Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Hansard source

I rise to oppose Senator Ludwig’s motion to refer this matter to the Senate Legal and Constitutional References Committee. Senator Ludwig should not be surprised at this, because, quite frankly, this is a political stunt which demonstrates the lack of seriousness of the ALP position. The ALP is not serious about a critical examination of the 457 visa program. Instead, it is running the agenda of its union constituency, to which it is so beholden—not surprisingly, given the millions of dollars that the union movement have given and continue to give to the ALP. Sadly, the ALP is concerned only with pursuing a short-term political agenda rather than a long-sighted review of the visa class, which is important for Australian businesses and communities. This is especially the case in many regional areas.

The government opposes the motion because it overlooks Australia’s significant economic growth over the decade of the coalition government. The government opposes the motion because Australia’s unemployment rate is down to 4.8 per cent. I remind the Senate—and especially those opposite—that this is the lowest in 30 years. I know that there are those who may not be happy about this, because they prefer to perpetrate doom and gloom. They want to peddle in negative news. They do not like good news. It does not suit them.

Skilled unemployment is even lower. Labor constantly overlooks this. Recently commissioned research by the Department of Employment and Workplace Relations, published in a report entitled Workforce Tomorrow: adapting to a more diverse Australian labour market, predicts that Australia faces a potential shortfall of 195,000 workers over the next five years due to the ageing of the population. Labor seems to overlook this reality. It should be noted that the Australian government has introduced a range of reforms to address this issue, including the recent Welfare to Work reforms. These reforms will increase participation of people who have traditionally been locked out of the labour market, such as sole parents, mature age people, people with disabilities and the long-term unemployed. But there are pressing skills shortages that need to be filled now.

In the absence of Australian workers, skilled workers from overseas have been brought in to keep Australian businesses working to ensure that productivity is maintained. Many of the claims by the ALP and the unions have been that Australian workers are being displaced from the labour market by foreign workers. You cannot displace those who are not there. Labor and the unions also claim that foreign skilled workers have been brought to Australia at the expense of training Australians. This is false: there has been record growth in the take-up of Australian apprenticeships. There are now over 389,000 Australian apprentices in training—a 151 per cent increase from March 1996.

Senator Ludwig’s motion also overlooks the cooperation between the Australian government and state and territory governments on 457 visas. If federal Labor were serious about making valuable contributions to the 457 visa program, they would listen to and take a lead from their state and territory counterparts. COAG considered the matter of 457 visas in July 2006 and asked the Ministerial Council on Immigration and Multicultural Affairs for a report by 15 November 2006. The ministerial council also considered the matter on 14 July and referred it to the Commonwealth-State Working Party on Skilled Migration. The ministerial council, which includes state and territory Labor ministers, noted that:

The critical role of sub-class 457 visas in addressing national and regional skill shortages in some areas and the importance of further developing measures that, while improving protection for temporary skilled migrants, would not materially add cost and delays for employers.

The Commonwealth-State Working Party on Skilled Migration met on 31 July 2006 to further improve cooperation between jurisdictions on 457 issues. The working party will report to COAG at the end of the year and focus on and go beyond the matters of interest raised by Senator Ludwig. It is important the Senate notes that the working party will inquire into a range of matters. They are: state and territory cooperation to investigate breaches, protocols, sanctions and fines; wage levels for 457 visas; increased use of labour agreements; labour market testing; information exchange on 457 visas; training requirements; improved communications with 457 visa holders and sponsors; the role of regional certifying bodies; regional definitions of 457s; labour hire firms; and English language requirements. This is hardly lack of scrutiny, as alleged by Senator Ludwig.

Against this background, it would be both a waste of time and a waste of public money for the Legal and Constitutional References Committee to run a concurrent inquiry. It is also important to underline that state and territory governments are the primary users of the 457 visa subclass. State governments constantly tell us how important the 457 visa subclass is to them. But this is a fact that federal Labor completely ignores. Sadly, it is content to undertake a lazy, xenophobic, misleading and negative campaign against skilled foreign workers.

One of the biggest users of the 457 subclass program is the New South Wales Department of Health. During the last 12 months, the New South Wales Department of Health nominated 1,030 nurses and doctors—the majority being nurses. On 1 January 2006, the Commonwealth and the New South Wales Department of Health entered into a second three-year labour agreement, providing for the entry of around 1,000 nurses per annum to address the needs of the New South Wales hospital system. But Labor is out of touch with business, is out of touch with regional Australia and, most intriguingly, is out of touch with its colleagues in the states and territories.

As further evidence of how unnecessary Senator Ludwig’s proposal is, I would like to offer the following responses to the recurring criticisms of the 457 program. Criticism 1: allegations of rorting and exploitation—wrong. The Department of Immigration and Multicultural Affairs is currently investigating allegations against 56 employers. This represents about 0.5 per cent of employers currently in the scheme. Of the 13 DIMA investigations completed since December 2005, there were no findings against employers in nine cases. Over the two-year period 2004-05, DIMA referred 35 cases to the Western Australian Department of Consumer and Employment Protection—out of 1,000 employers in Western Australia using the scheme. In 12 cases there was a finding of salary underpayment, but the level of underpayment was significant in only one case. These employers are on the DIMA watch list should they seek to sponsor further overseas workers.

Criticism 2: taking jobs of Australians—wrong, again. Research has consistently found skilled migrants create as many jobs as they take, and there is no difference if they are on a temporary visa. The impact is most positive where skilled migrants go straight into jobs, as they do with 457s, rather than have a period of unemployment, as is the case with independent skilled migrants. I remind those opposite that traditional labour market testing in 457 visas was progressively abolished following recommendations of an industry-union committee set up by former Labor immigration minister Bolkus in 1994. The committee found labour market testing created lengthy delays and costs for employers without adding any value, as employers rarely failed labour market testing.

Criticism 3: 457 visas are a source of cheap labour which is driving down wages—wrong, again. A 457 visa is not a cheap option for employers, given the costs of recruiting from overseas. A survey by Professor Peter McDonald found 457 employers emphasised that, ‘Austra1ian workers would be preferred because of the higher costs and time involved in sponsoring an overseas employee.’ I remind the Senate that the average salary of a 457 worker is $65,000. Furthermore, 457 visa holders regularly move from one employer to another in order to bargain for higher salaries. The market will not allow their salaries to be held down or be used to drive down wages.

Criticism 4: 457 visas are undermining training efforts—wrong, again. Employers sponsoring under a 457 are assessed for their commitment to training Australians. Of 650 employers refused in 2004-05, around 75 per cent were refused because of lack of commitment to training. The Howard government’s commitment to vocational education and training has grown strongly, with apprenticeships and traineeships completed in 2005 standing at 134,900.

Criticism 5: 457 visas are a guest worker scheme contrary to Australia’s traditional approach to migration—wrong, again. There are key differences between the guest worker schemes of Europe and North America and the 457 visa system, and I would like to point these out. The skill levels of 457 visas are much higher, with around 85 per cent being professionals, managers or semiprofessionals. At an average salary of $65,000, 457s receive higher salaries. A 457 can move from employer to employer in search of better pay and conditions. And 457s have open pathways to permanent residence.

I would like to conclude by pointing out that just a couple of days ago leading academics applauded the operation of the 457 visa system. New research by leading academics has further demolished the myths concerning the 457 visa that the trade unions and the federal Labor Party trumpet as facts to the Australian public. Labor has falsely claimed that the 457 visa brings cheap, unskilled foreign labour into the country to take jobs from Australians. A report entitled Temporary skilled migrants’ employment and residence outcomes (2006) by Professors Peter McDonald and Graeme Hugo and Dr Siew-Ean Khoo was released the other day by the Minister for Immigration and Multicultural Affairs, Senator Amanda Vanstone. As the minister has stated:

Some critics want to go back to ‘fortress Australia’ and keep out skilled workers from overseas ... But with an unemployment rate of 4.8% we can’t afford to take such a blinkered approach to attracting skilled migrant labour in a highly competitive international labour market.

I have referred to criticisms being peddled by those opposite. It is clear from this report that these myths have been comprehensively debunked.

Myth No. 1: 457 visa holders are being used as unskilled labour to drive down wages. Fact: 93 per cent of those surveyed in the report were in managerial, professional, associate professional or skilled trade occupations. Fact: employers utilising 457 visas must pay the award rate or the minimum salary level stipulated in the migration regulations—whichever is the higher. The average salary of 457 visa holders, as I have previously said and as has been reiterated, is $65,000 per annum. Like all Australian workers, 457 visa holders are able to move from one employer to another and bargain for higher wages in accordance with market movements. Table 2 of the report shows that, in a 12-month period, 16 per cent of 457 visa holders changed employers and 28 per cent of visa holders progressed to higher incomes.

Myth No. 2: 457 visa holders take jobs from Australians and are a substitute for training. Fact: past research has consistently shown that skilled workers create jobs for Australians by allowing businesses to access the skills they need when they need them. Fact: the report recently released adds to this picture and demonstrates that 98 per cent of 457 visa holders in their original jobs are passing on their skills to Australians, which means, in turn, training of Australians.

Myth No. 3: the 457 visa is just another name for ‘guest worker’. Fact: the Australian government has consistently rejected proposals for guest worker programs. Holders of 457 visas are able to apply for permanent residence, and they represent a significant and growing part of the annual skilled permanent migration program. The research in the report shows that 87 per cent of 457 visa holders surveyed have applied or intend to apply for permanent residence, which contradicts the myth that they are indentured guest workers with no security of tenure. As the minister has stated:

There is an overwhelming body of research that says that 457 visa holders are young, well qualified and highly skilled people who bring many economic benefits to Australia.

This includes the Access Economics report The impact of sponsored temporary business residents on Australia’s living standards (2002), which found that 457 entrants raise the productivity of Australian workers, alleviate skill shortages, raise employment and average earnings, and make a major contribution to Commonwealth and state budgets. The only surprising thing about all of this evidence on the value of 457 visas is that federal Labor and the trade union movement do not understand it.

It is clear that state Labor governments are working closely with the federal government to try and maximise the benefits the 457 visa can bring for their states. As I have already stated, the New South Wales government is the biggest single user of the 457 visa program. As the minister has repeatedly stressed:

Given our demand for skilled workers, we should be putting out the welcome mat for these people, not trying to white ant or demonise them.

In conclusion, given the work that the Commonwealth-state party looking into the issues has raised—the terms of reference of which I have quoted—the government believes this inquiry will comprehensively cover pertinent issues regarding 457 visas without the need for the reference suggested by Senator Ludwig.