Fair Dinkum Mal, Will Cutting The 457 Visa Really Save Jobs?

Much has been said, mostly negative from I have seen and heard, about the federal government’s decision to scrap the 457 visa and I must admit having some doubts myself too. Is this a case of Malcolm Turnbull saving Australian jobs or his own?

Let’s look at some facts.

There are currently about 177K 457 visa holders in Australia with a working population of about 12M. This represents 1.47 percent of all workers. Only half of those visa holders, or about 0.73 percent, are working in industries that don’t have a skill shortage – e.g. cooks, café managers, and many popular IT roles (e.g. Software and Applications Programmers, ICT Managers).

Source: Department of Immigration and Border Protection Quarterly Report: 30 Sept. 2016

Under Turnbull’s new scheme, including those roles I just listed and many others, remain open to overseas talent. Of the 216 professions that were cut from the 457 list of occupations, 18 have not been used once in the past decade and another 46 have not been granted once in the past year.

I agree we should not import skills if we have ready access to talent in Australia. But we also need to look at the reasons why some of this talent was imported. My understanding of the current job market and the research I have done show a number of reasons for this:

1. Genuine skills shortages
2. Reluctance of local talent to undertake the work; and
3. Cost of local vs. foreign talent – when businesses are under pressure to turn a profit for the stakeholders which includes the government, they inevitably look for cost savings.

Further on the cost issue – Australia does have a high standard of living and we have several collective industrial agreements and enterprise bargaining agreements in place that make our talent more expensive. This is not a make wrong, just a simple statement of fact. Essentially we have a tariff on the cost of Australian talent. Can you really blame employers who are looking to avoid this tariff?

However, the elephant in the room here really, in my opinion, is the practice of offshoring jobs to other countries. This is much more of a problem than imported 457 talent. There are no regulations stopping any organisation from offshoring any percentage of their jobs to a location that is less expensive than Australia. While this is NOT the patriotic way, it is an easy way out, it is cost effective and in some cases, the talent is of better quality and more motivated than their Australian equivalent.

Hypocritically, the Turnbull Government has offshored 20% of ATO jobs according to Independent Australia. In 2015, the NSW Government also offshored jobs, which is what helped give the Federal government the idea.

So really, we are not really talking about the number of jobs that are not going to Australians here. Businesses are finding it hard to recruit local because they can’t find qualified people and their hands are forced by economic forces. Hence, how much of Turnbull’s political rhetoric is just the case of sabre rattling rather than a genuine desire to secure jobs for Aussies?

I really think that rationally, as a nation, we need to look at the big picture and understand why organisations take these types of decisions and realistically estimate the impact. We can reduce the list of professions on the 457 or its derivative to skill-scarce jobs but let’s also look at the offshoring trends and, potentially, introduce incentives to organisations for employing people in regional areas to undertake the work that is currently being offshored.

And of course we should also continue to training and retraining our talent to focus on jobs of the future.

So Malcolm, if you are really looking at job creation, why not consider the above?

Image: ABC


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