The issue of migration is at the forefront of the Brexit debate. The “Leave” camp is arguing the United Kingdom should embrace tighter migration controls.

If it wins, Leave would strip European Union citizens of the automatic right to live and work in the UK in favour of an Australian-style “points-test system” for skilled workers. It argues such a system would limit migration and benefit the UK economy.

But how does the Australian system work? And is it, as the Brexit campaigners suggest, the “solution” for economic migration policy?

Australia’s skilled migration system

Permanent migration to Australia is highly regulated and capped at around 190,000 visas per year. Of these, about two-thirds are set aside for skilled migration; the rest are for family and humanitarian entrants.

For the year 2014-15, 128,550 permanent skilled visas were issued. Of these, 72,840 were points-tested visas.

Permanent skilled visas can be further broken down into two categories: employer-sponsored and independent. Visa applicants without employer sponsorship are required to lodge an expression of interest with SkillSelect, an online system that ranks applicants based on information provided – such as age, education and work experience.

Applicants are also required to nominate an occupation on the Skilled Occupation List and be assessed by a relevant assessing authority as having the skills required for that occupation. The SkillSelect system is used to invite highly-ranked applicants to apply for permanent skilled visas and allow state and territory governments to nominate a highly skilled person for a visa.

Independent skilled visas also require an applicant to pass a points test.

How does the points test work?

For each visa class subject to a points test, the immigration minister sets a “pass mark”.

The migration regulations specify the number of points that can awarded to an applicant across a range of factors. These include:

age;

English proficiency;

employment experience;

educational qualifications;

community language qualifications; and

the skills of an accompanying partner

Additional points are awarded to those who are invited to apply for a visa by a state or territory government agency.

For example, the pass mark for a Skilled Independent Subclass 189 visa is 60 points. A hypothetical person who is 27 years old, has “superior” English, and a bachelor degree would be able to obtain 65 points on these factors alone.

By contrast, a person aged 42 with the other factors the same would only score 50 points. They would thus need to rely on other criteria to obtain a pass mark.

The points-test scheme is intended to:

… attract migrants who are highly skilled in key occupations of medium to long-term need in Australia.

Those who are young, highly skilled and have excellent English abilities are most likely to meet the points test.

Strengths and weaknesses

Using a points test to screen for the best and brightest international talent is theoretically sound from a policy perspective. It sets clear and transparent standards for entry and allows the government to control economic migration into areas necessary for long-term economic growth.

However, the system is not without its problems. Some suggest a points test is a crude measure that does not account for “soft” attributes desired by employers such as communication skills, the ability to learn on the job, or resilience.

Australia’s Productivity Commission has suggested that what is labelled as “skilled” on the Skilled Occupation List is “arbitrary”. This raises questions as to the government’s ability to accurately project shortages in the labour market, leading to under-employment or over-employment in some areas.

This leads to suggestions that demand-driven models that allow employers to screen and employ applicants they need without resorting to the points test should be preferred. There is some evidence in Australia that employer-nominated migrants have:

… on average, better short and medium‑term labour market outcomes than independent skilled immigrants.

However, a shift towards employer-led models – where a person’s visa status is tied to a particular employer – raises questions about worker exploitation and underpayment of wages, both of which are problems in Australia’s temporary 457 and working holiday visa categories.

Is it a solution?

The merits of a points-test system should be examined in the context of a global and highly mobile workforce, and as part of each country’s broader economic migration policy.

In Australia, the system only applies to some permanent skilled visas as part of an overall mix of skilled visas that include employer-sponsored, temporary work, and business visas.

In Canada, all skilled migrants are subjected to a points test – but any applicant with an offer of employment is immediately ranked higher than those without a job offer.

Reform in Australia is seeking to focus more on temporary work visas to meet skills shortages. The Australian government is also actively reviewing the points-test system. A Department of Immigration discussion paper suggests the:

… removal of the points test could still deliver a successful skilled migration visa program if well-legislated and tailored.

Alternatively, the system could be amended to apply only to top tier skilled occupations, or be amended to contain only “essential elements of human capital”.

Whether or not the points-test system will remain a key feature of Australia’s skilled migration program is not entirely clear. The lesson for the UK, if it is to implement a similar system, is to carefully consider to which visa categories it would apply and how it would into a broader policy approach on economic migration.