A review of Australia’s “broken” migration system says it must be overhauled to attract skilled workers to fuel our future or risk falling behind other countries.

Home Affairs Minister Clare O’Neil will on Thursday release a 190-page report she commissioned last year and outline the government’s response.

The review led by former public service chief Martin Parkinson calls for “major reform” of Australia’s migration system, not just “tinkering” on the edges.

The review says the “outdated” skilled occupation list must be expanded to include the types of workers needed for the future.

The existing occupations “do not reflect current or anticipated skilled labour needs, including to support the transition to a net-zero economy or to build critical and sovereign capabilities,” the report states.

“There is growing international competition for highly skilled migrants and Australia risks falling behind without more innovative and attractive visa products and service delivery.”

The report says temporary visas — which have doubled — are not working and could turn Australia into a nation of residents who are “permanently temporary”.

The migration system relies on temporary workers, with about 2 million people in Australia on temporary visas.

But the system needs to go back to its roots and encourage permanent residency, which has remained flat. Only 10 per cent of temporary residents become permanent residents.

Australia must also change student visas and employer-sponsored visas which are failing to retain the “best and brightest”, said the review.

Ms O’Neil will flesh out the government’s new policy to fill worker shortages exacerbated by the pandemic when she addresses the National Press Club on Thursday.

She told ABC’s 7.30 Report on Wednesday night the entire system was “back to front”.

“Our migration system is broken. It’s not delivering for Australians. It’s not delivering for our businesses and it’s not delivering for migrants themselves,” said Ms O’Neil.

“It is a horrendously complex system that makes it really hard to bring high-skilled workers into the country who will lift productivity.”

She said for employers in tech-based industries, for example, the skills list was “archaic” and “out of date”.

But Ms O’Neil said it was “too easy” for employers to fill low-paid jobs with temporary workers, and wage exploitation of temporary migrant workers was rife.

She said Australia risked falling behind other developed immigrant countries such as Canada by becoming a nation of “permanently temporary” residents.

Some employer groups have called for looser restrictions on skilled migration caps and target industries, while others want a rethink of English language requirements and rules regarding post-study employment.