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Assessing the effect of recent 457 visa policy changes

On 18 April 2017, the Turnbull Government announced the abolition and replacement of the 457 visa program. A number of new visa eligibility criteria were introduced immediately, and formal abolition will follow on 1 March 2018, when the 457 visa is set to be replaced by the Temporary Skilled Shortage (TSS) visa.

Recent data indicates behavioural change

Recently released Department of Immigration and Border Protection (DIBP) visa data provide evidence that employers and migrants may have responded in a significant manner to the policy changes: the number of primary visas granted for sponsored workers from July to September 2017 fell by 35.7 per cent compared to the same period in 2016.

457 visas: Growth in visa grants (red) and people in Australia on a visa (blue)

Source: Temporary Work Skilled data, July to September quarter 2017, data.gov.au

In fact, the number of visas granted from July to September 2017 (8,264) was lower than from July to September 2009 (8,580), in the aftermath of the Global Financial Crisis. The table below outlines the current trend on the top ten occupations for which 457 visa grants were made: 

Top 10 occupations, primary 457 visa grants, July to September quarters, 2016 and 2017

Sept '16 Quarter

Sept '17 Quarter


351411 Cook




253112 Resident Medical Officer




141111 Cafe or Restaurant Manager




253111 General Practitioner




261312 Developer Programmer




351311 Chef




261313 Software Engineer




242111 University Lecturer




224711 Management Consultant




261111 ICT Business Analyst




Source: Temporary Work Skilled data, July to September quarter 2017, data.gov.au

As economic conditions did not sharply deteriorate in the July to September 2017 quarter, it seems unlikely employers stopped using the 457 visa program due to a big reduction in demand for workers. This suggests the change in government policy was an important factor in shaping the visa grant trend. However, there has been little public commentary or analysis of these changes or recent data (an August 2017 report by Bob Birrell from the Australian Population Research Institute is the major exception).

Occupation lists

The major change from 18 April 2017 was a one-third reduction in the number of occupations available to employers wanting to sponsor a 457 visa worker, and the splitting of the remaining occupations into two distinct lists, with different eligibility criteria.

The Prime Minister called this ‘a very substantial reduction in the list of skills that qualify for these visas.’ As an example, in a widely-reported change, ‘Goat Farmer’ was removed as an occupation. The Opposition Leader described the changes as a ‘con job, not a crackdown’ because no visas had been granted to people under the category of Goat Farmer over the previous decade.

Looking at the visa data for July to September 2017, approximately one-fifth of the decline in visa grants comes from occupations that are no longer eligible, with the remaining 80 per cent of the decline occurring in occupations that remain eligible but are being used less frequently than 12 months previously.

One example is Cooks. Since 2005–06, Cooks have been the third most common occupation in the 457 visa program, averaging about 1,500 visa grants per year. As the table above shows, while Cook remains an eligible occupation after the changes took effect, there was a strong reduction in that category (around 30 per cent) in the July to September 2017 quarter. This raises the possibility that policy change other than simple occupational eligibility may have had an immediate and substantive effect.

Further evidence is provided by looking at Chefs. In contrast to most other occupations, visa grants for Chefs grew slightly in comparison to the previous 12 months. Unlike Cooks, Chefs are on the occupation list available for a four-year, renewable visa with a pathway to permanent residency. Cooks are now restricted to a two-year, once-renewable visa with no pathway to permanent residency. The relevant lists are the Medium and Long-term Strategic Skills List and the Short-term Skilled Occupation List, established by legislative instrument.

The increase in Chefs could reflect genuine growth in employer demand for Chefs. However, it may also reflect employers who previously nominated Cooks now nominating Chefs as this is a more advantageous occupation for migrants and employers given visa conditions. If the job being performed in the business has not changed, this might be called ‘occupational inflation’, as employers upgrade their occupations to take advantage of more beneficial immigration policy settings.

Looking to the future

Additional eligibility changes may further reduce the demand for these visas. From 1 March 2018, applicants will require at least two years’ work experience and a new training levy will be introduced. Bob Birrell’s report highlighted the new work experience requirement as having the potential to further reduce the number of future visas. He also notes changes to the two permanent employer-sponsored visa categories (the Employer Nomination Scheme and the Regional Sponsored Migration Scheme) mean that these categories are also likely to see lower numbers in the future.

Unfortunately, there is no additional information about the 457 visa that is publicly available. For example, the data does not show how many visas are rejected or whether a migrant moves jobs in the labour market, from one employer to another. Salary data is also not included in the most recent data. Additional salary information would help to better inform analysis of policy change as salary is an alternative proxy for skill level and also helps to understand the demand for labour from employers.

This analysis also comes with a couple of caveats. Isolating the effects of a specific policy change is difficult as many factors determine visa trends. In addition, some visas granted between July and September 2017 would have been applied for prior to 18 April 2017. Lastly, it is possible DIBP has changed their approach to processing visas, resulting in a larger backlog of pending applications. Unfortunately this information is not available for public analysis. 

Tags: Immigration