The report, ‘Robust New Foundations’, authored by the Independent Review Panel chaired by John Azaria, is the 6th review of the 457 visa programme in the past 12 years.[1] The 457 programme has been hotly contested in the media in recent years and the panel’s goal in developing this most recent iteration of recommendations was to make available to the government a series of effective reforms to guarantee the programme’s integrity and productivity.

BACKGROUND

0n 25 February 2014 the Assistant Minister for Immigration and Border Protection, Michaela Cash, announced the appointment of four panel members to review the operation of the 457 programme. The terms of reference were to consider the integrity of the programme in light of recent reforms as well as to ensure its effective operation to meet business and economic needs. Eventus Immigration made a submission to the enquiry.

The report’s authors aims to strike a balance between ‘radical actions and maintenance’.[2] In practice the result appears oriented towards incremental change rather than substantial reform.

The report was released to the public in September and the government will now determine which recommendations will be implemented.

RECOMMENDATIONS

The report makes 22 recommendations including a number of sub-recommendations:

Report Recommendation

  1. Creation of a tripartite ministerial advisory council.
  2. Labour Market Testing be abolished.
  3. Retain the Consolidated Sponsored Occupation List but make regular amendments following advice of the the tripartite advisory council.
  4. Market Salary Rate be retained with an exemption at the top marginal tax rate.
  5. Temporary Skilled Migration Income Threshold (‘TSMIT’) be retained but implement regional / occupational concessions.
  6. Training Benchmarks be replaced by training fund calculated ‘per visa holder’ to be paid by sponsors and spent by the Department of Industry on training Australians.
  7. IELTS test requirement change from 5.0 minimum score to 5.0 average, alternative English tests, potential for greater Enlgish language concession concessions including broader exemptions based on study and passport nationality.
  8. Genuineness of position be retained but additional training provided and applicants receive opportunity to respond prior to negative decision.
  9. Skills Assessments be reviewed to better address visa applicant’s experience.
  10. Standard Business Sponsorship be increased from 3 to 5 year duration. Start-up businesses to be granted for 18 months. Renewal to be simplified and sponsorship classes to be reduced. Increase the notification period for Sponsors from 10 days to 28 days.
  11. Review fee structure for secondary visa applicants and visa renewals.
  12. Sponsors be required to provide summary of visa holder rights and Fair Work Ombudsman’s Statement in employment contract.
  13. Creation of streamlined processing arrangements based on risk matrix.
  14. Labour Agreement negotiation times be reduced and development of additional template agreements.
  15. Facilitating PR for 457 visa holders who have completed 2 years work on the 457 visa.
  16. Review restrictions on PR applications imposed on the basis of age.
  17. Allocation of additional resources to help Sponsors understand their obligations.
  18. Greater priority for monitoring and development of Department’s compliance model
  19. Greater collaboration between ATO and DIBP
  20. Fair Work Ombudsman to continue complementary monitoring compliance role.
  21. DIBP to monitor decisions by Fair Work Commission to identify breaches by sponsors.
  22. DIBP to be allocated additional resources for investigation and prosecution and disclose this information publicly.
  23. DIBP to investigate IT system improvements to facilitate greater linkages with other departments

ASSESSMENT OF RECOMMENDATIONS

The reforms proposed by the report are largely incremental changes to existing aspects of the programme. There are few proposed reforms which could be classified as ‘radical’.

Many of the minor reforms are valid and are intended to streamline and improve the performance of existing aspects of the 457 programme. Some elements of the programme which have been retained would have been better jettisoned in favour of alternative approaches.  

The most far-reaching changes include removing the Training Benchmark in favour of a national training fund and abolition of the already dead-letter Labour Market Testing.

MISSED OPPORTUNITIES

It is disappointing that the recommendations fail to address overly complicated and ineffective mechanisms such as the Market Salary Rates, and the TSMIT, as well as the impossible nature of the existing notification regime.

The report also fails to recognise the significance of intra-company transfers and create a streamlined method for businesses seeking to transfer staff internationally instead preferring an overall streamlined processing approach, discussed below.

Eventus Corporate Immigration’s submission to the Panel highlighted the challenges faced by small and medium business in determining applicable Market Salary Rates. The Panel quoted from the report and noted the difficulties but found that no better alternative is available.[3]

STREAMLINING PROCESSING & EASING VISA REQUIREMENTS

The Panel’s recommendation to introduce streamlined processing based on a risk matrix including business turnover, compliance record, salary and other factors is most welcome. However numerous reforms and recommendations in the past have had a similar goal. Implementing this recommendation is unlikely unless additional funds are introduced to the programme – another key recommendation.

A number of recommendations suggest an overall easing of requirements, in particular renewal of Sponsorships, returning to a simplified Sponsorship class for many visa types, longer timeframes for Sponsor notifications, more flexible English language requirements, and the removal of labour market testing. It is hoped that these recommendations will be adopted and implemented at the earliest.

IMPACT ON SPONSORS AND VISA HOLDERS

The current report forms a series of recommendations to the government and it cannot be certain which aspects will be implemented. The Assistant Minister has already spoken favourably about a number of the recommendations including improved information sharing with the ATO, simplifying the process for Sponsorship renewal, easing English language requirements and creating penalties for applicants who pays sponsors for an immigration outcome.

Some basic reforms are likely to take place in early 2015 with major reforms pending further development and potential implementation likely in late 2015. The overall impact on Sponsors and visa holders is likely to be substantial and on-going. Sponsors will need to continue to monitor the situation closely and make associated changes to their global mobility policy. Visa holders will need to be aware of the potential changes to their eligibility for PR and the potential impact on visa charges.

CONCLUSION

The programme will likely be improved by many of the incremental reforms recommended by the Panel as many existing aspects of the programme are functional but could be improved. Achieving this goal however is contingent on greater funding for training Departmental staff, monitoring and compliance activities. On the other hand, there have been significant missed opportunities. Many submissions made valuable recommendations which could have improved the programme by introducing new pathways or new mechanisms to simplify the process for businesses and visa holders.

The government is yet to confirm which reforms will be adopted and which will be left by the wayside. Any reforms which are adopted are likely to be implemented throughout 2015.