• by
• Phillip Coorey
• Yolanda Redrup

The Turnbull government has launched a major crackdown on the use of foreign workers by abolishing the 457 visa scheme and replacing it with a new program with much tighter restrictions and available to hundreds less occupations.

In a move welcomed by some major business groups but slammed by political rivals as kowtowing to One Nation, the Prime Minister announced the abolition of the 457 visa scheme for temporary skilled workers, saying it was time to put Australian workers first.

"Australians must have priority for Australian jobs," the Prime Minister announced, initially via a video on Facebook.

"We will no longer allow 457 visas to be passports for jobs that could and should go to Australians."

In a move that outbids Labor leader Bill Shorten, who promised a clamp down on the visa scheme as part of his "Australia first" push after Donald Trump's election victory, Mr Turnbull said 457s had lost credibility would be replaced by "a new visa that better targets skills shortage" and will be much more tightly targeted.

The new scheme will involve a two-year visa with no prospect of permanent residency at the end and available to 200 fewer occupations than the 457 visa. There will also be a new four-year visa available to just 183 high-end occupations

Both will have stricter requirements including the areas of previous work experience, English language proficiency and a greater onus on employers to fill to jobs locally first. The cost to employers of the four-year visa will be $2400 a worker, more than twice the cost of a 457 visa application. The two-year visa will cost $1150.

"It is important that business still get access to the skills they need to grown and invest."

But Mr Turnbull said the focus would be "Australian jobs and Australia values".

'We will always be an immigration nation' but

Mr Turnbull said that while "we always will be an immigration nation, but we must ensure that the foundation of that success is maintained and the foundation is that our migration system is seen to work in the national interest".

He said the system must ensure that Australian jobs are filled by Australians wherever possible.

"And that foreign workers are brought into Australia in order to fill critical skill gaps and not brought in simply because an employer finds it easier to recruit a foreign worker than go to the trouble of hiring an Australian."

457 visa has 'lost its credibility'

The prime minister said the 457 visa class had "lost its credibility" and would be replaced with two new temporary skilled visas with tougher eligibility requirements.

"It will require a full - a proper police record, a criminal check, which is not the case at the moment. It will require in almost all cases - the majority of cases - mandatory labour market testing. Again, a very significant change," Mr Turnbull said.

"Now, these new visas will ensure that Australian businesses have access to the workers from overseas they need to fill real skill gaps, but not otherwise, and that Australians, wherever possible, where jobs are - vacancies are there, where opportunities are there, Australians will be able to fill them. This is critically important."

The new rules will not apply to the 95,000 people already in the country on existing 457 visas.

"For those people here on a 457 visa at the moment, there will be a grandfathering arrangement. They will continue under the conditions of that visa," the prime minister said.

'Material reduction' in visa holders

Mr Turnbull said as a result of the changes, there would be far fewer foreigners working in Australia.

"Because we are narrowing significantly the number of occupations and we are increasing the qualifications that visa applicants need to have, it is our expectation that all other things being equal you will see a material reduction over time of people working on these temporary visas," he said.

Immigration Minister Peter Dutton said employer groups had been consulted and they were "by and large" accepting of the changes.

"By and large, there's acceptance and welcoming of many components of what we've announced today" the minister said.

457's are 'broken'

Reaction in the business community was mixed. The Australian Industry Group and the Australian Chamber of Commerce and Industry welcomed the changes, saying they would restore public confidence in the skilled migration system,.

"The 457 Visa system was a highly valued program but misunderstandings of its use and exaggerations of its misuse led it to become a lightning rod for anti-migration sentiments," said AiGroup chief executive officer Innes Willox.

But the Australian Mines and Metals Association was wary.

"If today's announcement is at all effective at silencing the cheap politics and scaremongering that has taken place around temporary skilled migration in recent years, AMMA would welcome that outcome," said acting chief executive Tara Diamond.
 
"But overhauling a responsible skilled immigration policy that has proven highly responsive to labour demand and supported nation-building projects, is hardly the type of big picture policy thinking that will address Australia's pressing employment and economic challenges.
 
"The government's attention would be better directed at tackling Australia's job-killing workplace relations system which, unlike 457 visas, has proven to be a major barrier to competitiveness and employment growth."

Michael Wall, the national leader of KPMG's Immigration practice, was similarly critical.

"There is no evidence that the current system is not working properly. It is a demand-driven program, and the number of 457 visas has been on a decline over the last few years," he said.

"As of September 2016 there were 95,000 primary 457 visa holders which is less than 1 per cent of the workforce.  

"This move does not align with Australia's stated commitment to increasing innovation and causes uncertainty for foreign companies considering investing or doing business here."

PoweredLocal chief executive Michael Jankie was "quietly optimistic" about the change.

"The truth is the 457 Visas are broken. I'm a strong supporter of bringing brains into the country and the 457's have not been operating with modern companies in mind."

However, he said that some of the language of the announcement did worry him.

"A lack of clarity on the new visa and specific mentions around work experience are worrisome. The truth is some of today's brightest minds from around the world do not have high level of work experience because what they tend to be working on is new, experimental, disruptive. Experience should not be tested on a number of years in a job, but on the knowledge able to be brought onto our shores."

'At odds' with innovation

But QUT Creative Enterprise Australia CEO Anna Rooke said that the changes were "at odds with the notion of building an innovation driven economy.

"We have specialist positions that our startups, and ourselves as an accelerator, have recruited overseas for because of shortages in specific technical skills in Australia. The implication that this announcement may jeopardise those workers, and the startup community more generally, is a significant issue until greater clarity is provided."

Tough for start ups

Shippit co founder Rob Hango-Zada said hiring for startups was already difficult due to skill shortages.

"Putting Australian jobs first is a great mantra, but how does this prevent jobs from being sent offshore?," he said.

"In the corporate world and more specifically in the tech space, off-shoring is a common practice and in recent times 457 visas have meant that at least offshoring for specialised jobs is minimised. The Government needs to provide specific information about how this would impact key areas such as engineering and development."