Do-nothing Malcolm offers fig leaf to visa rorts

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By Leith van Onselen

With pressure mounting on Malcolm Turnbull over 457 visas, the Coalition has thrown up a fig leaf. From The AFR:

Immigration Minister Peter Dutton has announced a more modest proposal which the government agreed to last month and which it hopes will ease concerns among its own backbench and the voting public…

The change, which will come into effect on Saturday, means a 457 visa holder who loses their job must leave the country within 60 days, down from the current 90 days, if they are unable to find a new sponsor.

Mr Dutton said the change “will assist in ensuring that the 457 program meets its intent of acting as a supplement to, rather than a substitute for, Australian workers”.

This does not address the underlying problems with the 457 visa system, namely:

  1. There are way too many occupations on the skills shortages list.
  2. 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. Hence, 80% of total 457 visa holders are not currently subject to labour market testing.
  3. The 457 visa system is not sufficiently responsive either to higher levels of unemployment, or to labour market changes in specific skilled occupations.
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Rather than pretending to care, the Coalition should instead seek to implement the recommendations of the recent Senate report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, including:

  • indexing the minimum income threshold for 457 visa holders to ordinary weekly earnings, so that it is not eroded over time;
  • implementing a more rigorous, independent, evidence-based, and transparent processes for determining the Consolidated Sponsored Occupations List (CSOL);
  • implementing stringent labour market testing of all 457 visa nominations to ensure that employers employ locals first wherever possible;
  • specifically prohibiting the replacement of local workers by 457 visa workers;
  • making employer sponsors of a 457 visa worker (professional) also employ an Australian tertiary graduate in the same enterprise on a one-for-one basis;
  • requiring employer sponsors of a 457 visa worker (trade) to demonstrate that apprentices represent 25% of the sponsor’s total trade workforce; and
  • implementing a $4,000 training levy paid per 457 visa holder employed in the business.

But hey, actual substantive reform is not Do-nothing Malcolm’s style.

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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.