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

The coalition will be supporting the Migration Legislation Amendment (Worker Protection) Bill 2008 but, in doing so, wants to raise some major concerns highlighted by the lack of availability of the regulations to the bill. Whilst the coalition is conscious of the various instances of exploitation of workers, it is important that legislation defining obligations be upfront and specific. It is very important that the good reputation of Australia and of Australian sponsors of temporary labour be maintained and not be eroded. In this respect the coalition believes that a framework for sponsor obligations is necessary. Indeed it was a process that the coalition commenced through the Migration Amendment (Sponsorship Obligations) Bill 2007. The then Minister for Immigration and Citizenship, Kevin Andrews, allocated additional resources to ensure implementation of more streamlined processes in this area.

We share the concerns that have been highlighted by the majority of the submissions to the inquiry by the Senate Standing Committee on Legal and Constitutional Affairs. In particular there are two areas of concern, regarding imposition of unknown obligations on sponsors which are contained in regulations which the government has not yet introduced and the potential for ongoing changes of obligations by regulation in the future. Indeed, some witnesses advocated that the bill be deferred until the regulations are presented and considered so that passage of both be effected together. The coalition notes that the Deegan report was not available at the time of the Senate committee inquiry and at the time of its reporting. Accordingly, my comments today are confined to the bill before us and to the Senate committee report on the bill.

The government has made much of the consultation process, although the adequacy of this process was questioned in the Senate committee inquiry by some witnesses who described it as truncated and inadequate. The coalition take at face value the government’s indications about sponsor obligations. However, we place on record our concerns about the enactment of legislation which imposes obligations which are not available for scrutiny at this point but are to be contained in regulations which will be available in the future. The question arose in the inquiry as to whether these obligations ought more properly be contained in the bill rather than relegated to regulations. The Department of Immigration and Citizenship, DIAC, insisted that it requires flexibility and hence the government has opted to impose obligations in this manner. This was the very concern of stakeholders who feared that this flexibility will permit the Rudd government to make changes to regulations and thus alter obligations as it sees fit and without appropriate consultation. This is a concern we too share.

I turn to the specifics of the bill. The objective of the bill is to amend the Migration Act to strengthen the framework for employer sponsorship with a view to ensuring that working conditions meet Australian standards and sponsorship costs be more fully identified. Visa holders are currently sponsored by employers who must meet a series of undertakings. These undertakings are now to be specified in the new regulations. The regulations will be drawn up in 2009 to be followed by months of consultation and education about the changes. All currently engaged sponsors will be transferred to the new regime. This is the nub of the concerns, because sponsors are being required to sign up to obligations which are yet to be defined.

In 1996 the coalition introduced new visa categories to allow employers to sponsor skilled workers on a temporary basis for between three months and four years to help ease labour shortages. The Howard government’s 457 visa program has been a great success in satisfying the demand for skilled workers and helping to ensure that Australia maintains its international competitiveness. The annual intake for the 457 visa program has steadily increased from 16,550 in 1996-98 to 22,370 in 2003-04 and to 58,050 in 2007-08. Table 3.1 of the Senate committee report sets out these statistics. Indeed in this 11-year period 304,400 section 457 visas were granted. In addition, 251,200 secondary visas were granted to spouses, interdependent partners, dependent children or other relatives of the section 457 visa holder, making a total of 550,600 visas granted under this umbrella. There are currently nearly 19,000 employers using 457 visas. Nearly 30 per cent of 457s are employed in New South Wales, with the New South Wales government—and indeed state governments generally—being the most prolific user of 457 visas.

Despite its successes, Labor and the unions have mounted a scare campaign surrounding the 457 visa system. As then shadow minister Senator Ellison pointed out, the previous scare campaign was debunked when the Rudd government released the final report of its review of 457 visas in May this year. This report recognised that 457 visas are essential to meet short-term skills shortages in Australia where no local labour is available. It also confirmed that businesses are experiencing significant delays in having visas processed, with 37 per cent of low-risk onshore visa applications taking longer than eight weeks to be finalised. The report went on to point out that there is ‘a need to reduce visa-processing times and improve flexibility of the temporary skilled migration programs’. As Senator Ellison indicated at the time, the coalition had already announced funding in last year’s budget to introduce a new fast-tracking system in early 2008. Unfortunately, Labor had delayed in getting this system up and running.

The coalition accepts that there have been breaches by employers of their undertakings and that these have been reported in the media. At the Senate inquiry, Mr Sutton from the CFMEU gave evidence of alleged ‘many’ instances of breaches and of his longstanding campaign in this area. In response to questions requesting that specific details be produced substantiating this assertion, Mr Sutton appears to have produced some documents detailing about 17 instances of breaches. The union assertion of ‘many’ breaches was disputed by many of the witnesses. As indicated, the coalition condemns the exploitation of workers. However, the number of breaches ought to be placed in the context of two important statistics detailed in the Senate’s report. Firstly, since 1997-98, 304,400 section 457 visas have been granted. Seventeen instances, whilst deplorable, do not constitute the alleged rampant breaches sought to be portrayed by the unions. Secondly, according to DIAC’s own statistics in its 2006-07 report, only 1.67 per cent of sponsors were found to have breached their sponsorship obligations.

There are areas of concern about this bill. While the framework in the bill can be supported by the coalition as a further evolution of our obligations of sponsorship, we do not yet know the details of the regulations. We will need to subject them to the usual scrutiny when they are revealed. The April 2008 discussion paper released by DIAC does, however, describe potential new payment obligations for sponsors of 457 visa workers and their families, including meeting all of the education costs of minors accompanying the worker; covering all medical costs through either insurance or direct payment, including covering medical costs where the insurance company refuses to pay; paying migration agents’ fees or other costs of recruitment up to a maximum specified; paying all travel costs to Australia—only travel from Australia was required previously; and paying any licence or registration fees associated with the worker taking up employment in Australia.

I would now like to turn to the four key issues raised in the Senate inquiry and reflected in its report. Regrettably, the short time frame and the lack of willingness by the government to afford longer time for greater scrutiny of the legislation meant that only the main points of concern were elicited.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

One day on the Telstra bill.

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