The AFR editorial has gone into full rent-seeker mode again, attacking the Turnbull Government’s modest changes to Australia’s temporary ‘skilled’ visa system:
It’s time Immigration Minister Peter Dutton got on top of what is becoming a serious problem: the government’s scrapping of the 457 visa changes and the uncertainty it has brought prospective highly talented workers and the Australian companies that seek to hire them.
Since the abrupt scrapping of 457 visas, a rug has been pulled from out under firms that need to import specialist talent. Rather than taking Australian jobs, this talent brings in global expertise and helps local business create more jobs for the locals. Now many businesses are unsure how to go about hiring overseas executives. Despite the new arrangements still being ostensibly designed to fill skill shortages, there are now questions about the new scheme’s political sustainability in the face of nativist rhetoric. Besides sending a poor message to international jobs markets, as with most hastily put together policy, more problems are emerging.
As The Australian Financial Review has reported, the big four professional services firms are now going to struggle to import people from their global operations. NBN’s American boss, Bill Morrow, is going to have to apply for a new visa…
Australia is in a global market for talent and Canada is chasing our market share. All Australians will lose if we close ourselves to the world’s best workers.
From The AFR’s constant whining, you’d think that the Turnbull Government had totally abolished skilled migration altogether, rather than making very minor adjustments to the temporary ‘skilled’ visa system, which was clearly being overused if not outright abused.
If The AFR had bothered to examine the facts pertaining to 457 visas, it would have discovered four major problems with the system that require fundamental reform, namely:
- There are way too many occupations on the skills shortages list.
- 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, nearly 80% of total 457 visa holders are not subject to labour market testing.
- Where labour market testing is required it can be overcome by putting an ad on Facebook or other social media and that is enough to show that you’ve tested the labour market – basically a farce.
- The 457 visa system is not sufficiently responsive either to higher levels of unemployment, or to labour market changes in specific skilled occupations.
The recent Senate Report, entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, identified major flaws in the Consolidated Sponsored Occupations List, which it saw as ad hoc and ineffective. The Senate Committee also claimed the 457 visa system was”not sufficiently responsive either to higher levels of unemployment, or to labour market changes in specific skilled occupations”.
Joanna Howe, Senior Lecturer in Law at University of Adelaide, also identified major flaws in the 457 visa program, which has meant that many foreign workers are being used in areas where there are no labour shortages, with Howe describing the system as “shambolic”.
Meanwhile, the Department of Employment has for several years shown that skills shortages are near ‘historical lows’. In a similar vein, almost 90% of 457 visas issued have gone to the cities rather than the regions, where skills shortages are supposedly the most acute.
Against these widespread flaws, let’s consider the Turnbull Government’s reforms to the temporary skilled visa system, which are summarised below:
- Implementing a new two-year temporary visa system that has no path to permanent residency, as well as a four-year scheme for highly skilled positions where there is a proven labour shortage;
- Cutting the range of jobs that foreign workers can apply for by more than 200 occupations;
- Mandatory employer-conducted labour market testing for all visas issued under the new scheme; and
- Mandatory English language proficiency.
These are modest reforms at best and hardly worth The AFR’s outrage. As noted by Labor, the Coalition’s reforms would only reduce the use of temporary skilled visas by 9%. So rather than pulling “a rug… from out under firms that need to import specialist talent”, these changes are merely tinkering at the edges.
In any event, rather than tinkering with the skilled occupations list, as the Coalition has done, it should instead significantly raise the minimum salary earned by 457 visa workers from the current pitiful level of $53,900 to at least the average full-time male earnings (currently $82,789) or, say, 30% above the median salary in each industry? Given we are dealing with ‘skilled’ workers, their salary rates should be set well above the national average (which includes unskilled workers), not at a level below the average as is currently the case.
Significantly raising the minimum salary threshold would discourage firms from hiring cheap foreign labour over locals, as has occurred en masse in areas like IT. It would also eliminate the need for labour market testing, and would greatly simplify the whole temporary skilled visa system.
It’s high time The AFR advocated for genuine reform in the national interest, rather than shamelessly lobbying on behalf of big business.
