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How the 457 scheme is changing Australian immigration

Changes to 457 visas by the Gillard government has divided political and public opinion in Australia. AAP/Lukas Coch

The current public debate over temporary employment 457 visa holders has thrown a spotlight on a major shift in Australia’s migration program.

Historical context

Prior to the introduction of the Temporary Business (Long Stay) visa by the Howard government in 1996, Australia prided itself on being a country that did not recruit guest workers, in which the emphasis was on immigration for nation-building.

Employer recruitment of workers who would have an automatic right to permanent residence was widespread, and indeed had been the heart of the immigration program from the 1950s. Australian governments regularly pointed to Switzerland and Germany as exemplary cases of the problems of social cohesion and integration that guest-worker programs would necessarily produce.

When planned under the Keating government, the temporary visa idea was to see the system as part of a major investment in training of Australians, and as a short gap cover until the training system was expanded.

However, in a strategy that was designed to allow a public perception that immigration was being reduced, employers were guaranteed they could recruit workers when needed. The then-recently-elected Howard government set in place the new visa sub-category that allowed short-term employer sponsorship of skilled employees.

The training wing of the Keating strategy of course atrophied, while simultaneously the 457 visa widened as an avenue for immigration. Official immigration indeed fell heavily in the first five years of the Howard government, picking up again as 457 visas reached the end of their contracts and converted to permanence, and as immigration more generally was expanded.

Recent reform

Over the past fifteen years, hundreds of thousands of sponsored workers have come to Australia, with just under half opting to take out permanent residence. After 2000 and the introduction of dual citizenship, even more of these permanent residents applied successfully to become immigrants, and later to gain citizenship.

Except for a dip each Christmas as people return home for the festive season and recruitment slackens off over the summer holidays, 457 visa holders have continued to increase in number month-on-month: new recruits feeding in at one end, leaving at the end of their contracts or converting to permanent residents at the other.

However as Peter Mares points out, the tank is backing up the sluiceway as the uncapped 457s pour into the channel already clogged with applicants for permanent residence for whom entry is quota-controlled. The pressure in the floodway is growing, and something has to give way.

In November 2012 - with very little fanfare - the Gillard government changed the rules in relation to 457s, tightening the requirement that the jobs be real and real efforts be demonstrated that no qualified Australians are available. The government was apparently prompted to act by some factors within the 457 scheme, and some factors outside it. It was thought that this would reduce the inflow of 457s, but also designed to speed up the pathway to permanent residency.

The pressures within the scheme are not only to do with numbers and the downstream effects of upstream recruitment. While the majority of 457s appear bonafide arrangements, whether they be country doctors and midwives or Italian pastry chefs, some rorting of the system also appears in significant sectors.

In an almost parallel process in Australia to that which is causing the almost unheard of phenomenon of street demonstrations against the government in Singapore, labour contractors are apparently arranging for the employment of significant streams of workers from particular sources in specific industries. In the past Korean building workers and Indian IT specialists have been mentioned, though IT in particular is dropping.

Working at a legal but potentially lower wage, more vulnerable to employer manipulation and exploitation, more willing to take conditions that are less acceptable in the wider community, such contract workers could be more easily made to fit the conditions of the older system than the revised and renamed Temporary Work (Skilled) category.

Cafes and restaurants have been accused of rorting the 457 visa scheme to gain access to skilled foreign workers. AAP/Angela Brkic

The November revisions also addressed one of the issues identified above: it made it easier and quicker for 457 holders to transit to permanent residents as a sponsored immigrant after two years. While this made becoming “an Aussie” potentially quicker (and allowed them to leap-frog the queued and barely moving thousands of waiting ex-international students on bridging visas) - and thus reduced the “guest worker” problem - it increased the pressure on the throttle of PR processing.

The current debate

The posts on SBS’ Factbox page on 457s capture the flavour of the debate, which marries rancour with pleas for fairness, and unashamed self-interest.

Those critical of 457s include people who see migrants as competing for jobs, who complain that their families are filling up the TAFEs and preventing Aussies from getting training, who believe that they are guest-workers who should be barred from permanent residency because they are “bringing the entire village, having babies here, never learning English and working in black economy”.

One Australian recently returned from overseas claimed that:

In reality firms are pulling people from China on these visas instead of hiring locals. Couldn’t get an interview. Australia is in trouble. Isn’t it called scab labour?

Then there are those who are critical of “the boat man” and want the asylum seekers blocked, so that 457s can have a better go in Australia. The 457 holders complain they pay full taxes and super, are more heavily taxed on their super, don’t get Medicare, and have to pay for public schooling. 457 holders are, as one says, “hardworking, educated people…I am sure we will contribute positively to the Aussie economy-look what has happened to the Aussie economy from 1996?”

So when prime minister Gillard announced the tightening of the 457 category and the “pursuit of rorts” to the ACTU conference on March 14 she was fishing in already heavily burleyed waters. The envy and suspicion of foreign workers goes well back into Australian history: White Australia was built on hostility to the Chinese miners and furniture makers and seamen who sought work in the Australian colonies. The ACTU was carefully duchessed with promises that no Australian jobs would be threatened nor conditions undermined when the great post-war immigration program was launched.

Now with the prime minister announcing forthrightly that she leads a Labor government not a social democratic one, the placing of the apparent protection of Australian workers at the forefront of immigration policy performs a grandly symbolic function.

Whether it will backfire - leaving the ALP now even more divorced from one its two pillars of traditional support, middle class and progressive social democrats outside the Labor movement (less than 20% of employees are union members and many of them are already strong Liberal supporters) - remains in part to be seen.

On the other hand the policy tweaking may actually herald real improvements, especially if augmented with a better human rights regime for 457 holders.

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