Almost half of skilled migrants are working below their qualification level, while Australia’s complex recognition system leaves urgently needed teachers, nurses, engineers and tradespeople underused.

There is wasted talent right across the Australian workforce. It is estimated that 44 per cent of Australia’s skilled migrants are employed below their skill level.

John Menadue

The OECD has found that up to 50 per cent of migrants in Australia with tertiary qualifications work in jobs that do not require their level of education and training. That is roughly double the experience of Australian born workers with equivalent qualifications.

The OECD has also estimated that employing migrants at the same qualification level as native-born workers would add several percentage points to GDP in countries with large migrant populations. And Australia has one of the highest proportions of overseas born residents in the world.

Skills shortages have been a problem for decades. In 2025, 29 per cent of occupations were in shortage. This involves almost 50 per cent of trade roles and about 40 per cent professional occupations.

The government appointed Martin Parkinson, a former secretary of Treasury, to advise on the wasted skills of migrants to Australia. He presented his report in March 2023, over three years ago.

Following the Parkinson review the Australian government launched its revised official migration strategy involving a series of structural overhauls to the visa and skills framework.

But Parkinson expressed concern that after three years there was still very slow implementation of his report. In an address to the National Press Club, he called for urgent action. He said that nearly half of all permanent migrants are working below their skill level. He said that there is an enormous economic value that is currently going to waste, largely unnoticed.

He added that we have a multi-step, multi-agency, multi-jurisdictional assessment and licencing process that was never designed as a system. It just accumulated layer by layer over decades. It is like a river clogged by mud, sludge and garbage over decades. We need to recognise that Australia is not getting the economic value it should from the skilled migrants that come to Australia.

A report by Activate Australia’s Skills (AAS) provides a blueprint for reforming Australia’s overseas skills and qualifications system. AAS is an alliance of businesses, unions, social services and community organisations working to improve skills and qualifications recognition policy to address the shortages crippling Australian communities, families and businesses.

AAS reported that we could fast track housing productivity by unlocking migrant skills to build 30,000 more homes each year. It reported that there were 18,400 permanent migrants in Australia with building and construction related qualifications who are working below their skill level because of costly, confusing and time-consuming approach in recognising overseas skills and qualifications.

AAS also reported that with appropriate skill recognition we could add 21,000 qualified teachers, over 16,000 nurses, almost 3000 pharmacists, 1000 plumbers, 1300 electricians, 5000 psychologists, 6000 civil engineers, 3800 electrical engineers and 7000 mechanical engineers.

AAS advised where properly recognised migrant skills could have the biggest workforce impact: professional, scientific and technical services 27,000; preschool and school education 18,000; hospitals 14,000; social assistance services 14,000; construction services 11,000; residential care services 10,000; medical and other health care services 10,000 and public administration 10,000.

There are many long-term obstacles to the proper recognition of migrant skills in Australia. Organisations like the AMA and the medical colleges have been barriers to the recognition of skills of migrants. The gatekeepers want to protect their territory and tell us that migrants will dilute safety and standards.

This non recognition of overseas qualifications is the primary reason for the waste of talent across Australia. But there are other obstacles.

Because of inadequate funding of ESL, the lack of English language skills is a barrier to migrants participating fully in the Australian workforce.

Migrants also lack social networks that are often important in obtaining employment. Who you know is often more important than what you know. Migrants seldom have the network to help.

Gareth Hutchens at the ABC has drawn attention to ways in which this skills confusion and waste could be addressed.

First, establish an independent skills and qualifications recognition commissioner who would have oversight of an end to end recognition system from visa, to occupational licence, to employment.

Second create a national recognition navigation service to offer a single point of guidance for migrants working through the recognition process across numerous jurisdictions and numerous professions.

Third, financial support to facilitate the recognition process, including specialised English training and helping clear social obstacles and isolation. The adult migrant English program and various state settlement services focus heavily on orientation and language support. What is missing is systematic connection to employment networks. Structured mentoring programs pairing newly arrived migrants with established Australian professionals in the same field should be made much more available.

A major problem, however, is that migrant settlement services have been distributed across several departments. In 2013, settlement and multicultural affairs was transferred to the Department of Social Services, while the Adult Migrant English Program was moved to the Department of Industry. These settlement services should be drawn together as part of the immigration settlement function.

Pulling the settlement services together is very much a secondary focus within the Department of Home Affairs which is overwhelmingly focused on security and border control like rejecting Palestinians who need to find a means of escape from the hell hole of Gaza. They might be undercover Hamas agents!

Fourth, we need to ensure that the way Australia chooses skilled migrants in the first place is better informed by occupational licensing requirements so that we stop creating problems at the point of entry. The points test for skilled applicants applying overseas rewards paper qualifications rather than predictions of actual work opportunities in Australia. Factors that could be taken include demonstrated employment in their overseas profession, strong English, a job offer in the field and positive prior assessments through recognised bridging programs.

A final problem is that the nature of our migrant inflow has changed. A large proportion of our migrant inflow now is people who have arrived on a different visas, perhaps student, working holiday or a tourist visa. The tests for such applicants in Australia are very different to the tests applied for skilled migrants applying overseas.

There are many difficulties in reforming skill recognition in the ways outlined above. An early start to address the numerous obstacles would be cooperation arrangements between the Commonwealth and state governments who are both large employers.

https://johnmenadue.com/post/2026/07/australia-is-wasting-the-skills-migrants-bring/

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