If you want a textbook example of why Australia’s ‘skilled’ visa program is a giant fraud, look no further than the special pleading coming from Telstra CEO, Andy Penn, who has demanded the government leave the gates wide open for companies to employ foreign workers. From News.com.au:
Mr Penn told an audience in Melbourne that, with a skills shortage forcing companies including Telstra to hire overseas, he was in favour of policies that prioritised the needs of business and Australian workers over vote-grabbing populism…
“Skilled migrants bring ideas, they bring expertise and innovation, and they bring the capacity to train and skill their Australian colleagues,” Mr Penn said on Wednesday.
“Skilled migrants also add to Australia’s wealth”…
He said Telstra’s urgent need for software engineers and the like was behind the decision to open a new innovation and capability centre in Bangalore, India, later this year.
So there’s a shortage of software engineers, hey Andy? Not so according to the Department of Jobs and Small Business’ “historical list of skills shortages in Australia”, which shows that Software Engineer has never been in shortage in the entire 31 year history of the series!
Yet despite the complete absence skills shortages, software engineers were the second most popular occupation granted permanent visas in the skilled stream in 2017-18:
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Accountants (3505)
Software Engineer (3112)
Registered Nurses (1561)
Developer Programmer (1487)
Cook (1257)
Worse, according to the federal government’s own data, not one of these top-5 professions granted permanent skilled visas were in shortage over the four years to 2017!
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Of course, we also know that this same government data shows that skills shortages in Australia are tracking near historical lows, close to recessionary levels:
So where is this mythical skills shortage necessitating such a strong intake of ‘skilled’ migrants into Australia? This is a particularly pertinent question when also viewed in light of:
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the persistently high labour underutilisation pervading across the Australian economy;
the stubbornly low wages growth;
the record number of university graduates, many of whom cannot gain meaningful employment; and
the appallingly low pay floor of $53,900 attached to ‘skilled’ migrants.
The sad reality is that Australia’s IT sector has been one of the most heavily abused by Australia’s ‘skilled’ migration system, given the large number of temporary and permanent foreign workers employed in this sector as well as the huge oversupply of local workers willing to do the job.
This was illustrated in all its hideous glory in the Australian Population Research Institute’s (APRI) report entitled “Immigration overflow: why it matters”. One of the findings from this report was “the high and increasing numbers of IT professionals being granted 457 visas”, which “constitute by far the largest occupation group within the 457 program”.
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The APRI also showed that Indian IT service companies have been successful in winning a major chunk of Australia’s IT consulting work on the basis of these 457 visa holders, partly because they are paying them much lower salaries than the market rate for IT professionals in Australia:
As Table 2 shows, some 76 per cent of the 7,542 457 visas issued in the three IT occupations listed were to Indian nationals. The great majority of these were sponsored by Indian IT service companies as intra-company transferees…
Once in Australia their staff are being paid at much lower rates than experienced resident IT professionals and in some cases even new local graduates.
Even more disturbing is the relatively high proportion of these Indian IT professionals (28 per cent) whose 457 visas were approved at the extremely low base salary of $53,900 or less. This is despite the fact that only eight per cent of the 457 visas granted to Indians in the two ICT occupations in 2014-15 were aged less than 25.
The median starting salary for local ICT graduates under the age of 25 is around $54,000. Coincidentally, the 457 minimum salary ‘floor’ is set at $53,900…
Clearly, Australia’s ‘skilled’ migration system is a farce that is working against the interests of incumbent residents – by clogging our cities, making housing less affordable, and undermining wages and working conditions. It needs to be shredded.
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.
