457 visa changes – what you need to know

Prime Minister Malcolm Turnbull made the surprise announcement yesterday that the Coalition Government will replace skilled 457 visas to give Australians top priority for jobs.

Current visa holders will not be affected by the changes and are not in any immediate danger of deportation.

The arrangement will see the introduction of two new temporary skills visas, including a two-year visa and a more specialised one for four years (which is targeted at higher skills).

The Immigration Minister Peter Dutton said there would be a grandfathering arrangement for current visa holders and the changes would prevent the "open-ended" nature of the scheme.

"The existing 457 visa program is conducted for a period of four years, but essentially it is open-ended, and it results, in many cases, in a migration outcome," he said.

"What we propose is that under the temporary skills shortage visa short-term stream there will be a two-year visa, with the options of two years, but there won't be permanent residency outcomes at the end of that."

Under the changes, the 651 professions eligible for a 457 visa would be reduced to 435 for a new two-year temporary skills shortage visa. The list for a new four-year visa would be shorter still.

Workers on 457 visas in Australia are common in a wide range of professions, including cooks, farmers, labourers, medicine, technology and education.

New skilled occupation list

As of 19 April 2017, the occupations list used for skilled migration visas (including the subclass 457 visa) will be significantly reduced.

From a subclass 457 perspective, 216 occupations have been removed from the Consolidated Skilled Occupation List (now the Short Term Skilled Occupation List). A list of removed occupations is outlined here.

Moreover, caveats have been added to 59 other occupations, such as accountants, bakers, cooks, management roles, technical sales reps and customer service managers.

New Temporary Skill Shortage visa

As of March 2018, the 457 visa programme will be replaced with a new Temporary Skill Shortage (TSS) visa. The new TSS visa will include a greater focus on English language proficiency, labour market testing and previous skilled work experience.

The new TSS visa programme will be comprised of a Short-Term stream of up to two years and a Medium-Term stream of up to four years.

Key changes include:

•    New condensed skilled occupation lists – a Short Term Skilled Occupation List (STSOL) and Medium and Long Term Skilled Occupation List (MLTSOL)
•    Minimum two years’ work experience (even with relevant qualifications)
•    Labour market testing for all occupations
•    Visa period of two years (for occupations on the STSOL) or four years (for occupations on the MLTSOL)
•    Police clearances
•    A new training fund for sponsors

Employers will be publicly shamed

Turnbull has also warned employers about his new temporary foreign worker visas, saying they will be publicly shamed if they try to abuse the system.

He said employers must demonstrate they have tested the local jobs market properly before they apply for foreign workers under his new scheme.

“If they fail to meet their requirements, details of their failure will be published,” he told the ABC.

“We’re going to be transparent about this ... where employers break their obligations they won’t be able to get further people in under visas.”

Furthermore, companies who plan to bring temporary skilled migrants to Australia are set to pay more.

The idea is that the Government wants to train more local workers, which is set to be funded by an increased fee charged when employers bring in temporary skilled foreign workers.

‘Recruitment difficulty is not the same as a skills shortage’

Dr Chris F Wright is an expert from the University of Sydney Business School and has published research on immigration, labour market regulation and supply chains.

He said the 457 visa placed far too much power in the hands of employers and used employer demand as the basis for identifying skills shortages, which was "highly problematic".

“The Turnbull Government should establish an independent mechanism to verify the existence of genuine skills shortages before employers can employ workers on temporary visas,” he said.

“The main objective of the 457 visa was to help employers address skilled labour shortages. My research into the scheme showed that the vast majority of employers who used the 457 visa claimed to experience challenges recruiting workers from the local labour market. But a recruitment difficulty is not the same thing as a skills shortage."

In this respect, Dr Wright said it is questionable whether the 457 visa was effective in meeting its stated objective of addressing skills shortages.

“This is especially the case in industries such as hospitality, which was a major user of the 457 visa in recent years,” he said.

“Skilled migration needs to continue as a central policy solution for addressing Australia’s skills needs. The Turnbull Government’s decision to establish a training fund is welcome but there are significant inadequacies with the education and training system that also must be fixed. This requires extensive changes to labour market and skills policies.”