The burden of the bureaucracy: 457 visas and a new Senator

There is a burden on the bureaucracy to provide information which is clear and by most measures, objective.

I don’t know the critical legislative and administrative detail of most immigration policy, but the one thing I know quite well is 457 visas. I was disappointed then to see the immigration department unable to explain some basics of the program to senators last night at estimates.

Here is a back and forth last night from Estimates on 457s:

Senator SESELJA: Are you able to give us a broad trend in terms of where the applications are at the moment?

Mr Fleming : Probably the best broad indicator is if we compare July to end of January this financial year with the previous financial year—

Senator SESELJA: Is this applications?

Mr Fleming : This is grants. So, for the previous financial year, for that seven-month period there were 41,761 granted; for this program-year for the same period, there have been 31,525—so, about 25 per cent fewer.

Senator SESELJA: So as the labour market has got a bit tighter the market has responded, and there are fewer of them being granted at the back end of the year?

Mr Fleming : That is correct.

There are two problem here: Mr Fleming did not provide the “best broad indicator” and he is wrong to describe Senator Seselja’s question as correct.

The 457 visa program is about employers who hire migrants to work in their organisations. Fundamentally, it is about demand in the labour market, not about immigration. Therefore instead of looking at visa applications and grants, the very best indicator is to look at nominations by employers who use the program. Visas provide a good proxy in most circumstances for business nominations.

The problem is that we are not in ‘most circumstances’ in relation to the 457 visa program. Last July there was an unprecedented price rise in the fee to apply for a visa. It went from about $400 to $900. In addition, family members are now charged similar amounts whereas previously they were free.

This, in conjunction with other matters, had a causal effect in the trend for visa applications:

Screen Shot 2014-02-11 at 2.43.06 PM

The big spike was from June 2013 last year, in the month directly before the price rise. This was the largest ever monthly lodgement of visas in the program’s history. All of those people who applied in June would typically have applied over the next six months, evening out the graph considerably.

This means when Mr Fleming says fewer visas are being granted as a response to the labour market he is fundamentally incorrect.

While there may indeed be some response to a less robust labour market, the fact the 457 visa program has dropped off in this particular 7 month period by 25-30% is due to the change in visa fees.

Further, a very quick analysis of the June 2013 figures show nearly 7000 of the visas were granted onshore. This means people who already hold 457 visas are getting them renewed or other visa holders are transitioning onto 457 visas. These people are not responding to the labour market. They already work for their employer! They are responding to price and if the price had of been the same in September 2013 as June 2013, there would be no 25% drop in applications. The best way to analyse is would be to look at a 12 month rolling average instead of a static 7 month period of comparison.

Unfortunately, there were further mistakes:

Senator SESELJA: Was that only in the case of the position coming to an end or termination, or if the person resigns can they then look for another under that same visa?

Mr Fleming : Without being able to comment on the particular case, there are essentially two ways that that can be effected. The actual condition on the visa is that the person is to do the work that they were sponsored to do, but there is capacity for that to change with the written permission of the department, or they can get a fresh employer and sponsorship and a fresh 457 visa, which is a more normal course of events.

Senator Seselja is talking about 457 visa holders working for more than one employer or changing employers and Mr Fleming outlines what he considers the process for this to occur.

However – and this is getting technical – my reading of the legislation is there is no ability for the department to provide written permission for a visa holder to work for a different employer. There is a visa condition – 8017 – that requires visa holders to work for their sponsoring employer. This can be waived in certain circumstances however it is done by a legislative instrument and requires the Minister’s signature as opposed to the “written permission of the department”. My apologies if I’m wrong but this is my understanding.

Further, and on this I am more certain, when visa holders change employers, they do not require a new 457 visa as suggested by Mr Fleming. They require a new nomination from their future employer. This is small difference but an important one. A visa relates to the person while the nomination relates to the business.

This is probably the case of an individual simply making a few mistakes. This specific provision of information is also probably not amazingly important in the big scheme of things.

But when you are in a senior position (First Assistant Secretary) where a brand new Senator is asking basic questions about a heavily political program, the onus is on the department to provide the correct advice. This is how he receives his information about how the 457 visa program operates and he deserves to be provided with factually correct, technically correct information.

We need a bigger debate about temporary migration in Australia as it is in the public interest to argue the merits of the 457 visa program. However this is not assisted when small mistakes become incorporated into the public record and shape our legislators perception of contentious policy.

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