Australia’s Migration & Automation Crossroads: Low-Skilled Labour Boom Meets Industrial Slowdown

In 2025, Australia faces a growing paradox: a rising reliance on low-skilled temporary migrants is meeting a lag in industrial automation, raising urgent questions about the future of labour productivity, innovation, and economic resilience.

Escalation of Low-Skilled Migrant Labour in 2025

As of 30 April 2025, Australia had an estimated 2.84 million temporary visa holders, including a new record of 720,720 student visa holders; a figure up sharply from previous years. Meanwhile, working holiday visa holders remain at 220,622, also significantly elevated.

This surge in temporary, often low-skilled labour reflects structural shifts in the workforce, particularly in sectors such as hospitality, agriculture, and caregiving.

Slowdown in Industrial Automation & Modernisation

Despite global trends toward robotics and AI, Australia's industrial automation uptake remains gradual. SMEs show incremental adoption of AI tools (like cobots, predictive maintenance, digital twins), but broad-scale disruption has yet to take root.

This constrained automation landscape means that sectors dependent on manual labour remain entrenched—and low-skilled migrant workers continue to fill gaps that could otherwise be tackled through modernization.

The Consequences: Growth; But at What Cost?

• Productivity stagnation risk: An overload of low-wage, manual roles curtails the incentive and resources to invest in productivity-enhancing automation.

• Underemployment pressure: With automation slow to take off, migrant workers may remain trapped in low-value roles, reducing upward mobility and long-term integration potential.

• Innovation drag: Without scaling automation, Australia's manufacturing, logistics, and service sectors risk falling behind global productivity curves.

2025 Policy Reality & Official Trends

While migration program quotas have not formally decreased, shifts are notable:

• The 185,000 permanent Migration Program planned for 2024–25 maintains a 70:30 split, with 132,200 places reserved for the Skill stream-emphasizing skilled migrants and regional needs.

• The Temporary Skilled (Skilled Transition) pathway shows strain: as of 31 March 2025, only 24,380 temporary skilled visa holders received permanent or provisional visas - a decline of 8.2% from the previous year; suggesting fewer migrant workers are transitioning to long-term contribution.

• Australia’s overall migration numbers remain high: net arrivals continued to exceed targets through 2023-24, signalling sustained flow of migrant labour—both skilled and low-skilled.

What Lies Ahead: Policy Levers to Reverse the Trend

To prevent a decline in productivity and ensure meaningful integration of migrant workers, Australia should consider:

1. Accelerating automation investment in sectors with high concentrations of low-skilled migrants like hospitality, logistics, and warehousing.

2. Creating upskilling pathways for migrants bundled with industry modernization, enabling them to move into tech-assisted roles.

3. Aligning temporary migration with automation agendas—so that migration supports, rather than substitutes, workforce transition.

4. Enhancing data integration and reporting on automation uptake, migrant employment trajectories, and sector-specific productivity metrics.

A Defining Moment for Australia

Australia stands at a crossroads. Its continuing influx of low-skilled temporary workers may address immediate labour shortages but with automation lagging and productivity pressure mounting, this model is unsustainable.

The real opportunity lies in marrying migration with modernization - investing in automation, upskilling, and technology-enabled roles so that labour supply evolves alongside industry efficiency.

Only by strategically weaving migration policy with innovation and workforce development can Australia protect its long-term competitiveness and economic resilience.

A vision of a Future-Ready Workforce through Skills, Technology, and Industrial Excellence

At Newsted Global, we strongly advocate for skilled migration pathways, industrial advancement, and technological innovation. Building a futuristic, tech-savvy, high-performing Australia means attracting talent that not only fills today’s needs but also shapes tomorrow’s prosperity - rather than over-relying on pathways that risk diluting skills, language standards, or long-term national growth. We also oppose the misuse of partner visa shortcuts, which have increasingly been exploited, ensuring that migration remains genuine, skills-focused, and aligned with Australia’s high-end workforce needs.