Goverment replaces 457 visa with two new visas

Prime Minister Malcolm Turnbull has announced the government will abolish 457 visas.

In a video posted on Facebook, Turnbull said the visa, which allows sponsored skilled overseas workers to work in Australia temporarily, will be replaced.

Embellishing on the announcement at a press conference this afternoon, Turnbull said the 457 visa will be replaced by two new kinds of visa: one limited to a two-year period that will require previous work experience, and another four-year visa that will require a higher standard of English language skills as well as a proper criminal check.

"We will no longer allow 457 visas to be passports to jobs that could and should go to Australians," he said in the video.

“However it is important that businesses still get access to the skills they need to grow and invest. The 457 visa will be replaced by a new temporary visa specifically designed to recruit the best and the brightest in the national interest."

Tech sector reacts

The news generated much reaction in the Australia’s information media and telecommunications sector which last year lodged around 2,000 457 visa applications.

Rob Hango-Zada, co-founder of Sydney-based shipping platform Shippit, employs an engineer on a 457 visa.

"Putting Australian jobs first is a great mantra, but how does this prevent jobs from being sent offshore?" he said. "In the corporate world and more specifically in the tech space, off-shoring is a common practice and in recent times 457 visas have meant that at least offshoring for specialised jobs is minimised. The Government needs to provide specific information about how this would impact key areas such as engineering and development.

"I would like to understand how the government can assist with recruiting for key areas with skill gaps?"

Marcus Dervin, director of Sydney-based IT consultancy WebVine, commented: "Do you know how hard it is to find specialised IT people in this country! They don't exist! I run a consultancy and we struggle to find people, no matter what recruiter we use...This will negatively affect the economy. The only alternative will now be to setup teams overseas and try to harness their skills from there which means no money in tax and unhappy clients."

Nick La, co-founder of Collingwood recruitment platform Weploy, welcomed the announcement.

"I think this is a great initiative as it can provide many more working opportunities to Australians who are looking to step into a career. By deploying skills to the right areas and addressing shortages, the change will free up more opportunities to our Australians – whether it be building up work experience or simply earning a living," he said.

"By providing a temporary visa focused more on specialised skill sets, Australia will be able to attract international talent, ultimately bringing our global level of excellence higher and up-skilling where required. This will hopefully motivate Australians succeed even more and help to drive our innovation agenda by giving founders access to the right talent to grow startups. As employers, it's important the Government can present a strong case behind the abolishment of the visas and is able to supply us with information on how it can benefit all parties."

Sydney digital agency Gruden CEO Tim Parker said his firm had a number of staff on 457 visas. He said he applauded the grandfathering of existing visas, “however given that many countries have been teaching coding in kindergarten for a decade or more, Australia is well behind in the tech talent stakes.

“Therefore we will continue to require imported talent in the short term, and hope the new arrangements recognise this need. Otherwise the imperative to offshore our software development could increase at the expense of the local economy,” Parker added.

Exploiting the system

According IT Professionals Association (ITPA) analysis, there has been a 136 per cent rise in 457 visas issued for IT workers over the last decade, compared to a two per cent rise in the total number of visas issued.

The ITPA’s analysis of data from the government's data.gov.au website found that the number of 457’s granted to entry level occupations including systems administration and IT support workers had increased by 480 per cent since 2005.

The association said local tech firms were “exploiting the system” to fill roles with cheaper foreign workers.

“We are very concerned about the growing number of IT organisations that appear to be exploiting the 457 visa system to displace local workers with internationally-recruited IT staff on much lower wages than would be otherwise applicable”, said ITPA director Martin Hale at the time.

At last count there are currently around 95,000 people in Australia on a 457 visa, a number which includes their family members. In the last financial year, the Government gave 45,400 visas to foreign workers, a decrease of 11 per cent from the year before.

While the number of visa applications lodged has been rising, the number granted has been decreasing year on year since 2013.

Dangerous situation

Late last year the government reduced the amount of time skilled international workers on 457 visas can remain in Australia after leaving their jobs from 90 days to 60 days.

“Well, our approach is really simple,” Minister for Industry, Innovation, and Science, Greg Hunt told ABC Radio at the time. “And that is, these are visas for areas that need the actual work. In the IT sector, there is no question.”

Following November’s announcement, Atlassian co-founder Mike Cannon-Brookes said that moves to tighten controls on 457 visas put the local tech industry in a “very dangerous situation”.

“This suddenly, throw your hands up, ‘all these people are coming in’...The sense that there’s some exploding programme of worker exploitation just isn’t supported by any facts or statistics,” Cannon-Brookes told ABC Radio at the time.

Around a quarter of Atlassian’s 1,000 Australia-based staff is currently on 457 visas, a necessity given the lack of senior skilled technology talent in the country, Cannon-Brookes said.

Further details on the abolition of 457 visas and its replacement are scant, with the Prime Minister saying he will make further comment in coming weeks.

"Australia is the most successful multicultural nation in the world, we are an immigration nation, but he fact remains Australian workers must have priority for Australian jobs,” Turnbull said.

"The new visa will better target genuine skills shortages, including in regional Australia."