It’s official: 457 visas are not about skills shortages

By Leith van Onselen

457 visas were initially introduced so that companies that could not source “skilled” labour locally, due to shortages, could instead employ foreign workers on a “temporary” basis in order to fill specific roles. They were designed as a short-term stop-gap at a time (the mining boom) when certain labour was genuinely scarce.

However, since their initial introduction we have seen the whole 457 visa system get perverted.

Exemptions from labour market testing have grown from around 20% initially to the outrageous level of around 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. Most of these jobs could be filled locally with a little bit of training.

457 visas holders residing in Australia also blew-out to around 200,000 (both primary and secondary), with many of these working in professions that are not consider to be particularly “skilled”, in short supply, or critical to the economy, such as cooks/chefs, cafe/restaurant staff, and customer service (see next table).

ScreenHunter_13721 Jun. 24 11.28

Not surprisingly then, the 457 visa system was found by a recent Senate Committee to be “not sufficiently responsive either to higher levels of unemployment, or to labour market changes in specific skilled occupations”.

Yesterday, The Australian published the results of an FOI request which revealed that government officials have refused to cull the Skilled Occupation List because they don’t want Australians to think 457 visas are being used to manage any short-term shortage of workers, despite this being their initial purpose:

Immigration Minister Peter Dutton on Sunday raised the prospect of more jobs being removed from the list, amid a debate over the role 457 visas. The documents show the government has traditionally taken a conservative, long-term approach.

The Australian has previously revealed the Department of Health wanted 41 medical occupations, including GPs and surgeons, removed from the 2016-2017 list because local graduates might struggle to find training places or jobs so long as the immigration pathway remains open. Those recommendations were largely ignored or overruled, by an interdepartmental committee and then the responsible Department of Education and Training, in the annual review, with the government offering no explanations.

Briefing notes for Vocational Education and Skills Minister Scott Ryan, obtained under Freedom of Information laws, emphasise that since its establishment in 2010 “the list has remained relatively stable with only a few occupations being added or removed in any given year”.

“Major changes to the list from year to year would signal that it is being used to manage short-term labour market fluctuations,” the briefs state.
Other aspects of that advice — including all instances where stakeholders disagreed with the recommendations — have been withheld from release under FOI for fear of compromising the review process and undermining the labour market.

As noted last week by Joanna Howe, Senior Lecturer in Law at University of Adelaide:

The mechanism for identifying who can apply for these [457] visas is the Consolidated Sponsored Occupations List. This is a list that has no requirement that the occupation be in demand in the Australian labour market. It includes more than 600 occupations, most of which are not in shortage. So long as an employer nominates an overseas worker to perform a job on this list, then the occupation is deemed to be in need.

Nursing, teaching, engineering and law are all on this list, and are also occupations where Australian graduates are struggling to enter the labour market.

This means the 457 visa can be used by employers who wish to access foreign labour for an ulterior motive.

The recent Senate Report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders also identified massive flaws in the Consolidated Sponsored Occupations List, which it saw as ad hoc and ineffective. Accordingly, the report recommended implementation of more rigorous, independent, evidence-based, and transparent processes for determining the List, along with more stringent labour market testing.

With the latest Department of Employment skills shortages report finding that Australia’s skills shortage “remains low by historical standards”, in addition to the massive labour underutilisation present across Australia, there is no need for the large-scale use of 457 visas.

The whole visa system must, therefore, be pared-back, including via:

  • increasing the minimum income threshold for 457 visa holders and indexing them to ordinary earnings growth;
  • implementing a more rigorous, independent, evidence-based, and transparent processes for determining the Consolidated Sponsored Occupations List;
  • implementing stringent labour market testing of all 457 visa nominations to ensure that employers employ locals first wherever possible; and
  • explicitly prohibiting the replacement of local workers by 457 visa workers.

The 457 visa farce has dragged on far too long. It’s time for fundamental reform of the system.

[email protected] 

Unconventional Economist


  1. Stop dicking about with it trying to “fix” it or make it “work”. It is a cancer that needs to be ripped out now. It is prone to misuse by politicians and abuse by employers, encourages exploitation and corrupts society. And its based on an anti-social principle of throwing locals on the scrapheap. It there is a skills shortage, that should be fixed by training locals, not importing people.

      • It’s no accident that the first Howard government’s massive expansion of work visas in the second half of the 1990s was accompanied by slashing and burning of the government vocational training system. It was always about undermining the bargaining power of Australian workers, first and foremost. The area that it first most targeted, IT, was followed by a collapse in local enrolements in the IT field. Much of its effects were disguised by the twin RE and mining booms, but as these fade away, its longer term negative effects, will become more apparent.

    • Strange Economics

      Meanwhile President to be Trump announces today…
      — Investigate abuses of immigration visa programs that “undercut the American worker.”
      (His campaign stated this is H1B visas, the American equivalent of 457s)
      What was Brexit and Trumpism about? – Reducing immigration against jobs.

  2. “Developer Programmer” and “Software Engineer” may as well be the same role…

    And even with such a high number in this role, I can confidently say that there’s still a shortage (I can only speak to this role, not to the whole 457 program).

    • Another consequence of 457s has to been to deter people from choosing to enter this field. Many people in the IT field even tell their children to stay away.

      • Following the same logic, one would say parents should advise their children to stay away from pretty much all jobs. There are no jobs that don’t suffer from the same competition as IT, with the exception of some “protected” medical jobs. And what do those medical professions have that the others don’t? An effective union.

        Since pretty much all jobs are under competition, parents’ advice should really be don’t work at all, just become a rent seeker and get mammoth loans to trade house houses amongst each other.

      • I heard this some time ago. I’m really more concerned about the lower levels where local people get a toehold in whatever. And I agree with drsmithy, saying that most of the whinging about “skills shortage” is really just self serving crap coming from businesses who want top level skills on the cheap. Businesses used to play an important part in developing the skills of employees and that was very important to the wider economy and society. .

    • There is no shortage of developers. Only a shortage of good ones.

      Perhaps employers need to pay more?

      • Exactly. If you want good IT candidates, You need to pay competitive wages. I just stay away from ads that offer joke of a rate and conditions. The biggest joke these days is fixed term contracts… All the insecurity of contractors with the pay rate of a normal permanent. Anyway, I find currently there are still demand for good IT people at good rates, so finding jobs is not so much of a problem. Much better than other industries such as science, accounting or some engineering.

      • What’s stopping IT employers importing boatloads of cheap experienced programmers from India to push the wages down?

      • @Robert
        The capabilities of the workers imported. The skill level of Indian workers combined with English level and willingness to come to Australia rather than the US. Really capable IT workers are quite hard to find, even in India.

        Therefore IT has always been way more employable than say accounting, provided you stay up to date with the current trends. Unfortunately it is usually staying up to date that catches IT employees out.

      • @Robert
        It’s really the users that now demand more that’s driving the changes.
        Eg. it used to be fine for a data warehouse system to have monthly or weekly updates, now they expect near real-time updates, which means you have to learn completely new technologies to cope with it.

    • For developers I see a broader issue in hiring 457s rather than investing even a tiny bit (1-4weeks) in upskilling unemployed developer who are even slightly out of date with latest technologies. Example, during GFC many devs became permanently unemployed and having to change careers whilst the 457 floodgates remained wide open.

      • Add to that, the Web(Which is believe most Developers are these days…) has become the wild wild west as of late. New technologies come and go in a matter of month and we’re expected to stay on top of it all…

    • In my experience, “shortage of developers” usually means one of:
      “Shortage of developers with ten years of experience in $TECHNOLOGY that’s only been around for five”
      “Shortage of NinjaUberGuruNerd developers prepared to work for seventy grand a year”

      • Nailed it. Also ad to that shortage of developers who are willing to work 12 hour days and over weekends for the same pay…

    • Apart from introductory courses programming is something you really need to learn on the job, we have a shortage of experienced programmers because Australian businesses can just hire experience from overseas instead of training locals.

    • Rubbish. There is not a skills shortage in programming/software engineering.

      There is a shortage willing to work for the money that is being offered. But there is not a skills shortage.

      • So why can’t employers get one of the 100 million or so experienced developers supposedly available in India to come here on a 457 and work for the lowest number the employer can think of?

        ‘shortage of developers willing to work for money on offer’ sounds dangerously like a job market where wages might end up rising.

      • So why can’t employers get one of the 100 million or so experienced developers supposedly available in India to come here on a 457 and work for the lowest number the employer can think of?

        That is pretty much what happens – just indirectly. A company now days is put out a tender for a bit work. The big companies (Wipro, IBM etc) win the bids with a rate that cannot be done with 1st world resources. The big companies either bring in their OS resources on 457 visa at about 1/10th of the Australian daily rate.

        There are huge amounts of people in Aus on 457 Visa working for the outsourcing companies (or they are working OS). There are not many jobs that cannot be out-sourced like this! This will get worse.

      • It sounds bad already! How will it get worse? Wages in Australia have stopped growing but wages in countries like India are growing at quite a good clip in recent years.

      • How can it get worse? What job done here can’t be done cheaper by an outsourcing company bringing in 457 workers? From the unskilled – cleaning contractors bring in workers; to the skilled – IT, accountants, lawyers. What job can’t be done with either high speed internet (doctors can operate remotely now) or by a big company sponsoring teams of workers living here temporarily?

      • Yeah, but all that’s been possible – and in fact happening – for at least a decade, if not more.
        That’s the status quo.

  3. Report Recommendations: These are the things that must be ignored at all costs if you’re a politician. We can’t have sensible policies get implemented on the back of some report. Tisk tisk tisk.

  4. When the 457 visa scheme was introduced it was clocked in the skills shortage bullshit. Imo, the only aim the business lobby and the LNP had was to kill wages and in the construction area undermine unions. Labor ultimately went along for the ride fearful of opposing has it would be accused of caving in to union pressure.

    So, what have we had from both sides of politics? Selling off of estb. homes to overseas investors increasing house prices to unbelievable levels and suffocating wages in skilled and unskilled areas over what, 20yrs? I wouldn’t be surprised if this has also contributed to the decline in apprenticeships, no need to continue to develop skilled trades if you can import it.

    Work mate the other day was telling me his son gave up a 1st yr apprenticeship as a baker, was getting $12 ph and your final yr is $18 ph! If an employer isn’t charging you out at trade rates by the 3rd yr, he (employer) must be incompetent.

    • When you look back over the last twenty years it is so clear that this mass immigration program has been twenty and thirty years inthe making. The destruction of the technical training industry and the destruction of quality university education. The only important training is that in the FIRE industry for the Australian elites and for the masses the training in how to take out a mortgage for an investmemt property.

  5. reusachtigeMEMBER

    Look, I’m not racialist but I think we’ve already got too many chinks, curry munchers and sand monkeys taking our jerbs!

  6. Constant house price rises through the roof while at the same time importing slave labour and stalling wage growth for the rest of the working population. Im sure this is gonna end well. When will people stopping wasting their votes on these major party scumbags …

  7. On a seperate note i can see on the list above almost 2000 accountant roles filled by visa 457s yet i have a friend who for the past few years cannot find work. Throw in all the student visa graduates who stay on to get permanent residency competing will locals ….

  8. Jumping jack flash

    Says it all really.

    I was going to say that the people in charge of this sham should be ignominiously discharged from whatever positions they hold, all the way to the very top!

    But, after thinking a bit harder I realise that nobody is in control of this after years of political turmoil, it was and is simply set-and-forget since the mid 2000s when it was introduced, with token “tick and flick” reviews, if any.

    “457 visas? Oh right, that weird thing that either Kevin or Julia brought in, not quite sure who it was. They swapped around so much didn’t they? It was for temporary skilled workers wasn’t it?… yes I’ve heard of it, but nobody seemed to know much about it so I left it alone. Seemed to be working well; nobody was complaining about it not working. We even took a whole 5 minutes each year to review it to make sure it was still working. Visas were being handed out, people were coming in with skills. What more do you want?”

    Until Trump bulldozed over the PC brigade, any talk of immigration or skilled migration reviews and reform was met with sideways looks and raised eyebrows: “you’re not racist, are you?”

    • It’s been talked about here for years. And elsewhere. You don’t need to be voting for One Nation to be concerned about abuse of the system. And I hear people say that you can’t talk about 457 reform without being labelled a racist but I don’t actually see that happening. I’m not seeing this PC Nanny state that’s apparently destroying free speech, where is it?

      • Labor has been talking about 457 rort for years and no one called them racists. People just ignored them.

  9. Removing occupations from the list will not work.

    They will import “project managers” and get them to drive trucks for $10/hour.

    So we really need to stop importing people.

  10. 457 visas are only 8% (200,000 primary & extended of the whole 2.4 million onshore Temporary & Tourist Visa unskilled migrant guestworker racket.

    We have 1.97 (let’s say 2 million) on temporary visas ~ almost all are unskilled and many working illegally.
    We then have an estimated 400,000 tourists often on multiple long stay also working illegally. (5% of 8 million tourist visitors) as recent ABC & immigration checks show.

    That’s 2.4 million foreign migrant guestworkers onshore ~ one in ten people and an estimated one million each or one in five people in Sydney & Melbourne.

    A $105 billion ~ largely underground blackmarket, illegally working, non tax paying non contributing foreign criminally run parasitic foreign migrant guestworker economy.

    That brings in less that $7 billion (world bank report shows less than $4 billion) including extensive recycling of those ‘international student fees’ or working holiday or NZ back door, visa agent, ‘cash back, two sets of timesheets & book’, ‘labour supply agencies’ & accomodation ‘fees’ back offshore.
    And these 2.4 million migrant guestworkers send out over $36 billion in remittances and extensive onshore & offshore money
    A -2% GDP impact that actually exceeds USA to Mexico outflow..
    A migrant guestworker program that works illegally, pays little or no tax, has little or now skill, is the core import of vice & illegal activities, destroys housing, education, public services, wages, job security and standards of living.
    And migrants who will NEVER be a future ‘intergenerational’ skilled tax paying economic base for Australia if allowed to stay. Never. Quite the opposite, they are already a burden, and once given a PR they set about dragging in their old & sick to be an additional welfare & health care cost.

    Occupying over 400,000 ex Australian dwellings (7 x the new dwelling building rate) purchased largely by foreigners or proxies to convert Australian established modest residential housing into vast migrant guestworker slums in bunk and matress share. That in itself a $24 billion subletting cash in hand racket (that core logic has no clue about it in what’s driving housing prices and real rental income) that’s created a huge housing price and indebtedness bubble for all Australians.

    We have 2.4 million Austrialian citizens or permanent residents seeking employment (Roy Morgan 2016).
    Job tenure, employer investment, youth apprenticeships – lost.
    Streets littered with Australian homeless.
    A completed debased education system.
    Falling wages.
    Increased costs of living.
    A migrant intake of useless unskilled amoral non contributors only here to take and then bring in their elderly & sick as a further welfare & health care burden. As any medical centre or public hospital will attest to with Medicare cards & fake ID used as communal items by the influx.

    Congestion & overloading of public services, transport & infrastructure. Massive new waste of time tax payer funded projects to further the rackets (Sydney metro tram : developer driven as a south east & inner west corridor of very high density migrant slum share).

    Something has to snap.

    So while not defending 457 ~ that category its clearly not needed and heavily frauded as well – it’s almost tangential.

    We need a Royal Commission into the entire temporary & tourist visa racket.

  11. Send them all home and let the system work itself out… Might take a while at the rate this Government trickles along.