A better way to manage ‘skilled’ temporary 457 visas

By Leith van Onselen

The Turnbull Government has agreed to review occupations that are currently on the banned list under its new skilled visa system. Large companies and business groups have been asked to submit job titles they want to be reviewed to the Immigration Department as soon as possible. Occupations that are likely to be put forward for consideration include web developers, helicopter pilots, aircraft maintenance engineers, merchandise planners and CEOs. From The AFR:

Mr Dutton and the Department of Immigration have been swamped by industry complaints about the crippling impact of abolishing the 457 visa on sectors including science and technology, research, mining, retail, hospitality and even the government’s own agencies…

The sectors are scrambling to convene high-level meetings, survey their members and pull together evidence as soon as Monday, including why Australian nationals cannot do these critical jobs and the economic impact if up to 200 occupations remained banned under the government crackdown announced on April 18…

Director of employment and training at the Australian Chamber Jenny Lambert is helping to lead the response for more than 60 industry groups. She said the university, restaurant and catering sector have also been badly impacted.

From the incessant whining coming from industry, you’d think that the Turnbull Government had totally abolished immigration altogether, rather than making minor adjustments to the temporary ‘skilled’ visa system, which was clearly being overused if not outright abused.

The arguments about filling skills shortages are particularly laughable, given 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 (graphic from The Australian):

The recent Senate Report, entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, identified massive 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, has also identified major flaws in the 457 visa process:

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.

Heck, an FOI request in November revealed that government officials had refused to cull the Skilled Occupation List because they didn’t want Australians to think 457 visas were being used to manage any short-term shortage of workers, despite this being precisely their initial purpose.

In any event, rather than tinker with the skilled occupations list, perhaps it is time for a new approach to managing so-called ‘skilled’ temporary visas.

How about significantly raising 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)? We are talking about ‘skilled’ workers after all, whose salary rates should be set well above the national average (which includes unskilled workers).

Raising the minimum salary threshold in this way 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.

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  1. Raising the salary floor would just be restricting the problem to a different set of occupations/victims.

    If the floor is at $82k, companies will import labour to undercut locals who are on $110k. Granted, there are less of these people and they are probably not the struggling youth, but it would still be manifestly unfair.

    So I think you’d need to keep labor market testing, in addition to the higher floor salary.

    • Labour market testing has been a rort since 2008 or earlier.

      Gillard was stupid enough to believe that there is a “shortage” of burger flippers in AUS/NZ!

      Simply put a $50k/year tax on each 457 visa – offset by any income tax the “skilled” worker pays.

      What have firms done to improve the quality of Aussie degrees? Probably nothing. So, cop it on the chin now.

  2. reusachtigeMEMBER

    We need to boost the intake of foreign workers so as to keep wages down and to boost company profits as this will create jobs allowing us to bring in more workers to fill them. The best Australians prefer to invest in property nowadays and the rest just want to be on the dole.

  3. Also, the 457 visa salaries should be funnelled via government:

    Firm would pay $2000/week to government and government would pass that on – minus income tax – to the 457 visa worker.

    No more “yes government, we are paying him properly, trust me”.

  4. drsmithyMEMBER

    Changing the definition of “skilled” would also be a good idea, I think, so that it’s not just a list but a generalised minimum level of capability as well.

    Eg: minimum qualifications for a 457 visa should be a postgraduate degree (Masters or PhD) in the relevant field, a four year undergraduate degree and five years of post-graduate work experience, or ten years of work experience in the relevant field.

    Obviously this needs to actually be policed to be effective, and the punishment for violation needs to be a sufficient deterrent – say, a fine equivalent to two years of the role’s advertised salary if the employer is not complicit in fraudulently acquiring the 457 and a fine equivalent to ten years of the role’s salary if they are complicit.

    • A PhD in cooking food?

      I do not mind if genuinely skilled chefs come here – as long as there is a $50k/year tax on each 457 visa.

      That tax would stop petrol stations from importing 3rd world staff because it would be cheaper to hire an Aussie.

      One of the reasons given for mass immigration is “improve the variety of food”. So only chefs from 5 star hotels should be let in – not truck drivers and “students”.

      • drsmithyMEMBER

        Do you think your “genuinely skilled chefs” would typically have ten or more years experience in the field ?

  5. The government could auction a restricted number of 457 visas each year. That would ensure that the companies that bought them really needed the foreign workers. The number of visas auctioned each year would be adjusted to keep the price reasonable – hot economy, lots available, recession only a few.

  6. The Patrician

    From the incessant whining coming from industry, you’d think that the Turnbull Government had, at the very least, reduced the migration intake

  7. Helicopter pilots? Seriously? The offshore oil and gas industry is having its worst downturn since the 90’s and they want to import more pilots? I bet the big 4 operators are crying foul because they need to bring in machines from overseas that are still registered in those countries, and thus must be flown by pilots with a license issued in said country.

    GA helicopter pilots are lucky to get a job, and when they do it’s in some godforsaken shithole flying tourists or mustering cattle. And getting paid peanuts to do it.

    No, we don’t fucking need to import helicopter pilots.

    • Ditto truck drivers and van couriers.

      And why can the helicopter pilots not be imported from NZ?

  8. The Patrician

    Give me my slaves
    Never a more appropriate illustration
    The high immigration profiteers will not see their slave trade threatened