The coalition is putting the early squeeze on foreign workers

The 457 visa for temporary workers won’t be officially abolished until March 1, but the number granted has already fallen by more than a third – heralding a squeeze on foreign workers by the coalition.

Australian National University researcher Henry Sherrell has found the number of primary 457 visas granted in the 2017 September quarter was down by 35.7 per cent on the same period of 2016.

And the dive was not because some jobs – most famously, “goat farmer” – have been ruled ineligible. In a paper published by the Parliamentary Library, the ANU Development Policy Centre research officer reports only a fifth of the decline in 457s came from the scrapped occupations.

Eight of the top 10 occupations for primary 457 visas had significant double-digit declines. Developer programmers were down by 42 per cent to 350 in the quarter, ICT business analysts plunged 49 per cent to 238, resident medical officers dropped 18 per cent to 436 and the top 457 job, cook, was off 29 per cent to 452.

Given the near-record employment growth last year, the sharp reduction in 457s appears to have nothing to do with demand for labour, but a response by employers and would-be employees to hiring and gaining permanent residency being made more difficult and expensive.

The size of the fall and the breadth of occupations to experience it during a period of very fast employment growth should raise some interesting questions about the nature of the Australian workforce and how 457s have been used.

From March 1, the 651 occupations eligible for 457 visas will be formally replaced by 435 occupations eligible for Temporary Skilled Shortage (TSS) visa, which comes in two flavours: a two-year visa that can be extended only once and offers no pathway to permanent residency; and a four-year visa that can lead to permanent residency. There are only 183 occupations eligible for the four-year visa.

The possibility of permanent residency seems to make an immediate difference to applications. Sherrell notes that while cook 457s plunged, visas granted to chefs rose slightly. Chefs are in the pot for four-year visas, cooks are left in the two-year pan.

“The increase in chefs could reflect genuine growth in employer demand for chefs,” Sherrell writes. “However, it may also reflect employers who previously nominated cooks now nominating chefs as this is a more advantageous occupation for migrants and employers given visa conditions. If the job being performed in the business has not changed, this might be called ‘occupational inflation’, as employers upgrade their occupations to take advantage of more beneficial immigration policy settings.”

Visa requirements tighten further from March. For the shorter TSS, applicants will need at least two year’s work experience – wiping out many of the foreign students and backpackers that have been transitioning. Employers will be subject to greater scrutiny, higher visa costs and a new training levy. There are stricter English language requirements and a lower maximum age for the four-year visas.

Sherrill notes a lack of other useful data on 457s, such as salary figures and the number of applications that are rejected, and warns that isolating the effects of specific policy change is difficult amidst multiple factors, but he suggests the eligibility changes could further reduce demand for TSS visas.

Before anyone gets too excited thinking fewer overseas workers will mean higher wages, Sherrell’s isn’t the only interesting paper to consider. Slate.com reports an American study that has relevance here on why workers aren’t getting decent wage rises despite jobs growth and falling unemployment.

The study suggests it’s not so much a matter of an excess of workers holding down wages, but a shortage of employers.  The idea is that in various geographical areas and fields, hiring is concentrated among a relatively small number of businesses resulting in a monopsony problem – a lack of competition among employers.

“Monopsony is essentially monopoly’s quieter, less appreciated twin sibling,” Slate explains. “A monopolist can fix prices because it’s the only seller in the market. A monopsonist, on the other hand, can pay whatever it likes for labour or suppliers, because it’s the only company buying or hiring.”

Given the limited number of players in key Australian industries, it’s not impossible to think monopsony develops whereby it’s not in those players’ interests to compete too hard for workers, or to at least not compete on price.

Meanwhile, back at the 457s, Sherrell says there’s a lack of analysis of the changes but cites an August report by the Australian Population Research Institute’s Bob Birrell – a campaigner against present migration levels.

Birrell called the 457 changes “the first serious sign that either major political party is prepared to tackle the immigration issue”.

“Make no mistake about the significance of the rest,” he wrote. “When fully in place from March 2018, the flagship ENS (employer nomination scheme for permanent residency) program will fall to less than a third of its recent size of 48,250. The number of TSS visas will also fall sharply relative to the current number of 457 visas being granted.”

Birrell expects further reforms by the government to make their immigration policy change more obvious to the public.

The apparent contradiction here is that while fewer 457/TSS visas would mean a relatively small reduction in the number of people in the country, there’s been no sign of a change in the permanent visa quota of 190,000, plus humanitarian admissions. Family reunions – mainly spouses – get 60,000 places and skilled migrants and their families the rest.

Whether the 130,000 should come as “newbies” based on their qualifications or those given a trial run through temporary work is a matter of further debate.  The Productivity Commission has argued that temporary workers here should not be given an advantage in the selection process, but the Lowy Institute’s Peter Mares makes a casefor the two-step temporary-to-permanent pathway having significant benefits for productivity because it facilitates better matching of skills to positions.

“Before the introduction of 457 visas, skilled migrants would often be granted a permanent visa before arrival in Australia,” Mares wrote. “Visas would be issued under the points system, which was the government’s attempt to match the annual skilled migration intake to its expectation of the number and types of professionals the economy would need in the year ahead. Migrants would often land in Australia and then search for a job to match their qualifications.

“Frequently, however, they might end up taking a position in which their skills were not well utilised. (We are all familiar with the scenario of engineers driving cabs, for example.) This might have been because government assumptions about the labour market were incorrect, or because those assumptions had been overtaken by a change in business conditions.”

p.s. despite the crackdown on goat farmers and kennel handlers,  the list or eligible skilled occupations for foreigners remains somewhat curious. It includes “journalists and other writers”. Anecdotal evidence would point to no shortage.  At least “federal politicians” doesn’t feature.

Significant Investor Visa

The Australian Government has announced a new visa pathway for migrant investors coming to Australia. This visa is scheduled to commence on 24 November 2012 as a new stream within the Business Innovation and Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa.

AUSTRALIA’S migration review tribunals are struggling under massive increases in workload

Applications to the Migration Review Tribunal (MRT) are up 26 per cent while applications to the Refugee Review Tribunal (RRT) are up 32 per cent.

“Our workload is increasing,” tribunals head Denis O’Brien told a Senate estimates hearing.

More than 5900 applications were lodged with the MRT and 1646 with the RRT in the financial year to January 31.

Decisions in the RRT were up 31 per cent in the same period, with 75 per cent made within the recommended 90 day period. The average decision time was 95 days.

But decisions in the MRT were down 28 per cent in the same period, Mr O’Brien conceded.

“The decrease in MRT decision output – despite the increase in lodgements – is principally due to the substantial increase in our RRT work to which we must give priority,” he said.

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“Can I say that our resource difficulties have been exacerbated by the recent loss of a number of experienced RRT members.”

Eight tribunal members had taken leave of absences for placements inside the Department of Immigration and Citizenship, he said.

As at January 31 there were 829 active cases before the RRT and 9731 before the MRT.

“We just can’t afford to let that backlog continually increase without trying to address it,” Mr O’Brien said.

Mr O’Brien said he hoped to have new staff in place by the middle of the year.

The increase in MRT applications was due in large part to a massive increase in student visa review applications sparked by recent law changes, Mr O’Brien said.

The MRT reviews departmental decisions made on general visas while the RRT reviews decisions made on protection visas

Free Seminars for Skilled Migrants in Victoria

Skilled migrants who have recently arrived in Australia can get expert advice on finding work in selected occupations at free seminars in Victoria.

The seminars will be held in Melbourne and regional Victoria, and will feature a panel of experts to answer questions and cover topics including:

* an overview of the labour market in Victoria for each occupation
* how to prepare for work in Australia
* how to write a resume for an Australian employer
* where workers for each occupation are needed most in Victoria.

Migrants who attend will also have the opportunity to network with a range of industry professionals, recruiters and other industry experts.

Please note that these seminars are for skilled migrant visa holders only. Other interested parties are advised to email seminars@holmesglen.edu.au for further information.