The Business Council of Australia has a new President, the former CEO of Origin Energy, Mr. Grant King.
His first comments about a month ago were what you might expect from an incoming BCA President: “My focus will be on continuing to drive a more innovative and competitive economy, improving incentives for businesses to invest, and making the economy more flexible so it can respond to global forces of change.” A couple of weeks later, King said he wanted to get some bipartisan support for policies the BCA advocates, make the complex simple and prioritise the right issues.
I’ve written in the past how big business is missing in action on migration policy. For as long as I can remember there have only been two stances from the BCA on migration: silence or reaction to others setting the agenda. In recent years they have been cleaned up by the CFMEU on the ChAFTA deal and failed to constrain the nativism which is seeping into the Coalition. There are a few reasons why big business might shy away from engagement on migration. After all, I can imagine how advocating for more migrants coming to Australia could easily come across as simple rent seeking. Stepping into the fray might generate additional volatility and provoke backlash from angry populists.
I don’t find this line of argument at all convincing. Consider the standard BCA positions on taxation and industrial relations and the almost non-stop advocacy of positions which would directly benefit BCA members and shareholders. And unlike taxation and industrial relations, migration policy actually needs as many coherent advocates as possible at the moment and businesses have a role to play. The field is pretty bleak as anti-migrant coalitions bubble away on the margins. Dick Smith’s history of “environmental” advocacy has coalesced with Pauline Hanson’s outright discrimination. Labor is content to poke the bear on skilled migration while the Coalition couldn’t dig themselves out of their own backpacker tax hole without help from the Greens. What a mess. Who is prepared to stick up for Australia’s greatest nation-building tradition?
The most obvious place for the BCA is addressing the continued failure to demonstrate the role skilled migrants play in the labour market. Skills transfer, training and development, and ideas generation from migrants are examples of actual innovation. Every single BCA member has numerous 457 visa holders employed who bring their experience and expertise to the Australian labour market and broader economy. These people aren’t being exploited in kitchens or on construction sites. They aren’t stealing jobs. Where are the stories by BCA members showing the real world effects of being able to tap into a global labour market? We’re told labour mobility is an integral part of international competitiveness so it’s time to show how this happens. Product managers revolutionising the retail supply chain? IT architects transforming how businesses manage their databases? Senior executives who bring with them new methods of business strategy? What about how migrants themselves play a critical enabling role in opening up potential export opportunities?
Instead of a 20-something start up founders popping up in the AFR every other week to say how we need to reform our visa system, I want to see CEOs from BCA members with Grant King’s backing talking about the importance of skilled migration to job creation. Reacting to the news cycle when another case of migrant exploitation has been uncovered is the complete opposite of effective advocacy. Which brings me to my main point.
Migration is so important to big business in Australia it’s time to stump up some political capital and purchase public confidence: The BCA need to get behind a clean up of the 457 visa program. Their members play by the rules so won’t have to worry about the implications. Instead, small and medium businesses who exploit vulnerable workers need to be shown it is unacceptable as this behaviour undermines the entire program. Get behind a price hike and a proper compliance operation to weed out those who wilfully exploit migrants.
Why would any business group would get behind a policy change which would result in a (small) cost increase? Clearly the status quo is not good enough and the end outcome if nothing changes is massive policy backlash to the visa program which a Turnbull Government will be unable to oppose. Exploitation also has broader implications for the labour market, creating incentives to undermine norms in search of profit. The more systemic this becomes, the more difficult it is for employers who comply with regulations to compete on an even playing field.
No need to stop there Mr. King. At a big picture level, the BCA should think about how to demonstrate what the differences in labour market activity mean for Australian workers and the importance of migration policy in addressing economic ups and downs. We only have one immigration policy but the labour market in the Sydney CBD is very different to Bundaberg. How can we better adapt migration policy across these different environments? BCA members see how the economy unfolds in real time through their sales and activity data. Instead of creating incentives to hoard this information, figuring out member-led initiatives to better inform a ‘demand-driven’ migration policy could create great dividends. Giving policy-makers more confidence about potential changes and improvements will lead to better outcomes.
If that sounds too difficult, how about fighting for migration policy to remain tethered to economic policy instead of being completely subsumed into security policy? Talking about migration through a security lens undermines policy capacity in the bureaucracy to improve labour markets. A good example to raise would be the massive blowout in processing times for 457 visas driven by greater security obligations. The time to process a visa under the Turnbull Government has almost doubled and it now takes 6-8 weeks instead of the 3-4 weeks average under the Labor Government. Where is the outrage? This harms businesses ability to respond quickly to their workforce needs. As security priorities continue to grow in a Department of Immigration and Border Protection uninterested in economic policy, BCA members will feel the brunt of poor processes and the lack of transparency. I haven’t once heard Peter Dutton as Immigration Minister give a big speech about the role of migration in economic policy. If he isn’t up to the task, start agitating for change.
Finally a simple suggestion. Get behind the Productivity Commission’s recommendation for a population policy as a vehicle for a more informed discussion. The ad-hoc nature of migration policy and the lack of depth hurts business over the long-term. More stability, more evidence and more engagement will lead to improvements.
None of these suggestions would directly benefit BCA members and one of them would add a small increase in costs for BCA members. But they would each prioritise the right issues, foster some policy debate where partisanship is tempered and attempt to better explain the complexity of migration. You only need to look at the backpacker tax debate to see the potential for future migration policy failure. And with the global environment tilting further towards populism and anti-migrant sentiment, the BCA have to put in the hard yards in 2017 to try and set some boundaries before the politics of the next election appears in 2018. Instead of responding to the next story Mr. King, get on the front foot and put the case forward about the importance of migration to Australia.
Post-script: Looks like more of the same is on the agenda at the moment.