1.1        On 6 June 2013, the Migration Amendment (Temporary Sponsored Visas) Bill 2013 (Bill) was introduced by the Minister for Immigration and Citizenship, the Hon Brendan O'Connor MP (Minister).[1] On 18 June 2013, the Senate referred the provisions of the Bill to the Senate Legal and Constitutional Affairs Legislation Committee (committee) for inquiry and report by 20 August 2013.[2] In order to assist the parliament's timely consideration of the Bill, the committee decided to present its report on 24 June 2013.

Purpose of the Bill

1.2        According to the Explanatory Memorandum (EM), the Bill seeks to:

[Amend] the Migration Act 1958 (the Migration Act) to enhance the Government's ability to deter sponsor behaviour which is inconsistent with the policy intent of the Temporary Sponsored Visa Program (of which Subclass 457 visas are a part). The Bill, together with proposed amendments to the Migration Regulations 1994 (the Migration Regulations), presents a comprehensive package of reform which would balance the interests of Australian workers with the need to strengthen protections for overseas workers.[3]

1.3        In his Second Reading Speech, the Minister set out the government's concerns regarding the current operation of the subclass 457 visa protection scheme:

[T]he subclass 457 visa plays an important role in allowing employers to address skill shortages when skilled local labour is unavailable. It is intended as a vehicle to allow employers to quickly supplement the Australian labour market, including the use of enterprise migration agreements and regional migration agreements, where a genuine skill shortage exists...

The use of the subclass 457 visa program has been growing strongly in recent years...

Many growing industries, including those connected with the resources boom, such as mining, as well as non-resource-sector users of the program, such as health care and information and communications technology, accounted for a large portion, over half, of all subclass 457 visa grants in 2011-12.

However, strong growth has also been recorded in industries in which employment has fallen recently, such as accommodation and food service, and retail trade.

It concerns the government that, at a time when the labour market has been flattening and some sectors and regions have experienced lay-offs and increased unemployment, the subclass 457 program has continued to grow.

Coupled with this strong growth is a tendency for some employers to source foreign labour through the subclass 457 program without regard to the Australian domestic labour force.

These trends highlight that current requirements do not commit sponsors to using the subclass 457 program as a supplement to, rather than a substitute for, the domestic labour force.[4]

Overview of the Bill

1.4        The Bill has six schedules. According to the EM, the Bill would amend the Migration Act to:

1.5        The majority of submissions were concerned with the provisions in relation to labour market testing conditions, which are set out in Schedule 2.

Labour market testing (Schedule 2)

1.6        In his Second Reading Speech, the Minister noted that the government
'will seek assurance from employers that they are only utilising the 457 visa program in circumstances where there is a genuine skills shortage in Australia'.[7] To enable this outcome, Schedule 2 of the Bill introduces a requirement that sponsors must undertake labour market testing in relation to nominated occupations in a manner consistent with Australia's relevant international trade obligations (item 2 of Schedule 2, proposed new subsection 140GBA(1)).

1.7        The labour market testing conditions are satisfied if:

1.8        In relation to the period of labour market testing required, the Minister stated:

It is proposed that the labour market testing requirement will initially require a sponsor to demonstrate that they have sought to find a suitably qualified Australian citizen or Australian permanent resident within six months prior to submission of an application for nomination approval.[10]

1.9        The evidence of labour market testing to accompany the nomination must include one or more of the following:

1.10      The Bill contains two exemptions to the requirement for labour market testing, namely:

1.11      The skill and occupation exemption provides that a sponsor is exempt from the requirement to satisfy the labour market testing condition in proposed new section 140GBA if:

Conduct of the inquiry

1.12      Details of the inquiry, including links to the Bill and associated documents, were placed on the committee's website at The committee also wrote to over 80 organisations and individuals, inviting submissions by 20 June 2013. Submissions continued to be accepted after that date.

1.13      The committee received 24 submissions, which are listed at Appendix 1. All public submissions were published on the committee's website.

1.14      The committee held a public hearing on 21 June 2013 at Parliament House in Canberra. A list of witnesses who appeared at the hearing is at Appendix 2, and the Hansard transcript is available through the committee's website.


1.15      The committee thanks those organisations and individuals who made submissions and gave evidence at the public hearing.

Note on references

1.16      References to the committee Hansard are to the proof Hansard. Page numbers may vary between the proof and the official Hansard transcript.

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