed to attract the best migrants, drive economic growth, and prevent exploitation of immigrants.

Identifying the problems within the visa system is one aspect, while finding ways to improve the system is another challenge. It can be anticipated that the new system, once implemented, will bring forth new issues, which can only be observed in due time. Implementing new policies will face significant challenges both in practice and in the political realm. For example, the cancellation of temporary visas without clear pathways to permanent residency (such as working holiday visas or certain international student visas) will face opposition from vested interests, whether they are immigrants themselves or those benefiting from this mobility of migrants.

The Indo-Pacific Region Enters the “Missile Era”

On April 24th, the Australian Department of Defence released a defense strategic review report. Although the report may not be prominently displayed, its contents are quite noteworthy, representing the most ambitious review of Australia’s defense posture and structure since World War II. The report specifically highlights the challenge posed by China’s military buildup to regional security and emphasizes the need for Australia to allocate more funds to defense, develop indigenous weapons, and enhance its capabilities to strike distant targets. Prime Minister Albanese stated that the purpose of this defense strategic review report is to assess whether Australia possesses the necessary defense capabilities, posture, and preparedness to protect itself in the current strategic environment. “We must seek to shape the future rather than wait to be shaped by it.”

The report mentions China nine times and characterizes the competition between Beijing and Washington as a “typical feature of our region and this era.” Due to the lack of transparency in China’s military buildup, countries in the Indo-Pacific region cannot feel assured. The report also warns that China’s military buildup in the Australian region is unprecedented since World War II, and Australia has a “strong sense of urgency” to address the deteriorating situation in the Indo-Pacific region. The rapid expansion of cyber and missile capabilities poses a threat to Australia. Previous notions clearly cannot adapt to the current new situation, hence Australia will undergo significant upgrades in long-range missile capabilities and reform its defense force infrastructure.

The release of this report coincides with heightened regional tensions over China’s stance on the Taiwan issue, as Beijing has repeatedly shown its willingness to use force to reclaim Taiwan if necessary. In the South China Sea, the Chinese Navy has also established a formidable presence, claiming sovereignty over multiple parts of the region that contradicts internationally recognized definitions. Australia’s new defense posture aims to keep strategic rivals like China at “as great a distance as possible” — attempting to deter China from using force to achieve its policy objectives, including Taiwan or the South China Sea. Of course, deterrence can fail, as seen in the events in Ukraine, so Australia must be prepared to respond.

Cyber warfare is not limited by geography. In modern warfare, the rise of the “missile era” sees the increased use of long-range precision weapons, fundamentally eroding Australia’s geographical advantage. In the region, some countries are capable of projecting power in five domains (maritime, land, air, space, and cyberspace). Currently, Australia’s missile range is up to 200 kilometres, but the assessment report calls for a five-fold increase to 1,000 kilometres. The federal government has committed to investing a total of 19 billion Australian dollars over the next four years to significantly expand the operational coverage. Additionally, strengthening defense in Australia’s northern region and enhancing the operational capabilities of the Australian Defence Force in northern bases are also focal points for Australia’s future military capabilities.

/ Australian Defense Force shifting posture

Australia’s “New Policy” Puts China Back in the Spotlight

Currently, one of the largest immigrant groups in Australia is international students, with over half of those granted permanent residency visas coming from this group. However, the majority of these graduates ultimately do not find work in their field of study. In other words, the student visa program, which was intended to be an important source of skilled migration, has not fully realized its potential, as many individuals are struggling to transition into the labor market or are being employed in positions below their skill level. The reason behind this is the various restrictions imposed by student and temporary graduate visas, which hinder students’ opportunities and abilities to succeed in the Australian labor market. One significant change in the future immigration system is the immediate increase in the minimum salary threshold for overseas temporary skilled workers from the current 53,900  AUD to 70,000 AUD. This threshold has been frozen for a decade, falling below 90% of the wages of full-time Australian workers and lagging behind the pace of development.

The federal government is planning a comprehensive reform of the current immigration visa system, which means almost all visa categories will be modified, with a commitment to tightening regulations for international students. Chinese international students, being the main force in Australia’s international education sector, will naturally be greatly affected. Although the policy shift may bring some difficulties for student immigrants, it is deemed necessary. The review report suggests that the Australia Department of Employment and Workplace Relations should select immigrants based on detailed skill requirements. It indicates a future trend of transitioning from a supply-driven immigration system to a demand-driven system, in other words, employer sponsorship is likely to become a major focus. Australia’s approach has shifted from using immigration as a tool to attract students to focusing on retaining the “best and brightest” international students who can find good job opportunities. Therefore, enhancing employability becomes a crucial skill for international students.

While immigration reform may only partially impact Chinese international students, the release of the defense review report is swiftly interpreted as a continuation of Australia’s response to China’s increased military influence in the Asia-Pacific region, especially in the South China Sea. This marks the first adjustment of Australia’s defense capabilities in 35 years, with the aim of ensuring that no potential aggressor finds the benefits of conflict outweighing the risks. Among the six priority areas listed in the report is the trilateral security partnership agreement between Australia, the United Kingdom, and the United States. The agreement aims to explain Australia’s acquisition of nuclear-powered submarines to enhance its military deterrence in the Indo-Pacific region, directly addressing potential threats from China. According to the Stockholm International Peace Research Institute, military spending in Asia and Oceania has increased by 45% since 2013. Beijing’s substantial military expenditures and its military actions in the region are likely driving forces behind Australia’s defense reforms.

Over the past nine years, relations between China and Australia have steadily deteriorated under several conservative governments. However, since the center-left Labor Party government led by Huang Yingxian won the election approximately a year ago, there have been signs of gradual improvement in the bilateral relationship. Nevertheless, even as Australia attempts to stabilize its relationship with China, the various reports released by Australia in recent times indicate that the two countries cannot return to the honeymoon period of 15 years ago. The future of Australia-China relations remains challenging in the coming period.