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Malcolm Turnbull axes 457 visa program for skilled migration, saying he's 'putting Australians first'

  • Prime minister Malcolm Turnbull has abolished the 457 visa for skilled workers.
  • The replacement regime will include shorter term visas that make it harder to gain permanent residency, as well as a reduction in the number of skills eligible for the visa.
  • The status of around 95,000 workers currently on the 457 visa will not change.

Prime minister Malcolm Turnbull is scrapping the 457 visa that allows temporary foreign workers to be employed in Australia.

The proposed replacement regime will include a short term two-year stream visa with a broad list of occupations. The second visa class will focus on higher skills and will have a four-year limit. It will require a higher standard of English than the two-year visa.

Both will require prior work experience and a criminal record check, plus extensive testing of the local labour market for available skills.

The announcement has been met with a cautious welcome from industry.

Turnbull made the announcement on Facebook this afternoon, explaining that the visa would be axed as part of his plans to put jobs and Australians first.

“Hear it here first – we’re putting jobs first and we’re putting Australians first by abolishing 457 visas. Watch the clip below to find out what these reforms mean,” read a statement accompanying his video announcing the move.

Here’s his announcement in full:

Australia is the most successful multicultural nation in the world. We are an immigration nation. But the fact remains that Australian workers must have priority for Australian jobs.

So we’re abolishing the 457 visas, the visas that bring temporary foreign workers into our country. We’ll no longer allow 457 visas to be passports to jobs that could and should go to Australians. However it is important that businesses get access to the skills they need to grow and invest, so the 457 visa will be replaced by a new temporary visa specifically designed to recruit the best and the brightest in the national interest.

The new visa will better target the genuine skills shortages in regional Australia. It will include new requirements including previous work experience, better English language proficiency, and labour market testing.

To help train Australians to fill skills gaps we’ll also establish a new training fund. I’ll have more to say about all this in coming days and weeks, but our reforms will have a simple focus: Australian jobs and Australian values.”

At an ensuing press conference this afternoon the prime minister said the changes were to ensure migration system is working in the national interest and to ensure Australian jobs are filled by Australian workers wherever possible.

Turnbull said in its current state the visa had “lost its credibility”.

As part of the changes the short-term visa will cost $1,150, while the medium-term visa targeted at higher skilled workers will cost $2,400 and can be applied for on or offshore.

Neither will result in a permanent migration outcome, as the current visa permits.

“The 457 visa is abolished,” said Turnbull.

The minister for immigration and border protection Peter Dutton said the changes were “an attempt to clean up Labor’s mess”.

“What we are doing is making significant changes… to restore integrity to visa program,” Dutton said.

He said the visa as it stands is essentially open-ended and results in permanent migration but said the proposed changes will put an end to that.

“This is a significant announcement. I think this will make a big different to young Australians… and be welcomed by all Australians.”

For people currently on the 457 visa, there will be no changes to their situation and they will be able to continue to work under the current conditions of their 457 visa.

“At the moment there are 95,000 457 visa holders in Australia,” said prime minister Turnbull. “Some of which were issued some of them a very long time ago… and can be rolled over on shore.”

He said that “because we are narrowing significantly the number of occupations… it is our expectations that you will see a material reduction over time of people working on these temporary visas”.

More than 1.28 million 457 temporary work visas have been issued since the 1997 financial year.

Business Insider’s Chris Pash has analysed the data of the visa of the past two decades. Here’s what he found.

Pauline Hanson claimed One Nation was responsible for the move by Turnbull.

Following the announcement she tweeted: “The Government will deny their tough talk on immigration & plan to ban 457 visas is because of One Nation but we all know the truth! #auspol”

Also in response to the news, Opposition leader Bill Shorten tweeted: “Make no mistake, the only job Malcolm Turnbull cares about saving is his own.”

The Australian tech and startup community has mostly reacted negatively to Turnbull’s proposed changes, some believing it could even drive companies to set up in Europe or the US.

Senior Lecturer at the University of Sydney Business School Dr Chris Wright says the visa in its current form placed far too much power in the hands of employers, and while the new replacement is an improvement, the proposal still has “significant inadequacies”.

“The scheme used employer demand as the basis for identifying skills shortages, which was highly problematic,” he says. “The Turnbull Government should establish an independent mechanism to verify the existence of genuine skills shortages before employers can employ workers on temporary visas.

“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, 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.

“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.”

Meanwhile Australian Industry Group chief executive, Innes Willox says the changes announced today will contribute positively to delivering the skills Australia needs, and will further improve the integrity of the visa program.

“The 457 Visa system was a highly valued program but misunderstandings of its use and exaggerations of its misuse led it to become a lightning rod for anti-migration sentiments,” he said.

“Ending that visa category, adding limits and more clearly defining its successor visas will help draw the focus back to the program’s primary purpose: addressing the pockets of skill shortages that persist in our economy.

“Integrity measures such as requiring visa holders to obtain and declare a Tax File Number combined with increased scrutiny of business sponsors are simple ways to further protect against abuse of the system.

“Given that many of the temporary skilled visas holders move on to become permanent migrants, the stronger focus of the new program on attracting higher valued skilled workers will have lasting, beneficial effects for our economy.

“The new approach to the Skilled Occupation List will also assist in identifying genuine skill shortages and guarding against often opportunistic spikes in applications for vague or non-essential skill categories.

“We will need to monitor the language testing changes to ensure they do not adversely impact on access to skilled workers in the lower skilled categories. Many of our workplaces are multi-lingual and a working knowledge of English is sufficient in many cases to meet both operational and safety requirements.

“It is important to note that the Labor Agreement pathway remains an option for employers with critical skill needs that do not meet the standard visa requirements and they can also access the Employer Nomination Scheme.

“This visa reform package deserves the support of all sides of politics. The temporary skilled visa program should now be considered as settled without the need for further reviews and disruptive policy change.”

Turnbull’s proposed changes following US president Donald Trump’s plan to sign an executive order seeking to tighten restriction on its own visa program for skilled workers.

On Tuesday Trump is expected to sign an order dubbed “Buy American, Hire American,” and will call on government departments to introduce reforms to ensure that H-1B visas are awarded to the “most skilled or highest paid applicants”.

Here’s Turnbull’s full statement announcing the 457 abolition on Facebook.

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