NEVILLE ROACH. Temporary Highly Skilled Migration – a lifeline that needs managing, not axing or cutting

The issue of temporary skilled migration is again controversial, most recently following Kristina Keneally’s questioning of the size of all forms of migration. It shouldn’t be so. Properly managed, it remains an essential and extremely beneficial program.

The subject needs revisiting because a country with a small population like ours will always have chronic skill shortages that cannot be met with our own people and our normal permanent immigration program.

I must confess personal bias! I had the privilege of chairing the committee that ushered in what became known as the 457 or Roach (Report) Visa in 1996.

The IT and construction industries are good examples of the challenge. Both involve large projects, which needing few resources before they commence, then a large, variable and unpredictable number during implementation, and only some of them after completion. The only economically viable solution to this complex problem is ‘just-in-time’ employment using countries, especially India and the Philippines, with far more abundant skilled resources of every conceivable type ready to travel overseas on a moment’s notice.

I must here declare possible bias. India is my country of origin and I am currently employed by Tata Consultancy Services, India’s largest IT company and the world’s largest provider of temporary skilled specialists.

The challenge for countries like Australia is how to ensure that the system is only used for bonafide purpose and isn’t rorted and allowed to destroy the integrity of our permanent migration program. The solution the 1996 committee proposed had three elements – restrict the program to highly skilled specialists only; thoroughly vet the sponsoring employer’s financial capacity and integrity; and monitor sponsors routinely, with severe penalties for any breaches.

A major strength of the report was the widespread support of different interest groups. For example, the committee included senior representatives of the largest users of the propped facility – the financial services, construction and IT industries – as well as the trade union movement. Most significantly, it enjoyed bipartisan support, having been appointed by Labor and then implemented by the Coalition.

The committee’s recommendations also placed significant local employment and training obligations on sponsors to prevent the 457 system from having adverse effects on Australian citizens and permanent residents.

The system was administratively simple and efficient. The overriding criterion for resolving issues was ‘benefit to Australia’. To assist a speedier process, a category of ‘pre-qualified sponsors’ was created for employers of substance and a proven track record of fulfilling their sponsorship obligations.

Another longer term side benefit of the 457 was that those coming here with it, became a valuable and cost-free source of permanent migrants with skills in endemic shortage in Australia.

There is no question that the 457 visa served Australia extremely well then and since. Almost immediately, it supported the urgent requirement for highly skilled specialists that resulted from the deregulation of financial services, the infrastructure and mining booms and the IT revolution, including the sudden, huge and uniquely temporary demand for specialists to address the Y2K problem leading into the year 2000.

Although a 457-like system will always be essential for the Australian economy, and some of its later incarnations remain in place, the current visas are far more restrictive, administratively cumbersome and involve significantly higher costs, effort and time. The primary reason for this is that many of the principles the original report required have gradually been watered down to the point where several of the benefits have been lost and numerous harmful side effects have become commonplace.

The cause and outcome of this malaise can both be blamed on the fact that the integrity of the overall temporary visa system has been compromised and fallen victim to large-scale rorting. It has degenerated to such an extent that many of the visas granted under it no longer meet the ‘benefit to Australia’ test.

So, what went so horribly wrong? Many things, but the most significant is that the skills required have been lowered to well below the ‘highly skilled specialist’’ level that the committee was asked to consider and scrupulously honoured and mandated.

Instead, the visa became a cash cow and, more insidiously, a tool to weaken unions and minimise wage growth for lower skilled workers in every industry. Suddenly, small traders, like corner shops or restaurants, started claiming the impossibility of finding workers in Australia who understood the subtlety and complexity of Indian spices or Asian cuisines! And, while sponsors, especially pre-qualified sponsors, rarely, if ever, used the visa to do personal favours to someone eager to come to Australia, it soon became an easy way for small, even micro, businesses to bring in relatives and friends in substantial numbers. Many applicants even bribed employers to sponsor them, effectively making them wage slaves, open to exploitation, even physical and sexual abuse.

Then, to raise even more revenue and in a half-hearted attempt to stop the most flagrant rorts, the visa fees were frequently increased and the process made increasingly complex for sponsors, visa applicants and the immigration department itself, causing the whole system to become bogged down in red tape, take much more time and work and impose far higher costs on everyone.

The pre-qualified sponsor category has disappeared. Most ironically, the large reputable employers the visa was originally designed for now have to employ many more specialists to navigate the system. Worse still, all sponsors were relieved of any obligations for local employment and training. The government forgot or deliberately ignored why the 457 visa was introduced in the first place.

The system is so broken that the only solution is to dismantle it completely and return to the original model very urgently. In the interest of fairness, lower-skilled workers already here and those with approved visas should still be allowed to stay or enter Australia and any applications submitted should be processed. But, apart from these exceptions, the letter and spirit of the original 457 visa should immediately be restored.

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Neville J Roach AO Former Chairman of Australian Government’s Business (Migration) Advisory Panel.

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14 Responses to NEVILLE ROACH. Temporary Highly Skilled Migration – a lifeline that needs managing, not axing or cutting

  1. Avatar Andrew Smith says:

    Not sure what these numbers represent, the NOM?

    ‘Last financial year this was 239,600, creating two-thirds of the 381,000 increase in Australia’s population’

    Permanent migration is below 200k and think 160k for current financial year, unlikely to be reached.

    Former British PM was naively wedged and /or advised into making a low NOM target pre-Brexit showing that he misunderstood the measure, while most equated it with (permanent) migration. The NOM acts as a ‘barometer’ of arrivals and departures to inform estimated population but (multiple factors) cannot be tightly controlled for it to be a fixed target (though present times have crashed NOM due to closed borders).

    Ditto GDP or ‘growth’, and depending upon definition, growth is often a positive e.g. increased wages, services or support, well being etc.; unclear or not necessarily a negative. Presently economic growth will crash due to needed measures for Covid-19 control, but not through choice in normal times?

  2. Avatar Andrew Smith says:

    Good article and pity our mainstream media could not offer a more nuanced and positive picture….and who informed Kenneally?!

    There has been intended confusion round (mostly undefined) ‘immigration’ and ‘population (growth)’ data lacking (informed) background, context and data literacy by armchair experts, helped along by several people with media profiles and supposed expertise who should know better…. for bigger negative headlines.

    Unfortunately too much media space and time are given to views shared by the current White House, far less to migration experts and almost none regarding the benefits of (post 1970s white Australia policy) immigration from our neighbouring region.

    It’s not just about highly skilled immigrants, as Covid-19 has shown e.g. there is much lower skilled work such as agriculture, logistics etc. while ageing permanent population expecting services and pensions vs. proportional decline in permanent working age, needs a broad tax base to support budgets (now and in future); increasing temporary ‘churn over’ of younger net financial contributors does this.

  3. Avatar George Brenan says:

    I agree with the thrust of this article. Along with this goes the issue of skills development which the current government was actually starting to think about – a mere 20 years or so since it became an important problem. Still to return to this story the dog-whistle aspect of KK’S piece was the misuse of data. Of the many visas issued most are kiwis, students etc and the 457-types of visas are perhaps 10% of temporary visas. Still a problem but not one which should be misrepresented. More important about the temporary visas perhaps is the shameful (I think) approach to the NZ CER rights. As recent times have shown we have created a third class resident – behind citizens and permanent visa holders – with a range of barriers to equivalent treatment. Deciding when a person should be regarded as permanent is a dilemma but in granting rights we should not be entrenching social disadvantage

  4. Avatar Keith MacLennan says:

    It’s one giant rort check out Dr Bob Birrell from the Australian Population Research Institute (APRI) report showing that Australia’s so-called skilled visa system is a giant fraud, whereby:
    many recently arrived skilled migrants (i.e. arrived between 2011 and 2016) cannot find professional jobs;
    many skilled migrants have gone into areas that the government’s own Department of Employment has judged to be oversupplied (e.g. accounting and engineering); and
    migrants have generally worse labour market outcomes than the Australian born population.
    Then read, Chris Wright and Stephen Clibborn from the University of Sydney published a report, entitled Back Door, Side Door or Front Door?
    An Emerging De-Facto Low-Skilled Immigration Policy in Australia, which also questioned the efficacy of Australia’s so-called skilled migration system.
    It’s a scam from start to finish

    • Avatar Graeme Bond says:

      Couldn’t agree more.
      The main useage of 457 visas that I had seen was for certain foreign companies to bring in mainly entry level IT people to take the place of Australians already in a job!
      These situations have been well exposed in the media and offenders include Neville’s company which featured in a 4 Corners report.
      The Australian companies taking advantage of these rackets have included the then Coles-Myer and Telstra and a long list of foreign comanies operating in Australia, such as AXA.
      I also meet many bright young Australian graduates struggling to get their first IT job while such people from another country are being placed in such jobs.
      People should have gone to gaol over these rackets.

  5. Avatar Michael Flynn says:

    Thanks for an excellent article about the start of the policy and later government maladministration. I hope the next policy iteration addresses the known defects. An example : worker from Europe employed by a small business in Melbourne as a TSM with European opticians skill not recognised here. She was paid less, performed skilled work with a local qualified person signing off then after years of faithful work was unable to apply for permanent residence because the employer failed to take the action expected
    A happy ending as she has another career but the public interest ? No local training, exploitation of a low paid skilled person and no regulation to stop employer greed.

  6. Avatar Bob Ellis says:

    Immigration has brought great benefits to Australia. English and Scots shipbuilders to Whyalla in the 1950s, mixed European immigrant Dam and pipeline builders to the Snowy, teachers, musicians and academics and post-war migration generally. In recent times however, 457 immigration as has simply brought more shop keepers, corporate bonded city dwellers and capital rich tax dodgers to the East Coast where their numbers now exert political and social influence on Australian society. Their influence is little discussed despite its significant effects to what euphemistically is called the “benefit of Australia’ and which could more justifiably be called the victory of personal greed, anti-social ‘deregulation’ and corporate dominance over long established Australian traditions. Australia Post has been gutted by two foreign born and socialised CEOs, Qantas ‘reformed’ into an anti-worker corporation unrecognisable as the former proud airline, ABC gutted by LCP/IPA hostility wielded by Thatcherite immigrant MPs (assisted by local opportunists). The list is extensive. What most of those immigrants have in common is that they have never lived outside the cities into which they arrived. Australia’s cities are being ‘internationalised’ to such an extent that they are unrecognisable and un-navigable to Australian-born and socialised citizens who occupy inland Australia.

    • Avatar Malcolm Crout says:

      Well said. I agree 100%. The far too broad scope of immigration has made local employers lazy to the point where they no longer invest in training employees. It’s time to put fresh eyes on skilled migration.

  7. Abul Rizvi Abul Rizvi says:

    The old ‘key activity’ versus ‘non-key’ distinction in the Roach Report was unenforceable. Every employer designated the position they wanted filled from overseas as ‘key’ irrespective of the skill level.

    • Avatar don owers says:

      Hi Abul, As you would know Kristine Keneally, shadow minister for immigration, put forward a proposal for a future labor government to reduce immigration. Last financial year this was 239,600, creating two-thirds of the 381,000 increase in Australia’s population. Despite NZ having done this much earlier, and with the support of the Greens, it was always going to be a contentious policy for us because there are many who have thrived because of population growth. This includes our federal politicians who own on average 2.4 properties each which provide an incentive to maintain the status quo . A quick trawl of the top rich list shows that most of the billionaires are in the property/ development business and are likely to be big political donors. Perhaps more damagingly the new policy has trod very hard on the toes of many economists who have used population growth to produce the much vaunted 28 years of economic growth. As a consequence the ink was scarcely dry on Ms Keneally signature before the pro growth economists were taking up pens to defend their chosen dogma. They are joined by right wing think tanks like the IPA who also quote the boost that immigration gives to the economy which makes it important to dissect exactly what they mean by the economy and how important it actually is.
      When economists talk of economic growth they mean growth in Gross Domestic Product or GDP. This comes out usually as a two figure number which when positive is their sole justification for claiming successful economic management. It is a big call and more than 50 years ago senator Robert Kennedy delivered a Shakespearian dissection of GDP which everyone should read but in its condensed form says simply ; “GDP measures everything, tells us nothing” . Actually its much worse than that, GDP can be, and too often is, used to hide the reality of bad economic decisions . Our economic growth over the last 30 years has been largely due to what is referred to as the housing boom which has seen 228,000 houses constructed in 2019 . This included a number of poorly built apartments like the Mascot and Opal towers which had to be evacuated because of dangerous faults. However due to the absurdities of economic measurement these structures will provide more GDP growth than the well built ones as owners in the later faced with a $53m repair bill. They may well walk away from their home, but that will bring even more economic growth to demolish the tower and find replacements, the lesson being that GDP doesn’t discriminate between the good and the bad.
      While economists wax lyrical about the joys of the growth in house numbers and price they are reluctant to admit that it is paid for with borrowings. Mortgage debt makes up the largest part of our $2.47 trillion household debt and the average household owes $250,000 . Not surprisingly this has created a great deal of stress with a possibility of defaulting on payments looming ever larger. To those not privy to the mysteries of economics it will seem puzzling that a increase in house prices is considered a boom while gas price rises are a threat to the economy. But this is a wonderful world where those armed with economic qualifications can tell us (until recently) in all sincerity that coal provides the cheapest source of power, or that it is more economically sensible to mine coal than have agriculture in the Hunter valley. They can also tells us that unemployment is “only” 5.3% , as well they have to, admitting to anything higher would shatter their argument that immigration creates employment.
      The official method of determining unemployment assumes anyone who has worked 1 hour in the last week is employed which is an absurd method and hides the failures of our economic system. Independent researches like Roy Morgan have shown that 2.58 million Australians are either unemployed or under employed . That’s about 4 times the ABS figure which does not included 1.055 million people called the “marginally attached” – those often over 50 who are available and want to work but have given up looking because employers prefer younger staff. There is also a million people working in more than one job and on average Australians work 4.6 hours of unpaid overtime which is often through fear of losing their job. If all that wasn’t enough to make you suspect the claims of our economic success the OEC finds Australia has one of the highest rates of casual employment and 36% of jobs face a significant or high risk of automation. Unemployment is more pronounced in those with disabilities, unskilled or with limited English skills and migrants are most likely to be exploited. Prof. Alan Fels head of the migrant workers taskforce says that exploitation of migrants was systemic with 7- Eleven just the tip of the iceberg. In many cases young people students or back packers, are living and working in brutal conditions for $9/hour, housed in over crowded hovels and with passport seized and unable to leave. The Australian government’s fair work ombudsman says it has uncovered “persistent” underpayment of Korean workers in Australia, mainly in New South Wales, with at least 24 Korean businesses sanctioned in the past two years.
      Of course these problems are not visible from the universities ivory towers where the good professors can wallow in the huge boost of income provided by o/s students who put up with being cheated because they were promised Australian residency. And why would they notice environmental problems like our green house emissions which are directly linked to growth or the 100,000 homeless people or the 1 in 7 who live below he poverty line? Our immigration policy has not failed, this was a deliberate approach, championed by business interests and legitimized by economists. I would of course be delighted to hear your response.

  8. Avatar Wayne McMillan says:

    How does temporary skilled migration (TSM) fit in when we have high youth unemployment and declining apprenticeships? I can see that (TSM)
    might be necessary where there is a shortage of IT specialists, however when there is high unemployment it does become problematic. I honestly think we will need to continue some form of a TSM program, but one that doesn’t clash with domestic unemployment concerns.

  9. Avatar Daniel Hill says:

    Don’t you just love an immigrant like KK criticising immigration! I bet she assumes that she would still get in under whatever regime she proposes.

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