Australia: Government response to 457 visa reform recommendations

Last Updated: 2 September 2015

The Federal government has released its response to the independent review into the 457 visa programme, Robust New Foundations.  While the Department has made an initial announcement outlining some of the changes to the programme the full details of the reforms are yet to be released.

The government's response supports the vast majority of changes proposed in the report. The primary goal of the report was to review the operation of the 457 visa programme to ensure that current systems provide sufficient checks and balances to ensure the integrity of the programme.

The Department is yet to provide detail on how many of these recommendations will be implemented but has provided an initial statement confirming:

– Training Benchmark A and B are to be replaced with an annual contribution calculated by the size of the sponsoring organisation. Funds will be paid to the Department of Industry and directed to training in areas of need.
– It will be made unlawful for a visa holder to pay a sponsor for sponsorship and penalties will apply.
– Labour Market Testing will be streamlined to reduce red tape for employers.
– English language requirements will be softened to allow for an IELTS score of 5.0 overall with a minimum of 4.5 in each band.
– The exemption for 5 years' study in English will be changed from 5 years' continuous study to 5 years' cumulative study.
– The age limit for permanent residency through the 186 and 187 Temporary Resident Transition streams are to be reviewed as part of the Skilled Migration and 400 Visa Series Review but the government supports the recommendations to reduce current requirements.
– The Ministerial Advisory Council on Skilled Migration will not be replaced but the government is seeking advice on whether it can be reconstituted with a particular focus on labour market issues.
– Information for sponsors on compliance will be reviewed but additional resources will not be allocated.

The changes are expected to occur over the next 6 months however some changes will not come into place until further consultation with stakeholders has taken place.

Eventus Immigration will provide further details of the reforms as they are announced.

A full breakdown of the Department's position on the recommendations is included in the table below.

Response to Proposed Reforms

1.1 That, in lieu of the existing Ministerial Advisory Council on Skilled Migration, a new tripartite ministerial advisory council, which is not necessarily prescribed in legislation, be established to report to government on skilled migration issues.
Government Response:  Supported in principle

1.2 That the new ministerial advisory council be supported by a dedicated labour market analysis resource.
Government Response:  Supported

2. Acknowledging that, as the OECD has pointed out, employer-conducted labour market testing is not "fully reliable", and in the Australian context has proven ineffective, that the current legislative requirement for labour market testing be abolished.
Government Response:  Noted

3.1 That the Consolidated Sponsored Occupations List (CSOL) be retained as a list of occupations which are at Skill Level 3 and above, and that the CSOL should be able to be amended by two means: first, the addition of skilled occupations which can be shown to exist in the community but which may not be on the ANZSCO list; and, second, the refinement of the CSOL in cases where there may be integrity or appropriateness concerns. Any occupations not on the list, which are usually referred to as semi-skilled, may be addressed as part of the Labour Agreement regime.
Government Response:  Supported

3.2 That the new ministerial advisory council provide advice on those occupations where some concerns exist and recommend additional requirements or limitations on occupations and/or regions.
Government Response:  Supported

4. That the market rate framework continue to operate as a core component of the 457 programme, but that the earnings threshold above which there is an exemption from the need to demonstrate the market rate should be aligned with the income level above which the top marginal tax rate is paid (currently at $180 000).
Government Response:  Supported

5.1 While there is an argument for abolishing the Temporary Skilled Migration Income Threshold (TSMIT), that it nevertheless be retained to allow for streamlining
within the wider programme, and that concessions to the TSMIT be afforded under Labour Agreements, Enterprise Migration Agreements and Designated Area Migration Agreements, as appropriate.
Government Response:Supported

5.2 That the current TSMIT be retained at $53 900 p.a. but that it not undergo any further increases until it is reviewed within two years.
Government Response:Supported

5.3 That the two roles currently performed by TSMIT (that is, acting as a determination of the eligibility of occupations for access to the scheme and as an income floor) be more clearly articulated in the 457 programme, and that consideration be given to accepting the eligibility threshold as up to 10% lower than the TSMIT.
Government Response:  Supported

5.4 That the government give further consideration to a regional concession to the TSMIT, but only in limited circumstances where evidence clearly supports such concession.
Government Response:  Supported

5.5 That in circumstances where the base rate of pay is below the TSMIT, the current flexible approach adopted by the department, taking into account guaranteed annual earnings to arrive at a rate that meets the minimum requirement of TSMIT be continued and made more visible to users of the programme and their professional advisors.
Government Response:  Supported

6.1 That the current training benchmarks be replaced by an annual training fund contribution based on each 457 visa holder sponsored, with the contributions scaled according to size of business.
Government Response:  Supported subject to further consultation

6.2 That any funding raised by way of a training contribution from sponsors of 457 visa holders be invested in:

a)   training and support initiatives, including job readiness, life skills, and outreach programmes for disengaged groups, particularly youth who have fallen out of the school system;

b)   programmes allowing employers to take on apprentices/trainees from target groups, including Indigenous Australians and those in rural and regional

c)   mentoring programmes and training scholarships aimed at providing upskilling opportunities within the vocational training and higher education sectors that address critical skills gaps in the current Australian workforce. Target sectors include those industries, such as nursing and the IT sector, that rely heavily
on 457 workers; and

d)   training and support initiatives for sectors of critical national priority. Target sectors include industries experiencing significant increase in labour demands, such as the aged care and disability care sectors.
Government Response:  Supported

6.3 That funds raised through the training contribution be dedicated to this training role and that the government reports annually on how these monies are spent by the Department of Industry.
Government Response:  Supported

6.4 That there be a new sponsor obligation to ensure that the cost to the sponsor of the training contribution cannot be passed onto a 457 visa holder or third party.
Government Response:  Supported

7.1 That the English language requirement be amended to an average score. For example, in relation to International English Language Testing System, the 457 applicant should have an average of 5 across the four competencies (or the equivalent for an alternative English language testing provider).
Government Response:  Supported

7.2 That greater flexibility be provided for industries or businesses to seek concessions to the English language requirement for certain occupations on a case by case basis, or under a Labour Agreement, Enterprise Migration Agreement or Designated Area Migration Agreement, as appropriate.
Government Response:  Supported

7.3 That consideration be given to alternative English language test providers.
Government Response:  Supported

7.4 That consideration be given to expanding the list of nationalities that are exempt from the need to demonstrate they meet the English language requirement.
Government Response:  Not Supported

7.5 That instead of the current exemption which requires five years continuous study, five years cumulative study be accepted.
Government Response:  Supported

8.1 That there be targeted training for decision-makers in relation to assessment of the genuine position requirement.
Government Response:  Supported

8.2 That before decision-makers refuse a nomination on the basis of the genuine position requirement, the sponsor be invited to provide further information to the decision-maker.
Government Response:Supported in principle

9. That the government should explore how skills assessment could more appropriately recognise a visa applicant's experience.
Government Response:  Supported

10.1 That Standard Business Sponsors should be approved for five years and start-up business sponsors for eighteen months.
Government Response:Supported

10.2 That as part of the government's deregulation agenda, the department should develop a simplified process for sponsor renewal.
Government Response:  Supported

10.3 That the department considers combining as many sponsorship classes as possible.
Government Response:  Supported

10.4 That when more detailed information is available, the department should investigate the alignment of overseas business and Labour Agreement sponsorship periods with the general Standard Business Sponsorship approval period.
Government Response:  Supported

10.5 That the timeframe for the sponsor to notify the department of notifiable events as set out in legislation should be extended to 28 days after the event has occurred.
Government Response:  Supported

10.6 That the department should explore options that would enable the enforcement of the attestation relating to non-discriminatory employment practices.
Government Response:  Supported

10.7 That it be made unlawful for a sponsor to be paid by visa applicants for a migration outcome, and that this be reinforced by a robust penalty and conviction framework.
Government Response:  Supported

11. That the government should review the fee structure, especially for secondary visa applicants and visa renewal applications.
Government Response:  Supported

12.1 That sponsors be required to include as part of the signed employment contract: a)   a summary of visa holder rights prepared by the department; and b)   the Fair Work Ombudsman's Fair Work Information Statement.
Government Response:  Supported

12.2 That improvements be made to both the accessibility and content on the department's website specific to 457 visa holder rights and obligations, and utilising the department's significant online presence more effectively to educate 457 visa holders on their rights in Australia.
Government Response:  Supported

13.1 That consideration be given to creating streamlined processing within the existing 457 programme as a deregulatory measure. To maintain programme integrity, streamlining should be built around risk factors including business size, occupation, salary and sponsor behaviour.
Government Response:Supported subject to further consultation

13.2 That should the recommended nomination and visa streamlining outlined in this report be implemented, the department should investigate a redefined accredited sponsor system. Current accredited sponsors should retain their priority processing benefits until their sponsorship ceases; however, no further sponsors should be afforded accredited status until a new system is implemented.
Government Response:  Supported

14.1 That Labour Agreement negotiation times be significantly improved to enable a demand-driven and responsive pathway for temporary migration, where the standard 457 programme arrangements are not suitable.
Government Response:  Supported

14.2 That to enable the Labour Agreement pathway to be more open and accessible for additional industry sectors, consideration be given to the development of other template agreements that will address temporary local labour shortages in industries of need.
Government Response:  Supported

15.1 That 457 visa holders be required to work for at least two years in Australia before transitioning to the Employer Nomination Scheme or Regional Sponsored Migration Scheme, and that consideration be given to the amount of time required with a nominating employer being at least one year.
Government Response:Supported

15.2 That consideration be given to reviewing the age restriction on those 457 visa holders transitioning to the Employer Nomination Scheme or Regional Sponsored
Migration Scheme. 
Government Response:Supported

15.3 That consideration be given to facilitating access for partners of primary sponsored 457 visa holders to secure permanent residence under the Temporary Residence Transition stream.
Government Response:  Supported

16. That consideration be given to the allocation of more resources to programmes aimed at helping sponsors understand and comply with their obligations, whether
those programmes are delivered directly to sponsors or through the migration advice profession.
Government Response:  Supported in principle

17. That greater priority be given to monitoring, and that the department continue to enhance its compliance model to ensure those resources are applied efficiently and effectively.
Government Response:Supported

18.1 That there be greater collaboration between the department and the Australian Taxation Office to uphold integrity within the 457 programme and minimise the burden on employers.
Government Response:  Supported

18.2 That a change to 457 visa conditions be introduced to place an obligation on the visa holder to provide the department with their Australian tax file number.
Government Response:  Supported

19.1 That the Fair Work Ombudsman's current complementary role in monitoring compliance and referral of findings to the department for action should continue.
Government Response:  Supported

19.2 That the department should provide information in real time that is both current and in a format compatible with those of the Fair Work Ombudsman.
Government Response:  Supported

20.1 That the department monitor decisions of the Fair Work Commission, so as to determine if sponsors have breached obligations or provided false or misleading information.
Government Response:Supported

20.2 That the department require sponsors, when lodging a new nomination application to certify that there has been no change to the information provided to the department in relation to whether the business or an associated entity has been subject to "adverse information" as that term is defined in the legislation.
Government Response:  Supported

21.1 That dedicated resourcing be made available to the department to enable the investigation and prosecution of civil penalty applications and court orders.
Government Response:  Supported subject to further consultation

21.2 That the department disclose greater information on its sanction actions and communicate this directly to all sponsors and the migration advice profession as well as placing information on the website.
Government Response:  Supported

22. That the department investigate the feasibility of system improvements that facilitate greater linkages with information held by other government agencies.
Government Response:  Supported in principle

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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