Consulting firm Deloitte has urged Australia to avoid becoming a less attractive destination for skilled labour by cutting incentives such as the Living Away From Home Allowance (LAFHA).

The Gillard Government announced last week that almost all temporary residents in Australia, including hundreds of Irish workers, would lose access to LAFHA under reforms of fringe benefits tax unveiled by Treasurer Wayne Swan as part of a mini-budget.

The new discussion paper by Deloitte urges Australia to take a “coordinated approach to workforce planning, government policy and employee relations”.

Deloitte Partner and National Immigration Leader Mark Wright wrote the new discussion paper, titled The New Immigration Paradigm.

Mr Wright argues that Australian states should have more say in sourcing workers and calls for a new visa to allow workers to be sourced from ‘depressed international markets’, such as Ireland.

“Traditionally, immigration has been about ‘ticking boxes’ in order to bring offshore labour in to fill a role, but we need to stop thinking about immigration policy in isolation from other workforce solutions,” he said.

“Instead, we need to move towards a more targeted approach to addressing our needs by moving some of the centralised control away from Canberra and allow states and regions greater input and control over the flow of skilled workers on a needs basis.

“Ensuring that the recently introduced Regional Migration Agreements and Enterprise Migration Agreements allow states greater flexibility in sourcing workers would be a first step in achieving that,” Mr Wright said.

The paper suggests a number of measures, including:

:: Global internship programs – to allow graduates develop their skills base by rotating through the global operations of the sponsoring company

:: Global skills passport – allowing skilled workers, such as engineers, entry to participating countries on the basis of their skills status alone

:: Sponsored project visa – to accommodate the high level of project-driven labour activity in the resources, construction, IT, and energy sectors

:: A new visa subclass to allow skilled workers from depressed international markets, such as the United States or Ireland, to work temporarily in Australia, for up to a year

Deloitte has voiced concern that the removal of LAFHA could see Australia lose out to competitor markets such as Hong Kong and Singapore.

“The recently announced changes to the Living Away from Home Allowance is a case in point,” said Mr Wright.

“We would contend that if Australia is to attract the best global talent, then we should be avoiding changes that make Australia a less attractive destination to corporate executives and expatriates than lower taxing competitors such as Hong Kong and Singapore.”

He said global mobility will be one of the key factors in ensuring Australia workforce requirements are addressed and that could only be achieved by “shifting the debate beyond our shores”.