Finance Work Temporary visa scandal: Busting the skills shortage ‘ruse’

Temporary visa scandal: Busting the skills shortage ‘ruse’

oil rig
An oil rig off the WA coast is reportedly one-third manned by 457 visa workers. Photo: Getty
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As Australia’s temporary work visa program faces fresh outcry, an economist has criticised the “mostly false” notion of skills shortages that underpins the entire scheme.

Temporary visas are back in the news after The West Australian revealed this week that one-third of workers on a US-owned oil rig off Port Hedland are US citizens on 457 visas, despite widespread unemployment on the west coast.

To add insult to injury, The West Australian reported that the US company, Offshore Diamond, has constructed its roster in such a way that its foreign workers infrequently come ashore, thus allowing them to avoid or minimise income tax.

Maritime Union of Australia national president Chris Cain denounced it as the “biggest rort of all time” because “hundreds” of local workers could have filled the jobs – and paid tax while doing so.

“The laws have to be tightened up so companies like this can’t get round it,” Mr Cain told The New Daily. “Bringing Americans in here is an absolute disgrace when Australians are out of work.”

ocean monarch
The Ocean Monarch, owned by a US company, reportedly hires 34 US crew members, and has a 183-day roster that helps them minimise income tax. Photo: Dockwise

Beyond this example, Australian economist Bill Mitchell, who has devoted much of his career to researching the labour market, said the very notion of skills shortages used to justify temporary migration is a “ruse” perpetrated by the business sector.

“Firms claim, ‘We can’t get anybody’, but that’s because they are no longer willing to offer job-specific training because they’d rather bleat that there’s all these ‘bludgers’ out there that won’t work,” Dr Mitchell told The New Daily.

“We wouldn’t get this ‘skills shortage’ story if we had low unemployment because firms would know they would have to offer training, which they did for decades after the post-war period.”

The temporary (four year) skilled 457 visa was introduced in 1996 to fill skills shortages, which were and still are perceived as a problem.

But a constant scarcity of labour is a healthy scenario because it prevents discrimination against vulnerable groups of workers and forces employers to invest in on-the-job training, Dr Mitchell said.

He pointed to conditions in the Australian labour market between 1945 and 1975, when unemployment was low and underemployment close to zero.

“Firms had to bury their prejudices with respect to ethnic groups, non-English speaking backgrounds, youth, women, indigenous Australians, you name it,” he said.

“They also had to work out ways they could mould what labour they could get to their specific processes. A job slot was also a training slot, and so you had this dynamic efficiency because workers were continually being absorbed and given the requisite skills reflecting the best-practice technology that was evolving year by year.”

457 visas
Now, because of temporary worker migration and high unemployment, businesses are free to refuse to retrain, and to discriminate by age, gender or ethnicity, Dr Mitchell said, resulting in “mass unemployment and underemployment and a huge skill set lying idle”.

No job that requires between three weeks and three months of training should be offered overseas, he said.

“There’s huge pressure on the government from their mates in the corporate and business sector in general to maintain [the 457 visa scheme], even in the face of the evidence, in my view, that there’s perfectly reasonable capacity available.”

Late last year, a researcher told The New Daily that the current rules of the 457 scheme are “farcical” because an employer need only post a job ad on social media to satisfy the Immigration Department that they tested the local market.

There is bipartisan support for a crackdown.

In October 2016, Employment Minister Michaelia Cash launched a Migrant Workforce Taskforce that will advise on reforms to better protect migrant workers and punish employers who exploit the system.

Kitchen staff are among the occupations highly sought after on 457 visas. Photo: Getty

Her colleague, Immigration Minister Peter Dutton, has also tasked the Ministerial Advisory Council on Skilled Migration (MACSM) with reviewing the list of occupations for which 457 visas can be used. The list currently contains 651 occupations.

The government is keen to paint the problem as one of Labor’s causing. A spokesman for Mr Dutton told The New Daily that Labor allowed the occupation list to “balloon”.

In November, the government also reduced the period that a 457 visa holder can remain in Australia after their employment ceases from 90 to 60 days. Some critics argue this change makes it easier for unscrupulous bosses to exploit migrant workers.

Labor is also pushing for reform. Opposition Leader Bill Shorten has introduced a private members bill that would require employers to prove they had genuinely tried to fill jobs locally before recruiting from overseas. It is yet to be voted on.

Labor’s employment spokesman Brendan O’Connor told The New Daily his party is “serious” about reforming the 457 visa program “to put local workers first”.

“It’s time the Turnbull government focussed its attention on jobs for Australian workers, rather than turning a blind eye to employers using temporary work visas as an alternative to local hiring.”

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