A “staggering” increase in the issuing of temporary visas has come as permanent skilled migration to Australia has fallen, Home Affairs Minister Clare O’Neil has warned, while vowing to fix a “backwards” system.

In a major speech to make the case for structural reform of the immigration system, Ms O’Neil said there were now more than two million temporary visa holders in Australia, double the number in 2007.

That growth, the minister said on Wednesday, had transpired over more than a decade and largely without notice, despite its profound implications for Australia’s economy.

‘Source of huge problems’

“For the first time in our modern history, our uncapped temporary program is the centrepiece and driver of our migration system,” the minister said.

“This simple fact is the source of huge problems.

“This rather staggering change in direction, from permanent to temporary, has happened without any real policy debate or discussion.”

The migration system was now subverting its economic purpose, Ms O’Neil said, and bureaucratic complexities effectively discouraged many kinds of skilled permanent migrants while posing fewer hurdles to unskilled temporary migrants.

Despite a national shortage of nurses it could take an overseas nurse nearly three years and upfront costs of $20,000 to have their qualifications recognised, the minister said.

The proportion of global skilled migrants being taken in by Australia had halved over three decades, Ms O’Neil said.

“We’ve got the system backwards,” she said.

“It will never substitute [for] skilling Australians – but it is a part answer to all of them. But the system today is not designed to help us solve any of these problems.”

Bureaucratic complexities can discourage skilled permanent migrants. Photo: Getty

‘We just genuinely don’t know’

Worse than being “unstrategic” it was not possible to say if the growing issuing of permits in visa categories – such as the 6 per cent of visa holders on “skills shortages” permits – were filling areas of need, such as shortages in health care and renewable energy.

“Are they bringing the skills and capabilities we need to drive our nation forward? We just genuinely don’t know,” she said.

Nearly two-thirds of permanent migration slots are now filled by people currently in Australia on temporary permits.

The Grattan Institute recently proposed reforms to reorient the visa system towards younger, more skilled workers that would deliver a projected $27 billion to the government’s bottom line.

A review of the migration system by former Prime Minister and Cabinet boss Martin Parkinson is due to deliver its findings in April.

In the one-year period to December the number of temporary entrants in Australia jumped by an “unprecedented” 720,000 people to reach 2.4 million, immigration expert Dr Abul Rizvi stated earlier this month.

He said the rise was driving an increase in the number of hours worked in Australia, but it was also putting pressure on housing and infrastructure.