Australia’s visa system “open to abuse”

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By Leith van Onselen

The fallout from the Dominos Pizza visa scandal continues, with The New Daily today profiling Tosif Varsi, a 31 year-old migrant worker from India, who was hired as the store manager of a Domino’s Pizza franchise on a sponsored permanent residency visa in 2016.

Tosif became the manager of the Domino’s outlet in Whyalla, and he subsequently complained to the Fair Work Commission because he had been underpaid and wrongly charged for rent. The Dominos franchise owner subsequently reneged on visa sponsorship in August 2016, and in September terminated Tosif’s employment, meaning that he now has until 20 February to find another visa sponsor or leave the country.

Commenting on Tosif’s case, workplace rights activist, Michael Fraser, claims that Australia’s visa system is “open to abuse”:

Michael Fraser, a workplace rights activist, who visited around 70 Domino’s stores across the country after receiving tip-offs. His material has contributed to Fairfax’s reporting.

Mr Fraser told The New Daily he developed a suspicion, based on interviews with Domino’s insiders, that franchisees sponsor store managers because it “guarantees them a period of ownership over that manager”.

“Sponsorship is a widespread problem, and I was amazed to hear how many Domino’s franchisees are doing it. We found out that there are at least 30 people sponsored in Domino’s stores around Australia.”

Mr Fraser said Australia’s visa system is “open to abuse”, and that the advertisements used to test if Mr Tosif was the most suitable candidate were known within Domino’s as the “fake ad scam”.

“Both franchisees and employees told us that the ‘fake ad scam’ is commonly used to sponsor workers in place of hiring willing and able Australian residents.”

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Aside from the flagrant abuse of migrant workers, there are several other issues at play.

First, the subclass 187 visa reportedly used by Tosif Varsi “is a permanent residence visa for skilled workers who want to work in regional Australia”. Why does managing a takeaway pizza chain qualify as “skilled” labour? And why is ANY migrant being sponsored to make pizzas? A skills shortage? Or a virtual slave trade?

Second, why does the visa offer the carrot of permanent residency when temporary residency would suffice?

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Third, where are the controls in place to ensure that local workers are given precedence over imported labour? As noted above, Michael Fraser “found out that there are at least 30 people sponsored in Domino’s stores around Australia”, with ‘fake ad scams’ commonly used to avoid genuine labour market testing.

The more I think about this issue, the more I believe there is one simple solution that would effectively stamp-out visa rorting and ensure that local workers are employed first: charge sponsoring businesses a punitive sum, say $50,000, to hire a foreign worker.

Under this approach, businesses would have a genuine incentive to seek-out and train local workers. Dodgy businesses would cease to operate in this space. And you could do away with labour market testing and the like, which is being abused anyway.

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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.