Tag Archives: UC 457 visa

The Law of Unintended Consequences as applied by DIAC

Wikipedia tells us “the law of unintended consequences has come to be used as an adage or idiomatic warning that an intervention in a complex system tends to create unanticipated and often undesirable outcomes”

I was always bought up to believe that intentional actions have motives and consequences.

You’d be entitled to think that our Federal government, the responsible Minister and the legion of senior (directly responsible) staff advising the Minister would, when making a significant change to say the Migration Regulations pertaining to the grant of 457 Business Long Stay visas, have given at least some thought to the impact of what they were doing.

OK if that is a reasonable assumption – How is it possible that parliament, the Minister and DIAC made significant changes to the Migration Regulations governing 457 visas without realising that these changes would affect thousands of already lodged applications RETROSPECTIVELY?

Answer: It’s not.

This was intentional and I can only assume it was designed to send a message (promulgated by the now previous Immigration Minister Brendan O’Conner of the made up 10,000 457 visa rorts allegation) or make a point to reinforce the thinking behind these changes.  Motives and consequences!

Specifically I’m talking about the recent change to remove the occupational exemption to the English requirement for many 457 visa applicants. Now I’m not commenting on the actual idea as I am of the view that the English language requirement should apply to all 457 visa applicants. However if the rule is they do not and you accept applications and money for them and businesses make financial and staffing plans based on this position it is not acceptable to then turn around and say… ‘Oh this is a time of decision criterion therefore the new rules apply to all undecided applications’. Retrospective application of rules is a fundamental breach of the principal of natural justice and to be a little more obvious and blunt it is just plain stupid.

So to recap – Is it possible that, as DIAC are now saying, that this retrospective application of the new position that English language exemptions are no longer available is an example of the law of unintended consequences?

Answer: Well no, pull the other leg.

DIAC have significant form in this area. They have tried this on before and it has always come undone as it now appears to doing again. Just the other day I got three emails from 3 different staff at DIAC about one application – the first two told me that my client had to now meet the English language requirement (not sure why two different people had to make this point although the second gave a time period to provide an IELTS booking date) and the third said no, wait, do nothing until we get back to you. I called up and was told DIAC were now considering the unintended consequences of the recent changes.

Newspapers were on the same day reporting that the Minister Burke believed that transitional arrangements were in place to cover 457 applications already lodged – ‘What problem’ was his position. Our new Prime Minister was out in the community saying the government was really keen to get back on board with business, small business especially and rebuild the rapport and trust between government and business.

Excellent work: I can think of no better way to build rapport and reengage with the business community who legitimately use the 457 visa program to fill the multiple skilled workplace shortages they suffer than to vastly increase the direct cost to business (200% to 400%) while at the same time refusing thousands of visa applications by the application of a retrospective provision.  Not exactly a PR triumph for Prime Minister or Minister.

My questions are: Who is it in DIAC that thinks that this sort of action is a good idea? Did these same folk really think that no one would notice or feel that this was unjust?

I was told the other day that it is cheaper for government just to do stuff and then fix up the unintended consequences later on. “Cheaper.” I asked. “Why don’t they just employ someone who has some idea what happens in the real world, in business?” Answer: Consultation is expensive.

It really is hard not to be cynical. Come on guys – “People Our Business”? Just not business friendly people I guess!

Minister: 457 visa rorts “I would say it would exceed over 10,000.”


I do question where Minister O’Conner plucked this charmingly round figure from? At a first guess I’d suspect thin air. Perhaps he will authenticate this number in the next few days.

See: http://www.smh.com.au/opinion/political-news/457-visas-more-than-10000-are-rorting-system-says-minister-20130428-2imcy.html

I do note that the matching Press Release on his Ministerial website conveniently makes no mention of this claim.

See: http://www.minister.immi.gov.au/media/bo/2013/bo202119.htm

Now this may seem an odd thing to say but I’m sitting here in my office feeling really quite sorry for / upset for the staff who work in the various 457 Business Temporary Entry sections of DIAC. I interact with them on a regular basis and I find them to be highly professional and efficient. To have their big boss basically say that they have made 10,000 mistakes in granting 457 visas cannot sit all that well or be a major boost for moral within DIAC.

I also wonder if the Minister was considering the DIAC 457 Monitoring unit staff when he quantified rorting at this level because I have not seen any evidence from ongoing monitoring action to suggest that 457 visas or Standard Business Sponsorships are being cancelled at anything like this level – quite the reverse in fact. So is the Minister suggesting that the staff employed here are not doing their job? What was he thinking?

For a long time now I have felt that the level of 457 monitoring DIAC have been able to accomplish has been hamstrung by a lack of resources. If this is the case then again it’s a bit rich to blame DIAC staff when it is the Government who is responsible for the allocation of funds available to get this important job done.

The problem here is that this is no joke. We have a Minister telling us that we could have a “stock” (his word) of 457 visas holders greater than the population of Wollongong in three years if “demand continues at the current growth rate” The latest 457 Summary Report on which Minister O’Conner is basing his comments does make this point – “However, there has been a general downtrend in visa grants since the peak in August 2012. This downward grant trend continued in March 2013.” Does this mean he will need to find a smaller Australian city to compare the stock of 457 visa holders to soon?

There have been numerous protests at the Minister’s statement from business and employer groups as the government again seems to be rushing to fix something that is not broken. The Minister is anticipating changes to the 457 system without actually articulating them – another Federal government tactic designed for a political sound bite without considering the consequences for any of the relevant stakeholders.

I also feel no confidence whatsoever in the new monitoring system to be put in place by the Minister… ‘We have taken action to stop employers misusing the program, and are giving Fair Work inspectors the powers to act on 457 abuses.’ Fair Work Australia’s recent record is less than impressive and while this may seem like a sensible idea as they are the body dealing with workplace issues you’ve got to wonder how well the synergy between two huge Federal Government departments will work. If the Minister is to be taken at his word a DIAC Unit set up specifically to monitor the 457 is being circumvented by staff with no real experience in this area or immigration. Does this now mean that DIAC and Fair Work Australia staff will be responsible for monitoring 457 Sponsors and visa holders? Sounds like a recipe for bureaucratic red tape and inter-departmental confusion and duplication to me.

457 visa hysteria – Is this policy or publicity?

I must admit that I have been sitting back resisting the urge to comment on the 457 visa rhetoric that has been swirling around since our Prime Minister and then our new Minister for Immigration & Citizenship flagged new measures to control what they both unashamedly painted as wide spread rorting of this visa system.

Immigration is a huge national system. If you get put on hold while waiting to speak to someone at DIAC you will be told that on a typical working day DIAC receives 13,000 visa applications, grants 11,500 temporary visas, 500 permanent residence visas and grants 300 people Australian citizenship. Quite amazing and I would suggest not hard to imagine that in all that activity each working day there must be some ‘rorting’ to use the language of our politicians. Every large system suffers from the actions of individuals who are less than honest. It is not good but it is inevitable be it our taxation system, workplace laws, consumer affairs; really every system that people use. It is therefore no surprise that some employers are misusing temporary work 457 visas.

The point is not does it happen? – of course it does – but how prevalent is it? The answer is not what our Prime Minister and then our new Minister for Immigration & Citizenship want to hear… in reality it’s not all that common. Smart operators, for want of a better or more accurate description, work every system not just immigration and the 457 visa program.

Now let’s have a look at the statistics trotted out by our new Minister for Immigration & Citizenship to justify important changes to this visa system while not really being able to articulate any substantial evidence of this widespread rorting he is so concerned about beyond saying DIAC are investigating a number of cases – DIAC are always doing this in such a huge system and DIAC often cancel sponsorships and visas as a result – it is great news if they catch and punish those who abuse the system!

The Minister is concerned that the growth in 457 visa grants is outstripping overall employment growth. Wow that sounds serious until you spend 5 seconds thinking about it. The inference is that temporary 457 workers are flooding in to take the jobs that unemployed Aussies should be getting. Well no.

  • First these things are not comparable statistics or to put it another way you cannot validly compare these two numbers it is statistical nonsense – as has been pointed out by numerous qualified folk who work in this area since these figures were presented as a flashing beacon of concern.
  • Second such raw numbers tell us nothing about the breakdown of this “growth” by occupation or location. It is for example nonsense to say a company should not hire a 457 visa holder in Geraldton, WA because there is an unemployed worker with the same qualifications living in Campsie, NSW who refuses to go to live and work in Geraldton, WA.
  • Third should we not be considering the percentage of the Australian workforce that 457 visa holders represent? DIAC statistics tell us that at the end of February 2013 there 107,501 primary 457 visa holders in Australia (See this link: http://www.immi.gov.au/media/statistics/statistical-info/temp-entrants/subclass-457.htm) and the Australian Bureau of Statistics (ABS) says that the Australian workforce totals 12,231,000 (11,572,800 employed and 658,200 unemployed with a participation rate of 65.1%.

(See this link: http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0).

That means that 457 visa holders represent 0.87% of the total workforce (less than 1 %). How valid, realistic, sensible or statistically valid is it to compare the rate of growth of the total workforce to a 1% segment? It’s not to answer my own question it is using numbers and statistics less than honestly to make a contrived point.

The Minister also said he was concerned that school leavers were not getting jobs. Yes so am I but school leavers have no qualifications and 457 workers are already highly qualified and often have many years of work experience to boot. Our school leavers need training again I say that is a great idea but you can’t hire a school leaver to work as an Accountant or Vascular Surgeon – they need to be trained first and if you need the employee now to fill a vacancy to do those books or repair those heart valves waiting 3 or 10 years respectively does not seem an appealing option while you await the school leaver to get trained or qualified.

Next the our Prime Minister and then our new Minister for Immigration & Citizenship insist that we need to able to show that employers have made efforts to find Australian workers before reverting to a 457 visa applicant. Again this sounds totally reasonable until you look at the government’s own departments who happily explain which occupations are in shortage – there are entire sections and committees who do this for a living. So now we ignore them and start micro managing labour market testing again – a policy ditched by DIAC some years ago now because it did not work, distorted the market and provided totally unreliable results.

Compliance (or lack of it) with 457 sponsorship obligations (that is rorting) is another sore point so we are told – some employers are being naughty so let’s fix this by making all employers jump through new compliance hoops. Punish everyone with more bureaucratic regulations so we can reign in those doing the wrong thing. This is the well-known “shotgun method”. If you shoot 100 people in a room containing 3 criminals you will definitely get the bad guys – shame about the collateral damage. DIAC have wide-ranging 457 Sponsorship monitoring powers. My suggestion – use them rather than punishing everyone – monitor sponsors and kick the back sides of those who do the wrong thing. Kicking the back sides of all sponsors is inefficient and just dumb.

So what is really going on in the world of Australian Standard Business Sponsors and 457 Business Long Stay visas holders? Well nothing at all really except there is a Federal election on the horizon in September 2013 and whipping up some hysteria and a touch of xenophobia about foreign workers plays long and loud in what the Federal government sees as working class Labor heartland electorates where they know they are struggling to hold seats. Politics is a cynical business but when this sort of policy response is driven by political not sound economic motivations it really leaves a bad taste in my mouth. What do you think?

Again we see the government rushing to fix another system that is not broken and that already has in place provisions that can be applied to mitigate the issues they feel so strongly about.

The demise of the Temporary work visa

A few words of caution for any business or individual contemplating lodging applications for Standard Business Sponsorship, Nomination and the associated UC 457 Business Long Stay (Temporary) visa, Australia’s major temporary work visa. On 14 September 2009 the Federal government made sweeping changes to Migration Regulations that apply to this visa subclass (457) and the pre-requisite approvals for the business (sponsorship) and the position or job (nomination).

I will go into these changes in detail next week once the dust has begun to settle on these new regulations, but for now please tread very carefully in this area.

It is becoming very evident that the Federal Government, and the Trade Unions that underpin the Labor government, are attempting to put this temporary work visa way beyond the reach of normal small to medium Australian businesses. They have for a long time now been a little too keen to see this visa disappear altogether and this looks very much like a a major step in that direction. The new Migration Regulations impose wildly unrealistic training requirements for applicant businesses (called ‘benchmarks’), create intentional minimum salary traps that virtually mandate application refusal and generally raise the hurdle, for previously qualifying businesses who needed skilled workers they could not find in Australia, to such an extent that an application may simply represent a donation of the application fees to the Federal governments coffers.

Watch this space for more details and don’t apply unless you have the best possible professional advice you can find.