The debate over 457 visas has reached the bottom of the barrel

During the past week we have heard a chorus of comments from the federal government
and the ACTU claiming rorting by unscrupulous businesses and suggestions that the treatment of some 457 visa holders is ‘‘tantamount to slavery’’. Slavery is a very serious issue and it is great pity this term has been appropriated for political purposes.

The temporary work skilled 457 visa program has more checks and balances than almost any other visa category. It is for stays in Australia of up to four years by skilled workers including chief executives and managers, nurses, doctors, engineers, professionals and skilled tradespeople.

Much has been made of the purported growth of 457 visa holders in a slowing economy. In this economic climate the number of applications from employers should have fallen, not risen. In fact that is exactly what has happened. To quote the Department of Immigration and Citizenship’s report released this week, ‘‘the number of subclass 457 primary visa applications continues to decline in January 2013, having now declined for five consecutive

Other facts that are often overlooked include that employers using 457 visas must demonstrate a commitment to training and pay market salary rates above a set salary threshold. This amounts in most cases to a large  premium, and they prefer to hire Australian trained staff first if they can.

Further, there is no slavery or bonded labour. It is extremely easy for the visa holder to change employers on shore and stay in Australia working for a new sponsor. One Australian Industry Group member complained to me they had paid $10,000 to bring out a skilled tradesman they couldn’t source locally, only to lose him to a competitor down the road.

In the rare cases where employers do the wrong thing they should be dealt with quickly and firmly. But no evidence supports the claim of systemic abuse. This week’s employment data shows Australia’s unemployment rate steady at 5.4 per cent.

This compares with an average unemployment across the past two decades of 6.5 per cent. As Wayne Swan said recently, we have low unemployment. So it is not surprising there are skill shortages. In a soon-to-be released AI Group survey of 500 companies across the economy, we found skill shortages in key occupational areas have not abated and companies see no relief ahead.

During the past 12 months, the greatest skill shortages were for technicians and trade workers (33.3 per cent), closely followed by professionals (20.4 per cent). So for the federal government to single out the information and communications technology industry for criticism as a growing user of 457 visas is baffling, especially  considering its own $37 billion investment in the National Broadband Network. Government data indicates that
there is an acute IT skills shortage in Australia.

The main reason for this is that the number of Australian students studying IT subjects has declined dramatically in the past decade at secondary and tertiary levels. Domestic commencements in tertiary ICT courses declined
from 17,436 in 2001 to 9263 in 2011. Completions of ICT tertiary courses by domestic students fell by 58 per cent from 2001 to 2011. The net skilled migration intake for ICT workers has been stable for the past five years, sitting at just more than 5000 workers annually.

This fills a gap that cannot be satisfied domestically because the skilled graduates do not exist. As the Australian Workforce and Productivity Agency recently noted: ‘‘The statistics indicate that, in the short to medium term, overseas students are likely to meet the majority of industry demand for ICT graduates.’’ 

The demonising of 457 visa holders and the businesses that employ them has to stop. It is a successful scheme that has drawn international attention for its ability to attract skilled permanent migrants. Almost half of 457 visa holders settle here permanently. It’s hard to see how the government’s demonisation of them furthers the objectives in the Asian century white paper.

It also has ramifications for our image as a modern and open economy. I have had calls from the diplomatic community and multinational chiefs confused by the debate and concerned about how to interpret this anti-overseas worker campaign. We are working in a global marketplace and closing our doors too tightly on labour is another form of protectionism. That was part of our past but shouldn’t be part of our future.


This opinion piece originally appeared in The Australian