Explainer: Australia’s 457 visa scrapping

Australian Prime Minister Malcolm Turnbull announced yesterday that his government would abolish the country’s 457 visa program and embrace an “Australia first” approach to job growth.

This coincides with similar developments in the United States, where US President Donald Trump has vowed to crackdown on foreign workers and companies that do not prioritise the American market.

While Australia’s oppositional Labor party has accused the Prime Minister of rushing the decision through in order to “save his job” and conservative senators like One Nation leader Pauline Hanson and recent crossbencher Cory Bernardi claim credit for the announcement, Turnbull insists this new development is a matter of policy, not politics.

Whatever the case may be, the axing of the 457 visa and concurrent introduction of two new types of visas to replace it is expected to affect thousands.

What is a 457 visa?
Introduced in 1996 by then Prime Minister John Howard, a 457 category visa allows foreign workers to apply for and work within over 650 occupational fields within Australia for a period of four years.

Although originally intended to provide labour for fields that were lacking the necessary numbers, a rise in national unemployment levels in the decades since has seen the Australian workforce disadvantaged while 457 visa holders take positions in industries already oversupplied with labour.

At the moment, there are around 95,000 people with 457 visas working in Australia. They will not be immediately affected by the new system.

What will change?
Starting March 2018, 457 visas will be replaced by two types of Temporary Skills Shortage (TSS) visas, one lasting for a period of two years and the other for a period of four.

Unlike the 457 visas, these new visas will require applicants to have a minimum of two years experience in their field of work and a proficient enough grasp of English as outlined by the International English language testing system (IELTS). They will also have to undergo a more thorough criminal history check.

The list of jobs available for TSS visa holders will also be substantially shorter than the 457 list, with around 200 occupations, ranging from police officers and translators to microbiologists and food technologists, set to be cut.

The Coalition says many of the axed jobs are “rarely if ever” brought into Australia, citing actors, goat farmers and antique dealers as examples.

What effect will this have?
It’s difficult to predict the exact extent to which these new visas will affect the Australian workforce and economy.

While the Prime Minister Turnbull stresses the policy will benefit Australian workers by providing them more career opportunities, some trade unions and businesses worry the proposal will prevent them from filling genuine labour gaps or shortages.

Much to their dislike, it is understood companies that wish to bring in foreign workers will be required to pay a mandatory ‘foreign worker tax’ intended to fund training in areas with skill shortages.

Some also believe the change is simply an effort at rebranding an already unpopular system, putting “spin over substance”.

Australian Council of Trade Union President Ged Kearney said workers would continue to be exploited.

“Where workers can come to Australia and do entry-level jobs like retail shop assistants or kitchenhands, we still have a broken system,” he said.

“Unions want to see a full tripartite review mechanism for work visas and rigorous labour market testing.”

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