Tony Abbott Supports Use of 457 Business Sponsorship Visas

By Mark Webster
30 April 2012

The Australian Federal Opposition leader, Tony Abbott, has supported the use of 457 visas as the mainstay of the Australian immigration program. The comments were made in an address to the Institute of Public Affairs, Melbourne.

Mr Abbott has called 457 holders the "best possible immigrants to Australia", saying that they make a contribution from day one, and are immersed in the Australian way of life.

Mr Abbott was critical of the current Labour Government's changes to the 457 program, saying that they had progressively made it more difficult for businesses to bring in 457 holders, mainly in response to union concerns.

Mr Abbott's comments have provoked an immediate response from the CFEMU - one of the largest trade unions in Australia. The CFMEU National Secretary Construction Dave Noonan said that under the former Liberal Government, there was widespread abuse of the 457 program by employers to "lower wages and conditions and reduce safety, sack Australian workers and replace them with 457s, ignore qualified Australian workers and turn their backs on their responsibility to train young Australians".

The CFEMU referred to the 2008 Deegan Report into the 457 program which resulted in reforms which "cleaned up some of the worst excesses of the 457 program". The employer abuses mentioned in the Deegan Report, such as people trafficking, non-payment of superannuation and other breaches of employment law were already illegal under the previous system, and the jury is still out on what the effect of the 2009 Deegan Report changes has been.

The Deegan Report changes have certainly made it more difficult for small employers and foreign companies seeking to introduce new technology to Australia. Larger established employers in Australia have been impacted to a lesser degree.

By far the most significant restriction on the 457 program is the introduction of compulsory skills assessment and English testing for many trade workers. This adds months to the process and approximately $2,500 in cost.

Unions are not in favour of undue reliance on 457s because they put downward pressure on wages which could potentially affect Australian workers. Employees on 457 visas are reliant on continued employment to maintain their status in Australia, resulting in a possible power imbalance between employee and employer. Unions prefer permanent employer sponsored visas as in most cases, permanent visa holders can remain in Australia even without continued employment and so have more negotiating power.

Employers find 457s useful as they allow them access to the skills they need in their businesses and are relatively quick to process. Permanent employer sponsored visas take a long time to prepare as they require full medicals and police clearances, and in many cases a formal skills assessment. Most permanent employer sponsored applicants already hold a 457 visa.

For large-scale resource projects, many thousands of employees will be required for limited periods of time and the 457 visa would in most cases be best solution to meeting these requirements. The cost to the Australian economy of not having sufficient workers for these projects to proceed would be significant.

It is not clear what reforms Tony Abbott is proposing, but his intent to make the process easier for employers is clear.

The Federal Budget will be handed down on Tuesday 9 May, and there are likely to be announcements about changes to immigration settings. It seems likely that there will be further reforms to the 457 program and we will post an update when the details are available.


Tony Abbott's address to the Institute of Public Affairs, Melbourne
CFMEU's response to Mr Abbott's comments

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