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Employers should be encouraged to recruit more overseas workers as permanent migrants, rather than relying on 457 visas, and a state-based approach to migration should be adopted, according to Immigration Minister Chris Evans.

Speaking at a breakfast forum in Perth today, Mr Evans said the employer-sponsored migration stream, which targets migrants with specific skills, needed to be built up.

"The willingness among WA employers to sponsor overseas workers is clearly there, but I want to see more employers sponsoring these workers as permanent skilled migrants," he said.

Mr Evans said he wanted to investigate why employers were not sponsoring more permanent migrants, and would consider incentives for businesses to use the scheme.

He said WA needed a tailored program to meet the specific needs of its resources-driven economy, which would be developed in close consultation with the state government.

"Under such a plan, the state government will be given greater scope to sponsor the skills they consider to be needed. Currently, the state government is constrained in the occupations they can sponsor. I believe they should be given greater capacity to make decisions on what skills are most needed in their economy to fill critical skills shortages," he said.

Mr Evans said employers also needed a greater role in determining the skills required in a migration program.

He said the skilled migration program generally needed to be more responsive to local economic needs, which required a boost in state-sponsored migration.

"If WA is to lift its share of the permanent migration program to sustain the growth in the economy, we need to do better in this area," he said.

Mr Evans also criticised the migration occupations in demand list (MODL), used to give extra points to migrants with skills in certain areas, referring to it as a blunt instrument.

Industry groups have previously been critical of the list for being too narrow in scope.

WA is now the second biggest user of 457 visas, with 11,800 primary visas granted last year.

This was a 41 per cent increase on the previous financial year - the largest growth rate of any state or territory.

Currently, 25 per cent of people applying for the permanent migration stream are 457 visa holders.