Understanding immigration and 457 visas

The increased use of 457 visas is part of a broader shift in Australia’s migration program over the past few decades, explains Penny Howard

Australia’s immigration rules have always served the political and economic interests of the Australian government and ruling class. These rules are constantly changing to better meet their interests. Immigration policies cannot be understood in isolation from the interests of Australian capitalism.

The 457 visa is just one component of a broader shift in Australian immigration policy since the late 1980s that aims to make migration fit more precisely with the shift in the structure of the Australian economy and the immediate needs of Australian employers, particularly in expanding industries.

The uneven development of capitalism involves constantly throwing workers out of work in one area, while drawing them to new areas of employment and expansion—both nationally and internationally.

Today, the workers drawn into new areas of production might be electrical engineers, IT workers, or nurses—all of whom require more training than 19th century factory hands. In most advanced capitalist countries, immigration policies are set to enable employers to exploit an international labour market as their demand for labour rises and falls.

The employment of skilled workers raised, educated and trained in other countries is also a way for governments to get cut-price skilled workers and expand their tax-paying labour force.
In post-war Australia, employers have always played an active role in migration policy. BHP was directly represented on the Commonwealth Immigration and Planning Council, had its own immigration agent in London to select Australian immigrants, and was able to shape national immigration policy to suit its needs.

The company’s rapid expansion of steel production relied on immigrants, who made up 70 per cent of the workers it hired before 1960. Thousands of migrants arrived in Australia each year in the context of full employment and a rapidly expanding manufacturing sector. But as the economy changed in the 1980s, immigration policy also began a period of substantial change.

FitzGerald: ‘A sharper economic focus’

The assisted passage scheme from the UK to Australia ended in 1981. Through the 1980s, most immigration to Australia came from “family reunions”. The new shape of Australia’s immigration policy was laid out in 1988 in a report delivered by Whitlam’s former ambassador to China, Stephen FitzGerald.

Fitting squarely with the economic rationalism of the Hawke Labor government, the report demanded:
“when politics is driven by the need for structural adjustment, skills formation, invention and innovation, for competitive exports competitively marketed, for cuts in public spending and balanced budgets, for reductions in welfare programs, for income tests, assets tests, user pays…immigration…must be dealt with squarely within the mainstream of economic strategy”.

The solution was “a sharper economic focus” in the migration program to select only the “most appropriate” immigrants: those with “skills and multi-skills and some self-sacrifice”. The report concluded that family reunion migrants were low-skilled and too old, and that standards in the points-tested “skilled” migration program needed to be raised.

Significant policy changes were made to tailor immigration to a systematic, neo-liberal approach. The migration program was divided into its three current streams: family, skill, and humanitarian (refugees).
Between 1988-9 and 1995, family visas declined from 70,000 to 40,000. Since then, the number of family visas has remained about the same, while the “skilled” visa categories have constantly become more selective and increased in number.

Roach: ‘in accord with the needs of business’

The next major change to the framework for “skilled” migration was made during Keating’s Labor government.

Neville Roach, CEO of Fujitsu, chaired a committee (also including an ACTU representative) that delivered its report in 1995. Quoting Keating’s 1994 White Paper on Australia’s role in the global economy and the Asia-Pacific, the report focused on the need to “enhance Australia’s competitive position”, particularly in the growing trade in “services”.

The report also quoted business leaders and the Foreign Affairs Department complaining that the current immigration system was too slow, restrictive, and hurt Australian interests overseas.

In September 1995 Keating accepted the report’s recommendations to create a new Temporary Business Entry (457) visa, to consolidate and simplify other “business” visa categories, and to speed up the application process. One of the key provisions was to allow “a considerable degree of self-regulation on the part of employers” through allowing pre-qualified companies to bring in “key” workers with less government scrutiny. The 457 visa was actually introduced in August 1996—after the Howard Coalition government came to office.

From ‘business’ to ‘skills’: the expansion of the 457 visa

Roach completed another report for the Immigration Department in 1999 that linked the 457 visa to other “business” visas and permanent “skilled” migration, arguing they were essential to significant growth in communications, education, health, finance, and IT, as well as high-tech manufacturing industries. The report described a global competition for skilled workers in these industries. Interestingly, it also expressed concern about the negative international impact of anti-immigrant and anti-Asian racism and worried that potential migrants were going to Canada, New Zealand and the US instead of to Australia.

Much greater emphasis was put on the “skilled” stream of permanent migration. In 1997-1998, for the first time, more people were granted permanent residence through the “skilled” than the “family” streams.

As manufacturing declined, Australian capitalism no longer needed workers in general. Workers needed to more precisely match the skills needed in other parts of the economy as well as speaking good English, and being of working age.

During this period work rights were expanded for international students and working holiday visa holders, expanding the pool of casual workers for the service and agricultural industries. In 2001, international students with specific qualifications were allowed to transition to permanent residence—although this provision remains fraught with problems.

A major Productivity Commission report in 2006 linking migration and “productivity growth” reinforced government policy. It emphasised that the “right” type of migrant could bring substantial economic benefits, calculating that each new skilled migrant added $30,000 to $70,000 per year to the national GDP.

Subsequent reforms to the 457 visa have responded to ongoing concerns that employers were using workers on 457 visas to undermine wages. In 2009, new conditions required that 457 visa holders received “no less favourable treatment” in comparison to the wages and conditions of other workers. This provision is likely to be widened and improved in 2013, although it is insufficiently policed. It has also become easier for 457 visa holders to gain permanent residence.

However, the positive recommendations of the 2008 Deegan inquiry, among them, that a 457 visa holder be allowed 90 days instead of 28 days to find a new employer-sponsor, have never been implemented.

A clear path to permanent residence for all 457 visa holders was introduced in July 2012 (the 186/187 visa), although this requires employer sponsorship after two years of work. Figures up to 2012 show that about 40 per cent of people on 457 visas end up acquiring permanent residence. Journalist Peter Mares describes this as a “two-step” immigration process; temporary residence rights for a few years, followed by permanent residence. About 80 per cent of people sponsored for permanent residence by an employer were already working in Australia and holding a 457 or other visa.

And many 457 visa holders are not actually “brought in” from overseas, but are issued to international students and working holiday-makers—people already living and working in Australia.
So the comparison between 457 visas and indentured labour or slavery simply doesn’t hold up.

Employer-sponsored migration

The key shift in Australian immigration policy over the past 20 years has been the way it has become more closely tailored to the needs of employers, to the point where they can now individually select and sponsor potential migrants.

Business and government circles see this as a great thing. In The Australian earlier this year, Michael Easson, former secretary of the NSW Labor Council and chair of the Ministerial Council on Skilled Migration, described the shift to employer-sponsored skilled migration “as one of the great success stories of the past decade…the gradual development of a market-influenced immigration program that links skills to jobs.”

In a total workforce of 11.5 million, there were 107,510 workers holding employer-sponsored 457 visas in Australia at the end of February 2013. Sixty-three per cent of the almost 200,000 people granted permanent residence in 2011-12 came through the “skilled” stream. One-quarter of all people becoming permanent residents —47,000 people—gained permanent residence because their employer directly sponsored them, up from 10,000 in 2003-4 (Figure 1). With the introduction of the 186/187 visa, this number is likely to grow.

Employer-sponsored immigration applications, for both temporary work and permanent residence, are given the highest priority and have lower fees. A new “SkillSelect” procedure introduced in July 2012 ties skilled migration even more tightly to employer needs.

All applicants for skilled permanent visas who are not sponsored by an employer now have to register an “Expression of Interest” with the Immigration Department. Potential immigrants can only complete the full application once they have been issued an “invitation”—from either an employer, or the Department.

Immigration and jobs

At the root of a great deal of the anxiety about immigration is the fear that “immigrants are taking jobs”. Shamefully Gillard has encouraged anti-migrant sentiments and is cynically campaigning on “local jobs” in a desperate attempt to win anti-immigrant votes in the coming election. But the truth is that in 2011-12, 180,000 more jobs were created than 457 visas were issued (Table 1 over page).

The industries that have the most 457 visa workers broadly reflect the changes to Australian employment since 1996. As Marx pointed out in Capital, over 150 years ago, in order for capitalists to use their accumulated wealth to invest in new growth industries, they need to be able to quickly find ways of, “throwing great masses of men into decisive areas without doing any damage to the scale of production in other spheres.”

In 1996, manufacturing was the largest sector of employment. But by 2013, an additional 600,000 workers were employed in health care and social assistance, which is now by far the largest employment category.

Four hundred thousand new construction workers were hired, and 200,000 workers were added to each of the four sectors of “retail”, “accommodation and food services”, “professional, technical and scientific services” and “education” (Figure 2). It is in these expanding industries that most 457 visas were issued in 2011-12 (Table 2).

Campaigning against 457 visas?

The whole logic of Australia’s immigration system is organised around the needs of employers. Ninety-eight thousand people are stuck in the “family” application pipeline, and thousands more asylum seekers are in limbo or in offshore detention centres.

We need to campaign against the restrictions in every part of the immigration system. In the case of 457 workers, in particular, we need to fight to ensure that workers are not dependent on employers to obtain jobs or permanent residence.

Any such campaign must recognise that workers on 457 and other temporary visas are a large and growing part of the Australian working class, and are as much a part of the Australian working class as any other worker.

Employers already have a huge amount of power over the lives of 457 visa workers. The task of socialists is to increase the power that workers have relative to their employers through collective organisation of all workers, regardless of visa status, and by campaigning for all workers to have the same rights.

The campaign by some union officials against 457 visas and “foreign workers” in favour of “local jobs” only increases the climate of fear and suspicion that migrant workers experience, and increases the power of their bosses over them. Such campaigns also distract our attention from the real fight against job losses and the bosses who are responsible for them.

Where bosses are sponsoring workers for permanent residence, the “local jobs first” and the “no 457s” demand being pushed by some union officials risks creating the dangerous impression amongst migrant workers that bosses want them in Australia—but unions don’t.

In March 2013, as part of the Labor government’s posturing about “local jobs”, Fair Work inspectors were given the powers to check that 457 visas workers were being paid the correct salary and were in the job identified on their visa.

But inconsistencies are to be referred to immigration inspectors—the same inspectors who are responsible for rounding up international students or catching “illegal” workers and sending them to Villawood detention centre for deportation.

Socialists oppose a migration program that is organised around the needs of employers—in the same way that we want production organised for human need and not for profit. That’s why we oppose all immigration controls and fight to oppose any restrictions on migration.

The campaign against 457 visas is demanding that workers only come into Australia through permanent skilled migration, but as we have seen, skilled migration is capped and regulated to meet the needs of the employers. The “no 457” visa campaign does not even demand an increase in the skilled migration quota. We have to fight the restrictions of the 457 visa. Such workers should not be beholden to the employer who sponsors them for permanent residence and they must not be deported if they lose their job.

But the “no 457” campaign is not a demand against a “visa category”—it can only lead to a campaign against, and the exclusion of, workers who have no other way of getting to Australia.

Every part of the immigration system is tailored to meet the needs of Australian capitalism. Demands, by politicians of all stripes, to restrict immigration are regularly used to mobilise racist and nationalist sentiment and blur class divisions.

Campaigning against 457 visas directly feeds such sentiments. Any campaigns about changing immigration policy must mobilise and unite workers in concrete struggle to improve conditions and extend their rights, and oppose the restrictions of the immigration system.


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