Australia’s visa backlog will be tackled by first prioritising 60,000 permanent visa applications lodged by skilled workers based overseas as the federal government focuses its response on workforce shortages being hindered by processing delays.It's been revealed the backlog facing the government is close to a million applications across several visa categories, the problem stemming from the impact of the COVID-19 border closure.

The Department of Home Affairs has redirected resources and brought on more staff to address the visa gridlock, which has made wait times for applicants worse.

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But Home Affairs Minister Clare O’Neil has now confirmed its plan will prioritise skilled applicants from offshore with a focus on health, education and aged care.“The real priority for me is what we can do within the constraints of the system to quickly work through that backlog,” she told ABC Radio on Wednesday.

“The change is prioritising people who are offshore who are wanting to come here to work and working through those applications as quickly as we can.”

It’s a drop in the ocean, when we are talking about a backlog that is close to a million

New government figures have revealed, that the current visa backlog is 961,016 visa applications across all categories with some 560,187 lodged by people outside Australia.

This includes 57,906 skilled workers seeking permanent visas. Another 13,806 offshore visa applicants are seeking temporary visas.

Associate Professor Anna Boucher of the University of Sydney described the visa backlog as “massive” and said this initial response would only amount to a first step.“It’s a drop in the ocean, when we are talking about a backlog that is close to a million and we need close to half a million workers as unemployment keeps dropping,” she told SBS News.“Even if they took all of those permanent visa holders in the queue and all of the temporary visa holders - it’s still nowhere near going to cover the scale of the skill shortage.” Ms O’Neil has conceded the initial plan is a short-term response, but says the government intends to discuss how the migration program can be tailored to address long-term challenges at a jobs summit on 1-2 September.

“Our immigration program is a sacred nation-building exercise that we need to really think about and have a good community conversation about and design it carefully," she said.

Ms O’Neil - who recently visited Sri Lanka - also used her interview to stress that Australia remained committed to turning back boat arrivals as the South Asian nation faces an economic crisis with fears this could encourage people to take the risk.“The most important thing I can do in my position is to reiterate that operation sovereign borders is Australian government policy," she said.

“Don’t get on a boat and think you are going to be able to make a life in Australia - you will be turned back.”

The migration debate

The jobs summit will bring together unions, employers, civil society groups and representatives of governments with migration to be a key discussion point.Professor Boucher said it was important to find a middle ground in the debate warning “otherwise it can inflame xenophobic tendencies”.“It’s not just about the size,” she said."A more fine-grained picture and raising awareness about the migration program - how important it is and also some of the complexities of it can only be beneficial."The permanent migration program was capped at 160,000 per year under the previous Morrison government.But the impact of COVID-19 saw this fall into negative levels for the first time since the post-World War II era.A reopening of the international border on 21 December has witnessed a gradual recovery of migration numbers, but businesses are still waiting months to bring in staff to fill skill shortages.

The Australian Chamber of Commerce has called for the annual migration program to be expanded to 200,000 people to help secure the country’s economic pathway out of the pandemic.

Treasurer Jim Chalmers said businesses were crying out for workers describing labour shortages as an obstacle holding back the economy.“Focusing on the skilled workers that the economy is crying out for in that long queue of visa applicants I think is a very smart thing to do,” he told reporters.“[But] we need to caution against thinking that migration can be a substitute for some of the other things we need to do to build a bigger, more productive, better skilled higher wage workforce in this country.”

Australia’s unemployment rate fell to 3.5 per cent in June - its lowest levels in 48 years, but despite the strong labour market, skilled shortages remain a challenge.

Professor Robert Breunig, a public policy economist from the Australian National University said investment in training needs to be considered in the debate over addressing Australia's workforce needs.“This is a good move [focusing on skilled visa applications] - we are currently in a situation where labour shortages are really doing damage to the economy,” he said.

“[But] a challenge for Australia is how do we make sure that our education system is actually providing the skills to people that our labour market needs."