Blind Freddy (but not the Coalition) can see the entire visa system is being rorted

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By Leith van Onselen

The Coalition has found a new scapegoat to blame for its poor election showing, blaming a so-called Labor “scare campaign” about foreign workers competing against local jobs. From The AFR:

An aggressive campaign on the rorting of 457 work visas helped Labor come close to winning back Coalition seats on the Queensland coast, including the super-marginal seat of Flynn.

In the same way Labor went hard on claiming the Coalition was going to privatise Medicare, the party activated an “Aussie jobs first” campaign that resonated with voters in the mining cities of Gladstone, Mackay and Townsville.

Liberal National Party insiders said the Labor Party ran a dishonest campaign on the 457 visa issue that mirrored the exaggeration of claims over the future of Medicare.

It’s not a scare campaign if it’s true.

Blind Freddy can see that Australia’s entire visa system is being rorted.

The 457 system is intended be used by employers in areas of skills shortages – i.e. to fill genuine labour market gaps. However, the Department of Employment’s latest skills shortages report found that “skill shortages continue to be limited in the Australian labour market”.

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Given that skills shortages are yesterday’s problem, why are 457 visas still being handed-out like candy?

As shown in the below table, there were 33,340 primary 457 visas handed-out in the nine months to March 2016:

ScreenHunter_13722 Jun. 24 11.31
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There were also 97,770 primary 457 visa workers residing in Australia as at March 2016 (add secondary 457 visa holders and the number is closer to 200,000):

ScreenHunter_13723 Jun. 24 11.32

Moreover, over 80% of 457 workers – i.e. those working under the skill level 1 (so-called “Managers and Professionals”) and skill level 2 (so-called “Associate Professionals”) – are not subject to any labour market testing to determine whether an Australian can do the job first.

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Exemptions from labour market testing have grown from around 20% initially to the outrageous level of over 80% currently.

Exemptions were originally to be granted for clearly defined skills shortages as identified by the then DEEWR (now Department of Employment), such as for doctors in rural areas and for short term skill-specific undertakings (e.g: Asian chef’s for expo’s, etc). Instead we now have Australia’s pubs importing kitchen hands on 457’s in significant numbers with government approval. Virtually all of these jobs could be filled locally with a little bit of training.

So, rather than relieving genuine skills shortages, which are next to non-existent nowadays, the whole 457 visa system has become a rort.

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The Coalition has also conveniently ignored the recent reports of widespread fraud and rorting of the visa system, encapsulated in the recent 7.30 Report segment on “Australia’s hidden people smuggling scandal”:

The report featured Melbourne Indian community leader, Jasvinder Sidhu, explaining his first-hand accounts of blatant visa rorting and corruption:

NICK MCKENZIE: In a series of conversations, the visa fixer asked Jasvinder Sidhu to find new visa applicants among his friends and family back in India. The fixer would then arrange for a corrupt employer to provide the paperwork for a fake job and visa sponsorship.

JASVINDER SIDHU: They were offering multiple sponsorships in commercial cookery, in mechanics, IT as well because he said his boss could arrange 457 in IT – information technology.

NICK MCKENZIE: The visa scam came as little surprise to Jasvinder Sidhu. He knows of many Indians who’ve paid large cash sums to corruptly obtained skilled or student visas in an effort to get permanent residency.

JASVINDER SIDHU: I’ve been hearing it eight, nine years and the last time I heard was last week when somebody paid $45,000 cash.

NICK MCKENZIE: Now Sidhu is determined to expose what he’s learned about Australia’s immigration underworld.

JASVINDER SIDHU: These people will then create your fake timesheets, fake pay slips and they will pay in your bank account and obviously everything else will also be fake, which is superannuation and other related documents.

NICK MCKENZIE: So you’re paying for a fake, a phantom job and in return you get your skilled visa?

JASVINDER SIDHU: Yes. So you are paying extra to get or create a job which doesn’t exist and to create a service which was never delivered and you’re getting permanent residency, which is not fake. This is a real output…

Yes, there’s corruption from top to bottom. Thousands and thousands of people are being sponsored and they’re all fake…

These people just get away. Even if they’re caught, media or otherwise through police and thing, they just go on bail and I think the system is very, very easy on these sort of things.

NICK MCKENZIE: It’s easy to rort?

JASVINDER SIDHU: Yes, very easy to rort. You have 10 ways to rort and then if the Government has one rule, you have actually 10 responses how to basically bypass those rules.

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It also featured Clint Raven, a former employee at Murphy Pipe & Civil, explaining systemic rorting of the 457 “skilled” temporary worker system:

NICK MCKENZIE: The rorting of Australia’s immigration system has taken place on some of the nation’s biggest mining and infrastructure projects.

CLINT RAVEN: These people aren’t just here to work, they’re here to get permanent residency.

NICK MCKENZIE: For the first time, Clint Raven is speaking publicly about the hiring practices of his former employer, multinational construction contractor Murphy Pipe and Civil.

CLINT RAVEN: As a business, we were sponsoring visas for workers as project coordinators, project administrators where that role didn’t exist on our site and these people were actually – their actual job was as a labourer on the ground.

NICK MCKENZIE: He was shocked as he dug deeper into what appeared to be blatant visa fraud.

CLINT RAVEN: We would have employees be sponsored as quite a senior role, but be operating an excavator or working as a labourer. Many of these people didn’t have the training even to operate machines when they came to the country.

NICK MCKENZIE: Raven said he personally identified at least 30 workers at Murphy Pipe and Civil who appeared to be in breach of migration laws and suspects there were many more, often aided by Federal Government licensed migration agents.

How were they getting away with it?

CLINT RAVEN: Ah, I don’t know. I don’t know. They were working very closely with immigration agents that were requesting they change resumes to suit a role better.

NICK MCKENZIE: The migration agents are in on the scam?

CLINT RAVEN: Oh, most definitely, yeah. They were advising them on how they could get the loopholes…

The issue is that Australians are missing out on jobs and there are people jumping the queue to gain residency into the country off the back of a mythical labour shortage.

And featured one of the Immigration Department’s top officials admitting endemic rorting and corruption:

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NICK MCKENZIE: The Australian Border Force has spent the last 12 months investigating criminal syndicates involved in visa rorting, but insiders say the problem is massive. One of the Immigration Department’s top officials until 2013 has now broken his silence. He says visa rorting was and is endemic and has largely been ignored by politicians focusing on the boat people issue.

Joseph Petyanszki managed investigations for the department for eight years. He wouldn’t be interviewed on camera, but has given 7.30 a statement about what he calls, “The shocking and largely unknown fraud within our working and student visa programs”. He describes a world of “shonky immigration agents” where, “fraudsters …. enter the community with ease”. He points to immigration law “loopholes”, “major integrity problems” and a department which has struggled to cope with such an, “attack on the integrity of our systems”. Petyanszki blames a, “lack of funding and politics”. He says, “It’s been easy to deflect the public’s attention to boat arrivals,” but this fear-mongering has totally ignored, “where the vast bulk of real fraud is most significantly undermining our immigration programs.”

Tonight 7.30 can reveal there are corruption allegations inside the Immigration Department. Its chief Michael Pezzullo has referred 132 allegations to the corruption watchdog, the Australian Commission for Law Enforcement Integrity. They are just allegations and the department disputes many of them. They raise the prospect that some officials are involved in the visa rorting.

While the Coalition deflected the public’s attention to boat arrivals, it allowed Australia’s visa and permanent residency system to become overrun by crooks and criminals.

The Coalition should spend less time complaining about “scare campaigns” and more time restoring integrity back into the visa system.

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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.