Philip Ruddock (Berowra, Liberal Party, Attorney-General) Share this | Hansard source

The first point I would make in relation to this matter of public importance, in which the opposition alleges the government’s failure to prevent the use of skilled temporary subclass 457 visas to exploit foreign workers and drive down wages, is that that proposition has not been proven. The Prime Minister dealt with that very clearly today when he made it clear that the objective evidence is that wages are not being driven down—that, in fact, there was a two per cent increase in wages in the last quarter. I think that puts paid to that proposition immediately. In the context of employment in Australia, there has been substantial employment growth. Unemployment is at the lowest level it has been at in over 30 years. That is a substantial record of achievement, but it also means that there are circumstances in which you might reasonably expect that there will be some growth in visa entries for people who have skills that are in demand in the Australian labour market.

The point I wanted to start with was to explain the genesis of the skilled temporary subclass visa 457. This visa class arose as a result of an inquiry initiated by the former Labor government, which handed down a report known as the Roach report on business temporary entry. The report was accepted by the former Labor government and these visa classes were implemented. The fact is that the Labor government at that time was strongly of the view that we needed to have streamlined access to skilled temporary workers from overseas. The then minister, Senator Bolkus, said in the Senate:

The policy objective for this government is to place Australia, through our rules and regulations in this temporary migration area, in a position to benefit both now and into the future.

He went on to say:

... it is crucial that we ensure the smooth movement of key personnel into and out of this country.

The report was handed to the government and accepted in 1995. Labor did not remain in office for much longer. In fact, as Minister for Immigration and Multicultural Affairs, I implemented that report in the terms of the recommendations made.

It is interesting that, in the eight years of the operation of the recommendations of that report and of the measures under the new regulations, the Leader of the Opposition said he had no complaint. What he said today was that, in the last two years, he has had some complaint. That is what he is suggesting. I ask myself: what were the changes that were made by the government in relation to the rules and regulations for 457 visas that have generated this possibility of potential for complaint? The reality is that there were no changes. Yes, in the economic circumstances that we are in, there has been a substantial increase in the number of visas issued, but that is taking place in the context of the lowest unemployment rate in 30 years, jobs growth of 180,000, the longest period of sustained economic growth that Australia has experienced, the baby boomer generation reaching retirement age and projections of a slowing growth rate in the Australian working age population. It is against this background that Australia and Senator Bolkus argued for visa class 457. He was arguing for it in the context of the expectation that, in the following five to 10 years, we would have a critical need to attract skilled workers.

The 457 visa is a demand driven program, so its size does fluctuate with the strength of the economy. Research shows that the program has been highly positive in terms of its impact on the living standards of Australians and on Commonwealth and state budgets. Access Economics has done a considerable amount of work in relation to that visa class and has been able to substantiate those benefits. Sponsored temporary business workers raise the average productivity of Australian workers. They provide fiscal benefits to the Commonwealth, state and territory budgets. The intake of about 37,100 persons a year—that is, 22,000 principal applicants and their dependants—benefits the living standard of existing Australian residents by about $43 per head per year.

So what we see is a business class that benefits the Australian economy very substantially and that is significantly used by state and territory governments to meet their skill needs. Yes, there has been an increase, but it has brought people with skills that we need that are benefiting Australia quite significantly. The source countries are primarily: the United Kingdom, 24 per cent; India, 10 per cent; and South Africa, eight per cent. Managers, professionals and associate professionals continue to represent the largest user groups in the 457 class and registered nursing remains the largest nominated occupation.

So I think it is important to recognise that in context this visa system is working particularly well; it is working for the benefit of Australians generally. If you look at the administration of this visa class, which is closely monitored by the government, the fact is that there have been something of the order of 6,471 business sponsorships monitored to test their compliance with sponsorship undertakings during 2005-06. Of those, 1,790 business sponsors were also site visited based upon targeted risk profiling and random samples—not on the basis of complaints, I might say. If you look at the numbers of complaints that are made, they are relatively minor in the context of the numbers of visas that are issued.

Since December 2005, 15 allegations have been finalised, with four of the investigations finding that allegations were proven. The department is currently investigating some 200 employers in relation to potential issues of abuse in the 457 class—and this includes the allegations received from the Department of Immigration and Multicultural Affairs and from community sources—and other issues identified during regular monitoring activities. In other words, if you look at the community complaints, as well as the issues identified by the department’s own monitoring activities, you have investigation of some 200 employers out of something in the order of 10,000 business sponsors. I think it is important to put that in context.

The facts are that there is labour testing in relation to these visa classes and, notwithstanding the allegations, this system has worked well for eight of the 10 years it has been in place. The early testing that was accepted by Minister Bolkus in 1995—that is, that it be for key activities—was the subject during the late 1990s of a review by government. To clarify matters, key and non-key activities were replaced on 1 July 2001 by minimum skill and salary thresholds in order to more tightly administer the program. That has meant that, while Australia’s unemployment rate is highly polarised, with low rates of unemployment for skilled people and relatively higher rates of unemployment for the unskilled, new regulations stipulated that, for highly skilled positions gazetted by the minister for immigration on advice from the minister for employment—that is, professionals, managers, associate professionals and tradespeople—no labour testing would be required. Certification by a regional certifying body that the position cannot be reasonably filled locally would be required for semi-skilled positions. So there is enhanced testing that was put in place by this government to ensure that the system would operate more effectively.

In relation to English language, many occupations sponsored under the 457 program are subject to licensing and registration. English language skills are mandatory requirements for many of them. Nursing, which is the largest occupation, is a group where that is required. English is not an issue for around 75 per cent of the 457 visa holders in the professional, managerial or associate professional jobs. But for other skilled occupations the employer is best placed to determine whether a person has the right English or other skills for the job. For lesser skilled occupations, there is a case for the introduction of an English language requirement, and that is why on 1 May the minister, Senator Vanstone, announced an English language requirement would be introduced subject to consultation with industry, and those consultations have been underway.

On issues in relation to wages: 457 visa holders are not a cheap option given the costs of recruiting from overseas. Professor Peter McDonald found that 36 per cent of surveyed 457 employees either were promoted or obtained better jobs with another sponsor. Market forces ensure that people holding such visas are paid market rates, and average salaries for 457 visa holders are around $65,000 a year. I think it is better to allow the market to set those rates than to try and regulate them. Minimum salary levels, which have been increasing at 4.6 per cent per annum, provide the floor for 457 visas.

In relation to training issues, employers seeking to sponsor workers for 457 visas must demonstrate that they have a satisfactory record or demonstrated commitment to training Australians. In 2004-05, around 650 sponsor applications were refused. Some 75 per cent were refused on grounds of inadequate commitment to training. The government’s commitment to vocational training has grown steadily over the past 10 years. In 1985 there were 36,500 apprenticeships and traineeships completed; in 2005 this number had grown to 134,900. I think it is important to recognise that.

These positions under section 457 are not the guest worker arrangements which we see in other parts of the world. The skill levels of workers under the 457 visa class are significantly higher. 457 visa workers receive average salaries above the Australian average, while guest workers in Europe and North America receive low salaries. 457 workers are not tied to a single employer and there are often pathways here in relation to residence.

If I may, I would like to speak briefly about compliance because it is important to recognise that the allegations against those people who use the 457 class of visa have been quite limited. I mentioned before that allegations about 200 employers within a program of 10,000 participating employers is an indication of the extent to which these matters are the subject of irregularities. Allegations against 200 sponsors represent about two per cent of the employers using the visa class.

In relation to those who misuse the 457 class of visa, there are severe sanctions. The Migration Act provides for sanctions to be applied where a sponsor breaches undertakings with regard to their workers. The sanctions can include cancellation of sponsorship and barring the sponsor for a specified time from being a sponsor. The Migration Act provides for recovery of debts to the Commonwealth with a limit of up to $10,000, including where we have to locate a sponsored person, detain a sponsored person and remove a sponsored person from Australia, including airfares. The new employer sanctions bill, which is presently before the parliament, will further strengthen available sanctions where an employer misuses the 457 class of visa. In addition, Minister Vanstone has announced that there will be consultations on possible fines.

I would mention the fact that temporary visa holders do save and create jobs for Australians. This is highly beneficial. The irregularities are not substantial in the context of the whole scheme. If skills are lacking in regional areas that prevent the creation or continuation of jobs, the 457 visa class gives you the opportunity to obtain people with appropriate skills that will create opportunities for other Australians.

The minister has produced a table of good-news stories in relation to 457 visa holders and employers. I suspect that, if I ask for leave to table that statement, I would probably be denied it. But I do not have to seek leave to table it and so I do table—

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