Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Parliamentary Secretary for Immigration and Shadow Parliamentary Secretary Assisting the Leader in the Senate) Share this | Hansard source

Given the devil likely to be contained in the detail in the regulations, Minister, it is likely that there are even more concerns which time and the absence of the regulations have precluded the Senate from examining.

Firstly, concerns were raised about the actual need for the bill and whether the Rudd government was using the proverbial sledgehammer to crack the nut. The Australian Chamber of Commerce and Industry argued that the changes ‘seem disproportionate to the actual scale of sponsorship problems’, citing the 1.67 percentage of sponsor breaches referred to earlier. ACCI submitted that some of the proposed measures would have a detrimental effect on Australian business, especially on small to medium enterprises and that the cost of some of the measures might be prohibitive for many businesses. Indeed, it would even discourage the use of the program by Australian employers experiencing genuine skill shortages.

Evidence indicated that there was only a very small proportion of sponsors who abused the system, that the breaches that had come to light had been oversensationalised by the media and that abuse of sponsor obligations in white-collar professional industries was extraordinarily low. Understandably, the union movement supports the bill and, in some instances, argued it did not go far enough. Given the campaign waged against 457 visas by the unions, one only has to look at the rather large advertisement like the one I am holding up here in the Sydney Morning Herald of 10 November 2008 to know that the unions are not going to stop until they get rid of 457 visas.

While acknowledging that there have been some abuses but disputing that these had been as widespread as reported, several industry representatives questioned the appropriateness of treating all migrant workers on subclass 457 visas as one group and suggested consideration of a two-tiered system that differentiated between migrant employees who were acknowledged as potentially at risk as opposed to professionals such as engineers who were more likely to be capable of looking after their own interests. AMMA submitted that the legislation and regulations should only target those visa holders who may be at risk of exploitation and proposed a threshold salary of $75,000, above which visa holders would not be subject to the full extent of the legislation and regulation protection regime. It is interesting to note from table 3.2 of the Senate report that in 2003-04 about 89 per cent of the 22,370 section 457 visas granted were in the top three major groups of ASCO nominated occupations—namely, managers, administrators and professionals and associated professionals. By 2007-08 the figure was 80 per cent of 58,050 visa holders in same top three categories.

Secondly, concerns were raised about the effect of the bill on industry, with a range of witnesses indicating that the broad effects of the bill and the overall reform package would be to burden industry and discourage the use of the subclass 457 visa system. Several portrayed this as counterproductive, especially in light of the overall skills shortage and the Rudd government’s intention to address the financial crisis by bringing forward infrastructure projects. Indeed, some actually said that this was illusory, given the shortage of engineers in Australia.

ACCI emphasised that the extra costs associated with increasing the number and scope of sponsor obligations would be prohibitive, particularly for small employers. The Migration Institute of Australia, while being supportive of the bill, raised concerns that the balance set by the bill and subsequent regulations may weigh heavily against the sponsoring employer and, if so, employers would avoid sponsoring overseas workers and would either fail or take business offshore, which is not the intended outcome.

The Ethnic Communities Council of Queensland expressed similar concerns, but from the viewpoint of the visa holder. It stated that, if the legislation and regulations are too severe, visa holders themselves may be disadvantaged by the measures.

Thirdly, there are concerns about the sponsor obligations and the enforcement regime, the most significant complaint being the lack of availability of the regulations. Many witnesses and submissions questioned how to comment on the impact of a bill when its most vital component, namely the regulations, was not known. This uncertainty is already impacting on employers currently considering sponsoring 457 visa applicants. Concerns about the unavailability of the content of the regulations are also particularly relevant to the issue of enforcement and the proposed inclusion of the civil penalty provisions for failure to satisfy sponsorship obligations, resulting in a maximum penalty of $6,600 for an individual per offence and $33,000 for a body corporate. There is a lack of clarity about the element of ‘fault’, no statutory defence options and no ministerial discretion apparent in the bill.

Concerns are further heightened by the effect of transitional arrangements whereby current sponsors will have to comply with the new sponsorship obligations, and accompanying civil penalties, when the new provisions commence. Indeed, the Senate report retains serious misgivings about some aspects, and for penalties of this nature it is arguably appropriate that the scheme clearly include elements of fault or the availability of relevant statutory defences, or both, and for this to be apparent in the bill and not left to prescription by regulation.

Other areas of concern raised in the Senate report include: the proposed 140L test regarding barring of sponsors; penalties for multiple breaches; the potential damage to small business; the mandatory sanction provision in proposed section 140L(2), which could be harsh and unworkable, especially in relation to partnerships and unincorporated associations; the lack of detail about the proposed scheme for inspectors and lack of enforcement powers; and proposed section 140Z, which seeks to make it a criminal offence, punishable by up to six months in prison, for a person to fail to produce a document or thing to an inspector by a specified time—not less than seven days—and which lacks any defence.

Fourthly, repeated and significant concerns were raised about the application of new obligations to existing sponsors, referred to as retroactive or retrospective. The transitional provisions apply to several categories of existing sponsors. Whilst DIAC was at pains to point out that the effect of the bill is not retrospective, Fragomen Global lawyers observed:

… the fundamental point—

is—

that sponsors are going to be deemed to accept the new obligations at the point where they are introduced by regulation.

Major stakeholders have raised objections about the potential costs of this approach, including the need to redraft and renegotiate contracts and revise many aspects of current business practice, as well as about the added complexity of assessing the impact of the bill in the absence of the detail of the regulations. DIAC is opposed to managing two systems whilst obligations expire, but the report calls for DIAC to give consideration to allowing sponsors to seek exemption from new obligations that would impose extreme hardship.

Other issues of concern raised in the inquiry, but not examined, include the lack of clarity about certain terms, employers hopping on the part of subclass 457 visa holders and privacy issues. In conclusion, the coalition, notwithstanding its concerns, does not want to delay the protection of workers and therefore will support the passage of the bill.

Debate (on motion by Senator Wong) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.