Explainer: 457 visas in Australia

Most 457 visa holders are well-paid professionals or in management. AAP/Angela Brkic

With all the fuss over 457 visas in recent weeks, and prime minister Julia Gillard due to address the issue at a conference today, it’s worth looking beyond the cries of vested interests and politicians trying to score a hit with the electorate to establish the facts about this much-debated migration program.

Demographers have studied the effect and take-up of these visas since their introduction. This data can give an important insight into how 457s work, who uses them, and whether they’re being misused.

Unsurprisingly, the reality of 457 visas doesn’t entirely tally with the agendas of unions, businesses or politicians. As usual, the answer lies somewhere in between.

What is a 457 visa?

Temporary Business (Long Stay) (Subclass 457) visas are one of many of visa categories which are part of the national migration program. It is a temporary visa which allows skilled workers to be sponsored by a business in Australia to fill a vacancy which cannot be filled locally.

When the 457 was introduced in the second half of the 1990s it represented a significant shift in Australian immigration policy. Before this, Australia had eschewed temporary worker schemes, opting instead for large-scale permanent settlement migration. This approach valued immigrants not only as workers but future permanent residents and citizens.

But a government inquiry in 1996 found that sudden increases in the demand for skills and intense international competition for skilled labour meant there was an increasing international labour markets for the highly mobile, high skilled workforce. In this context, the permanent migration avenues were insufficient.

So 457 visas were introduced to achieve greater flexibility in the migration system to allow businesses to react quickly to skill shortages at times of economic growth.

How many 457s are there?

The 457 visa has a number of major restrictions. It is confined to only highly skilled workers. There are minimum salaries which apply so that they cannot be used to undercut Australian workers. Their stay is restricted to four years.

Demand for the visa can be seen in its rapid growth, as shown in Figure 1. As the scheme became better known, the numbers peaked in 2007-08.

Australia: 457 visas granted, 1997-98 to 2011-12. DIAC Population Flows: Immigration Aspects, various issues and DIAC 2012

There was downturn during the global financial crisis but it has quickly recovered, and a new record was reached in 2011-12 when there were 125,070 grants – 68,310 workers and 56,760 dependents.

In June 2012, there were 162,000 457 visa holders in Australia including 91,050 workers. The number of businesses employing 457s increased to 22,450 in 2011-12.

Who holds 457 visas?

Almost 70% of visa holders are highly paid managers or professionals. Almost all (94.7%) work in the private sector and more than a third (34.1%) are in New South Wales, especially Sydney.

The fastest growth has been in Western Australia (22.5%) and Queensland (16.8%). Major countries of origin are the U.K. (20.5%), India (20.4%), Ireland (8.5%), The Philippines (6.7%), the USA (5.5%) and China (4.6%).

Do the visas work?

Research has shown that the 457 visa has been effective in enabling businesses to access skilled workers quickly at times of economic growth. A significant number of 457s have subsequently applied to enter Australia as immigrants so that in 2010-11 40.3% of migrants to Australia were already in Australia under another visa (student, visitor, working holiday maker or 457).

The scheme has been especially effective in recruiting skilled workers to regional and remote areas where there has been great difficulty in recruiting Australians, especially in medical services, engineering and specialised skilled trades.

Are they misused?

Throughout the life of the scheme there have been accusations of a small number of employers misusing the scheme by underpaying the 457s or not testing whether equivalently skilled Australians were available. From the beginning, the government introduced a number of in-built protections to prevent local workers conditions being undercut and overseas workers from being exploited and the latest changes need to be seen in this context.

The first major intervention to strengthen the integrity of the 457 scheme came in 2008 when a number of initiatives were introduced to ensure the working conditions of 457s met Australian standards.

The number of infringement notices issued to sponsors of 457s increased from nine in 2010-11 to 49 in 2011-12. The latest initiatives are designed, among other things, to ensure that sponsors of 457s have made genuine attempts to recruit Australians with the required skills and are putting in place the training mechanisms to ensure that long term demand for skilled workers are met by Australian and permanent migrants.

The verdict

The 457 visa has served the Australian economy well – both major parties agree on this. As with other visas, such as tourist and student visas, there have been attempts to misuse it.

Training Australians to meet skill shortages in the medium- and long-term must be a priority in Australia, but there are contexts where 457s are the most appropriate way to deal with short term shortages.

The answer is not to abolish the program but to ensure it works in the way it was intended – to meet a genuine need and benefit all Australians.