The Albanese Government will spend $85.2 million over four years to speed up skills assessments for migrant trades workers and reform Australia’s permanent migration points test, as the Federal Budget seeks to ease labour shortages in construction, infrastructure and priority trades.
The reforms are aimed at getting qualified migrant workers onto job sites faster, while changing the way permanent skilled migrants are selected. Budget papers say the points test will be “optimised” to select migrants who are “better educated, higher-skilled and younger” overall.
The funding includes $75.1 million for a new modern trade skills assessment system through Trades Recognition Australia, including the capacity to integrate occupational licensing into skills assessments.
A further $5.6 million will fund a new skills recognition program for onshore visa holders, while $4.5 million will strengthen oversight of assessing authorities.
The Budget papers say the new system will involve working with states and territories to pilot streamlined assessment-to-licensing pathways for priority trades such as electricians and plumbers.
Treasurer Jim Chalmers framed the measure as part of the government’s broader productivity agenda, saying the Budget was about moving faster on economic reform.
“To lift wages and living standards, we have to lift productivity,” Dr Chalmers said in his Budget speech.
“This Budget is about going further and moving faster.”
Chalmers said the government was “doing more on skills recognition and education so tradies can get their qualifications recognised more easily and businesses can find the skilled workers they need.”
The government says the reforms could cut the time taken for migrant trades workers to enter the workforce by up to six months. SBS News reported the changes are designed to help bring up to 4,000 additional skilled trades workers into the workforce each year, particularly in construction and electrical trades.
The changes come as Australia continues to face pressure to build more homes, deliver infrastructure projects and fill gaps in skilled occupations.
Master Builders Australia welcomed the support for skilled migration, including faster skills assessments, occupational licensing reform and a new program to recognise the qualifications and practical experience of onshore visa holders.
But Master Builders chief executive Denita Wawn said the Budget still did not go far enough.
“Workforce shortages remain one of the biggest constraints to delivering homes. The Budget doesn’t go far enough to address this,” Ms Wawn said.
“There is more work to do to make it easier to deliver the homes, infrastructure and buildings Australians rely on.”
The Business Council of Australia also welcomed the occupational licensing and skilled migration reforms, saying skills shortages were holding back projects in housing, energy and infrastructure.
“With skills shortages holding back essential projects across housing, energy, infrastructure and more, we welcome the occupational licensing and skilled migration reforms to speed up entry to the workforce,” BCA chief executive Bran Black said.
The Budget confirms the permanent migration program will remain capped at 185,000 places, with 132,240 places, more than 70 per cent, allocated to the Skill stream. Across both the Skill and Family streams, the government will prioritise applications from migrants already living in Australia, with 129,590 places set aside for onshore applicants and 55,110 offshore places mostly targeted at high-skilled migrants.
The government says this approach will place downward pressure on net overseas migration while still directing migration towards long-term skills needs.
Net overseas migration is forecast at 295,000 in 2025–26, before falling to 245,000 in 2026–27 and 225,000 by 2027–28. Budget papers say the forecast is higher than previously expected because migrants on temporary visas are leaving Australia at lower rates, while arrivals of New Zealand citizens are expected to remain strong.
Settlement Services International, which convened the Activate Australia’s Skills campaign involving more than 130 organisations, welcomed the Budget measure as a step towards unlocking migrant talent already in the country.
“The government’s commitment to accelerate better skills recognition for migrant trade workers is an important productivity win,” SSI said.
However, SSI said broader reform was still needed, warning that engineers, teachers and nurses remained blocked by slow and costly recognition systems despite urgent workforce needs.
The Refugee Council of Australia also welcomed the funding, but said more work was needed for people already in Australia who were unable to work at their skill level.
“Many refugees and migrants come to Australia with years of professional experience and a strong motivation to work and build a career but then experience significant de-skilling after arrival here,” RCOA co-chief executive Paul Power said.
“Improving skills assessment and recognition processes is a useful step; however, we still need further work to reform the accreditation process by domestic bodies for people who are already here in Australia.”
The Budget also includes $27 million over two years to continue information and education activities aimed at improving migrant workers’ awareness of workplace safeguards, protections and compliance measures linked to migration law.
The government will also reform the Working Holiday Maker program to better control numbers, reduce barriers to work and provide what it describes as a fairer allocation of visas, including expanded use of ballots.
The reforms place skilled migration, trade recognition and visa integrity at the centre of Labor’s Budget pitch on productivity, housing and workforce shortages. For migrant workers, the changes could mean a faster path from arrival to licensed work. For employers, particularly in construction and infrastructure, the test will be whether the reforms deliver workers quickly enough to meet Australia’s housing and labour demands.
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