Let’s recall Bill Shorten’s comments over the weekend where he claimed that temporary foreign workers are ‘taking the jobs’ of Australians and must be pared-back. From The Guardian:
“What’s happening is we’ve got people coming to work in Australia, nearly 1m people [or more] with temporary work rights and, in some cases, they’re getting ripped off and exploited, lowering wage outcomes and taking the jobs of nurses, motor mechanics, carpenters, auto-electricians…
“These are the jobs which can be done by Australians and we make no apology for saying Labor’s approach to the Australian economy is buy Australian, build Australian, employ Australians”.
…what I will never do is apologise for putting Australian jobs first,” he said. “I do not believe that we’re doing enough to prioritise local apprenticeships.”
As expected, business groups have lashed Shorten’s position, with Australian Industry Group CEO Innes Willox vigorously defending the 457 visa scheme. From The AFR:
“Successive Labor and Coalition governments have tightened up the rules significantly around 457 visas over the past decade. The scheme is well monitored and controlled and incidences of abuse or misuse are rare,” Mr Willox said.
“457 visas should not be used as some sort of proxy punching bag for broader immigration concerns. They fill known and genuine skills gaps.”
The data certainly supports Shorten’s argument.
The Senate Education and Employment References Committee report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, released in March, showed there are over 1.8 million temporary visa holders in Australia (see Table below), with approximately 1.4 million of them having work rights. This means that temporary visa holders comprise around 10% of Australia’s labour force.
This Senate Report explicitly noted that Australia’s Working Holiday Maker (WHM) and student visa holders were “consistently reported to suffer widespread exploitation in the Australian workforce”.
The Report also noted that undocumented foreign workers were eroding labour standards for Australian employees:
The committee received evidence that undocumented work by migrant labour has resulted not only in the severe exploitation of highly vulnerable workers, but also impacted Australia’s labour markets, including placing downward pressure on the wages and conditions of Australian workers and undercutting the majority of legitimate employers that abide by Australian workplace laws.
The Report also raised concern at the about so-called “skilled” 457 visas, noting that “the committee received evidence that the 457 visa program was having a detrimental impact on the employment opportunities for Australian graduates in specific occupations such as engineering and nursing”, and that “the 457 visa program is not sufficiently responsive either to higher levels of unemployment, or to labour market changes in specific skilled occupations”.
The Committee, therefore, recommended the following changes to the 457 visa system:
- indexing the minimum income threshold for 457 visa holders to ordinary weekly earnings, so that it is not eroded over time;
- implementation of more rigorous, independent, evidence-based, and transparent processes for determining the Consolidated Sponsored Occupations List (CSOL), which it sees as ad hoc and ineffective;
- stringent labour market testing of all 457 visa nominations to ensure that employers employ locals first wherever possible;
- replacement of local workers by 457 visa workers be specifically prohibited;
- employer sponsors of a 457 visa worker (professional) be required to also employ an Australian tertiary graduate in the same enterprise on a one-for-one basis;
- employer sponsors of a 457 visa worker (trade) be required to demonstrate that apprentices represent 25 per cent of the sponsor’s total trade workforce; and
- implementation of a $4,000 training levy paid per 457 visa holder employed in the business.
There is little doubt that the 457 visa system is being abused. 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 Australia’s skills shortage “remains low by historical standards”.
Given that skills shortages are yesterday’s problem, why are 457 visas still being handed-out like candy?
As shown in the table above, there were nearly 200,000 457 visas (both primary and secondary) as at 31 March 2015. Yet 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.
To make matters worse, the overwhelming majority of 457 visas are not going to workers in remote regional communities, but rather big cities like Sydney and Melbourne. Many are also 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).
So, rather than relieving genuine skills shortages, which are next to non-existent nowadays, anyway, the whole 457 visa system has become a rort.
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.
Given dodgy labour hire companies are also behind much of the exploitation of the visa system, Labor is right to target foreign workers.
