Government Hypocrisy: 457 visas and Labour Market Testing

I believe the only piece of legislation passed by the Rudd Government v2.0 was the Migration Amendment (Temporary Sponsored Visas) Act 2013. The main purpose of this legislation was to introduce labour market testing for 457 visas (amongst other provisions). This means when an employer wants to hire a migrant using a 457 visa, they must first advertise the job.

Personally, I don’t believe requirement will be effective in achieving its intended outcome, which is to ensure Australian citizens are able to compete for these positions. The reasons are numerous, including the difficultly of enforcing such requirements. Further, the regulation is seriously complex, meaning significant delays for employers who wish to use the program..

However this blog post is about the politics of labour market testing. As this is going to get overly complex and detailed (migration nerds rejoice), the simple message is this is another example of Coalition hypocrisy, back-peddling and insipid policy implementation.

Back in June, labour market testing was bitterly opposed by the then-Abbott opposition. In his second reading speech, Scott Morrison said:

These measures are designed not to improve the 457 skilled migration program, which is so important to this country, but to choke that program at the behest of the unions, choking the scheme with union red tape.

Given this, one assumes the new government would actively seek, within existing law, to lessen the impact of the regulations on businesses. This can be done as the Minister for Immigration can designate certain occupations as being exempt from labour market testing. This is outlined in the legislation:

Skill and occupational exemptions

(2)  The approved sponsor is exempt from the requirement to satisfy the labour market testing condition in section 140GBA if:

(a)  either or both of the following are required for the nominated position, in relation to the nominated occupation:

(i)  a relevant bachelor degree or higher qualification;

(ii)  5 years or more of relevant experience; and

(b)  the nominated occupation is specified for the purposes of this subsection under subsection (4).

(3)  The approved sponsor is exempt from the requirement to satisfy the labour market testing condition in section 140GBA if:

(a)  either or both of the following are required for the nominated position, in relation to the nominated occupation:

(i)  a relevant associate degree, advanced diploma or diploma covered by the AQF;

(ii)  3 years or more of relevant experience; and

(b)  the nominated occupation is specified for the purposes of this subsection under subsection (4).

What does this legalese mean? Scott Morrison can exempt as many occupations as he wants which meet the conditions outlined in (2) and (3). These conditions relate to the type of qualification a migrant has and the length of their previous work experience. This means businesses who want to hire in those occupations do not have to undertake “union red tape”.

From my count, and this KPMG document, 223 occupations require labour market testing which equal about a third of all occupations available under the 457 program. This means Scott Morrison has imposed labour market testing, a measure he says will choke the 457 visa program,  on about one third of all occupations available. Did he have to do this?

The conditions governing occupational exemptions from labour market testing allow for any occupation classified by the ABS as skill level 1, 2 or 3 to be exempt (skill levels are defined under the ANZSCO classification of occupations, with 4 and 5 designating lower skilled jobs).

However, 99 per cent of occupations in the 457 visa program are skill level 1-3. This means, with the exception of some nursing and engineering occupations, the vast majority of occupations under the 457 visa program could have been exempted by Minister Morrison. All it would have taken was an additional line in this legislative instrument which could have read:

SPECIFY for the purpose of paragraph 140GBC(4)(b) of the Act, all occupations that are classified in the ANZSCO as Skill Level 3

Instead, without that one line, an additional 223 occupations are now subject to labour market testing.

(Sidenote: Why is this the case? My guess is a legislative drafting mistake. The key words in the legislation quoted above are “either or both” in relation to the type of qualification and the length of experience. What the authors of the legislation were presumably attempting to do was capture exemptions for skill level 1 (under section 2) and skill level 2 (under section 3). However, all skill level 3 occupations also require “at least three years of relevant experience” therefore meeting the criteria for an exemption under section 3 of the above legislation)

This begs the question, why did the Minister allow labour market testing, aka “union red tape”, to be imposed on ~30,000 employers who use the 457 program? While Senator Cash calls this a “sensible approach”, I am unsure organisations like AI Group, ACCI and the BCA would agree. In fact, I’m sure if you presented this regulation to the then-opposition back in June, it would have been furiously denounced as “union red tape”.

The actions of this government to date demonstrate the sheer, unbridled hypocrisy of saying one thing in opposition and doing another in government. The Gonski reforms are exhibit 1A. While these 457 visa regulations are more likely exhibit 14F on the priority scale, it is important to highlight how Ministers Morrison and Cash are showing a heavy dose of hubris and hypocrisy by walking away from previous policy positions.

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