BALDWIN, Professor Kenneth, Vice-President, Financial Sustainability, Australian Academy of Technological Sciences and Engineering DERBYSHIRE, Mr Peter, Acting Chief Executive Officer, Australian Academy of Technological Sciences and Engineering JAGADISH, Emeritus Professor Chennupati, Fellow, Australian Academy of Science [by video link] NICHOLSON, Dr Kathleen, Board Director and Policy Chair, Science & Technology Australia [by video link] TEASDALE, Dr Hayley, Head, Science Advice and Policy, Australian Academy of Science WINN, Mr Ryan, Chief Executive Officer, Science & Technology Australia CHAIR: Welcome to those giving evidence at this roundtable. Do you have any comments to make on the capacity in which you appear? Prof. Jagadish : I am also a former president of the Australian Academy of Science. CHAIR: Thank you for appearing before the committee today for this roundtable. Although the committee does not require you to give evidence under oath, this hearing is a legal proceeding of the parliament. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. Thank you for your submissions to the inquiry. I'll invite each organisation to make a very, very short statement, because we've got quite a few of you to get through—what I want to see is a discussion taking place rather than read statements. Dr Nicholson : Thank you for the opportunity to appear today. Science & Technology Australia, the peak body for Australia's science and technology sectors, represents nearly 150 member organisations and more than 235,000 scientists and technologists across the country. STEM professionals born overseas are essential to Australia's productivity, economic growth and wellbeing. Australia is facing an acute shortage across the STEM workforce, and we rely heavily on highly skilled migrants to help close these gaps. Jobs and Skills Australia's own projections show STEM jobs requiring a bachelor's degree or higher are expected to grow by 24 per cent to nearly 2.9 million roles by 2035. More specifically, Australia is expected to face a shortfall of 60,000 AI workers by 2027 and a further 60,000 engineers by 2035. At the same time, our domestic pipeline is showing real signs of strain. This week's PISA results show Australia's lowest math scores ever. Year 12 STEM subject enrolments have fallen 10 per cent in a decade along with declines in participation in higher intermediate mathematics and physics. Meanwhile, almost half of Australia's practising scientists say they're considering leaving their profession altogether. This combination—a shrinking domestic pipeline and rising STEM demands from priorities like artificial intelligence, AUKUS, cyber, quantum and net zero—means Australia cannot meet its own workforce needs without migration. The most recent data we have indicates that 43 per cent of workers in STEM and health occupations were born overseas, and that's up 38 per cent from just a decade ago. Our submission makes three recommendations to this inquiry. First, we need a plan. We want government policy to take a long-term, evidence based approach to delivering the STEM workforce our national priorities depend on. Second, we ask that government ensure Australia's visa settings enable clear, easily navigable pathways to permanent residency for STEM professionals and researchers and enable the sector to draw more deeply on the talent pool of international students and graduates already trained here. Third, we ask that government support organisations and programs with a proven track record of helping migrants and people from diverse backgrounds gain STEM work experience and employment in Australia. We know the fiscal and political sensitivities around migration policy are real, and this committee will hear a wide range of views through this inquiry. Our evidence is specific to the STEM and research sectors, where the case for clear, well-designed skilled migration pathways remains very strong. We're conscious that attracting migrants— CHAIR: Dr Nicholson, can I interrupt you there for a moment. Do you have much more to go? There are six of you. Dr Nicholson : I'm on my last sentence. CHAIR: Just keep it short. We'll be able to discuss all this when we open it up for discussion. Dr Nicholson : I'll finish off by saying that attracting migrants is only half the task. We have to do better to ensure the skills they bring are retained in Australia. We welcome the committee's inquiry and are happy to answer any questions. CHAIR: Thank you very much. Sorry for cutting you short; it's just that we've got until 1 pm, and we want to have a real discussion. So I'll go to our next witness. Mr Derbyshire : Thank you; I will shorten mine as well. Thank you for the opportunity to address you all today. Australia's productivity and prosperity relies on a skilled STEM workforce. In addition to meeting the demand for STEM undergraduate degrees, this also means developing a pipeline of talented postgraduate researchers who can help Australia solve our most pressing problems and take advantage of our opportunities. Yet we aren't enrolling enough graduate research students to meet our needs. In the 10 years to 2024, the domestic research student population fell by 15 per cent despite our national population growing by around 14 per cent in that time. According to the ABS, research students do more than half of all research hours conducted in Australian universities. If it weren't for growth in international research students over the same period, this decline could have been catastrophic for Australian science and research. These shortages aren't limited to research. In other coursework degrees, like IT, geology and engineering, skill shortages are only growing. Developing Australian talent is vital, and skilled migration should not be a replacement for this. In key areas like AI and the energy transition, all countries are seeing skill shortages simultaneously and will do everything they can to retain their own skilled STEM graduates in the face of intense global competition. Australia will not be able to migrate its way out of this problem. So, for sectors like energy and AI, we'll need to redouble our efforts to produce a highly skilled workforce from Australian trained students. However, with the scale of the shortages more broadly across engineering and many other occupations, we won't be able to meet the demand with domestic talent alone. Unfortunately, our migration planning is focused too much on the short term and not the future needs of our nation. The occupation list system is unresponsive and unable to predict the jobs of the future. We propose a strategic long-term skills based system developed alongside a 40-year strategic road map and the National Skills Taxonomy being prepared by Jobs and Skills Australia. The global competition for talent is intensifying. Australia needs to compete, and it needs to think much further ahead. Once we do get the right people in the right skills, we need to make sure that we're using their skills effectively. Of Australia's 266,000 overseas born engineers, half are not in engineering roles. This is not just a missed opportunity for migrants; it's a missed opportunity for Australia. Engineers Australia projects that getting better utilisation of migrants' engineering skills could lift GDP by $2.56 billion by 2030. If we're serious about building a more productive, innovative and sovereign Australia, we need a skilled migration system designed not only for the problems of the past but for the capabilities of the future. Thank you. CHAIR: Thank you very much. Dr Teasdale : Professor Jagadish will be giving our opening statement. Prof. Jagadish : Good afternoon, members and senators. Thank you for the opportunity to appear today and contribute to the proceedings of this committee. I'm representing the Australian Academy of Science, and I'm also an emeritus professor of physics at the Australian National University. I led its semiconductor optoelectronics and nanotechnology group. I was born in India and educated in India, including my PhD, and I worked in Canada. I came to Australia with my wife and a two-month-old baby with a two-year contract in 1990. I never imagined that one day I would become the President of the Australian Academy of Science. I had the honour of continuing doing my research, publishing more than 800 journal papers and training more than 70 PhD students and more than 60 postdoctoral and research fellows, and they are in leading positions in academia and industry in Australia and overseas. I witnessed the challenges faced by the current cohort of students, colleagues and researchers as they navigate the Australian system. My wife, Vidya, and I launched an endowment in 2015 to support students and researchers from developing countries to visit Australia and pursue collaborative research. Australia's national research capability relies on attracting, retaining and developing international talent. University graduate and research workforce projections by the Australian Academy of Science show that almost all domestic student enrolments across science fields are declining over the next 10 years, and our scientific workforce is ageing, without a strong pipeline of talent. We will not have the science capability needed to meet our national ambitions without skilled migrants. It has never been more critical for Australia to create a competitive skilled migration system and prioritise STEM skills in areas of national need. Every laboratory I walk into in this country has someone in it who chose to be here; they didn't have to be. That's the genuinely hopeful part. Some of the world's best scientists want to come to Australia, and we need them, but we need to keep that door open. Thank you. CHAIR: Thank you very much. Professor Baldwin? Prof. Baldwin : I'm happy to table the ATSE statement. CHAIR: Thank you very much. If there's more in your statements, please feel free to send that through to the secretariat, and it will be taken as evidence. I might kick off with a couple of questions. In terms of our science and technology standards, we talk about the cutting-edge jobs of the future, which are very highly technical. Highly educated people need to be in this field. How do we fare in our competitiveness in attracting those high-end, skilled workers to Australia—the nuclear engineers? We've got the massive build, in South Australia, of the AUKUS submarines, defence work. In terms of our position in the world, I think attracting the best minds is very beneficial to this nation. It'll only benefit our economy. It'll benefit our society. There are just benefits absolutely everywhere. How do we fare compared to other countries around the world in terms of attracting these people? And, if we're not up there with the rest of the world, what can we do to improve it, as governments, in terms of putting policy in place? Mr Winn : I'll start. I realise we didn't acknowledge country when we started as well, so I want to acknowledge the traditional owners of the land we're meeting on, the Ngunnawal people. I think a key part of it is just certainty. We have various settings around our visa settings that need to be—as Professor Jagadish spoke about, we have amazing people who want to come here, so we need to simplify and be clear about that process. We also have a range of talent who are not at the senior level but are actually the critical talent and who are a very small group. One example I would reflect on would be the heavy-ion accelerator, which is a cutting-edge facility at the ANU, just down the road here, who struggle to find and attract talent, because often their skill is really high level but their pay salary is not as high. So there's this interesting tension for really highly technical staff, who may fall below the threshold of the salary cap for these as well. CHAIR: Just on that point, when we're competing with other countries—they're much higher in other nations: the Canadas, the United States, the Britains, Europe? Okay. Mr Winn : So there's that flexibility— Dr Nicholson : May I add something here? Mr Winn : Fire away, Kathy. Dr Nicholson : For my day job, I'm based in Adelaide. I'm with the Australian Institute for Machine Learning. We attract talent from all over the world here, to South Australia. The No. 1 challenge we have is visas for people to join us. These people are coming because they are highly talented. They have job opportunities all over the world. They like our lifestyle. They like what we can offer in Australia. They'll accept the salary, but they want to bring their families. They want to raise people. They want to have the security to be able to buy a house and set up in Australia. It takes me about 18 months to get a visa for one of these people. That's 18 months where, in many cases, they actually get offered other jobs in the meantime and don't end up coming. A pathway to permanent residency visa for highly skilled—they might not be as old; they may only be in their 20s. But these highly skilled individuals are the No. 1 challenge I have in attracting talent. CHAIR: I know the school very well; I've visited it on a number of occasions—great work. Would you like to add anything else to that, Mr Winn—or anyone else? Mr Winn : One of the things I would add would be that we need to also remember that the system fits inside of a funding system as well, and it's actually the certainty of other parts of the system around science funding where, if there's uncertainty in the other parts, even the interest to come here can be made complex as part of that. Professor Jagadish, you started to speak, I think. Prof. Jagadish : I'll just give you the most recent example of last week. One of my colleagues from the University of Cincinnati wanted to come to Australia on a sabbatical visit. The university sent a letter to him, inviting him to come and join us, and then he goes to the website of our embassy and it says, 'It will take up to one year to get your visa.' He asked me whether he should stop applying for this visa, because he doesn't have the time to wait for one year. This is just for a sabbatical visit. I have lost many students to the UK, Japan and the US because our visa processing took too long, and I've lost lots of postdoctoral fellows—again, to other countries—because we have taken too long. It is very important, particularly in the critical technology areas, that we attract talented people, train them, retain them and then really provide opportunities for them to stay back in our country. So it is very, very important, and, if we really don't do that, it is going to create a lot of problems for us in terms of productivity and our economic activities and sovereign capability. It is absolutely critical we create a system where Australia looks very attractive for them and where there are no barriers and hurdles for them, taking forever, to apply for visas. CHAIR: That takes me to another question. There's been talk about an intracompany visa—in other words, some of our Australian multinational companies with offices in London and Paris could use a particular visa to exchange staff so that, when they need a particular staff member's expertise in one nation, they can bring them over, and vice versa. And they're saying that would go a long way. If you look at the industry, you'd look at the universities and the research universities as a whole around the country. If there were an intratransfer visa or an intrauniversity visa here in Australia so that staff could go back and forth as needed, would that be of benefit in situations like the one that you just raised with the professor from Cincinnati? Prof. Jagadish : Absolutely. It is very important, and we need to be flexible so that the talented people will find those opportunities and then be willing to move to other institutions, including industry, and then also to choose Australia to stay back. Again, as has been pointed out earlier, we need to make sure that their families do not have barriers, particularly their kids and their education and a range of things or issues which come into the picture. When we're attracting talented people, we need to attract the entire family. The ability to move institutions becomes very attractive for them, rather than having to reapply for another visa because you're moving institutions, which really creates a lot of frustrations for those individuals, and we do not want to create a system like that. Mr Derbyshire : I'll just add quickly to that. While it does help with the university area as well, when we're talking about things like the clean energy transition, where every country in the world is now trying to figure out how to transition to renewable energy and every country is fighting for electrical engineers, electrical system engineers and all of these things, creating that mobility between countries is probably one of the easiest ways to make sure that we can bring those skills in. Even if we may not get to keep them forever, we're just making sure that we're doing that and also giving the opportunity for Australian skilled workers to move overseas and learn from the best and the brightest. That increased mobility with countries that we can do that with—the US, the UK and the like—would actually go a long way, I think, both in industry and academia. CHAIR: Deputy Chair. Mr REBELLO: My first question is to Mr Derbyshire. In your opening statement you spoke about the skills shortages we have in a number of different areas in the science space and the tech space. You made the comment: 'Australia will not be able to migrate its way out of this problem'. I was hoping you could expand on that and give us a bit more context. Mr Derbyshire : It builds on what I was talking about a moment ago, and I think Ken might want to add to this. Essentially, as I said, every country is fighting for the best and the brightest minds, and the challenge is that we're not going to be able to rely on that skilled migration that we used to rely on 20 years ago. In the past, we relied on opportunities to bring people from India, from Nepal and from places like that to come over here to study, do a masters in engineering and stay here in Australia and give us the skills that we need. These people are now needed in other countries in order to do the same thing. At the same time, we're going to have to grow our own skills pool, but that takes time. It takes five years to train someone as an engineer. It then takes a few more years to get them fully on the ground and ready to go. So we have to marry the time it takes to grow our own domestic pipeline with the skilled migration that we need to take on these challenges now. Ken, did you have anything to add? Prof. Baldwin : What we're looking at here is a very time-dependent problem that Australia and the rest of the world faces. There are two areas that we've identified. One is the energy transition. This has got to happen in the next 25 years. During that time, the entire world will be looking to grow its expertise in engineering, in software systems, in power generation and in AI to control the system, and Australia won't be able to migrate its way out of the problem by bringing people into the country unless we are perceived as being a much better destination for those skill sets. This is not just a skilled migration problem; this is a domestic education issue. We're going to have to redouble our efforts to attract people into the disciplines needed to make the energy transition happen and to provide the expertise in the other very time-dependent area, which is the adoption of AI. AI is going ahead at breakneck speed. Kathy can tell you all the issues around trying to attract people in that particular area. It is not just growing; it is accelerating exponentially. We won't be able to go out into the world market and bring people in with expertise in AI any longer, because the entire world is going through this exponential growth. We, again, will have to redouble our efforts to home grow our experts. This is a much broader problem than just skilled migration. Mr REBELLO: This is to both of you. Firstly, do you think the government understands that? And, secondly, do you think that the concept of using migration to solve the problem as opposed to putting the focus on our domestic pipelines is the current strategy? Is that your impression of the current strategy—in other words, in your opinion, are we trying to migrate ourselves out of the problem? Is that what's happening now? If it is, is that shift required? Prof. Baldwin : In the past, it has been our way of solving the problem. But we're flagging that this will no longer be possible. So what we need is a plan that goes over many decades. Like I said, the energy transition is going to take us 25 years. The AI transition is immediate and will happen in the next decades following. So we need a long-term plan that is holistic across government, not just in the migration sector but in the education sector, in the skills training sector, in the business sector and in the research sector, so that Australian research can grow and attract these people as well. This is a holistic problem. It's not just a problem in one particular government department. Dr Teasdale : I'd just like to add that we've done some analysis at the Academy of Science looking at Treasury's Intergenerational report and the forces shaping our economy over the coming decades. What we've done is then map the science capability we need to respond to those challenges shaping our economy. As part of that, there's some modelling of our scientific workforce into the coming decades, including how skilled migration and education domestic pipelines are shaping those fields. We do see, exactly as my colleagues are outlining, that we have this driving competition in key areas of Australia's needs, particularly in things like material science, geoscience, climate science and artificial intelligence, where we are recruiting fewer and fewer skilled migrants because of this competition. I just want to add that all of us have also been working on contributing to the strategic examination of R&D—the review that was done of our system—and thinking about how we can make sure Australia has the R&D workforce it needs into the future. There is quite a lot of information in that report that can help build a very competitive country to attract these migrants into the future. Mr REBELLO: Even if we are looking at the inbound migration as it stands presently in your areas, would you agree that the demand for—and all of these are pretty high quality and, generally, I'd say high income, and you can fill me in on that—high-quality, high-income tech and science migration, even though we have that demand, is still not being met through the migration system? Is that right? Mr Derbyshire : It's safe to say that the demand of what industry, what research and what the country needs is not being met by the migration system alone. It is also not being met by the domestic system alone. And, if you combine the two, it's still probably not being met. This is why things that increase flexibility or mobility of skills are really important. But I also think that the Australian government is working hard to increase the domestic pipeline of students in many places. There are programs that help bring disadvantaged people into the STEM fields so that we are training people who typically might not have gotten into engineering and the like. So there are steps being made. But, as Ken said, there is no overarching field to it. So, when we talk about a migration strategy, we don't necessarily marry that up directly with a long-term jobs and skills strategy or an economic strategy. We need to see that holistic view of things so that we know how it all maps together, which the Academy of Science have done some of. Mr REBELLO: Part of that as well would be when we spoke right at the beginning of this inquiry to the Department of Home Affairs, who obviously oversees our migration strategy, but also to other departments such as Infrastructure, who are critical to our ability to attract and retain migrants, especially if we're talking about regional and rural areas, as well as domestic students in certain areas. It was clear that there was a disconnect in that one doesn't talk to the other when it comes to informing our migration strategy. Would you say also that, yes, it's a holistic approach that's needed at a government level, but is it also that, from a thought leadership level, we say that we do need to consider our need, we do need to consider migration and we also need to consider those domestic pressures—for example, housing, community support and all of that sort of stuff? Is that something you'd agree with? Prof. Baldwin : Yes, I think you've hit the nail on the head here. This does not only apply at the high end that you talked about at the beginning. We're going to need, in the energy transition, people with electrician and electrical power system skills. You mentioned housing. We've got to build a very large number of houses in a very short period of time. That is going to soak up a lot of people with the electrician-type skills that we need. That is going to be in direct competition with those skills that are needed in the energy transition itself—building powerlines, battery systems, rooftop solar and all these things. So it is truly an issue that has to be looked at across a whole range of sectors in the economy in order to go from research all the way down to the trades skills. There are different educational needs to grow our domestic students in that in those areas, and there is also bringing in people who've already got those skills from overseas. What we'll find is we will not be able to attract the overseas skills base unless we have an identified critical advantage, and, at the moment, I cannot see what that is. We've got barriers like delays in visas, uncertainty in opportunity—all these areas. These are barriers. These are not advantages for people to come here. At the moment, it is very difficult to understand, given the salary rates and all the rest of it, how we can attract people away from countries that really need these people as well in their domestic economy. Mr Derbyshire : The other part of this overarching theme is that we assume that, when we bring someone in through skilled immigration pathways, they've got the job and away they go—they're fully supported to do this. We also know that some support on the ground actually has to be put in place as well. We do bring in a fair number of engineers, and a lot of them are not working as engineers. They are working as taxi drivers and the like because, while their engineering qualifications are recognised here in Australia due to agreements we have with other countries, they're not necessarily provided with the skills needed to understand how to get a job in Australia—the nuances that come with getting into an Australian company. So I think we also need to look at it in the space of domestic training, immigration and then utilising the immigration pathways that we have. What happens when someone lands on our doorstep? How do we support them to get into the workforce? Mr REBELLO: One of the issues that has come through in this inquiry is the underutilisation of our already existing migrant workforce. One of one of the things that I have put forward—and I'd be interested in your views—is that that should be front-footed prior to or at the beginning of the migration process. When we've met with the multicultural community groups, it's the same thing. It's about the integration aspect in Australia. Part of it is that they haven't really been exposed to that outside and then they get their visa. They come here, they're in a very different environment and they're expected to immerse themselves, so maybe that should be front-footed, including how you do get a job and how you do certain things. Would you also support situations where we say, 'Okay, if you are coming here for a particular role, you must be able to work in that particular role as well'? Mr Winn : You're spot on. Forty-eight per cent of migrant engineers in Australia are not working as engineers. That's compared to 35 per cent of Australian engineers. We have a massive gap there. It's a critical question. That's a lost capability. There are amazing companies and organisations in Australia that support those sorts of people; iSTEM Co. is a particular one that is a member of Science and Technology Australia that directly works with that migrant community to help them to engage and be successful in STEM careers in Australia. I think there is an important role for us to support those organisations to maximise that talent. So I agree that we need to maximise the talent that's already here as well as the students coming through, but the challenge we have is the scale of the skills and capabilities we need, from engineering through to the health sector. We know that 43 per cent of STEM and health workers now are born overseas. About 10 years ago, it was 38 per cent. So there's a significant demand change there. The scale of the skill need, particularly in things like engineer transition and AI, is a now problem, and so we need to find a multipronged approach. How do we support the students who want to study here? How do we bring the high-end talent quickly and in a timely manner so that they don't get poached before they arrive on our shores? How do we build up our domestic talent? There's no single solution to this. It really needs to be multifactored. CHAIR: What dangers are in place at the moment? I go back 20 years to when renewable science was really taking off and we lost a lot of our best brains to overseas places. I remember visiting one of the largest solar farms in the world, in Seville, run by Australians at the time because they just couldn't make any headway here. I don't think we're at that position where we will lose, but, if we remain status quo, is there a danger of a brain drain as well in this area? Do you want to elaborate on that a little bit? And is it happening now in some areas? Mr Winn : We see brain drain already. That's a given. We see it across the board and we need to stem that. One of the things that is probably worth flagging already is that we have fantastic research talent and really great ideas but don't translate that through the pipeline and get the companies. The most glaring example of business translation using STEM skills is that Australia's business expenditure on R&D sits at 0.9 per cent of our gross domestic product. The OECD average is 1.99. We're a whole percentage point of GDP below, and that is because businesses don't have the skills, the talent or the confidence to do that in Australia. We need to build that, because that adds to economic complexity. Australia's economic complexity is extremely low, and in part that's because businesses need the talent to drive those ideas and reinforce it. Dr Nicholson : In working at a university environment, we graduate AI PhD students. These are the graduate students who Australia has invested in gaining their PhD qualifications, and yet, for them to get a job in industry after they leave us, it's fine if it's a big industry, but, if they want to work for a startup, for an innovator, for one of those things, the visa challenge for them to work in those environments is actually quite limited. If we keep them at the university, we've got pathways. If you go to work for Amazon, there are pathways. But, if you want to work for that little three-person startup where you're going to add a lot of value, that startup has to support that visa. Again, that pathway to retaining that talent in Australia is one of the biggest challenges I see from these people actually going into the innovative small businesses. Prof. Jagadish : Many of my students and postdoctoral fellows had to move overseas because they particularly want to work in industry. In the last 15 years or so, we've gone backwards in terms of R&D investment. In 2008 we had 2.2 per cent of GDP investment in R&D, but now we are sitting at 1.69 per cent. The world is investing more and more in R&D, though we've gone backwards in the last 15 years or so. As Ms Ryan has pointed out, the industries are also not investing. We need really clear policies to ensure that industry invests in R&D and then provides jobs for graduates, who have enormous amounts of skills. It's a missed opportunity for the nation and for the productivity of our economy. We really need to look in a comprehensive way at how to invest more in R&D so that we're able to create opportunities for the next generation. Otherwise, a lot of brain drain is going to take place. It's already taking place. And again, lots of people want to come back after going overseas. Is there an opportunity? Even some of my former students, those who are in Oxford and Cambridge and Manchester, would love to come back to Australia, but the lack of investment in R&D is creating a lot of constraints for the university sector and the research sector, including industry, as well. CHAIR: How do we compete in the R&D area? Sure, one way is government putting more money in, and that's a pretty simple sort of way. But when you're looking at the EU, for example, there are billions of dollars in research and development because they're all grouped together—450 million people. You then look at the United States—again, huge population, lots of benefactors, renowned universities. How do we attract people from those institutions in a nation of 26 million where we have two or three universities per city, if that, and not many benefactors? There has been some talk about looking at Asia, with millions of people, and grouping our research and development with a certain three or four countries that are close to us to get that that level up so we are competitive, in a way, to Europe and the United States to attract people to come and do their research and development in Australia. Prof. Baldwin : This is a very complex issue. As you say, it starts with research funding and the attractiveness of working in Australia in a research environment. But it also extends to things like salaries and reputation. If we're thinking about the Australian diaspora or students who have been educated in Australia who've gone overseas, they already have a connection with Australia. All things being equal, they probably would like to come back here. But unless all these other boxes are ticked for them, they're not going to move. You talk about Asia. We look at countries like China, which had a concerted program to bring all their diaspora back to China and establish these amazing research institutes. I was there in June. They used to have very few researchers in my area. There are now at least 17 laboratories around the country, each of which is bigger than all the Australian effort in this area. So they made a concerted effort. They had a plan to bring back their diaspora to help grow their capability. We perhaps need a plan as well. And it relates to a whole range of these different areas, not just salary competitiveness. It relates to research funding, institutional capability, infrastructure—all these things. I think if we look more broadly at our diaspora and our trained students, they are already with a mindset to come here. And then, of course, if we can't attract people like that, how are we going to attract people who have no connection with Australia at all and just want to come here on a purely competitive basis? CHAIR: Dr Teasdale? Dr Teasdale : I just wanted to mention some of the talent attraction programs that these types of countries are administering. You mentioned Europe, which has, I think, a 500 million euro fund to help people choose Europe. I think it is of the utmost importance that we not only have these pathways for people to come to the country but that we have pathways for them to stay and, in this case, that we are actually attracting talent and prioritising attracting that talent. If you can bring in one talented researcher who can grow a research group first and then perhaps start a new industry or new business in Australia, it's transformative. Other countries are prioritising that, and it is something that Australia should consider. CHAIR: So what you're saying is we need, as a government together with institutions, to look at targeting that very high end and making it palatable for those people to come here who then can actually grow a particular— Dr Teasdale : The Academy of Science has the Global Talent Attraction Program, which we created— CHAIR: Yes, tell us tell us about that attraction program and how it works. Dr Teasdale : That was started about a year or so ago, starting to look at how we could recruit, particularly from the United States at that point in time, some top researchers—we're talking people of the equivalent of Professor Jagadish of our fellows of our learned academy's level of excellence—to Australia for this exact purpose. We have a great list of verified candidates of exceptional quality, who are being poached by countries all over the world, ready to come to Australia, but our biggest bottleneck has been in finding funding to place these people in Australian institutions. CHAIR: We have people that have indicated that they wish to come here. Dr Teasdale : Yes. CHAIR: They're at the top end of their professions, and the hold-up is— Dr Teasdale : Funding. Mr Winn : I think this just comes to certainty. We have amazing people who want to come to Australia and work here, but we have uncertainty about the speed of visas, the uncertainty of whether they can bring their families and uncertainty of when they come here of the funding for their research that will drive through things. I think the mixed signals of Ambitious Australia—we've now had six months since the report. We're still waiting for progress on that. We've seen baby steps around the council, but we need a clear focus on our strategy and competitive advantage and then into policy. And then we at the same time have government removing very significant funding streams of grants from Australia. Notably, Australia's Economic Accelerator was axed as part of the most recent budget. That took $800 million worth of research funding that was directly about universities partnering with industry to develop new industries and new products and services. It sends big signals to people overseas who we should be and could be pulling to Australia. CHAIR: You spoke about bottlenecks in the sector. Are there particular fields in which the bottlenecks for visas or the applications or the paperwork are far greater than in other areas? Dr Teasdale : It's not so much for us that I've seen it in fields. Rather, it is in countries that the people are coming from that there are different bottlenecks. But apologies—I saw Kathy had her hand up before me. I spoke over her. Dr Nicholson : I'll just add—and, again, I'm talking of the field of artificial intelligence. Quite rightly so, artificial intelligence is seen as a critical technology, which means it's got extra foreign interference things that go on to ensure that we are protecting that sovereign capability. That does slow down visas for AI. I think anything defence AI has to have that extra element of it, but the fact that that slows things down so significantly can be an issue. Prof. Jagadish : Again, for critical technologies, we need to have skilled people, but sometimes critical technology is seen as a national security issue. How do we manage this carefully? But, if we do not have talented people here, what are we trying to protect? There is nothing much to protect. That is why we need to make sure that we try to attract talented people in all areas of critical technologies, so thereby we're able to strengthen our critical technology capabilities, which really helps us to be able to enhance our sovereign capability in these important areas. CHAIR: In terms of the national security, obviously you can understand why we have such stringent rules. How would you get around it? Do you think that we could do it better? Many times, for example, I've heard people who have approached me in my office for visa applications where they haven't heard anything back, and we'll make some inquiries and we'll find out that we're awaiting a police clearance from a country overseas. Some countries are very quick; others aren't. So sometimes it's out of our hands but still a very important step in ensuring you get that clearance, because without that clearance we don't know the background of the person, supposedly. National security is a very difficult area. But you said there are some areas where there is no national threat and they should be able to be identified. Dr Nicholson : I think it comes down to the streamlining of processes and the transparency of communication. I had a candidate from Canada recently who was delayed by 11 months on a visa that was supposed to take two months. It was because it was AI related, but he was a clinical engagement officer in a hospital. Yes, there was AI involved in his work. He was coming from Canada; let's call it a safe country. It took 11 months for us to get that visa, and there was no communication to the individual. Prof. Jagadish : There are many allied countries with whom we collaborate and cooperate, even on defence interactions we are having, defence exercises and all these things. But, at the same time, we are doing one side this one, and, on the other side, you're saying that we're taking our own time in terms of attracting these talented people. And once also they come into the country—say, for example, in critical areas, we attract some talented people—if we offer them permanent residency as a priority, they will stay back and then be able to strengthen our critical technology areas, which enhances our capacity to be able to take care of our own needs and particularly sovereign capability. CHAIR: Deputy Chair. Mr REBELLO: I'm conscious of time, but I do have a few questions. The first one is to Professor Baldwin. You spoke about the use of China's diaspora, the effective use of its diaspora. I was on a call earlier this week with some of our diaspora in Silicon Valley, who are very much at the forefront of the AI and tech revolution, and one of their suggestions was that as part of our AI strategy we should have an engagement of our own diaspora. Part of that is trying to attract them to come back here as well, because a lot of them have gone overseas. I know that this isn't directly within the migration space, but it does affect the balance between domestic and migration, so it will affect our migration numbers and how much we need to depend on migration. Do you think that we should be making or pulling the necessary economic levers to bring these people back? Ultimately these people have gone overseas. Yes, it's for the experience and to get to know the situation on the ground, but in large part it's because it's much more economically attractive, given the tax settings of the United States and elsewhere. Should we be pulling those levers economically as a country in order to give us the access domestically to our own talent? Prof. Baldwin : I think it depends on what levers you're wanting to pull. But one of the key levers that drive these people in the research area—I'm not talking here about people who are outside research—is understanding that Australia is committed to a research based future. At the moment, given the levels of investment in R&D, both in industry and by government, it is at the moment at the bottom of the tier when it comes to our international comparators. So, unless that lever is pulled, it is going to be very difficult to persuade people on higher salaries who might be willing to give up that salary differential to come back to Australia and find that they're in a research environment where they cannot do their research because of the funding limitations. Mr REBELLO: In the AI space, a lot of the development is actually done through the private sector, as you'd be aware, as opposed to through government, so I understand the need to upfund the R&D and all of that side of things. But, if that translates into new companies being set up, if they're not economically viable or if there's a benefit to go overseas—I'm thinking about recent changes to CGT and a few other things—there is no way that we're even going to get the benefit in this country from that initial R&D investment. So, when I'm talking about the economic levers, I'm talking about, for example, the tax settings that we have. Is that something that you'd all agree on? Mr Derbyshire : Absolutely. The recent changes to the capital gains taxes have come as a bit of a surprise to particularly the medical technology and the deep technology sectors. Things like having a 10-year limit on the R&D tax incentive—those changes, which were not part of the Ambitious Australia report but have been proposed on top of that, have created a deep challenge for a lot of these small startups, who use the share options in order to bring people back on a lower salary, often Australian diaspora or skilled immigration people, to participate as part of these small to medium enterprises that are innovative and growing. Even though some of these changes have not come into effect yet, the uncertainty around these changes has been enough for people to start automatically thinking: 'Maybe it's best to set up our board in the US. Maybe it's best to stay here.' Mr REBELLO: To bring it back to migration, am I right in saying that the flow-on effect of that is that we don't have the ability to fill those skill shortages or to progress at the level that we'd like in the AI and tech revolution, and so that is why we are back to where we started, migrating our way out of this? Mr Derbyshire : I think maybe it's twofold. In one essence, we're talking about bringing people in who have big ideas and big innovations; they want to come in. But, at the same time, if you went ahead with those changes, I don't think the demand itself would drop off to a point where we're not going to have anyone applying for visas. Mr REBELLO: Of course. Yes. Mr Derbyshire : I think we're always going to have people who want to come to Australia, who want to study in Australia and do research in Australia. The question is: What do we want to bring in? Do we want to bring in the best academics and the best researchers? Do we want to bring in people who want to set up small startups or participate in some of the startups we've set off? I'd argue we want to bring in both, but these are different control settings. Mr REBELLO: To finish up—I'm conscious of the time—I guess the answer to this situation that we're in is not going to be solved through migration alone. It is going to be solved through looking at our domestic pipeline of students and making sure that we're trying to attract people into this sector, but it's also going to be solved if we are going to try and bring back that talent that we already have, in that it's not going to add to net overseas migration, which is obviously very controversial at the moment but is also a key part. Migration plays one part out of a much broader issue here. Mr Derbyshire : Absolutely. That's one of our key recommendations: a broader plan that takes all of these things into consideration. Mr Winn : I think the key part to that plan, Deputy Chair, is that these things don't sit in isolation. Different policy settings across government create tensions. The CGT and RDTI changes you're reflecting are that economic lever, and, if we have this push-pull, it creates uncertainty or complexities for the skills we need and whether they stay here, whether they go overseas and whether we can pull that talent overseas. We need a whole plan to manage these tensions, and we need government vision and ambition to actually drive these through in an appropriate way. Prof. Baldwin : And joined-up dots between different government departments. I think that's the key. Mr Winn : Yes. CHAIR: I'll finish off with one last question. In the science and technology area, in terms of positions that can't be filled right now—positions that exist in the different dealings you have that can't be filled—which sector, or which area, are those positions in? Is it engineers? Which positions are there? For example, when we go to the construction industry—we've got them in next week, but we've had some discussions—we'll ask the same question. They'll automatically say: 'We need 7,000 plumbers today. There are 7,000 positions out there.' Mr Winn : I don't think it's as simplistic as that. I think it's easy to say we need— CHAIR: I know they're different industries, but it would be good to know where the shortages are, where we can start thinking about filling gaps immediately and what we can do as a government. Mr Winn : I think when you look at, particularly, the Australian Academy of Sciences' Australianscience, Australia's future report, you can see those areas around geoscience, around AI, around digital technologies and around synthetic biology. There are some really key touchpoints around that. When you look at even the energy transition, there are key points and there are key thematic research and industry areas that sit across that. Then, when you start to look at what the capabilities are that sit in there, you talk about geoengineers; you talk about synthetic technical expertise, so synthetic engineering; you talk about data expertise; you talk about nuclear experts and people sitting outside the area of quantum and sort of putting those bounds on where the knowledge is. CHAIR: So it's everywhere, pretty well! Professor. Prof. Baldwin : Mr Chair, one example of what is needed I can provide from personal experience. I'm chair of the Australian Council of Learned Academies' Australian Energy Transition Research Plan. The aim of that is to prioritise the research that is needed to underpin the energy transition for the next 25 years, so we've done a lot of work on that across government, industry and research. What we are missing is a capability map of where the skills are across the country in order to be able to deliver those priorities in the timeframes that they're needed, so information in this area—which is exactly to your question—is needed. We need to understand where the gaps are in the workforce for specific priority areas that we can see coming down the track. I'm using the energy transition as the example, but there will be examples like this in other areas—AI, I think, is an obvious one—but we need to map the capability that we have and we need to map where that capability will need to expand going forward based on the priorities that we have in these areas. The Australian Energy Transition Research Plan is a microcosmic example of the need for this mapping and understanding of capability. CHAIR: Yes. Dr Teasdale. Dr Teasdale : The biggest gaps we've identified through the analysis of the science sector specifically show that we have big existing shortages of physicists—people with training in physics. This is applied to many fields very important to Australia. If you talk to organisations like Geoscience Australia, they're trying to hire geoscientists and earth scientists; many of them need a basic understanding of physics. This also applies to materials scientists, so people who are trying to create new materials, recycle some of the many critical minerals and find our critical minerals in our country. They all need a background in geoscience and material science, but the underpinning field that we have the biggest shortage in already is physics, and that is also where we are seeing the domestic pipeline drying up the fastest. So I'd say that's our priority, but our analysis, as mentioned, predicts where we will have the shortages over the coming decade. CHAIR: Thank you very much. That brings us to the end of this session. Thank you for coming today, presenting before us, giving us your evidence and talking to us. If you've been asked to provide any further or additional information, please send it to the secretariat by Friday 16 October. If there's anything else you wish to feed through, please do so at any time. Feed it through to the secretariat, and we can take it as evidence. You'll be sent a transcript of your evidence and you'll have an opportunity to request corrections to any transcription errors that you may feel are there. Once again, thank you. It's an area where, I suppose, I could make a few points. We have skill shortages in the country—everything from labour hands and kitchen hands right through to those cutting-edge jobs. As a nation, if we want to develop our economy, if we need to create those cutting-edge jobs of the future, in my view, this is the area in which we should be concentrating on getting the best brains that we possibly can to Australia and ensuring there's an environment that will support it and help it grow. Thank you for coming today. That concludes our hearing program. Finally, I would like to thank the committee, the deputy chair, the secretariat, a couple of people that came online from the committee today and, of course, Hansard, who has made sure that there is an accurate record of everything that was said today. Committee adjourned at 13:07