DISSENTING REPORT BY COALITION SENATORS
The Migration Amendment (Temporary Sponsored Visas) Bill 2013
The Explanatory Memorandum for The Migration Amendment (Temporary
Sponsored Visas) Bill 2013 (Bill) states that the Bill amends the Migration
Act 1958 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 key issues in relation to the Bill raised in the submissions to the
Inquiry were in relation to:
(a) whether there is a need for labour market testing for the
subclass 457 visa program; and
(b) the impact that labour market testing would have on employers using the
subclass 457 visa program.
In drafting this report Coalition Senators have drawn on and referred to
the information provided in their dissenting report to the Legal and
Constitutional Affairs References Committee Inquiry into the Framework and operation of
457 visas, Enterprise Migration Agreements and Regional Migration Agreements
(457 Inquiry) which is being tabled in conjunction with this Report.
Overview of the 457 visa program
Coalition Senators believe that Australian workers should, as a
priority, be adequately resourced to enable them to be up-skilled and
empowered, to gain meaningful employment.
Australian businesses overwhelmingly prefer to hire Australian workers in
preference to overseas workers on the basis that it is more economical and less
complicated to fill skill requirements from the local workforce.
There is a shared consensus across business and the community that
Australia's skilled and semi-skilled migration program should only be utilised to
supplement our domestic workforce where necessary.
Coalition Senators do not consider that an effectively managed temporary
labour migration program will threaten Australian jobs. Rather, it is an
important tool to secure the future of businesses and grow employment
opportunities to enable business to employ more Australians.
The Australian skilled and semi-skilled migration program should be
sufficiently robust to ensure that the employment opportunities of Australians
must always be protected, whilst recognising that an appropriate and
sustainable human capital strategy for Australia must be readily available to
safeguard business from labour and skills shortages.
The 457 visa is the dominant component of Australia's temporary skilled
migration program. It is designed to provide a prompt response to fluctuations
in demand for skilled and semi-skilled workers where such demand cannot be met
by the Australian workforce.
An effective policy for temporary skilled migration is vital to the
efficient operation of the labour market and has the capacity to deliver
significant economic benefits at a national and regional level.
Foreign workers on 457 visas account for approximately one percent of
Australia's labour force,
and account for approximately 2% of our skilled workforce.
At these low levels it is both unrealistic and naive to suggest that the
457 skilled migration program is flooding the national labour market with
There is significant evidence to show that 457 visa holders make a
positive economic contribution to the economy through the payment of personal taxes
and the spending of wages, whilst in Australia.
It is also relevant to acknowledge that 457 visa holders are required to
pay for health care insurance and are not entitled to access government welfare
Australia faces an increasing labour shortage and responding to this
labour challenge in a positive manner is a key productivity issue for Australia
that cannot be ignored.
The ongoing demand for labour and skills and the challenges they present
cannot be underestimated by Government and failure to effectively respond to
identified labour shortages will negatively impact on the national economy.
The failure of the Labor Government to develop appropriate human capital
strategies is all the more alarming against the background of numerous projects
across the nation which could be jeopardised by labour shortages.
Included in this pipeline are projects to the value of (approximately):
- Western Australia: $293.9 Billion worth of projects;
- Queensland: $199.1 Billion worth of projects;
- New South Wales: $84.6 Billion worth
- Victoria and Tasmania: $57.6 Billion worth of projects;
- South Australia: $50.1 Billion
worth of projects; and
- Northern Territory: $43.5 Billion worth of projects.
Currently across Australia there are approximately 259
approved projects with a value of $446.4 Billion, while a pipeline of 163 less
advanced projects will potentially deliver a further $282.4 billion of
The National Resources Sector Employment
Taskforce has predicted there could be a shortage of approximately
36,000 skilled tradespeople in the resources sector of by 2015. 
Effectively addressing labour shortages through skilled and semi-skilled
migration programs is not a new phenomenon in Australia.
The Howard Government's record of strong economic management was
supported by sound policies designed to provide flexibility for Australia's
migration intake and to serve the national interest. These policies included options
to assist business to address skills shortages.
The Howard Government oversaw an increase in the proportion of skilled migration
in Australia's permanent migration program, from around 30 per cent when it
assumed office in 1996 to almost 70 per cent when it left office in 2007. The
introduction by the Howard Government of the 457 temporary skilled visa program
ensured greater responsiveness and flexibility in responding to fluctuating
In contrast to the Howard Government policies which successfully
addressed labour shortages through skilled and semi-skilled migration programs,
the current Labor Government has burdened the 457 visa program with unnecessary
red tape and has effectively locked many regional areas out of the program. As
a result of the mismanagement of the 457 visa program, business has been
frustrated and inconvenienced in its attempts to address labour shortages.
To accommodate Australia's growing requirements for skilled labour it is
critical for the Government to recognise the need to implement sound policies
that can assist in immediately addressing the labour shortages that business
and industry are experiencing, in particular by making the present 457
visa program more efficient and user friendly, not by increasing more red tape
The former Rudd Government and the current Gillard Government, in
responding to union objections to the current 457 visa program, have diminished
the effectiveness, reliability and integrity of Australia's skilled and semi-skilled
Lack of Consultation in relation to the Bill
Coalition Senators have grave concerns in relation to the lack of consultation
on the impact of the Bill and the abuse and complete disregard by the Government
of due process in relation to Senate Committee Inquiry process.
On 18 June 2013, the Senate referred the Bill to the Senate Legal and Constitutional
Affairs Legislation Committee for inquiry and report.
Submissions to the Inquiry closed at midday on 20 June 2013.
The lack of adequate time for submitters to properly consider the bill and
its potential impact and to provide considered comment was reflected in the
submission to the Inquiry from Padma Raman, Executive Director of the
Australian Human Rights Commission.
Dear [Committee Secretary]
I refer to your invitation, by email at 7:56 pm yesterday
Tuesday 18 June, for this Commission to make a submission to the Committee's
Inquiry into the Migration Amendment (Temporary Sponsored Visas) Bill 2013,
with submissions being requested by 12 pm tomorrow 20 June 2013.
I note that the Senate referred this matter for inquiry on 18
June and that the Committee is required to report by 25 June.
I must advise that the Commission is quite unable to make a
submission on the substance of the Bill within this timeframe. I request,
however, that you publish this email as the Commission's submission to the
The Commission wishes to state
for the information of the Parliament, and for the public record, that an
inquiry process which is so truncated as not to provide a realistic opportunity
for public participation is not consistent with the requirements of Article 25
of the International Covenant on Civil and Political Rights.
Director, Australian Human Rights Commission
Council in its submission questioned why the Government was rushing the
proposed changes through the Parliament without adequate consultation:
The Law Council opposes the Bill because it has been
introduced hastily without adequate consultation with stakeholders and whilst
the Senate's Legal and Constitutional Affairs Reference Committee is yet to
deliver its findings on its May 2013 Inquiry into subclass 457 visas,
Enterprise Migration Agreements and Regional Migration Agreements.
The Government appears to be rushing proposed changes through
the last Parliamentary session before the September 2013 election without due
consideration to the views of stakeholders.
Coalition Senators note that the Explanatory Memorandum to the Bill states
that consultation has taken place with various Commonwealth agencies including
the Attorney-General's Department, the Department of Foreign Affairs and Trade,
the Department of Education, Employment and Workplace Relations, the Fair Work
Ombudsman, the Department of the Prime Minister and Cabinet, the Department of
Treasury, the Department of Resources, Energy and Tourism, the Department of
Finance and Deregulation, and the Office of Best Practice Regulation.
Coalition Senators also note however, the failure by the Government to
consult with business, industry or any other private interests in relation to
the impact of this Bill.
Government's failure to properly consult is made all the more serious by the
fact that the Explanatory Memorandum states that "the financial impact of these amendments is
is not in an informed position to assert the impact of the financial impact of
the Bill as consultation in relation to these financial impacts has not taken
assertions on the financial impact of the Bill are no more than political
campaign to undermine 457 visa program
Over recent months, the Government and elements within the union
movement have run an aggressive media campaign claiming abuse in the 457 visa
program and have resorted to making statements aimed at demonising both 457
visa holders and their employers.
Minister O'Connor claimed on 28 April 2013 that there have been in
excess of 10,000 cases of abuse in the 457 program. As a result of these
alleged rorts Minister O'Connor committed the Government to introduce legislation
to crack down on the use of 457 visas.
Coalition Senators note that Minister O'Connor's claim of 10,000 cases
of abuse in the 457 program equated to approximately 9 per cent of the total
number of principal visa holders in Australia at 30 April 2013 being 108,810.
In scrutinising the obvious exaggeration and unbelievability of
Minister O'Connor's claim of 10,000 cases of abuse in the 457 program, the
Coalition repeatedly called on Minister O'Connor and the Government to produce
evidence to substantiate these claims.
Coalition Senators are unsurprised that Minister O'Connor has failed to
produce any evidence.
In attempting to justify his exaggerated comments alleging abuse of the
457 visa program, Minister O'Connor referred in the House of
Representatives, in March 2013, to a Department document which focussed on
strengthening the integrity of the 457 visa program, provided to his
Ministerial Advisory Council on Skilled Migration early this year.
The Coalition Shadow Minister, Mr Scott Morrison MP,
subsequently obtained a copy of this document under Freedom of Information and
challenged Minister O Connor on the veracity of his original allegations.
Contrary to Minister O Connor's false claims, the document did not
suggest any widespread rorting or concerns with the program.
Following the Shadow Minister's challenge to produce factual evidence
that there have been in excess of 10,000 cases of abuse in the 457 program,
Minister O'Connor subsequently admitted that he had made this number up and
that his allegations were not based on any authoritative statistics or other
Coalition Senators conclude that Minister O'Connor therefore misled the
Australian people with his self-serving false comments.
Coalition Senators note that the concerted negative campaign by
Minister O'Connor and a number of unions alleging abuse in the use of 457 visas
was strongly criticised by industry groups, labour market experts and the
Migration Council of Australia (MCA).
In May 2013, the MCA released a landmark report on the 457 visa program,
including analysis based on a survey of 3800 visa
holders and 1600 businesses. It found that only two per cent of foreign
workers were being underpaid.
As stated by
Ms Carla Wilshire, Chief Executive Officer, MCA:
findings show that the 457 visa program is critical in keeping Australia
competitive in an era when industry is global and 98 per cent of innovation
happens outside of Australia'.
In its submission to the 457 Inquiry, the Australian Industry Group referred
to the fact that no evidence has been presented which points to widespread or
systemic abuse of the 457 visa program:
The current debate over the program has unfairly focused on
the relatively few employers who do not meet their obligations. In our view,
those employers should face whatever sanctions are available. However, no
evidence has been presented which points to widespread or systemic abuse and we
strongly object to the tone of the public debate which has had the effect of
vilifying both employers and those who themselves hold 457 visas.
The BCA submission to the 457 Inquiry noted the harm that was being done
to the 457 visa program as a result of the Government's unsubstantiated claims:
The unsubstantiated claims by the government of excessive
growth and widespread rorting in the temporary skilled migrant 457 visa scheme
are harming our international reputation and risk undermining a program that is
vital for the economy. The facts are that there are 105,000 primary 457 visa
holders performing critical roles in Australia, which is less than one per cent
of the workforce, and that number fell in March as visa grants declined.
BCA also called on the Government to provide its evidence of systemic
The BCA also stated:
The government's changes to the 457 visa scheme announced in
February were said to be in response to excessive use and so-called rorting,
but with little justification presented. Individual visa holders or employers
not complying with the legislation should be dealt with directly. Ad hoc
changes to the rules only add cost, undermine business confidence and slow
The ACCI submission to the 457 Inquiry stated:
Given the importance of skilled migration, ACCI has become
increasingly alarmed at recent policy announcements and public commentary
around important elements of migration. Worthy programs such as 457 visas, EMAs
and RMAs have, in recent months, become subjected to a series of
unsubstantiated claims of widespread rorting and have been used to invoke
parochial and even racist sentiment with claims of foreign workers 'stealing'
jobs from unemployed Australians. ACCI feels that a careful, considered
approach, based on clear and substantiated evidence, is needed to ensure
that we maintain the value and integrity of the schemes and don't further harm
our reputation overseas as a good destination to do business, work or learn.
The Australian Mines and Metals Association submission to the 457
...the recent demonisation of 457 visa workers is extremely
damaging. AMMA is particularly concerned at the politically charged context in
which the government announced further changes to the system for 457 visas, and
the lack of essential consultation with industry as a critical interest in the
effective operation of both short term and ongoing skilled labour migration.
a. The depiction of skilled migrants as foreigners that need
to be 'put at the back of the queue', and that Australians are being 'discriminated
against', is base rhetoric that borders dog-whistling and invites allegations
of industrial xenophobia.
b. These emotive claims also ignore the reality that current
rules require labour to first be sourced from the local workforce.
The Ernst & Young submission noted:
Recent sensational media reports about the subclass 457 visa
program are unhelpful to a rational public dialogue and discussion about the
appropriateness of Australia's skilled migration program. The program is
important to the needs of business to fill temporary vacancies with skilled
foreign workers. Records published by the Department of Immigration and
Citizenship indicate that there are rare and isolated instances of concern in
the program. It is essential that the current sanctions regime deal with
inappropriate use of the program.
The Migration Institute of Australia, in its oral evidence at the 457 Inquiry,
confirmed that the actual statistics did not support Minister O'Connor's false claims:
Senator CASH: Ms Chan, you would be aware that the
minister, Mr O'Connor, claimed that there were at least 10,000 rorts occurring
in the 457 visa system, which was then proven to be a 'guesstimate'. Mr Sheldon
of the TWU this morning threw a rounder figure of 100,000 breaches of human
rights in relation to the 457 visa program. Given that you do represent almost
half of the migration industry, what is your experience in relation to the
allegations of rorting within the 457 visa program? And if there are rorts, are
they dealt with by way of a legislative basis?
Ms Chan: We would only have the information that is
provided through DIAC, and the statistics do not support either a 10,000 rort
or a 100,000 rort.
Perhaps the most damning evidence in relation to Minister O'Connor's
false claims of widespread rorting was provided by his own Department at the
public hearing of the 457 Inquiry.
confirmed under questioning from Senator Cash that it did not provide Minister
O'Connor with any advice that would form the basis of his false claims:
Dr Southern: We certainly did not provide advice
around a number of 10,000.
Claims of rorting by the CFMEU and the TWU
Evidence given by the Construction, Forestry, Energy and Mining Union
(CFMEU) in its submission to the 457 Inquiry was to the effect that there were
fundamental abuses or rorts of the 457 visa program:
The fundamental abuse or rort of the 457 visa program is when
the Australian government authorises an employer to employ a foreign national
on a 457 visa when a qualified Australian citizen or permanent resident is
available and willing to do the work.
The CFMEU submission went onto state that the union would 'provide to
the Committee, on a confidential basis and upon request, numerous examples of
the exploitation of 457 visa workers'.
Coalition Senators note that the evidence provided by the CFMEU on a
confidential basis to the 457 Inquiry referred to 6 cases of alleged rorting.
This is hardly sufficient to justify intemperate claims of fundamental rorts
At the public hearing for the 457 Inquiry, Mr Tony Sheldon of the Transport
Workers' Union of Australia (TWU) stated that he believed there were more than
100,000 people on 457 visas having their human rights exploited:
Mr Sheldon: And you would look at the question Senator
Cash rightly asked, as you are asking: is there exploitation of people on 457
visas beyond those two months? When you are talking about having a human right
taken from you whereby you can be deported from the country, I would argue that
the entire 100,000 plus are human rights exploited...
Coalition Senators note that the total
number of principal visa holders in Australia at 30 April 2013 was estimated by
DIAC to be 108,810.
When asked by Senator Cash how many allegations of cases of
exploitation or rorting had been reported to the TWU, Mr Sheldon's evidence was
that there were only 24 such cases:
Senator CASH: In your oral evidence today you did use
the word 'exploiting' in relation to 457 visas. How many allegations or cases
of either exploitation or rorting have been reported to the TWU?
Mr Sheldon: It is 24.
The evidence of Mr Sheldon regarding his intemperate claims of
exploitation of people on 457 visas appears to be similar to the exaggerated
and factually inaccurate claims made by Minister O'Connor and the CFMEU.
Office of the Prime Minister – Mr John McTernan
Coalition Senators have serious concerns with an article that appeared
in the Australian newspaper on 22 June 2013 under the banner headline "PM's
office breeches FoI rules for spin doctor John McTernan".
The article by the Australian's National Chief Correspondent,
Hedley Thomas, states that the Prime Minister's office is "flouting
Freedom of Information rules and is refusing to hand over documents relating to
the hiring of her communications director John McTernan, a Scotsman on a 457
visa for foreign workers".
The article indicates that the Office of the Information Commissioner
told the Weekend Australian that it had formally rejected the Office of the
Prime Minister's request for more time to process the documents. Ms Gillard's
office has already been granted two extensions totalling 40 days.
The article reveals that the Weekend Australia in early April 2013,
sought all documents relating to the hiring of Mr McTernan in 2011 as chief
spin doctor for the Prime Minister. Other documents sought relate to the efforts,
if any, taken to identify a suitable person in Australia for the role, such as
advertising, the engagement of recruitment agencies of direct contact with
media outlets and highly qualified local journalists.
Coalition Senators are of the opinion that:
(a) given the stated reasons for this Bill being to enhance the
Government's ability to deter sponsor behaviour which is inconsistent with the
policy intent of the Temporary Sponsored Visa Program; and
(b) the false claims by Minister O'Connor, the largely
unsubstantiated claims of the CFMEU and the TWU of widespread rorting,
the Prime Minister should immediately and without further delay
authorise the release of all documents relating to the appointment of her chief
Mr John McTernan.
Coalition Senators are of the opinion that if the Prime Minister
fails to do this, coupled with her office's failure to comply with the Freedom
of Information request, the conclusion that would most reasonably follow such a
failure to disclose the requested information, is that the Prime Minister is
culpable in attempting to deliberately cover up, to quote Minister O'Connor, "a
case of abuse" within her own office in relation to the 457 visa program.
Coalition Senators' conclusions on allegations of rorting the 457 visa
The lack of authoritative statistical or substantive evidence provided
by Minister O'Connor, the CFMEU and the TWU in their spurious claims of
widespread rorting of the 457 visa program, is not consistent with the records
published by the Department, which indicate that such incidents are rare and
isolated within the 457 visa program.
Shadow Minister's challenge to produce factual evidence that there have been in
excess of 10,000 cases of abuse in the 457 program,
Minister O'Connor has subsequently admitted that he had made this number up and
that his allegations were not based on any authoritative statistics or other
(a) the evidence of a lack of rorts in the 457 program provided to the 457 Inquiry,
(b) the fact that Minister O'Connor admitted that his claim that there has
been in excess of 10,000 cases of abuse in the 457 program was false; and
(c) the fact that the CFMEU and the TWU were unable to provide authoritative
statistics or substantial evidence to back up their claims of wide spread
Coalition Senators conclude that the extremely damaging
statements made by
Minister O'Connor, the CFMEU and the TWU, alleging widespread rorting of the
457 visa program, were politically motivated, without foundation and designed
to undermine the 457 visa program.
also note that if widespread rorting was as evident as the Prime Minister and Minister
O'Connor claimed, then this failing and weakness in the system has occurred on
Labor's watch over the past five years.
Government has by its own admission failed
to adequately police Australia's skilled migration program.
Labor Market Testing (LMT)
The Bill introduces new LMT requirements across all skill level
occupations with Minister O'Connor having the power to exempt some, but not
all, higher skill level occupations.
The Bill provides that employers may be required to provide evidence
that they have made attempts to fill the position locally before seeking to
become a 457 visa sponsor.
Evidence to be provided would include:
- advertising of the position by the employer;
- participation in career expos;
- fees paid for recruitment; and
- results of recruitment attempts.
LMT was previously a requirement for not only subclass 457 sponsorship
but also sponsorship under the Employer Nomination Scheme and Regional
Sponsored Migration Scheme.
LMT was abolished in all of those areas as it was deemed to be complex,
onerous and ineffective.
Evidence of an adequate inbuilt
mechanism for LMT
Senators note that there is already an adequate inbuilt mechanism for LMT
within the current 457 visa process.
of the current inbuilt mechanism for LMT was supported by the evidence of AMMA to
the 457 Inquiry which set out and described the basis upon which an employer is
able to access the 457 visa program:
Before a position in a business can be filled with an
overseas worker, the sponsor must certify that it is suitably skilled and that
the qualifications and experience of the visa holder are equivalent to what
would be required of an Australian employed in that occupation. Market rates
and conditions that would be paid to an Australian in the same job in the same
workplace must also be provided.
Sponsors incur additional costs for employing workers on 457
visas such as paying for health insurance, flights to and from Australia, and
agent fees for finding the worker. These additional costs of sponsorship can
amount to $60,000 per person.
457 visas are not a low cost option to avoid the costs of
employing Australian residents. It would be unsound to proceed on any other
basis than that employer's hire foreign workers only as a last resort. This
in-built mechanism makes it unnecessary to incorporate further labour market
testing into the visa application process.
Furthermore, labour market testing – insisting that employers
show evidence of having recruited locally would be debilitating for employers
urgently seeking to fill a position, and who are familiar with the challenges
of the local employment market. Employers seek foreign workers when they
urgently need skills that are not otherwise accessible to them.
Labour market testing would also be fraught with bureaucratic
and administrative problems, as DIAC case officers would also have to assess
the additional information provided, thereby increasing DIAC workload and
inflating processing times for 457 visas. To take this a step further and be
absolutely clear, deliberately inflating process times as a disincentive to
using 457 visas would be: very poor governance indeed, a rank waste of public
resources; and would ill serve the interests of the Australian economy and job
Coalition Senators believe that the introduction of stringent LMT
ignores the reality that it is in the employer's best interests, to conduct
their own labour market testing and assess the availability of local skills prior
to seeking to utilise the 457 visa process.
In her oral evidence to this Inquiry Ms Caroline Lambert, Director of
Employment, Education and Training from ACCI stated:
...we do not believe that the government or the unions or the
department are in the best position to determine how the labour market should
Businesses need to respond to their own circumstances in
regions, in industries and across the economy, depending on their own
circumstances and the urgency they may have for filling a job.
Having a departmental person or the government or anyone else
say that there is only one size fits all approach to labour market testing is
strongly putting barriers of regulation that the economy and these businesses
do not need.
Certainly, we would urge the Senate and we would urge the
parliament not to support this bill without rigorous further evidence and a
regulatory impact statement.
Coalition Senators note the evidence from various submitters to the 457
Inquiry that Australian businesses overwhelmingly prefer to hire Australians.
Consult Australia submitted that as it more economical and less
complicated to fill skills requirements from the local workforce, employers
unsurprisingly conduct their own LMT, in the first instance.
Consult Australia's submission to the 457 Inquiry stated that employers
consistently advise that they prefer to recruit locally available staff rather
than having to seek out temporary skilled migrants:
The cost of employing a temporary skilled migrant is much
larger than the cost of recruiting locally, especially in terms of the cost of
the process and the cost of relocating a new employee and their family to
Australia. Temporary skilled migrants require more support to settle into
Australian business practices, and their families require support to ensure
their experience is a positive one and they do not return home early.
This demonstrates that labour market testing is a normal
procedure for employers in the built environment consulting sector. Placing new
requirements on employers to document and report on labour market testing is
not required, and will end up as unnecessary regulation.
Consult Australia's evidence was supported by the submission of Hamilton's
Migration Law to the 457 Inquiry, which stated:
...labour market testing is already conducted by employers with
a range of means...Employers are entitled to determine how best to recruit to
fill a vacancy given the workforce available in their particular area. The
statutory form of labour market testing has already been rejected as a feature
of the 457 regime as it was seen to be incompatible with the purpose of the
program which is to flexibly and quickly fill short-term vacancies.
The evidence of the Australian Industry Group to the 457 Inquiry also
supported an employer's preference to recruit locally available staff:
Sourcing skilled labour via 457 visas attracts a significant
premium over hiring locally and this ensures that in the vast majority of cases
employers will only go down the 457 path when they have exhausted local
options. In this way, employers themselves test the market thoroughly before
choosing to hire through the 457 program. The visas are also available only for
skills which are demonstrated to be in demand. Stringent testing will simply
add more unnecessary bureaucracy...Delays caused by such testing could prevent
a business from meeting urgent commercial needs.
Evidence against the introduction
of stringent labour market testing
Coalition Senators note that the Committee majority report for this
Inquiry acknowledges that there was significant opposition to the introduction
of a LMT condition for the subclass 457 visa program.
Coalition Senators note that both the 457 Inquiry and this Inquiry
received strong and credible evidence that the introduction of stringent LMT will reverse the balance of minimal administrative burden, which is
vital to the success of the 457 visa program, and reduce the ability of an
employer to access skilled labour in an efficient and economical manner.
In its submission to the 457 Inquiry, the Chamber of Commerce and
Industry Queensland stated its belief that LMT is ineffective, time consuming
and of little value to small and medium employers.
The Business Council of Australia (BCA) strongly recommended against the
introduction of LMT as an onerous requirement that would impose additional,
unnecessary regulatory costs on industry, and would be impractical in most
BCA noted that LMT introduces complex and costly process without
providing any demonstrated benefits:
Businesses overwhelmingly prefer to hire Australians first.
It is cheaper and faster to fill skills requirements from the permanent local
workforce. Employers are taking on additional costs of hiring, training and
relocating overseas when applying for 457 visas – it is in their commercial
interest to have already assessed whether there might be Australian workers
available to fill the roles.
There is next to nothing to be gained from mandatory labour
market testing. Labour market testing would only add more cost and delay to
employers and curtail business activity.
Furthermore, the introduction of labour testing could be
inconsistent with Australia's commitments under World Trade Organization and
free trade agreements, as noted in the government response to the report of the
Joint Standing Committee on Migration in 2009.
The BCA in its submission to this Inquiry stated:
The most damaging initiative in the Bill is a return to
labour market testing, which was abandoned following a major 2001 departmental
review that found it was costly, ineffective and inferior to the system we have
today (see the report titled In Australia's Interest: A Review of the
Temporary Residence Program).
The evidence of the ANU College of Law to this Inquiry was that the
introduction of stringent LMT within the application processes for the 457 visa
program would be inefficient and ineffective.
We believe that the introduction of Labour Market Testing
condition will only add another layer of complexity, delay and administrative
cost to the 457 visa scheme, without addressing the objective. These amendments
are likely to deter employers from pursuing sponsorship altogether.
ACCI in its submission to the 457 Inquiry submitted that the
introduction of stringent LMT requirements could cause significant time delays
and would only slow down access to skilled overseas workers under what is
supposed to be a fast, flexible visa solution to skilled labour shortages.
ACCI in its submission to this Inquiry states:
...detailed labour market testing will add to cost, time and
the overall red‐tape
burden incurred by businesses seeking to secure skilled labour. Of most
significant concern to ACCI is the lack of a Regulatory Impact Statement
examining the impact of the proposed Bill on businesses seeking to secure
The introduction of stringent labour market testing requirements
could cause significant time delays that may see regional areas not having
access to health professionals due to the time impost of conducting detailed
labour market analysis.
The Legislation acknowledges that labour market testing creates
time delays. Section 140GBB of the bill includes an exemption to the Labour
Market Testing requirement in the event of a natural disaster in order to
assist disaster relief or recovery. In his second reading of the Bill, the
Minister stated that: This exemption will give the government flexibility to
respond to situations of national or state emergency and would facilitate the
speedy entry of overseas skilled workers without the delay caused by requiring
a sponsor to undertake labour market testing.
This admission in the Bill that Labour Market Testing adds
delays contradicts the 'timely access' policy rationale of the 457 visa
Failure of government to provide a Regulation Impact Statement (RIS)
There can be no doubt that one of the most concerning aspects of this
Bill is the failure by the Government to produce a RIS in relation to Schedule
2, as is required under Government policy guidelines.
The requirement for a RIS is set out on the Office of Best Practice
(OBPR) website, which states:
A Regulation Impact Statement (RIS) is required, under the
Australian Government's requirements, when a regulatory proposal is likely
to have an impact on business or the not-for-profit sector, unless that impact
is of a minor or machinery nature and does not substantially alter existing
The OPBR was consulted by the Government on this and advised that a RIS was
required for the amendments contained in Schedule 2 to the Bill to determine
the effects of the LMT provisions.
Despite this advice, DIAC sought a waiver from this requirement from the
the hearing for this Inquiry evidence was given that the following process was
followed in relation to the RIS.
On 14 May 2013,
the OBPR advised the Department that in relation to Schedule 2 of
the Bill, which contains the LMT provisions, a RIS was required. The Department
then advised the OBPR that it would not be able to fulfil the request in the
short time frame given that the Bill was to be tabled on 29 May 2013.
On 22 May 2013 Minister O'Connor wrote to the Prime Minister and asked
that an exemption be given to the requirement to provide a RIS.
The Department, on
notice, provided evidence that Minister O'Connor gave the following
reasons for seeking an exemption from undertaking a RIS, relating to the
introduction of LMT:
Given the exceptional circumstances relating to the urgency
of the reforms to the Temporary Sponsored Work Visa Program; the need to realign
the program to be used only where a genuine skills shortage exists; and the
critical timeframe to finalise the Bill for introduction into Parliament, I am
seeking your approval to exempt the LMT measure from the RIS process.
On 27 May the Prime Minister granted that exemption.
Despite calls from stakeholders and the Coalition to publically state
what the cited "exceptional circumstances" are for the granting of
the exemption from the RIS, both the Minister and the Prime Minister have
refused to provide an explanation.
This failure to observe administrative guidelines appears to be for
crass political reasons and reflects badly on both Minister O'Connor and the
Coalition Senators have significant concerns regarding the failure of
the Government to provide a RIS in relation to Schedule 2 of the Bill given the
cogent evidence of the likely detrimental impact these provisions will have on
Government was advised of the concerns of business and industry in relation to
the detrimental impacts of the Bill in the 'Open letter to members of the
Federal Parliament regarding the Migration Amendment
(Temporary Sponsored Visas) Bill
2013' (17 June 2013).
was from the Migration Council of Australia and signed by: Innes Willox, Chief Executive Officer of the Australian Industry Group; Jennifer Westacott,
of the Business
Australia; and Carla Wilshire, Chief Executive Officer
of the Migration Council Australia.
from the text of the letter setting out the concerns of business and industry
is as follows:
We are writing to
ask for your support in opposing the Migration
Amendment (Temporary Sponsored Visas) Bill 2013
full when it is introduced into the parliament this week.
We are greatly concerned by the lack of supporting evidence, damaging rhetoric and poor process associated with the proposed changes
to the 457 visa scheme, along with the considerable risks
posed for investment,
creation and economic
growth. Furthermore, there has
minimal consultation with industry about these changes.
legislation risks undermining the capacity to fill identified skills gaps
a timely way without a proper assessment of whether there is a genuine problem to be solved. What is so concerning is that the government is seeking to rush these changes through
the final session of
parliament before the election without subjecting its claims about
alleged scheme abuses and inadequacies to the rigor of its own Regulatory Impact Statement (RIS) process.
The RIS exemption for the new labour market testing requirements
the Bill cites
'exceptional circumstances'. It is unclear what these circumstances
are, given that the
minister's department has provided no hard evidence of
a systemic problem with the scheme.
government's primary argument for a systemic
problem rests on a misleading interpretation of an ambiguous survey finding in a recent Migration
Council Australia report.
This is not an adequate foundation for
introducing costly new regulation.
A Regulatory Impact Statement, with full
consultation with industry, is the appropriate way to assess whether a problem exists with the 457 visa scheme and the costs
and benefits of
solving any purported problems
through specific actions, including regulation.
Unwarranted additional regulation of the
457 visa scheme risks penalising all employers
and their employees, and undermining investment, skills
and development and broader
creation, to address a relatively small number of instances that may be better dealt with
through other means.
The very serious concerns raised in this letter were supported by
evidence from a number of other submissions to this Inquiry.
The Migration Institute of Australia in its submission to this
The MIA is concerned that there has been no proper
examination of the regulatory impact the proposed changes will impose
on Australian business and industry, together with impacts on labour market
efficiency and business productivity from the reintroduction of labour market
testing in particular.
It is in the matter of labour market testing where the
greatest impact may be on Australian businesses and industry, and yet there has
been no examination of that because the Prime Minister has granted an exemption.
AMMA in its submission stated that:
...the most damaging proposal in the bill – the reintroduction
of LMT – was not a recommendation made by [the Ministerial Advisory
Council on Skilled Migration (MACSM)]. AMMA was particularly surprised to see
LMT in the bill given concerns raised in the 2008 Deegan Review that this would
compromise Australia's international trade obligations.
AMMA also finds that LMT would be operationally debilitating for
employers urgently seeking to fill skilled positions:
Such an outcome would directly detract from the policy
rationale of the 457 program: providing timely access to skilled workers in
occupations where identified shortages exist.
AMMA also finds that the reintroduction of LMT some 12 years after it
was scrapped would a radical and regressive measure insensitive to the needs of
employers and the economy and states that the LMT requirement is not only
strongly opposed by industry and employers, but also the Migration Institute of
Australia, the independent Migration Council of Australia and the Law Council
of Australia. It was not recommended by the Government's very own
Advisory Council on Skilled Migration.
In oral evidence to this Inquiry many witnesses stated that the
introduction of this bill and in particular the LMT requirements would have a
detrimental impact on job creation in Australia:
Mr Pryor: Yes. That is our view of the potential costs
and risks of introducing this new scheme. There will be some element of a
barrier being erected towards job creation in the economy. A distribution of
that will depend on the different sectors and businesses themselves, but that
is our view: there is a potentially significant cost and risk to job creation
in the scheme.
Mr Melville: The most common thing I hear from
companies that get involved in this area is: 'I know that I can't find these
people. I know from the local community I'm working in that they're not there'.
It might be a company in a remote area of Australia or even somewhere like
Ipswich. They know that there aren't people with those skills there, and saying
to them that they have got to get on to a process where they advertise these
positions that they know are not there and adding to their cost of employment
even further is just unnecessary...
Companies have been under pressure from all sorts of things
like the global financial crisis and increasing energy costs. You cannot just
say that this is only a small cost. It is a small cost, but
it is another small cost on top of a lot of other costs that have been going
up. When you talk to our member global companies, their head offices look at
Australia and ask, 'Why should we do business there?' They look at the
workplace relations laws and, although the dollar has come off, they look at
the cost of the high dollar, but they also look at employment costs...
Ms Wilshire: I think that there is both a short-run
risk to job creation and a long-term risk. The short-run risk, which has been
articulated by both AAG and BCA in their evidence, is that it could change the
calculus of the investments by individuals. The long-term risk is that reducing
the value of the program will impact on competitiveness and the six-month
framework associated with the mooted labour market testing would mean we would
lag behind global trends in innovation and process improvements. In a sense it
would disconnect us. One of the long-term risks to job creation is that without
the flow of skilled people into Australia we risk becoming a backwater in the
Ms Lambert: I certainly think that they would be
deterred from using the program if you look at the proposed legislation
holistically as well as, in particular, the labour market testing. Deterrence
in regulation is everywhere across the economy, and further regulation just
exacerbates that frustration that business has in dealing with these issues.
I think the other important thing about the labour market
testing proposed is that the flexibility and responsiveness is just eliminated
from the scheme. That frustration will be enormous, and so the choices for many
small businesses could be that they could close. So not only are we lacking the
job creation opportunities we are actually potentially forcing some businesses
to close because of their inability to use what is currently a flexible and
responsive scheme because of the labour market testing—again, that
one-size-fits-all approach to labour market testing.
Mr Bolton:...having an uncertain labour supply would
certainly be a very good reason for a business not to even tender for
contracts. As we see, there are huge resources contracts still going ahead
across the country; there have been a few that have been shelved, but there are
still a lot in the pipeline. Australian businesses faced with the prospect of
an uncertain labour supply, faced with the prospect of potentially waiting for
six months before they can ensure that they have the people to do the job would
be a very significant barrier and, indeed, a reason for them not to even
On the impacts on businesses not directly related to
contracting, the possibility of a hospital being without a medical registrar
for six months, the possibility of a telco being without a system engineer for
six months, or the possibility of a restaurant being without a chef for six
months would mean that that business is not able to do its business. That would
possibly send some businesses to the wall.
Coalition Senator's conclusions
The OBPR has advised the Government that a
RIS is required in relation to Schedule 2 of the Bill.
The Government failed to comply with this
The failure by the
Government to provide a RIS in relation to Schedule 2 of the Bill means that
the Parliament is debating this proposed legislation without information before
it relating to the potential cost impact on employers and in particular the flow-on
effects to jobs in Australia as a result of the LMT provisions.
Due to the very serious nature of the
concerns that have been raised in relation to the Government's failure to
provide a RIS and the considerable risks
posed by this Bill for investment,
creation and economic
growth in Australia,
Coalition Senators believe that this Bill should be immediately withdrawn until
a RIS with full consultation with industry has been undertaken.
Minister O'Connor's misrepresentations on what LMT is
On 21 June 2013, the same day as the Inquiry into this bill, Minister O'Connor
misrepresented what LMT actually is.
Minister O'Connor in response to a question asked of him at the Skilled
Migration National Employer Conference in Melbourne told attendees the LMT
provisions in his Government's 457 bill amounted to:
...putting an ad in the paper. That's it. There is no
other undertaking required from the employer.
Under questioning from Senator Cash at the Inquiry, the Department contradicted
Minister O'Connor and confirmed that the Department is yet to determine how the
LMT provisions will work. DIAC also said that Minister O'Connor's statement was
not provided by the Department.
Senator CASH:...What would the department do if they
asked a business for evidence of labour market testing and the business
responded, as per Minister O'Connor's statement, 'I put an ad in the paper'? Is
Mr Wilden: The way the [labour market testing] is
going to work is yet to be determined in great detail...we have not looked at the
Senator CASH:...[Y]ou do not know that yet, because as
per your own evidence, you have not yet looked at the micro detail[?]
Mr Wilden: We have not looked at the micro detail...
Senator CASH:...[U]pon what basis does Minister
O'Connor make that statement?
Mr Wilden: I cannot speak to why the minister would
have made that statement. I was not aware of the statement and it was not
prepared by this office.
Coalition Senators are gravely concerned that Minister O'Connor has yet
again deliberately manufactured false claims in relation to a bill for which he
is responsible for.
Minister O'Connor has already had to admit that in relation to his claim
that there have been in excess of 10,000 cases of abuse in the 457 program he
had made this number up and that his allegations were not based on any
authoritative statistics or other probative evidence.
Minister O'Connor has now again been caught out deliberately providing
misleading information in relation to the 457 visa program.
(a) the fact that Minister O'Connor had to admit that his claim that there
has been in excess of 10,000 cases of abuse in the 457 program was false; and
(b) the fact that Minister O'Connor has now been caught out again deliberately
manufacturing false claims in relation to LMT;
Coalition Senators conclude that the statement made by Minister
O'Connor at the Skilled
Migration National Employer Conference in Melbourne were politically
motivated, incorrect and designed to deliberately mislead stakeholders in
relation to what LMT is.
Coalition Senators' conclusions on Labour
Coalition Senators note that the 457 visa program is only accessible to
those employers with a strong record of, or a demonstrated commitment to,
employing local labour and, also, a demonstrated financial commitment to
training Australian workers
Coalition Senators also note the compelling evidence from industry
groups and labour market experts who have argued against the introduction of
stringent LMT as part of the 457 visa application process.
Coalition Senators agree that the introduction of stringent LMT will
undermine the rationale and purpose of the 457 visa program, which is intended
to facilitate the rapid filling of employment positions during temporary skill
The ability to rapidly fill vacancies with a skilled overseas worker is
an important feature in the overall success of the 457 visa program.
Coalition Senators believe the proposed regime for LMT will be
cumbersome to implement and difficult to monitor, and will increase the burden
of costs, regulation, obligations, compliance and enforcement on employers
seeking to sponsor workers on 457 visas.
Based on the evidence provided to the Inquiry, and the false statements
of Minister O'Connor and the spurious evidence of the CFMEU and TWU regarding
abuse of the 457 visa program, Coalition Senators have formed the view that the
re-introduction of LMT is politically motivated and is being used as a vehicle
to frustrate and discourage business from utilising the benefits that underpin
the 457 visa regime.
Coalition Senators do not support the introduction of LMT.
Conclusions – Coalition Senators
Coalition Senators are concerned that the passage of the Bill is being
progressed by the Government with indecent haste and without appropriate
consultation with affected parties.
Senators believe that this Bill if passed will add significantly to the burden
of costs, regulation, compliance and enforcement on employer sponsors using the
457 visa program.
The failure by the Government to follow the advice of its own OPBR and
provide a RIS in relation to the amendments contained in Schedule 2 to the Bill
and the Prime Minister's actions in granting of an exemption without any
explanation as to why she did this, confirms Coalition's Senators belief that
this Bill is the culmination of a deliberate union and Government campaign to
discredit and undermine the 457 via programme and demonise foreign workers.
Coalition Senators also conclude based on the evidence provided to the
(a) the failure by the Prime Minister to comply with a FoI request in
relation to her employee Mr John McTernan and
(b) the fact that the extremely damaging statements made by Minister
O'Connor, the CFMEU and the TWU alleging widespread rorting of the 457 visa
program are not supported by their own evidence or any other authoritative
statistics or sources; and
(c) Minister O'Connor's misleading information to the Skilled Migration
National Employer Conference in Melbourne in relation to what LMT is
confirms that this Bill is politically motivated and designed
to undermine the 457 visa program.
This Bill is confirmation of the excessive power, control and influence that
the union movement has over the Gillard Labor Government.
Coalition Senators believe that this bill based on the evidence provided
to the 457 Inquiry does not represent good public policy and is not a bill that
has been drafted in Australia's national interest.
Coalition Senators recommend that the Government delay the passage of this
Bill 2013 to allow a RIS assessment, proper consultation with relevant parties
in relation to the Bill and in particular its impact on business and industry.
The Bill is flawed and should not be proceeded with in its current form
and should be withdrawn.
|Senator Gary Humphries
|Senator Michaelia Cash
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