Dodgy Visas Could Cost Australian Jobs

Recent leaks from the Department of Immigration have revealed Australia’s 457 visa scheme is riddled with visa fraud and rorts. These show that many workers in Australia’s dedicated skilled migration scheme received their 457 visa under false pretences. Employers state that workers will perform a highly skilled job such as ‘project co-ordinator’ or ‘contract administrator’ but then employ them in low or semi skilled work. Clearly something needs to be done to address this situation but the reality is, problems with 457 visas reveal only a fraction of the low skilled work being done by migrants that is not adequately regulated.

The Age, by Joanna Howe and Alexander Reilly, 13 August 2014

There are two problems under the current law. First, migrant workers are vulnerable to exploitation and second, they may be taking jobs that should be available to Australians by performing work in areas where no real skill shortage exists, putting downward pressure on wages and conditions for local workers.

Whilst ‘officially’ Australia only has a highly skilled migration program (namely, the 457 visa), the reality is that the Australian labour market is flooded with low skilled temporary migrant workers on other visas. International student and working holiday visas, in particular, allow entry to the Australian labour market, without a requirement that the job they perform be experiencing a domestic skill shortage.

Successive Coalition and Labor governments have not only tolerated this unskilled migrant workforce, but have encouraged its growth. The working holiday maker scheme was expanded in 2005 to allow visa holders the option of a second year in Australia so long as they do a three-month stint working in a regional location. In 2012-13, a staggering 258,248 working holiday visas were granted. Of these, 38,862 were for a second working holiday visa.

In 2013 the government introduced a new 485 visa which allows international graduate students to work for two years in Australia. The 485 visa is not subject to labour market testing, and graduates are not required to work in the area of their studies. As a result, international student graduates are competing directly with Australian university graduates and many of these visa holders are performing low skilled work.  Last year alone, 142,405 students stayed in Australia on other visas at the conclusion of their studies with 31,833 of these on the new 485 visa. This new visa looks particularly anomalous given changes to unemployment benefits to young Australians mooted in the federal budget and given the dire youth unemployment statistics in some parts of the country.

Ironically, Australia has two official entry pathways for low and semi-skilled workers, both of which are bypassed by most employers because of the presence of international students and working holiday makers, and the ease by which the 457 visa can be exploited. These two pathways, the Pacific Workers Scheme and the labour agreements scheme, are so heavily regulated that employers are reluctant to use them. The latter involves six to eight months of red tape before an employer can access a semi-skilled worker via a labour agreement.

Clearly Australia’s migration settings are out of kilter.

The biggest challenge for the government is how to resolve the tension between the objectives of expanding employers’ access to migrant workers and protecting the job prospects and conditions of Australian workers in a context in which migration is acknowledged as a key driver for economic and social renewal in Australia. This is a difficult balancing act, which has been made all the more challenging with the government’s recent decision to close the Australian Workforce and Productivity Agency, which had a key role in determining which occupations were in shortage and could be accessed by employers as part of the permanent migration program.

We proposed to the 457 visa Senate inquiry in 2013 that Australia rethink the backdoor to low skilled work that is presently provided by the international students and working holiday maker schemes. The problem with this backdoor is that these visa holders are often highly susceptible to exploitation by unscrupulous employers because of their vulnerable labour market status. The migrant worker is easily replaceable because of their low skill level and they are reluctant to voice concerns over health and safety or poor wages and conditions for fear of losing their visa.

Our proposal is that Australia introduce an official entry stream for low skilled workers, like ‘a subclass 457B’. This visa would be subject to strict independent labour market testing so that only occupations which are in shortage can be accessed. This independent labour market testing would also confirm that the skill shortage was not due to a lack of investment in training and/or Australia’s apprenticeship program, or because of unacceptably poor wages and working conditions for that occupation.

The problem of rorts in the 457 visa should also be addressed through a more rigorous independent labour market testing scheme. In a classic example of policy-making on the run, the previous Labor government introduced employer-conducted labour market testing despite OECD recommendations that an independent body test the labour market rather than employers. A good example of where this occurs fairly effectively is in the UK, through the work done by the Migration Advisory Commission.

More resources also need to be put into monitoring the work lives of all visa holders. Whilst Labor did add 300 inspectors to Fair Work Australia to tackle this issue, this is a drop in the ocean given that the number of migrant workers exceeds half a million.

Since the election, there has been so much fanfare about stopping the boats and so many resources directed towards achieving that objective. This has obscured the real crisis in Australia’s migration program, which is being poorly managed and is highly susceptible to fraud and rorts. Australia needs a more considered, coherent and transparent approach for determining its migration policy.

Dr Joanna Howe and Associate Professor Alexander Reilly work in the Adelaide Law School and are members of the Public Law and Policy Research Unit at the University of Adelaide Law School.

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