Scapegoating boat arrivals while ignoring the real issue


By Leith van Onselen

While the Turnbull Government seeks to persecute the small number of boat people seeking asylum in Australia, it continues to ignore the many thousands of migrant arrivals to Australia by plane who are either systematically rorting Australia’s visa system to gain permanent residency, and/or are being exploited by employers, thus undermining overall Australian working conditions.

Back in June, ABC’s 7.30 Report aired an alarming report on “Australia’s hidden people smuggling scandal [that] doesn’t involve boat arrivals, but rather people arriving by plane and obtaining working or student visas”:

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

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


As well as one of the Immigration Department’s top officials admitting endemic rorting and corruption:

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.

John Menadue, former head of the Department of Immigration and Ethnic Affairs, has also warned of widespread exploitation of Working Holiday Programs (WHP), which are being used by employers as a source of cheap foreign labour, depriving young Australians of opportunities:


The number of working holiday makers in Australia has grown dramatically in recent years. In June 2016 there were 137,376 working holiday makers in Australia under various visa arrangements…

The WHPs have now become overwhelmingly about labour recruitment and a source of cheap labour. As the Fair Work Ombudsman (FWO) has reported there is widespread exploitation and abuse…

The Working Holiday Program is now a labour market program which has significant implications for the job market and jobs for Australians. A responsible government would not just acknowledge this. It would change the Program to ensure it minimises harm to Australian job seekers and removes the obvious incentive for wage fraud and exploitation of visa holders.

There are now in Australia at any time about one million people on temporary residence visas with rights to work… These programs have been allowed to grow without adequate attention to their labour market impacts on young Australians and the exploitation of visa holders desperate for work.

And earlier this year, the Senate Education and Employment References Committee released a scathing report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, which documented the abuses of Australia’s temporary visa system for foreign workers.

Last year, Fairfax’s Adele Ferguson first exposed the 7-Eleven migrant worker scandal, which received national attention.


Last week, Ferguson revealed that Caltex service stations have also been involved in systemic exploitation of foreign workers:

Caltex is in damage control as it tries to bat off speculation that wage fraud is rampant across its network…

Like 7-Eleven, many Caltex sites employ foreign workers who similarly are too scared to speak out.

This week a worker who had agreed to speak out, had armed goons turn up at his family home in Pakistan to heavy him into withdrawing from the story. His sister, who is pregnant, was hysterical.

Even if a franchisee was caught red-handed underpaying workers, the worst they could expect was a small fine and forced to pay back the money owed.

In some cases they would pay the money back – to prove to the ombudsman that they had done the right thing – then tell the worker to give it back or lose their job.

And today, Ferguson has busted 7-Eleven once again for short-changing its workers:


7-Eleven has been sprung short-changing workers potentially millions of dollars in back pay by changing the way compensation payouts are being calculated.

Fairfax Media can reveal that since 7-Eleven sacked a compensation panel headed by Allan Fels and replaced it with an internal system in collaboration with Deloitte, it has been using the ultra low cash rate to calculate interest on worker repayments…

Documents obtained by Fairfax Media show that the discrepancies relate to a decision by the new panel to adopt a lower interest rate that is not in accordance with the standard practice of using the Federal Court Rate, which is the official cash rate plus 4 per cent.

The decision by 7-Eleven to pay interest to its exploited workers using the ultra low cash rate of 1.5 per cent stands in contrast with its own business practice to charge franchisees interest on the loans they use to buy stock at the Westpac Indicator Rate – which can run up to 7 per cent.

That Australia’s visa and permanent residency system can be run in such a shoddy way is an absolute disgrace. But hey, it’s been easy for the Government to ignore the issue while it deflects the public’s attention to boat arrivals – the so-called immigration ‘bait-and-switch’.

When combined with the Turnbull Government’s policy allowing 6 year-olds and their guardians visa entry into Australia’s primary schools (and allowing them to purchase established property), along with the proposal to allow migrants to bring into Australia their elderly parents (thus further straining Australia’s healthcare system and infrastructure), it is clear as day that Australia’s immigration system is a farce.


There needs to be a Royal Commission investigating the corruption, fraud and rorting endemic in the visa system. Enough is enough.

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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.