This was published 7 years ago
Pressuring foreign workers the wrong way to reform 457 visas: Peter Mares
By Peter Mares
Both sides of politics are taking aim at the 457 visa. Opposition Leader Bill Shorten vowed Labor would crack down on the temporary skilled migration scheme to ensure unemployed Australians can find work.
Immigration Minister Peter Dutton responded that he was already onto the problem. In a media release the minister "announced" changes he had quietly made three weeks earlier that make it harder for 457 visa holders to stay in Australia if they lose or leave a job. Previously migrant workers had 90 days to find an alternative employer to sponsor them for a new visa; now they have just 60 days.
Labor leader Bill Shorten will announce a plan to crackdown on 457 visas on Tuesday. Credit: Joe Armao
Mr Dutton says the change "is about reducing competition from overseas workers for those Australians who are actively looking for work".
If the primary policy concern of the Coalition and Labor is unemployment, then they seem to be lavishing a disproportionate amount of attention on an insignificant aspect of the problem.
Prime Minister Malcolm Turnbull welcomed the arrival of the first RAAF P-8A Poseidon aircraft at Fairbairn, Canberra with Immigration Minister Peter Dutton on Tuesday.Credit: Andrew Meares
There are fewer than 95,000 primary 457 visa holders in Australia today, and even if we include their partners (who also have work rights), 457 visa holders still make up less than 1.2 per cent of the total Australian labour force. Moreover, the number of 457 visa holders in Australia has been falling, not rising, in recent years.
While the Coalition has sought to blame Labor for the high number of applications approved when it was in office, such fluctuations have little to do with government action. The rise and fall in visa applications largely reflects the strength or weakness of the job market. Business is bringing in fewer temporary workers from overseas under the Coalition because it has less need for them than it did when the economy was growing more strongly.
It might be tempting to think that if the government kicked out all the 457 visa holders tomorrow, then unemployment would suddenly fall because jobless Australians would automatically step in to take their places. The opposite result is more likely: unemployment would probably go up, because 457 workers generally create more jobs than they take.
Many abattoirs in rural and regional Australia, for example, source skilled boners and slaughtermen from overseas. If they could not fill these positions, then the meatworks would not operate. This would mean Australians – including young workers without experience or qualifications – would miss out on other jobs in the plant. It would also make it harder for farmers to sell their livestock locally, thus undermining the economy of country towns.
Labor has resurrected its "Aussie Jobs First" campaign, while the government has followed with its own announcement on changes to the program.
A 2012 survey found three-quarters of 457 visa holders help to train or develop other workers. Skilled workers on 457 visas generate employment by spending money in Australian businesses. They also help provide essential services.
Professionals on temporary visas fill many positions in the health sector; in regional areas in particular, many hospitals and medical clinics rely heavily on these migrant workers.
The Productivity Commission notes 457 holders improve the overall budget position, because most earn relatively high salaries and pay a significant amount of income tax, yet they generally have no access to government benefits and services.
Certainly there may be some 457 visa holders who are in jobs that could be filled by Australians; it is hard to see why employers in the food industry find it necessary to import so many restaurant and café mangers for example. Local IT and nursing graduates complain about the number of foreign workers taking up positions in their sectors.
It can be convincingly argued the list of occupations for which employers can sponsor a temporary worker on a 457 visa is too extensive, particularly when there are jobs on the list that might potentially be filled by an Australian after a relatively short period of training. Some people might question why childcare workers and commercial cooks can be brought in on 457 visas for example.
But perhaps we are asking the wrong question here: does the fault lie with the business that fails to recruit a suitably skilled local worker, or does the fault lie with a neglected and impoverished vocational education and training system that fails to equip Australians with the skills that employers need?
We should also remember that labour market conditions in Australia are not uniform: perhaps there is no shortage of childcare workers in Adelaide, but it may be very difficult to find sufficient qualified staff to run a centre in Carnarvon.
Labor's response to the 457 "problem" is to strengthen labour market testing. If it won office, Labor would require businesses to advertise jobs locally against stricter criteria and for longer periods of time before allowing employers to recruit offshore. This is unlikely to be successful because it is extremely cumbersome to regulate and police, particularly in an era of recruitment via online advertising and social media.
Reputable businesses will do the right thing, thus adding to their costs without significant gain for anyone, while rogue employers will continue to evade the system. These are likely to be the same employers who pay below award wages and fail to provide safe working conditions.
The Immigration Minister's decision to cut the amount of time that 457 visa holders have to find an alternative employer will also do little to help jobless Australians find work.
It is far more likely to have the unintended consequence of discouraging temporary migrant workers from quitting jobs where they suffer poor conditions, underpayment and abuse.
Because a migrant worker's 457 visa is linked to their job, many fear that leaving an exploitative boss will mean being forced to leave Australia too. Giving temporary migrants less time to find a new sponsor will only heighten their fears and make them more vulnerable to employer threats and intimidation.
If the government and the opposition wish to tighten the 457 visa program then there are more constructive options on the table.
It is legitimate to ask whether there are occupations that should be removed for sponsorship on a 457 visa, or that should only be available to employers in certain parts of the country.
The Ministerial Advisory Council on Skilled Migration set up in 2015 was supposed to provide expert advice on exactly these kinds of questions. But the work of this tripartite body comprising industry, union and government lacks transparency and seems more likely to be a forum for interest groups to argue their case, rather than provide an authoritative evidence-based account of where legitimate skills gaps exist.
If this body were reformed, and provided with intellectual resources to do its job, then this should enable the 457 visa scheme to be better targeted to meet economic needs while simultaneously restricting employers' capacity to use it as an expedient alternative to local recruitment.
Another obvious step would be to require employers who recruit workers on 457 visas to pay a significant training levy. The levy would serve two functions. Firstly it would act as a price signal to discourage employers from recruiting offshore unless absolutely necessary. This is likely to be far more effective that a complex regime of labour market testing.
Secondly, the training levy would raise funds that could be ploughed back into Australia's vocational education and training system, and particularly targeted at areas of recognised skills shortage or at improving the employment prospects of the long-term unemployed.
The introduction of a training levy was recommended by both the independent inquiry into the integrity of the 457 visa system commissioned by the Abbott government and the more recent Senate education and employment reference committee's investigation into the exploitation of temporary visa holders.
To suggest that we can address unemployment by "cracking down" on 457 visa holders or by giving them less time to find a different employer, is at best a distraction from more important issues, and at worst an exercise in scapegoating.
Peter Mares is the author of Not Quite Australian: How Temporary Migration Is Changing the Nation (Text Publishing)