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Temporary skilled migration and the 457 visa

On 23 February 2013, the Government announced that there would be changes to the temporary skilled (subclass 457) visa program to ensure that employers are ‘not nominating positions where a genuine shortage does not exist’ and that ‘employers give Australian workers a fair go’.
The changes listed on the Department of Immigration and Citizenship (DIAC) website, ‘Strengthening the integrity of the 457 program’, include the introduction of a ‘genuineness criterion’ and the removal of English language exemptions for certain positions. According to DIAC, it is envisaged that the changes (to take effect on 1 July 2013) will not affect the ‘vast majority’ of ‘genuine’ 457 visa applicants. 

ANU demographer, Peter McDonald, questions whether tightening of the rules is really necessary, estimating that only ‘about 2 or 3 per cent of employers’ are ‘rorting’ the system. Others argue that the program is not tough enough in spite of significant amendments to the program in 2009. In a paper published in November 2012 by the Centre for Population and Urban Research at Monash University, the authors noted that while labour market testing may be expensive and hard to enforce, there is a need to better protect domestic workers from foreign competition.

However, mandatory labour market testing will not be introduced as part of the new suite of changes. The Government is confident that it is not necessary since ‘if a suitably qualified Australian worker is readily available and acceptable, they are the more preferable option because it is comparatively less expensive to source a local worker’.

Temporary skilled migration
One of the greatest changes in immigration patterns to Australia in the last decade has been the growth of long-term temporary migration and it is increasingly becoming one of the primary pathways to permanent settlement for many migrants. The largest categories of temporary migrants coming to Australia in the last decade have been overseas students and temporary skilled migrants, in particular those arriving on a (subclass 457) Temporary business (long stay) visa.

The 457 visa was introduced by the Howard Government in 1996 as a means of attracting more skilled workers to Australia. It allows employers to sponsor skilled workers from overseas for up to four years and provides employers with a faster and more flexible avenue of recruiting skilled workers than is possible under the permanent migration program.

Unlike permanent migration, temporary skilled migration is not subject to caps set by government, but is demand-driven and while there was a drop in demand for temporary workers in the Australian labour market during the GFC, demand has risen again with over 125,000 457 visas granted in 2011–12. See table 4 in the appendix of the Parliamentary Library’s paper, Skilled migration: temporary and permanent flows to Australia for annual statistics since 1996.

DIAC’s website includes links to very comprehensive statistical reports available back to 2007–08. These reports demonstrate that the majority of primary 457 visa grants go to managers and professionals and the largest group are from the UK (secondary visas are granted to the dependents and spouses of the primary applicant). In 2011–12:
  • the top three citizenship countries for primary visa grants were the UK (23.1 per cent), India (17.5 per cent) and the Republic of Ireland (9.2 per cent)
  • 69.2 per cent of primary visas were granted to managers and professionals and 24.2 per cent to technicians and trades workers, and
  • the top three industries for primary visa grants were construction (13.4 per cent), other services (11.6 per cent) and health care and social assistance (11.5 per cent).
Interestingly, recent rises in visa grants appear to be due to a significant rise in onshore, not offshore applications. DIAC points out that Australia is ‘an attractive destination for people who may be facing high unemployment and low wages at home’ and that many 457 applications in 2011–12 came from students and working holiday makers already in the country:
Within the program, significant growth was recorded in 2011–12 from applicants applying from onshore who held a working holiday maker visa or student visa. These subclass 457 visa applicants held mostly vocational qualifications, and in some industries accounted for over half of total grants. This trend suggests the program is being increasingly used by temporary visa holders seeking to remain in Australia instead of supplementing the Australian labour force.
DIAC states that there is a need to strengthen sponsorship obligations in order to provide ‘further disincentive to use the program in a manner which was not intended’.

For more background and statistics on the 457 visa program see the Parliamentary Library’s paper, Skilled migration: temporary and permanent flows to Australia, 2012.