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Michael writes on emerging markets, architecture and engineering. He has served as a correspondent in Tokyo, London and Johannesburg and has written for Reuters, the Financial Times, The Age and The Sydney Morning Herald.

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‘Tighter 457 regime needs more compliance funding’

Published 25 February 2013 12:44, Updated 26 February 2013 13:03

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‘Tighter 457 regime needs more compliance funding’

Government proposals to curb alleged abuses of the 457 visa regime need authorities to allocate extra money for compliance or else they risk making skilled worker visa applications more bureaucratic and expensive for companies, research body the Migration Council of Australia says.

“Without the announcement of significant dollars for compliance it is hard to see how the proposed reforms will curb the behaviour of the few employers who are misusing the program,” council chief executive Carla Wilshire says.

“While it’s still too early to tell, the risk is that these reforms will place a significant regulatory burden on employers with very little gain.”

Changes immigration minister Brendan O’Connor announced over the weekend will tighten the regulations around 457 visas from June 1. One aim is to curb alleged abuses by employers in industries such as construction, who bring in workers even though there is no local genuine shortage of them. Unions, who support the planned changes, want applications to be subject to labour market testing, a process that would cost more money on the part of businesses applying to import workers under the visas.

The minister’s statement made no allocation of extra funds to authorities who process the applications, nor did it commit to labour market testing.

The proposed changes amid signs of an easing in some parts of the labour market. Last week, Hancock Prospecting said it would not need to rely on the enterprise migration agreement it struck with the government to import 1715 foreign workers for the construction of its Roy Hill iron ore project in the Pilbara in WA, as a cooling labour market had freed up local supply.

The timing of the Labor government’s move raises the question of whether tightening the rules at a time of weaker demand will have little effect. Peak labour body the Australian Council of Trade Unions has long opposed the 457 regime as a threat to Australian workers.

Employer bodies warn, however, that increasing the cost of employing workers on projects could imperil further investment decisions.

“The shortage of skilled labour is across the board,” Ai Group chief executive Innes Willox said in a statement on Monday. “While mining is coming off its peak and there some individual projects that have been shelved for the time being there is still a huge pipeline of projects coming through that are going to need highly skilled workers that just aren’t available locally. Downstream manufacturers, many of whom are supplying the mining industry, will also continue to need skilled workers, especially as they try to compete for and win more local contracts.”

Australian Mines and Metals Associate chief executive Steve Knott agrees.

“There are $383 billion worth of new projects slated for our shores between now and 2018 that have not yet received final investment decision,” he said. “While the resource industry is not a heavy user of 457 Visas, accessing small numbers highly specialised skills from global markets is critical to successfully bringing these projects to realisation.”

The current 457 regime is effectively playing the role for which it was designed – that of a demand-led way to bring in extra skilled labour that responds to the changing economic conditions, Wilshire says.

Immigration department figures show that in December, the number of primary applications for 457 visas lodged fell in December for a fourth straight month.

“The program is designed to be responsive to labour market needs and the recent increase in domestic skilled workers available did in fact translate into a drop off in the nomination rate for 457 workers,” Wilshire said.

In the year to June, 68,310 immigration authorities granted 457 visas. The overwhelming majority of these – just under 70 per cent – were made to managers and professionals. Technical and trades workers accounted for a further 24 per cent. The remaining minority of visas granted was shared among community and personal service workers, clerical and administrative workers, sales workers, machinery operators and drivers and labourers.

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