Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I indicated when I first started this debate some time ago that I would not take very long, but it has taken a few days—but I certainly have not been on my feet for all that time. In conclusion—and I will come to the issue rather than continue on—this matter should be referred to the Legal and Constitutional References Committee. The regime of 457 temporary visas to address a skill shortage is a mechanism for the destruction of wages and conditions of every Australian worker. It is an area in which there is certainly a cogent reason for this matter to be referred, not only with regard to the issue of 457 visas themselves but also with regard to the procedures and mechanisms that underpin them, and they are detailed in the reference that I moved when I started this debate some time ago.

This matter should be referred but, when you look at the broader mechanisms that are available, you will see that the government might argue that it is a matter that has already gone to COAG and that officials of COAG are looking at the 457 visa. The department has a task force underway. We already know that the minister has had a report into the T&R meatworks’ practices. We are unaware of whether or not that will be made public. We are also unaware of when the task force from the department will report and whether that will be made public.

Similarly, we do not know whether the COAG findings will be made public, although I expect they may be. This reference is a broader reference than all of those because it not only looks at future but also looks at past. The government might argue that there is already sufficient scrutiny, but that is not true. The argument simply cannot be sustained, because the references in this instance allow for the public to have an input, submissions to be called for and made, and the Senate to travel to and call for evidence from a range of capital cities and regional areas to see the impact of 457 visas—both good and bad, as the case may be. There may be some positive benefits.

Labor has always said that the use of the temporary skilled visa is worth while for the purpose for which it was originally designed. This reference would also highlight that purpose and give the government the opportunity to highlight it. It would also allow those matters, where the department is not ensuring compliance, to be exposed. The reference also allows for the department to be called to account and have sufficient scrutiny in the way of questions and answers through the Senate committee process. This process is not available to COAG or the departmental officials in the same way or manner, which is why I argue strongly for this reference. I recognise that I do not have the numbers in this place. I recognise that I will not get this reference up but I still urge the government to look carefully at it.

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to 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.

Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise this afternoon to support Senator Ludwig’s motion to refer the matter of 457 visas to the Senate Legal and Constitutional References Committee. This week, over the last two or three days, we have heard so much about the 457 visas—about the way that they are being used, or perhaps I should say misused, by employers to the detriment of those persons who are coming into this country wishing to work. They are really just being abused. The concerns that we have expressed this week in relation to 457 visas include the facts that they are being used to displace Australians from jobs, they are being used as an excuse to cut training opportunities and they are being used in a way that is simply driving Australian wages down.

What has been the response of the Minister for Immigration and Multicultural Affairs to what we have raised this week in the Senate? As Senator Fierravanti-Wells has just referred to, the minister has used as her ‘defence’, shall we put it, the report Temporary skilled migrants’ employment and residence outcomes (2006). Senator Fierravanti-Wells quoted extensively from that and the minister’s media release. I will not attempt to deal with each and every item that she referred to but, rather, make the point that has been made by Labor in relation to this report. Our argument about this is pretty simple—that is, the report that Senator Vanstone and Senator Fierravanti-Wells have referred to was prepared and the research done prior to the Work Choices legislation coming into place. As we all know, the new industrial relations laws have now been in effect since March, for the last three months or so. But all the research for this report was done prior to the new industrial relations laws coming into effect.

It is pretty obvious, I would have thought, that the impact of the industrial relations laws makes for a new capacity for these temporary worker visas, the 457 visas, to be used in a way that simply drives wages down. The reason why that has happened is quite simple. It is because the new industrial relations laws have opened up a huge gap between what the market rate was and what the new legal minimum rate could be. So what does the minister do in order to refute this? She puts out this academic study dated August 2006 but does not mention the fact that all of the research that was done to prepare this report was conducted under the old industrial relations system.

So all of what Senator Fierravanti-Wells referred to, the various myths that she pointed out and the various percentages that she referred to—like 93 per cent of those surveyed in the report were in managerial, professional, associate professional or skilled trade occupations—have to be taken with a grain of salt because this does not represent the current law, given that Work Choices is now in place and the scenario has changed considerably. As Labor has said, there is not one sentence in the document that the minister released that actually undermines what Labor has been claiming during the course of this week. The only way that the minister appears to be able to defend the temporary worker visas, the 457 visas, is to go to this data that predates the current industrial relations regime.

What I do want to point to this evening is research that has been conducted under the existing industrial relations laws. There was an article published quite recently in the journal People and Place by an academic, Mr Bob Kinnaird, who is an immigration analyst. The work that he has done actually was conducted during the operation of the Work Choices legislation, which is the current law. I want to draw the attention of the Senate to a number of his findings, because I think that they are a lot more relevant than the report that Senator Fierravanti-Wells referred to and the one that the minister is using as her defence for the operation of these visas.

One statistic is that the growth in these 457 visas has been so rapid in the last year that for the first time there will probably be more temporary skilled 457 visas granted than skilled permanent residence visas. I think that is a pretty alarming statistic. Why is it that we are bringing in these temporary skilled 457 visa holders? Why are we not bringing in skilled permanent residents and granting them appropriate visas? In fact, it is the case that in the year 2005-06 the number of 457 visas that were granted was 40,000—a very large number, especially when you compare it with the number in the previous year. As I understand it, in that year some 28,000 visas were issued, so the number rose from 28,000 to 40,000 in the course of just one year—an increase of 43 per cent.

In his research Mr Bob Kinnaird also referred to the fact that some 457 visa holders are being paid below market rates. This is something that is emerging and becoming really quite apparent, but it is very difficult for us to get exact figures because the government does not even collect data on the actual salaries that are paid to these workers. Another trend that is emerging, and this is something that Senator Lundy referred to in the chamber a couple of days ago, is that 457 visas are adversely affecting jobs and training for young Australians, particularly in the IT industry.

In the time that I have remaining I want to focus on one of the most concerning aspects of the way this visa is operating and highlight to the chamber just why it is so essential that we do have a Senate inquiry into the operation of the 457 visas and the government’s mismanagement of them. Firstly, I refer to the data that indicates the actual incomes that are being received by persons on the 457 visas. It is shown than 25 per cent of 457 visa holders in the trades reported average incomes of less than $35,000. One third of 457 professionals reported incomes under $50,000, including three per cent below $35,000. You would have to compare this with what is being received out there in the marketplace. The median starting salary for new graduates with a bachelor degree was $38,000 in 2004, so it is clear that a huge number of these people are being paid considerably below the market rate. As I said, it is very difficult to compare because the government does not collect any data on the actual salaries paid to these workers.

Another thing that is emerging is the number of hours that these people on 457 visas are being required to work. Some are being required to work in excess of 40, 45 and even 50 hours a week to receive this minimum salary. The point that I wish to emphasise is the way that the 457 visa minimum salary is actually setting a benchmark for low wages for all Australians. It is setting a low, low benchmark against which salaries for all other Australians are eventually going to be measured.

I will briefly touch on the way that 457 visas are now essentially attracting semi- or even unskilled workers into Australia, with very low English requirements. Given that there is no labour market testing, there has been, as I said, this move towards semi- or even unskilled workers. For example, in Western Australia McDonald’s has confirmed that a Filipino 457 visa holder was transferred to Karratha and that his duties included doing shiftwork as an assistant manager and serving food. We really have to wonder why it is that the minister can say, and actually verify, that there is a shortage of McDonald’s staff in Australia. Why is it that we need to be using people coming in on these 457 visas to take up employment in McDonald’s?

There have also been a number of references to the fact that the program does not appear to be used for the purpose for which it is meant to be used—namely, to target critical skills shortages in Australia, particularly in the building trades. The Australian Trucking Association has also reported that it is close to having the government approve 100 truck drivers under the 457 visa. This week we have also referred to investigations in South Australia where meatworkers have not been working in jobs relating to the skill that was stated on their visa application. We have to wonder whether or not the government is aware of these breaches. Something that has also come to light during the course of this week is that, because of the compliance measures—or, rather, lack of compliance measures—that the government has in place, the department currently visits only 25 per cent annually of employers who employ 457 workers. It is very difficult to know whether or not the conditions of the visa are actually being complied with.

I think what emerges out of this is that the government is expanding the 457 visa system to include semiskilled and unskilled labour. This obviously has nothing whatsoever to do with the skills shortage that we clearly do have in Australia and everything to do with driving down wages and conditions not just for the people on 457 visas but, essentially, for all Australians who are looking for work.

In conclusion, I would like to mention something that Labor senators have said numerous times in this chamber this week—that is, Labor of course supports the 457 visa. It is a very good concept and, if it were to be used properly—that is, to bring in people to work in areas where there really is a skills shortage—then clearly it is a very good program and naturally Labor would support that. But there are many concerns that have been raised during the course of this week that make it quite clear that there is an urgent need for an inquiry into this. It is pretty clear that employers are not required to show that there is a skills shortage in a particular area before taking on an individual. It allows employers to import semiskilled or even unskilled workers onto wages and conditions that bear no resemblance whatsoever to accepted Australian minimum standards. Most concerning is the fact that this visa is having the effect of reducing job and training opportunities for Australians. It is for this reason that I support Senator Ludwig’s motion that this matter be referred to the Senate Legal and Constitutional References Committee, and I urge all senators to support the motion.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the motion moved by Senator Ludwig to refer a matter to the Legal and Constitutional References Committee be agreed to. A division having been called, I remind honourable senators that if a division is called for on Thursday after 4.30 pm the matter before the Senate must be adjourned until the next day of sitting at a time to be fixed by the Senate. The debate is therefore adjourned accordingly.