More 457 visa rorts revealed

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By Leith van Onselen

Another day, another report about an Australian employer opting to hire foreign labour on 457 visas rather than employing locals. From The Canberra Times:

Immigration officials swooped on a Pie Face operation in Sydney on Monday following reports of the exploitation of foreign workers.

The raid was triggered by a tip-off to the Department of Immigration and Border Protection earlier this month, which included claims relating to the underpayment of a group of workers on 457 visas.

The immigration department would not discuss details of the investigation but confirmed it was aware of the allegation Pie Face workers had been underpaid.

Leaving aside the allegation that these foreign workers have been underpaid, and whether or not Pie Face is viable without them given its recent problems, the question once again needs to be asked: where is the skilled labour shortage necessitating the hiring of foreign workers?

457 visas are supposed to be used only when skilled local workers cannot be found to do the job. Yet, as revealed by the Department of Employment, skills shortages in Australia are tracking at an “historical low”, with employers able to “recruit skilled workers with little difficulty” amid “softness in the labour market”.

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Worse, the Government’s own so-called “independent report” on the 457 visa system revealed that the majority of 457 visas have been granted to professions that many would not consider to be particularly “skilled”, in short supply, or critical to the economy, such as cooks/chefs, cafe/restaurant staff, and call centre/customer service staff (see next table).

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It’s hard to imagine that a serviced-based business like Pie Face, which let’s face it does not require a PHD to run, should be allowed to use 457 visa workers at all, especially when unemployment/underemployment across Australia remains elevated, especially for our youth.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.