Demands for 457 visa reform reignited by Australian business groups

Australian business groups are reigniting the campaign for 457 visa reform, stating that the time has come to ‘dispel misinformation about the 457 visa scheme….’ In a move likely to create friction with unions over the 457 visa for temporary skilled migrants, business groups are demanding that the government abolishes ‘Labor-era market testing arrangements in the scheme.’

 In a letter to the Productivity Commission, the Chamber of Commerce and Industry wrote that labor market testing should be scrapped. The Australian Mines and Metals Association (AMMA)  that labor market testing requirements for 457 visas ‘add red tape.’

The demand for 457 visa reforms comes at a time when employer groups prepare for a separate review of the salary threshold for occupations under the 457 visa.

Australian Chamber of Commerce and Industry and income threshold

The Australian Chamber of Commerce and Industry (ACCI) oppose increasing the income threshold for 457 skilled worker visas beyond inflation. Additionally, the ACCI argues that employers in regional locations should be allowed to recruit skilled overseas workers on salaries lower than the threshold, provided this is in line with Australian market rates for people in that regional location.

Jenny Lambert, ACCI’s employment, education and training director,  “Misinformation is fueling the idea that overseas workers are taking jobs from Australian workers. This is the wrong basis on which to move forward.”

A report based on the review of the Temporary Skilled Migration Income Threshold is due to be published by the end of April [2016]. The Australian government had agreed to move the review of the threshold [currently set at $53,900] forward, as part of a deal with the Labor Party to end continuing arguments over the China-Australia free trade pact known as ChAFTA.

In addition to reviewing the appropriate level for the income threshold, the roles of indexation [a technique used to adjust income payments by means of a price index, in order to maintain the purchasing power of the public after inflation] and regional concessions for the threshold will also be given attention.

457 Visa salary threshold should be lower in some areas

During discussions concerning ChAFTA, Labor had called for the threshold to be set at $57,000 for Chinese nationals coming under the Australian visa, but then withdrew this requirement after it was revealed that this would price several rural areas out of the 457 visa scheme.

That the salary threshold should remain at its current level, but did acknowledge that there were solid arguments for indexation to inflation. However, for regional locations she argued that a discount should be applied due to the difference between metropolitan and regional lab our markets.

“The higher you raise the threshold, the less businesses and positions would be eligible to have someone come in on a 457 visa. This creates real economic problems, not just for the business who can’t find a skilled worker, but for the regional community who may not have the services available to them because the skilled worker is not available at the price that the region can afford,”.

Lambert stressed that employers should not be given the option to pay foreign workers less than what equivalent Australian workers would be earning in that region for the same type of work.

Currently, areas affected by skills shortages – including the Northern Territory – can pursue a ‘designated area migration agreement.’ Such agreements allow employers to request concessions of up to 10 per cent below the income threshold, provided the cost of living is lower than the national average and foreign workers receive the same income as Australian nationals.

However, Ms Lambert did warn that there’s no guarantee for businesses that there will be such agreements covering their area.

Labor market testing like ‘Walking through wet cement’

The ACCI recently submitted comments to a Productivity Commission review into migration and said that it disputes a draft finding that is supportive of labor market testing because the testing is “akin to asking employers to walk through wet cement.”

Scott Bark lamb, AMMA’s executive director of policy and public affairs,  “Despite some highly-skilled occupations being exempt from testing, resource employers support the abolition of this needless and burdensome requirement.”

Meanwhile a spokesperson for the Business Council of Australia said it had “consistently called for labor market testing to be abolished.”