The “large scale rorting” of Australia’s visa system

Neville Roach, the former chairman of the Australian Government’s Business (Migration) Advisory Panel, has penned an article lamenting the “large scale rorting” of Australia’s temporary skilled visa system:

I had the privilege of chairing the committee that ushered in what became known as the 457 or Roach (Report) Visa in 1996…

The challenge for countries like Australia is how to ensure that the system is only used for bonafide purpose and isn’t rorted and allowed to destroy the integrity of our permanent migration program. The solution the 1996 committee proposed had three elements – restrict the program to highly skilled specialists only; thoroughly vet the sponsoring employer’s financial capacity and integrity; and monitor sponsors routinely, with severe penalties for any breaches…

The committee’s recommendations also placed significant local employment and training obligations on sponsors to prevent the 457 system from having adverse effects on Australian citizens and permanent residents.

The system was administratively simple and efficient. The overriding criterion for resolving issues was ‘benefit to Australia’.

…many of the principles the original report required have gradually been watered down to the point where several of the benefits have been lost and numerous harmful side effects have become commonplace.

The cause and outcome of this malaise can both be blamed on the fact that the integrity of the overall temporary visa system has been compromised and fallen victim to large-scale rorting. It has degenerated to such an extent that many of the visas granted under it no longer meet the ‘benefit to Australia’ test…

So, what went so horribly wrong? Many things, but the most significant is that the skills required have been lowered to well below the ‘highly skilled specialist’’ level that the committee was asked to consider and scrupulously honoured and mandated.

Instead, the visa became a cash cow and, more insidiously, a tool to weaken unions and minimise wage growth for lower skilled workers in every industry. Suddenly, small traders, like corner shops or restaurants, started claiming the impossibility of finding workers in Australia who understood the subtlety and complexity of Indian spices or Asian cuisines! And, while sponsors, especially pre-qualified sponsors, rarely, if ever, used the visa to do personal favours to someone eager to come to Australia, it soon became an easy way for small, even micro, businesses to bring in relatives and friends in substantial numbers. Many applicants even bribed employers to sponsor them, effectively making them wage slaves, open to exploitation, even physical and sexual abuse…

The system is so broken that the only solution is to dismantle it completely and return to the original model very urgently.

Temporary ‘skilled’ 457 visas were initially introduced so that companies that could not source “skilled” labour locally, due to shortages, could instead employ foreign workers on a “temporary” basis in order to fill specific roles. They were designed as a short-term stop-gap when certain labour was genuinely scarce.

However, since their initial introduction we witnessed the whole 457 visa system get perverted.

Exemptions from labour market testing grew from around 20% initially to the outrageous level of around 80%.

Exemptions were originally 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.

But, over time, we saw the system be rorted with an explosion of cooks/chefs, cafe/restaurant staff, customer service staff, and hairdressers. Most of these jobs could have been filled locally with a little bit of training, and none are particularly “skilled”, in short supply, or critical to the economy.

Not surprisingly then, the 457 visa system was found by a Senate Committee to be “not sufficiently responsive either to higher levels of unemployment, or to labour market changes in specific skilled occupations”.

Even government officials conceded via an FOI request that the Skilled Occupation List (SOL) was rarely changed because they didn’t want Australians thinking that 457 visas were being used to manage short-term shortage of workers, despite this being their initial purpose:

Briefing notes for Vocational Education and Skills Minister Scott Ryan, obtained under Freedom of Information laws, emphasise that since its establishment in 2010 “the list has remained relatively stable with only a few occupations being added or removed in any given year”.

“Major changes to the list from year to year would signal that it is being used to manage short-term labour market fluctuations,” the briefs state.

Other experts, like the University of Adelaide’s Joanna Howe, described 457 visas as “shambolic” and open to abuse by employers:

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.

The replacement for the 457 visa system – the Temporary Skill Shortage (TSS) visa – also remains wide open to rorting.

The two fundamental problems remain.

First, the Temporary Skilled Migration Income Threshold (TSMIT) remains at an appallingly low $53,900 (non-indexed), which is $3,300 (6%) below the median income of all Australians ($57,200), which includes unskilled workers:

This $53,900 TSMIT has incentivised Australian employers to hire cheap migrants instead of local workers, as well as abrogated the need to provide training.

Second, the SOL bears little relation to actual shortages in the labour market. Thus, most ‘skilled’ migrants have gone into areas already in oversupply, with most also employed at levels well below their claimed skills set.

The first best solution is to raise the TSMIT to the 75th percentile of weekly earnings (currently $85,852 p.a.). This would close off the cheap labour route and ensure that employers only hire migrant labour to fill genuinely skilled professions, which was the initial intention when the temporary ‘skilled’ visa system was introduced.

Unconventional Economist
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    • Indeed they did but it was never quite the issue. More came in one month in those big flying silver things and simply overstayed whatever visa or other bullshit paperwork they had

      • mild coronaMEMBER

        exactly. the boats have been a diversion from the true situation of migration for 20 years, its beyond belief that people still rail against refugees.

        • Why is it that Europe has economic migrants and refugees arriving by boat but everybody arriving by boat to Australia is assumed to be a genuine refugee?

          • mild coronaMEMBER

            I don’t know if your question reflects the hopeless coverage of this issue over the years but boat arrivals are asylum seekers once they make a claim and are all assessed and a whole ton of them are found to be refugees. And some are found not to be and are sent home. This processing has never really changed. all that’s changed is that boats can’t get here but planes can. And an unfortunate bunch of people have got caught in the middle, unassessed and managed at enormous cost. The big question is, if we don’t like the refugee convention why don’t we quit it? Why is this never discussed.

  1. This is a great surprise. Nobody could have foreseen this, and nobody knew it was occurring once it started happening. Migrants bring only positives. And it’s clearly not happening anyway. This is all fake news and the author is a Russian Bot. Too much migration is never enough, and it’s all highly skilled. Anybody who makes claims like this is a racist. Also a dog-licker. No, wait, dog-whistler.

    And it goes without saying that we have always been at war with EasAsia.

  2. Well, that’s what happens when you put pubic policy out to tender to the highest bidder.

    You eventually get cronies like Scott Morrison and Angus Taylor just working from the inside to do the bidding directly.

    They don’t even bother to hide the smugness and naked vested interest anymore.

    Who could possibly hold them to account ? How ?

    Such is a plutocracy

  3. Hahahahaha … “roach”. The rodent’s best friend.

    Actually, while rather funny, that is rather unfair. Withdrawn.

  4. Stewie GriffinMEMBER

    I’m old enough to actually remember when the 457 visa system was first rolled out – it was initially sold that they only ever envisaged a couple thousand highly skilled migrants, mainly foreign CEOs, would be need to be brought in on 457 visas.

    That’s how Globalists work – they create a small intellectual beach head that seems reasonable, then rip it wide open.

    • Whenever you hear justification for the 457 visa they always mention Facebook or Google developers. Have we ever got one of those?

  5. Hill Billy 55

    What makes a 10 year “temporary” migrant non-viable?
    A system that encourages training and innovation. Even, God forbid, an entrepreneurial one.
    Coming to a country near us? Not in our lifetimes!

  6. SchillersMEMBER

    From Neville Roach, 24.04.2020…

    “Retraction/Correction relating to Article on International students in Australia post-COVID-19 by Neville Roach

    After reading the comments on my recent article and obtaining additional information on the English Language capability of Overseas Students, I realise that my expectation that their degree implied a standard above the IELTS tests was not valid for a considerable number of them. So, I no longer advocate that they do not need to take the IELTS tests. What this reveals, though, is that our degree courses are not delivering fair value in return for the very high fees we charge our international students. This indicates a level of dishonesty and corruption that needs fixing immediately both from a moral perspective and to improve our national reputation and that of our higher education institutions as providers of high quality world standard education. We should immediately require all international students to pass the IELTS tests early, say in the first semester or year, of their course. This may make it harder to attract international students, but there is no excuse not to do it!”

  7. The “skilled” threshold is way too low. But be mindful of the Rizvi solution, which is to keep up the hyper migration, and pour in unlimited technical resources, to improve the visa processing.

    Outside of the COVID event, when Treasury sets huge migration targets in the Budget, the record shows that Home Affairs can deliver. The key challenge is to stop Frydenberg reverting to form in October, with Albanese’s full blessing.

    • How do you “stop” this, exactly ? Asking for a friend.

      I suppose one could write to their local member ? Quaint as that seems.

      Join your local Liberal party branch ?

      Buy the Liberal party ?

      • I dunno if you can. Who wants lower migration? Only the electorate and environment. Who wants hyper migration? Political parties, Treasury, RBA, states, cities, developers, media, academics, unions. There’s only one possible winner.

        Pity the CCP didn’t impose a hefty surcharge on their students and migrants, instead of our barley.

  8. Even the original presumption regarding large IT projects is not valid anymore. Project aren’t built using the Waterfall methodology anymore and are generally smaller and more manageable from a resource requirement point of view (generally). I see no shortage of IT workers waiting for a job. The industry is flooded with migrant workers. Unfortunately most of them don’t satisfy the ‘skilled’ part.