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2016 - 2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MIGRATION AMENDMENT (SKILLING AUSTRALIANS FUND) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Immigration and Border Protection,
the Hon. Peter Dutton MP)
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MIGRATION AMENDMENT (SKILLING AUSTRALIANS FUND) BILL 2017
OUTLINE
The Migration Amendment (Skilling Australians Fund) Bill 2017 (the Bill) amends the
Migration Act 1958 (the Migration Act) to:
require employers who nominate a worker under the temporary and permanent
skilled migration programmes to pay the nomination training contribution charge
imposed by the Migration (Skilling Australians Fund) Charges Act 2017 (the
Charges Act). The nomination training contribution charge will offset
expenditure from the Skilling Australians Fund, a training fund administered by
the Department of Education and Training, to support skills development of
Australians;
allow nominations to be accepted from persons that have applied to be an
approved sponsor, or have entered into negotiations for a work agreement; and
allow the Minister to determine, by legislative instrument, the manner in which
labour market testing in relation to a nominated position must be undertaken, and
the kinds of evidence that must accompany a nomination.
This Bill is to be read in conjunction with the Migration (Skilling Australians Fund)
Charges Bill 2017.
FINANCIAL IMPACT STATEMENT
The training contribution charge is expected to generate revenue of $1.2b over the
forward estimates. Expected expenditure from the Skilling Australians Fund over the
forward estimates is $1.47b.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A statement of compatibility with human rights has been prepared in accordance with
Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 and is at Attachment A.
REGULATION IMPACT STATEMENT
A regulation impact statement has been prepared and is at Attachment B.
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MIGRATION AMENDMENT (SKILLING AUSTRALIANS FUND) BILL 2017
NOTES ON INDIVIDUAL CLAUSES
Clause 1 Short Title
1. The short title by which this Act may be cited is the Migration Amendment
(Skilling Australians Fund) Act 2017.
Clause 2 Commencement
2. Subsection 2(1) sets out when the provisions of the Act commence.
3. Sections 1 to 3 of the Act will commence the day the Act receives the Royal
Assent.
4. The amendments in Schedule 1 to the Act will commence on a single day to be
fixed by Proclamation, unless the provisions do not commence within 6 months of
Royal Assent, in which case they commence on the day after the end of that 6
month period.
5. The amendments in Part 1 of Schedule 2 to the Act will commence at the same
time as Schedule 1, but only if Schedule 1 to the Migration Amendment (Family
Violence and Other Measures) Act 2017 commences at or before commencement
of Schedule 1 to this Act. Otherwise, these amendments will not commence at all.
6. The amendments in Part 2 of Schedule 2 to the Act will commence at the same
time as Schedule 1, but only if Schedule 1 to the Migration Amendment (Family
Violence and Other Measures) Act 2017 does not commence on or before
commencement of Schedule 1 to this Act. Otherwise, these amendments will not
commence at all.
7. The amendments in Part 3 of Schedule 2 to the Act will commence at the same
time as Schedule 1 to this Act.
8. Subsection 2(2) provides that any information in column 3 of the table is not part
of this Act. Information may be inserted in this column, or information in it may
be edited, in any published version of this Act.
Clause 3 Schedule(s)
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9. This clause provides that each Act specified in a Schedule to this Act is amended
or repealed as set out in the applicable items in the Schedule concerned. In
addition, any other item in a Schedule to this Act has effect according to its terms.
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SCHEDULE 1 - Nomination training contribution charges
Part 1 - Main amendments
Migration Act 1958
Item 1 Subsection 5(1)
10. This item inserts the new defined terms Finance Minister and nomination
training contribution charge.
11. The term Finance Minister means the Minister who administers the Public
Governance, Performance and Accountability Act 2013.
12. The term nomination training contribution charge means the charge imposed by
section 7 of the Migration (Skilling Australians Fund) Charges Act 2017.
Item 2 Paragraph 140GB(2)(a)
13. This item is consequential to item 1 or 19 of Schedule 2 to this Act (whichever
commences). It amends paragraph 140GB(2)(a) to replace 'sponsor' with
'person'.
Item 3 Subsection 140GB(2) (note)
14. This item is consequential to item 4 of this Schedule. It replaces 'Note' at the end
of subsection 140GB(2) with 'Note 1'.
Item 4 At the end of subsection 140GB(2)
15. This item inserts new Note 2 at the end of subsection 140GB(2). Note 2 refers
readers to new section 140ZM, which sets out when a person is liable to pay a
nomination training contribution charge.
Item 5 Paragraphs 140GBA(1)(b) and (c)
16. This item is consequential to item 1 or 19 of Schedule 2 to this Act (whichever
commences). It amends paragraphs 140GBA(1)(b) and (c) to replace 'sponsor'
with 'person'.
Item 6 Subsection 140GBB(1)
17. This item is consequential to item 1 or 19 of Schedule 2 to this Act (whichever
commences). It amends subsection 140GBB(1) to replace 'the sponsor' with 'the
person'.
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Item 7 Subsection 140GBB(2)
18. This item is consequential to item 1 or 19 of Schedule 2 to this Act (whichever
commences). It amends subsection 140GBB(2) to replace 'sponsor' with
'person'.
Item 8 Subparagraphs 140GBB(4)(a)(i) and (ii)
19. This item is consequential to item 1 or 19 of Schedule 2 to this Act (whichever
commences). It amends subparagraphs 140GBB(4)(a)(i) and (ii) to replace
'sponsor' with 'person'.
Item 9 Paragraph 140GBB(4)(b)
20. This item is consequential to item 1 or 19 of Schedule 2 to this Act (whichever
commences). It amends paragraph 140GBB(4)(b) to replace 'sponsor' with
'person'.
Item 10 Paragraph 140GBB(4)(b)
21. This item is consequential to item 1 or 19 of Schedule 2 to this Act (whichever
commences). It amends paragraph 140GBB(4)(b) to replace 'sponsors' with
'persons'.
Item 11 At the end of Division 3A of Part 2
22. This item inserts new section 140ZL to bind the Crown in respect of Division 3A
of Part 2 of the Migration Act. This recognises that an Act is presumed not to
bind the Crown, in any of its capacities, in the absence of express words or
necessary implication.
23. New subsection 140ZL(1) expressly provides that Division 3A of Part 2 of the
Migration Act binds the Crown in right of the Commonwealth, of each of the
States, of the Australian Capital Territory and of the Northern Territory. The
effect of this is that the Commonwealth, States and Territories will be bound by
the provisions in Division 3A, subject to new subsection 140ZL(2).
24. New subsection 140ZL(2) makes it clear that the Crown is not liable to be
prosecuted for an offence. The effect of this is that the Crown cannot be
prosecuted for an offence under Division 3A of Part 2 of the Migration Act.
25. New subsection 140ZL(3) puts it beyond doubt that new subsection 140ZL(2)
does not prevent the Crown being liable to pay a pecuniary penalty under Division
3A of Part 2 of the Migration Act. This means that the Crown may be liable to
pay financial penalties as required or permitted by Division 3A.
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Item 12 After Division 3A of Part 2
26. This item inserts new Division 3B after Division 3A of Part 2 of the Migration
Act.
New section 140ZM - Nomination training contribution charge
27. New section 140ZM sets out when a person is liable to pay a nomination training
contribution charge under section 140GB.
28. New subsection 140ZM(1) provides that a person who nominates an applicant or
proposed applicant for a visa under amended section 140GB is liable to pay a
nomination training contribution charge if the nomination is a nomination of a
kind prescribed by the regulations.
29. The effect of this amendment is that a person who nominates an applicant or
proposed applicant for a prescribed visa under section 140GB will be liable to pay
a nomination training contribution charge in association with the nomination.
New paragraph 140GB(2)(ab) makes it a condition of approval of the nomination
that the nominator is an approved sponsor. However a person does not need to be
an approved sponsor at the time of making a nomination application under
amended subsection 140GB(1). It is possible that a person's application to be an
approved sponsor may be subsequently refused (and the nomination application is
refused as a consequence). Provision may be made for the remission or refund of
a nomination training contribution charge pursuant to new paragraph 140ZN(c)
(see new section 140ZN below).
30. New subsection 140ZM(2) provides that a person is liable to pay a nomination
training contribution charge if they have applied under the regulations, or in
accordance with the terms of a work agreement, for approval of a nomination of a
prescribed kind in relation to a holder of, or an applicant or proposed applicant for
a visa of a prescribed kind. This is intended to enable the nomination training
contribution charge to be imposed on nominations other than those made under
section 140GB of the Migration Act. For example, if the regulations prescribe a
Subclass 186 visa for the purposes of paragraph 140ZM(2)(a) and prescribe a
nomination relating to a Subclass 186 (Employer Nomination Scheme) visa for
the purposes of paragraph 140ZM(2)(b), then a person applying for approval of a
nomination of a position in relation to the holder of Subclass 186 visa will be
liable to pay the nomination training contribution charge.
New section 140ZN - Regulations about nomination training contribution charge
31. New section 140ZN allows the regulations to make provision for, or in relation to
various matters.
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32. New paragraph 140ZN(a) allows the regulations to make provision for, or in
relation to, when a nomination training contribution charge is due and payable.
For example, the regulations may prescribe that a nomination training
contribution charge is payable at the time an application for approval of a
nomination is lodged.
33. New paragraph 140ZN(b) allows the regulations to make provision for, or in
relation to the method of paying a nomination training contribution charge,
including the currency in which the charge must be paid. This allows the
regulations to prescribe, for example, that a nomination training contribution
charge must be paid in Australian Dollars.
34. New paragraph 140ZN(c) allows the regulations to make provision for, or in
relation to the remission or refund of a nomination training contribution charge.
For example, if a nomination training contribution charge is paid in relation to a
nomination that is subsequently refused because the associated sponsorship
application is refused, new paragraph 140ZN(c) allows the regulations to permit a
refund of the charge. This paragraph also allows the regulations, for example, to
permit a refund or partial refund of the nomination training contribution charge
in circumstances where the actual period of stay of a nominated visa applicant is
significantly less than the anticipated period set out in the nomination.
35. New paragraph 140ZN(d) allows the regulations to make provision for, or in
relation to the overpayment or underpayment of a nomination training
contribution charge. For example, to deal with cases where an applicant makes a
payment of the nomination training contribution charge but the amount paid is
less than the amount required because the applicant has understated their
business' turnover, the regulations may allow the applicant to pay the difference
with a subsequent payment. Also, for example, to deal with cases where an
applicant makes a payment of an amount that is greater than what is required, the
regulations may allow for the surplus amount to be paid back to the applicant.
36. New paragraph 140ZN(e) allows the regulations to make provision for, or in
relation to the payment of a penalty in relation to the underpayment of a
nomination training contribution charge. For example, where an applicant
makes a payment of the nomination training contribution charge but the amount
paid is less than the amount required because the applicant has understated their
business' turnover and the regulations allow the applicant to pay the difference
with a subsequent payment (pursuant to the power in new paragraph 140ZN(d)),
the regulations may also require the payment of a penalty in relation the
administration of the underpayment. The penalty may, for example, be a
prescribed fee that reflects the cost to the Department of Immigration and Border
Protection of administering multiple payments. The penalty may, for example,
take the form of an interest payment to reflect the loss of interest revenue resulting
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from the underpayment. Such a penalty constitutes a debt due to the
Commonwealth (see new section 140ZO below).
37. New paragraph 140ZN(f) allows the regulations to make provision for, or in
relation to the giving of information and keeping of records relating to a person's
liability to pay a nomination training contribution charge. For example, if
regulations for the purpose of paragraph 8(2)(b) of the Migration (Skilling
Australians Fund) Charges Act 2017 prescribed different charges for different
kinds of persons, new paragraph 140ZN(f) would allow the regulations to require
a person to provide evidence that they are a particular kind of person, and
therefore liable for the applicable nomination training contribution charge.
New section 140ZO - Recovery of nomination training contribution charge and late
payment penalty
38. New section 140ZO applies if an amount of nomination training contribution
charge or a penalty in relation to the underpayment of such a charge is due and
payable to the Commonwealth. New section 140ZO makes it clear that such an
amount is a debt to the Commonwealth and is recoverable by action in a court of
competent jurisdiction.
New section 140ZP - Notional application of nomination training contribution charge in
relation to nominations made by the Commonwealth
39. New section 140ZP notionally applies the nomination training contribution
charge to nominations made by the Commonwealth.
40. New subsection 140ZP(1) recognises that the Commonwealth cannot make itself
liable to pay Commonwealth taxes or fees. However, to give effect to the policy
intention that Commonwealth departments and agencies are liable to pay the
nomination training contribution charge, new subsection 140ZP(1) makes it
clear that the Commonwealth (which includes a Commonwealth entity within the
meaning of the Public Governance, Performance and Accountability Act 2013
under new subsection 140ZP(5)) should be notionally liable to pay such a charge.
41. New subsection 140ZP(2) provides a mechanism for payment of a nomination
training contribution charge by the Commonwealth by allowing the Finance
Minister to give written directions in relation to the transfer of money within an
account, or between accounts, operated by the Commonwealth.
42. New subsection 140ZP(3) puts it beyond doubt that a direction given under
subsection 140ZQ(2) will have effect notwithstanding any other law of the
Commonwealth.
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43. New subsection 140ZP(4) provides that a direction under subsection 140ZP(2) is
not a legislative instrument within the meaning of subsection 8(1) of the
Legislation Act 2003.
44. New subsection 140ZP(5) provides that references to Commonwealth in new
subsections 140ZP(1) and (2) includes a Commonwealth entity (within the
meaning of the Public Governance, Performance and Accountability Act 2013)
that cannot be made liable to taxation by a Commonwealth law. This reflects the
policy intention that Commonwealth entities are notionally liable to pay the
nomination training contribution charge and are subject to directions given by
the Finance Minister under new subsection 140ZP(2).
New section 140ZQ - Division binds the Crown
45. New section 140ZQ binds the Crown in respect of Division 3B of Part 2 of the
Migration Act. This recognises that an Act is presumed not to bind the Crown, in
any of its capacities in the absence of express words or necessary implication.
46. New subsection 140ZQ(1) expressly provides that Division 3B of Part 2 of the
Migration Act binds the Crown in right of the Commonwealth, of each of the
States, of the Australian Capital Territory and of the Northern Territory. The
effect of this is that the Commonwealth, States and Territories will be bound by
the provisions in Division 3B, subject to new subsection 140ZQ(2).
47. New subsection 140ZQ(2) makes it clear that the Crown is not liable to be
prosecuted for an offence. The effect of this is that the Crown cannot be
prosecuted for an offence under Division 3B of Part 2 of the Migration Act.
48. New subsection 140ZQ(3) puts it beyond doubt that new subsection 140ZQ(2)
does not prevent the Crown being liable to pay a pecuniary penalty under Division
3B of Part 2 of the Migration Act. This means that the Crown may be liable to
pay financial penalties as required or permitted by Division 3B, for example a
penalty in relation to the underpayment of a nomination training contribution
charge.
Part 2 - Other amendments
Item 13 After paragraph 140GBA(3)(a)
49. Current subsection 140GB(2) requires the Minister to approve a nomination made
under section 140GB if, amongst other things, the labour market testing condition
under section 140GBA (if applicable) is satisfied.
50. Current subsection 140GBA(3) sets out the requirements for satisfying the labour
market testing condition.
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51. This item inserts new paragraph 140GBA(3)(aa) to make it an additional
requirement for satisfying the labour market testing condition that the labour
market testing in relation to the nominated position was undertaken in the manner
determined under new subsection 140GBA(5).
Item 14 Subparagraph 140GBA(3)(b)(i)
52. This item is consequential to item 13. It amends subparagraph 140GBA(3)(b)(i)
to replace '(see subsections (5) and (6)' with 'of a kind determined under
subsection (5)'.
Item 15 Subsections 140GBA(5), (6) and (6A)
53. This item repeals current subsections 140GBA(5), (6) and (6A) and inserts new
subsections 140GBA(5), (6), (6A) and (6B).
54. Current subsections 140GBA(5) and (6) set out the requirements for evidence in
relation to the labour market testing, however they do not specify or provide any
power to prescribe how labour market testing should be conducted.
55. To address this issue, new subsection 140GBA(5) will allow the Minister to
determine, by legislative instrument, the manner in which labour market testing in
relation to a nominated position must be conducted. New subsection 140GBA(6)
provides that, without limiting new subsection 140GBA(5), this may include the
language to be used for any advertising, the method of advertising, the period
during which the advertisement must occur prior to nomination, and the duration
of advertising to be determined by legislative instrument.
56. New subsection 140GBA(6A) will allow the Minister to determine, by legislative
instrument, the kinds of evidence of labour market testing that must accompany a
nomination. New subsection 140GBA(6B) provides that, without limiting new
subsection 140GBA(6A), this may include a copy of the advertisement.
57. New subsection 140GBA(6C) makes it clear that a legislative instrument made
under new subsection 140GBA(5) or 140GBA(6A) may determine different
manners of labour market testing or different evidence requirements for different
nominated positions, or classes of nominated positions.
58. Allowing the Minister to determine the manner in which labour market testing
must be conducted and the evidence of labour market testing that must be
provided will ensure that a person who lodges a nomination under 140GB must
properly test the labour market prior to nominating an overseas worker, in order to
satisfy the labour market testing condition.
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59. The ability for the Minister to make a determination by legislative instrument
under new subsections 140GBA(5) and 140GBA(6A) is consistent with existing
provisions in Subdivision B of Division 3A regarding labour market testing. For
example, current subsection 140GBA(4) allows the Minister to determine, by
legislative instrument, the period within which labour market testing is required in
relation to a nominated occupation.
Part 3 - Application and transitional provisions
Item 16 Application provisions
60. Subsection 16(1) provides that the amendments to Subdivision B of Division 3A
of Part 2 of the Migration Act made by Part 1 of this Schedule apply in relation to
nomination applications made, but not decided immediately prior to
commencement, as well as new nomination applications made on or after
commencement.
61. Subsection 16(2) provides that the amendments to Subdivision B of Division 3A
of Part 2 of the Migration Act made by Part 2 of this Schedule apply in relation to
new nomination applications made on or after commencement. The effect of this
is that nominations made, but not decided prior to commencement will not be
subject to the new labour market testing requirements.
62. Subsection 16(3) provides that new section 140ZM of the Migration Act applies
in relation to nomination applications made, but not decided immediately prior to
commencement.
63. Currently, standard business sponsors are required to meet one of two training
benchmarks by either making a contribution equivalent to at least two percent of
their annual payroll into an industry training fund; or expending at least one
percent of their annual payroll into the provision of training to their Australian
employees.
64. Subsection 16(3) reflects the policy intention that a person will not be
simultaneously required to comply with the existing training benchmarks and
liable to pay a nomination training contribution charge. Standard business
sponsors will be required to meet the training benchmarks until commencement of
this item for approval as a sponsor, however they will not be required to continue
to meet these requirements after commencement.
Item 17 Transitional provision
65. This item preserves exemptions made under subsection 140GBB(2) of the
Migration Act that were in force immediately before the commencement of this
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item. The effect of this is that such an exemption will continue to have effect
under amended subsection 140GBB(2).
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SCHEDULE 2 - Contingent Amendments
66. The amendments in this Schedule are contingent on the commencement of
Schedule 1 to the Migration Amendment (Family Violence and Other Measures)
Act 2017 (the Family Violence Act).
67. Schedule 1 to the Family Violence Act amends the definition of approved sponsor
in subsection 5(1) of the Migration Act to distinguish between an approved family
sponsor and an approved work sponsor.
68. This Schedule amends various provisions in Division 3A of Part 2 of the
Migration Act that, prior to commencement of Schedule 1 to the Family Violence
Act, refer to an approved sponsor.
69. The amendments in Part 1 of this Schedule replace a number of references to
'approved sponsor' in Division 3A of Part 2 of the Migration Act. These
amendments will commence if Schedule 1 to the Family Violence Act
commences after this Act.
70. The amendments in Part 2 of this Schedule are equivalent to the amendments in
Part 1, but will replace references to 'approved work sponsor' in the event that
Schedule 1 to the Family Violence Act commences before this Act.
Part 1 - Amendments if the Migration Amendment (Family Violence and Other
Measures) Act 2017 commences after this Act
Migration Act 1958
Item 1 Subsection 140GB(1)
71. This item amends subsection 140GB(1) to allow a person who is an approved
sponsor, has applied for approval as a sponsor, or is a party to negotiations for a
work agreement, to nominate an applicant or proposed applicant for a visa of a
prescribed kind under section 140GB of the Migration Act. The purpose of this
amendment is to clarify that an application for a nomination under section 140GB
can be made at the same time as an application for approval as a sponsor.
72. Allowing a person who has applied for approval as a sponsor, or is a party to
negotiations for a work agreement to lodge a nomination is more efficient for both
the nominator and the Department of Immigration and Border Protection, as it
allows the sponsorship application and nomination application to be lodged at the
same time.
73. It will continue to be a condition of approval of the nomination that the nominator
is an approved sponsor.
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74. Amendments consequential to this item, discussed below, replace certain
references to 'approved sponsor' to reflect amended subsection 140GB(1).
Item 2 Subsection 140GB(2)
75. This item is consequential to item 1 of this Schedule. It amends subsection
140GB(2) to replace 'an approved sponsor's' with 'a person's'.
Item 3 After paragraph 140GB(2)(a)
76. This item inserts new paragraphs 140GB(2)(aa) and (ab).
77. New paragraph 140GB(2)(aa) makes it a condition of approval of a nomination
that if the nominating person is liable to pay a nomination training contribution
charge in relation to the nomination, the charge has been paid.
78. New paragraph 140GB(2)(ab) makes it clear that a person who nominates an
applicant or proposed applicant for a prescribed visa must be an approved sponsor
in order for the nomination to be approved, notwithstanding that a person who has
applied for approval as a sponsor, or is a party to negotiations for a work
agreement may also lodge a nomination under amended subsection 140GB(1).
Item 4 Subsection 140GB(3)
79. This item is consequential to item 1 of this Schedule. It amends subsection
140GB(3) to replace 'an approved sponsor's' with 'person's'.
Item 5 Subsection 140GBA(1)
80. This item is consequential to item 1 of this Schedule. It amends subsection
140GBA(1) to replace 'an approved sponsor' with 'a person'.
Item 6 Paragraph 140GBA(1)(a)
81. This item is consequential to item 1 of this Schedule. It amends paragraph
140GBA(1)(a) to replace 'an approved sponsor is in a class of sponsors' with 'a
person is, or has applied to be, in a class of approved sponsors'.
Item 7 Paragraph 140GBA(3)(a)
82. This item is consequential to item 1 of this Schedule. It amends paragraph
140GBA(3)(a) to replace 'approved sponsor' with 'person'.
Item 8 Subparagraph 140GBA(3)(b)(ii)
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83. This item is consequential to item 1 of this Schedule. It amends subparagraph
140GBA(3)(b)(ii) to replace 'approved sponsor' with 'person'.
Item 9 Paragraph 140GBA(5)(a)
84. This item is consequential to item 1 of this Schedule. It amends paragraph
140GBA(5)(a) to replace 'approved sponsor's' with 'person's'.
Item 10 Subparagraph 140GBA(6)(a)(i)
85. This item is consequential to item 1 of this Schedule. It amends subparagraph
140GBA(6)(a)(i) to replace 'approved sponsor' with 'person'.
Item 11 Subparagraph 140GBA(6)(b)(i)
86. This item is consequential to item 1 of this Schedule. It amends subparagraph
140GBA(6)(b)(i) to replace 'approved sponsor's' with 'person's'.
Item 12 Subsection 140GBA(6A)
87. This item is consequential to item 1 of this Schedule. It amends subsection
140GBA(6A) to replace both references to 'approved sponsor' with 'person'.
Item 13 Subsection 140GBA(7) (definition of eligible temporary visa holder)
88. This item is consequential to item 1 of this Schedule. It amends subsection
140GBA(7) to replace 'an approved sponsor' with 'another person'.
Item 14 Subsection 140GBA(7) (paragraph (b) of the definition of eligible
temporary visa holder)
89. This item is consequential to item 1 of this Schedule. It amends paragraph (b) of
the definition of eligible temporary visa holder in subsection 140GBA(7) to
replace both references to 'approved sponsor' with 'other person'.
Item 15 Subsection 140GBB(1)
90. This item is consequential to item 1 of this Schedule. It amends subsection
140GBB(1) to replace 'An approved sponsor' with 'A person'.
Item 16 Subsection 140GBB(4)
91. This item is consequential to item 1 of this Schedule. It amends subsection
140GBB(4) to replace 'an approved sponsor' with 'a person'.
Item 17 Subsection 140GBC(1)
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92. This item is consequential to item 1 of this Schedule. It amends subsection
140GBC(1) to replace 'an approved sponsor, under subsection 140GB, if the
sponsor' with 'a person, under subsection 140GB, if the person'.
Item 18 Subsections 140GBC(2) and (3)
93. This item is consequential to item 1 of this Schedule. It amends subsections
140GBC(2) and (3) to replace 'approved sponsor' with 'person'.
Part 2 - Amendments if the Migration Amendment (Family Violence and Other
Measures) Act 2017 commences before this Act
Migration Act 1958
Item 19 Subsection 140GB(1)
94. This item amends subsection 140GB(1) to allow a person who has applied for
approval as a work sponsor, or is a party to negotiations for a work agreement, to
nominate an applicant or proposed applicant for a visa of a prescribed kind under
section 140GB of the Migration Act. The purpose of this amendment is to clarify
that an application for a nomination under section 140GB can be made at the
same time as an application for approval as a work sponsor.
95. Allowing a person who has applied for approval as a work sponsor, or is a party to
negotiations for a work agreement to lodge a nomination is more efficient for both
the nominator and the Department of Immigration and Border Protection, as it
allows the sponsorship application and nomination application to be lodged at the
same time.
96. It will continue to be a condition of approval of the nomination that the nominator
is an approved work sponsor.
97. Amendments consequential to this item, discussed below, replace certain
references to 'approved work sponsor' to reflect amended subsection 140GB(1).
Item 20 Subsection 140GB(2)
98. This item is consequential to item 19 of this Schedule. It amends subsection
140GB(2) to replace 'an approved work sponsor's' with 'a person's'.
Item 21 After paragraph 140GB(2)(a)
99. This item inserts new paragraphs 140GB(2)(aa) and (ab).
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100. New paragraph 140GB(2)(aa) makes it a condition of approval of a nomination
that if the nominating person is liable to pay a nomination training contribution
charge in relation to the nomination, the charge has been paid.
101. New paragraph 140GB(2)(ab) makes it clear that a person who nominates an
applicant or proposed applicant for a prescribed visa must be an approved work
sponsor in order for the nomination to be approved, notwithstanding that a person
who has applied for approval as a work sponsor, or is a party to negotiations for a
work agreement may also lodge a nomination under amended subsection
140GB(1).
Item 22 Subsection 140GB(3)
102. This item is consequential to item 19 of this Schedule. It amends subsection
140GB(3) to replace 'an approved work sponsor's' with 'person's'.
Item 23 Subsection 140GBA(1)
103. This item is consequential to item 19 of this Schedule. It amends subsection
140GBA(1) to replace 'an approved work sponsor' with 'a person'.
Item 24 Paragraph 140GBA(1)(a)
104. This item is consequential to item 19 of this Schedule. It amends paragraph
140GBA(1)(a) to replace 'an approved work sponsor is in a class of sponsors'
with 'a person is, or has applied to be, in a class of approved work sponsors'.
Item 25 Paragraph 140GBA(3)(a)
105. This item is consequential to item 19 of this Schedule. It amends paragraph
140GBA(3)(a) to replace 'approved work sponsor' with 'person'.
Item 26 Subparagraph 140GBA(3)(b)(ii)
106. This item is consequential to item 19 of this Schedule. It amends subparagraph
140GBA(3)(b)(ii) to replace 'approved work sponsor' with 'person'.
Item 27 Paragraph 140GBA(5)(a)
107. This item is consequential to item 19 of this Schedule. It amends paragraph
140GBA(5)(a) to replace 'approved work sponsor's' with 'person's'.
Item 28 Subparagraph 140GBA(6)(a)(i)
108. This item is consequential to item 19 of this Schedule. It amends subparagraph
140GBA(6)(a)(i) to replace 'approved work sponsor' with 'person'.
19
Item 29 Subparagraph 140GBA(6)(b)(i)
109. This item is consequential to item 19 of this Schedule. It amends subparagraph
140GBA(6)(b)(i) to replace 'approved work sponsor's' with 'person's'.
Item 30 Subsection 140GBA(6A)
110. This item is consequential to item 19 of this Schedule. It amends subsection
140GBA(6A) to replace both references to 'approved work sponsor' with
'person'.
Item 31 Subsection 140GBA(7) (definition of eligible temporary visa holder)
111. This item is consequential to item 19 of this Schedule. It amends subsection
140GBA(7) to replace 'an approved work sponsor' with 'another person'.
Item 32 Subsection 140GBA(7) (paragraph (b) of the definition of eligible
temporary visa holder)
112. This item is consequential to item 19 of this Schedule. It amends paragraph (b) of
the definition of eligible temporary visa holder in subsection 140GBA(7) to
replace both references to 'approved work sponsor' with 'other person'.
Item 33 Subsection 140GBB(1)
113. This item is consequential to item 19 of this Schedule. It amends subsection
140GBB(1) to replace 'An approved work sponsor' with 'A person'.
Item 34 Subsection 140GBB(4)
114. This item is consequential to item 19 of this Schedule. It amends subsection
140GBB(4) to replace 'an approved work sponsor' with 'a person'.
Item 35 Subsection 140GBC(1)
115. This item is consequential to item 19 of this Schedule. It amends subsection
140GBC(1) to replace 'an approved work sponsor, under section 140GB, if the
sponsor' with 'a person, under section 140GB, if the person'.
Item 36 Subsections 140GBC(2) and (3)
116. This item is consequential to item 19 of this Schedule. It amends subsections
140GBC(2) and (3) to replace 'approved work sponsor' with 'person'.
Part 3 - Application and transitional provisions
20
Item 37 Application provision
117. This item provides that the amendments to Subdivision B of Division 3A of Part 2
of the Migration Act made by this Schedule apply in relation to nomination
applications made, but not decided immediately prior to commencement, as well
as new nomination applications made on or after commencement.
Item 38 Transitional provisions
118. This item preserves regulations made under subsection 140GB(3) and paragraph
140GBA(1)(a) of the Migration Act that were in force immediately before the
commencement of this item. The effect of this is that these regulations will
continue to have effect under amended subsection 140GB(3) and paragraph
140GBA(1)(a).
21
Attachment A
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act
2011
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
This Bill relates to the Migration (Skilling Australians Fund) Charges Bill 2017 (Charges
Bill). The Charges Bill imposes the nomination training contribution charge payable
under new section 140ZM of the Migration Act 1958 (the Act), sets a charge limit for the
nomination training contribution charge and provides for the indexation of the charge
limit. It also provides that the amount of the nomination training contribution charge is to
be prescribed in the Migration Regulations 1994, and that the Regulations may prescribe
different charges for different kinds of visas or persons.
The purpose of this Bill is to provide a framework for the collection of the nomination
training contribution charge from employers accessing workers under the temporary and
permanent employer sponsored migration programs.
The nomination training contribution charge will offset expenditure from the Skilling
Australians Fund (SAF), a training fund administered by the Department of Education
and Training. The SAF will prioritise the funding of apprenticeships and traineeships in
occupations that are in high demand and currently rely on skilled migration, or have
future growth potential, including in regional Australia.
This Bill amends the Act to provide that persons seeking to nominate a worker for a
prescribed visa must pay a nomination training contribution charge.
The Bill also amends the Act to provide that the Migration Regulations 1994 (the
Regulations) may make provision for a range of matters relevant to the nomination
training contribution charge, including:
the visas that are subject to the nomination training contribution charge;
o It is intended that the visas to be prescribed are the Temporary Skill
Shortage (TSS) visa (which is to replace the Temporary Work (Skilled)
Subclass 457 visa), the Employer Nomination Scheme (ENS) (Subclass
186) visa and the Regional Sponsored Migration Scheme (RSMS)
(Subclass 187) visa;
the amount and method of payment of the nomination training contribution
charge; and
the remission, refund and recovery of underpayment of the nomination training
contribution charge.
22
The nomination training contribution charge replaces current requirements that employers
sponsoring a worker under the Temporary Work (Skilled) Subclass 457 visa (457 visa) or
nominating a worker under the Direct Entry stream of the Subclass 186 visa have recently
spent:
the equivalent of at least two per cent of their business' payroll in contributions to
an industry training fund (training benchmark A); or
the equivalent of at least one per cent of their business' payroll on the training of
Australians (training benchmark B)
The Bill also amends the Act to provide that a nomination of an applicant for a visa of a
prescribed kind may be lodged by a person who:
is an approved sponsor; or
has applied to be approved as a sponsor; or
is a party to negotiations for a labour agreement.
This amendment continues the current practice under policy of accepting nominations
from businesses that have lodged an application to be approved as a sponsor, and further
extends this practice to include parties that have entered into negotiations for a labour
agreement. This can provide processing efficiencies for both the business and the
Department of Immigration and Border Protection.
Currently, the Act requires that evidence of LMT must be provided with a nomination by
a standard business sponsor unless:
an exemption applies due to a major disaster;
an exemption applies on the basis of the required skill level and occupation for a
nominated position; or
it would be inconsistent with Australia's international trade obligations.
The Bill amends the Act to provide that the Minister may, by legislative instrument,
determine the manner in which labour market testing (LMT) in relation to a nominated
position must be undertaken and may determine the kinds of evidence of LMT that must
accompany a nomination. The matters to be prescribed in an instrument are expected to
include the language in which a job advertisement must be written, the method of
advertisement, the period the advertisement occurs in, and the period the advertisement
must run for.
This amendment will help ensure that, where LMT is required, businesses properly test
the labour market before nominating a foreign worker for a prescribed visa and provide
evidence of that LMT.
Human rights implications
Together with the Charges Bill, this Bill contributes to the provision of training
opportunities for Australian citizens and permanent residents by establishing the
framework for the nomination training contribution charge, to be paid by employers
23
accessing workers under the temporary or permanent employer sponsored migration
programs.
The nomination training contribution charge will fund initiatives which improve training
opportunities and outcomes for Australian citizens and permanent residents. Such
initiatives engage Articles 6.1 and 6.2 of the International Covenant on Economic, Social
and Cultural Rights (ICESCR). Article 6.1 of ICESCR recognizes:
The right to work, which includes the right of everyone to the opportunity to gain
his living by work which he freely chooses or accepts, and will take appropriate
steps to safeguard this right.
Article 6.2 of ICESCR states that:
The steps to be taken by a State Party of the present Covenant to achieve the full
realization of [the right to work] shall include technical and vocational guidance
and training programmes, policies and techniques to achieve steady economic,
social and cultural development and full and productive employment under
conditions safeguarding fundamental political and economic freedom to the
individual.
This legislative framework for the nomination training contribution charge supports the
right to work under Article 6.1 in relation to Australian citizens and permanent residents.
Funding a national training partnership through the sponsorship and nomination
framework is an effective mechanism to promote training across a broad range of
industries and occupations. The measure positively engages Articles 6.1 and 6.2 of the
ICESCR as it is a mechanism for Australia to comply with these rights.
The amendment to accept nominations from employers who have applied to be approved
as a sponsor or entered into negotiations for a labour agreement does not interact with the
right to work, however, it will improve the Department of Immigration and Border
Protection's administrative processes and will contribute to faster processing times for
applications of this type.
The Bill also contributes to the provision of employment opportunities for Australian
citizens and permanent residents by expanding the legislative framework for labour
market testing requirements to include the manner in which labour market testing must be
undertaken by a standard business sponsor seeking to nominate a foreign worker for a
prescribed visa.
In allowing employers to only employ a foreign worker if a suitable Australian worker
has not been found, subject to exemptions, the LMT framework engages the right to non-
discrimination under Articles 2 and 26 of the International Covenant on Civil and
Political Rights (ICCPR) and Article 2 of the ICESCR, including as it relates to the right
to work.
In its General Comment 18, the UN Human Rights Committee stated that:
24
The Committee observes that not every differentiation of treatment will constitute
discrimination, if the criteria for such differentiation are reasonable and objective
and if the aim is to achieve a purpose which is legitimate under the Covenant.
Similarly, in its General Comment on Article 2 of the ICESCR (E/C.12/GC/20),
UNCESCR has stated (at 13) that:
Differential treatment based on prohibited grounds will be viewed as
discriminatory unless the justification for differentiation is reasonable and
objective. This will include an assessment as to whether the aim and effects of the
measures or omissions are legitimate, compatible with the nature of the Covenant
rights and solely for the purpose of promoting the general welfare in a democratic
society. In addition, there must be a clear and reasonable relationship of
proportionality between the aim sought to be realized and the measures or
omissions and their effects.
Neither the ICCPR nor the ICESCR give a right for non-citizens to enter Australia for the
purposes of seeking residence or employment. The UN Human Rights Committee, in its
General Comment 15 on the position of aliens under the Covenant, stated that:
The Covenant does not recognize the right of aliens to enter or reside in the
territory of a State party. It is in principle a matter for the State to decide who it
will admit to its territory. However, in certain circumstances an alien may enjoy
the protection of the Covenant even in relation to entry or residence, for example,
when considerations of non-discrimination, prohibition of inhuman treatment and
respect for family life arise.
Consent for entry may be given subject to conditions relating, for example, to
movement, residence and employment. A State may also impose general
conditions upon an alien who is in transit. However, once aliens are allowed to
enter the territory of a State party they are entitled to the rights set out in the
Covenant.
As such, Australia is able to set requirements for the entry of non-citizens into Australia
and conditions for their stay, and does on the basis of reasonable and objective criteria.
The aim of the skilled entry program is to maximise the benefits of skilled entrants to the
Australian economy. This includes channelling permanent skilled migrants into
occupations that have been identified to be in the long term strategic interest of the
Australian economy, and restricting short-term temporary skilled migrants to occupations
that are currently in shortage but for which there may not be a long term requirement.
Australia sets the requirements for the entry and conditions of stay for skilled migrants
and temporary entrants on the basis of reasonable and objective criteria formulated
through labour market analysis and stakeholder consultation.
Further, Article 4 of ICESCR provides that the State may subject the rights enunciated in
the ICESCR:
25
... only to such limitations as are determined by law only insofar as this may be
compatible with the nature of these rights and solely for the purpose of promoting the
general welfare in democratic society.
The authority for the Government to grant work rights, and the authority to prescribe
conditions or limitations on temporary non-citizens in respect of those work rights (such
as requiring certain sponsors to conduct LMT before nominating a foreign worker unless
an exemption applies), are lawful as a matter of domestic law. The objective of these
conditions and limitations is to ensure that Australian citizens and permanent residents
have continued access to paid employment.
The limitations imposed by the labour market testing framework are legitimate and
justified by Article 4, for the principal reason that they are for the "purpose of promoting
the general welfare in a democratic society". In other words, the measure will ensure that
persons who are in Australia permanently are given the opportunity to seek work before
those seeking to work and live in Australia only on a temporary basis. Such a limitation,
noting the discussion in relation to work rights in Article 6 above, is permissible.
Similarly, for the reasons stated above, in order to give effect to Article 6 and Article 4 of
ICESCR in relation to Australian citizens and permanent residents, the labour market
testing framework is legitimate, reasonable and proportionate. Furthermore, it does not
seek to preclude foreign nationals from entering and working temporarily in Australia,
but rather conditions that ability with the reasonable and proportionate measures which
are further refined by these amendments.
Conclusion
The Bill is compatible with human rights as the measures support the right to work of
Australian citizens and permanent residents, and insofar that there are any limitations
upon the right to work in Article 6 of the ICESCR for certain foreign workers, these
comply with limitation requirements in Article 4 of the ICESCR. Further, although it is
arguable that the measure may have a discriminatory effect within the meaning of Article
2 and 26 of the ICCPR and Article 2 of the ICESCR, the measure is legitimate,
proportionate and reasonable.
The Hon. Peter Dutton MP, Minister for Immigration and Border Protection
Attachment B
Abolition and replacement of 457 visas
Regulation Impact Statement
(OBPR ID: 21946)
Department of Immigration and Border
Protection
August 2017
27
Contents
Overview: Australia's employer sponsored skilled visa programme ...................................... 28
Current regulatory framework ............................................................................................. 28
The problem ............................................................................................................................. 34
Why is Government action needed .......................................................................................... 39
Policy options........................................................................................................................... 40
Option 1 ............................................................................................................................... 40
Overview of Option 1 ...................................................................................................... 40
Likely outcomes of Option 1 ........................................................................................... 43
Option 2 ............................................................................................................................... 52
Overview of Option 2 ...................................................................................................... 52
Likely outcomes of Option 2 ........................................................................................... 53
Option 3 ............................................................................................................................... 56
Overview of Option 3 ...................................................................................................... 56
Likely outcomes of Option 3 ........................................................................................... 56
Consultation ............................................................................................................................. 56
Best option ............................................................................................................................... 61
Implementation and evaluation ................................................................................................ 62
28
Overview: Australia's employer sponsored skilled visa programme
1. The employer sponsored skilled visa programme, and the underpinning legal and
regulatory framework, is the primary way the Australian Government regulates
how non-citizens may enter and remain to work in Australia, as well as many of the
circumstances in which they may work. It also provides mechanisms to ensure that
migrants do not pose unacceptable health, character and security risks to the
Australian community.
2. The employer sponsored skilled visa programme is part of the broader migration
programme, and allows sponsoring businesses to nominate an appropriately skilled
non-citizen to fill a temporary or permanent employment vacancy in Australia. This
programme regulates both the sponsor and the migrant to facilitate certain policy
outcomes, such as ensuring that employers only seek to fill vacancies with overseas
workers where appropriately skilled Australian workers are not available.
Current regulatory framework
3. The employer sponsored skilled visa programme is comprised of the Temporary
Work (Skilled) (subclass 457) visa (457 visa) and the permanent Employer
Nomination Scheme (subclass 186) visa (ENS, 186 visa) and Regional Sponsored
Migration Scheme (subclass 187) visa (RSMS, 187 visa) (permanent employer
sponsored skilled visas).
Top named industries for primary subclass 457, 186, and 187 visa grants
in 2016-17 to 31 March 20171
Rank Sponsor Industry Total
1 Other Services 8,639
2 Accommodation and Food Services 7,224
3 Professional, Scientific and Technical 7,202
4 Information Media and Telecommunications 6,813
5 Health Care and Social Assistance 5,306
6 Construction 3,634
7 Education and Training 2,899
1
There were 16,452 visas granted to an industry, which is not specified in departmental reporting systems.
29
8 Manufacturing 2,525
9 Retail Trade 2,213
10 Financial and Insurance Services 2,017
Top occupations for primary subclass 457, 186, and 187 visa grants in 2016-17 to 31
March 2017
Rank Nominated Occupation Total
1 351411 Cook 4,635
2 141111 Cafe or Restaurant Manager 3,031
3 261312 Developer Programmer 2,334
4 351311 Chef 2,004
5 225113 Marketing Specialist 1,987
6 242111 University Lecturer 1,872
7 261111 ICT Business Analyst 1,834
8 224711 Management Consultant 1,550
9 221111 Accountant (General) 1,487
10 261313 Software Engineer 1,464
4. Only certain occupations are eligible for use under Australia's permanent and
temporary employer sponsored skilled visa programmes.2 Depending on which visa
programme is applied for, applicants must nominate an occupation from either:
the Medium and Long-term Strategic Skills List (MLTSSL), previously known
as the Skilled Occupation List (SOL), which targets occupations that are
relevant to the medium to long term skill needs of the economy; or
2
Further information on the occupation lists can be found at:
http://www.border.gov.au/Trav/Work/Work/Skills-assessment-and-assessing-authorities/skilled-
occupations-lists
30
the Short-Term Skilled Occupation List (STSOL), previously known as the
Consolidated Sponsored Occupation List (CSOL), which targets occupations
that are relevant to the short term needs of the economy.3
Additionally, the Direct Entry (DE) stream of RSMS can apply for Australian and
New Zealand Standard Classification of Occupations (ANZSCO) skill level 1-3
occupations.
5. The SOL and the CSOL were replaced with the MLTSSL and STSOL on 19 April
2017, which involved a reduction of 216 occupations from eligibility for the 457
visa. The number of eligible occupations fell from 651 to 435. The replacement of
the CSOL with the STSOL represented a significant shift in approach by limiting
temporary migrant occupations to those in need in the Australian labour market and
distinguishing between short and medium to long term needs. On 1 July 2017, the
occupation lists were updated based on stakeholder consultation, labour market
analysis, and advice from government departments to ensure they accurately reflect
the skill needs of the Australian economy. These lists will be reviewed biannually.
Temporary employer sponsored skilled visa
6. The 457 visa allows employers to address temporary labour shortages by enabling
businesses, as approved sponsors, to nominate overseas workers when an
appropriately qualified Australian citizen or permanent resident is not available. It
is an uncapped and demand driven temporary visa aimed at meeting genuine
temporary skill shortages.
7. As of 31 March 2017, there were 95,360 primary 457 visa holders in Australia. To
be granted a 457 visa, applicants must meet certain requirements including:4
demonstrating that they have the skills and experience necessary to work in the
nominated occupation;
holding any mandatory registration, license or professional membership;
demonstrating that they have the required English language skills, unless
exempt;
meeting health and character requirements;
holding adequate health insurance, unless covered by Medicare;
3
CSOL was an expansive list of skilled occupations not based on labour market shortages, which was used
to determine eligibility for sponsored temporary and permanent migration.
4
Further information about what a skilled overseas worker needs to do to apply for a primary 457 visa can
be found at: http://www.border.gov.au/Trav/Visa-1/457-#tab-content-1
31
having no outstanding debts to the Australian Government; and
providing biometrics if asked.
8. In the 2015-16 programme year there were 34,493 active sponsors in the 457 visa
programme. There are two ways an eligible business can become an approved
sponsor:
apply to be a standard business sponsor; or
negotiate a work agreement.
9. To become a standard business sponsor, a business must:5
be a lawfully operating business;
have no relevant adverse information against their business; and
if the business is in Australia:
o meet training requirements;
o demonstrate a commitment to employing local labour; and
o not engage in discriminatory recruitment practices.
10. Alternatively, a business may be able to enter into a work agreement if they have a
demonstrated need for skilled migrants that cannot be met by the Australian labour
market and which falls outside standard employer sponsored skilled visa
programmes.
11. All businesses who sponsor a 457 visa holder must meet sponsorship obligations
including:
cooperating with inspectors;
ensuring equivalent terms and conditions of employment;
keeping records;
providing records and information to the Minister of Immigration and Border
Protection (the Minister);
5
Further information about what an employer needs to do to apply for be a sponsor for the 457 visa
programme can be found at: http://www.border.gov.au/Trav/Visa-1/457-#tab-content-3
32
notifying the Department of Immigration and Border Protection (the
Department) when certain events occur;
ensuring the visa holder participates in the nominated occupation;
not recovering from, transferring or charging certain costs to another person;
paying travel costs to enable sponsored people to leave Australia;
paying costs to remove sponsored people who become unlawful non-citizens;
providing training to Australians and permanent residents; and
not engaging in discriminatory recruitment practices.
12. To nominate an overseas worker for a 457 visa, an approved sponsor must:6
ensure that the overseas worker works directly for their business or for an
associated entity of their business, unless the nominated occupation is exempt;7
ensure that the overseas worker is afforded equivalent terms and conditions of
employment to Australian workers;
meet the 'genuineness' criterion;
meet the Temporary Skilled Migration Income Threshold (TSMIT)
requirements, set at $53,900 as at 31 March 2017;
not be subject to adverse information; and
conduct Labour Market Testing (LMT) for professional, nursing and
engineering occupations, unless it conflicts with international trade obligations.
Permanent employer sponsored skilled visa
13. The permanent employer sponsored skilled visas were introduced in their current
form in 2012 and are demand-driven programmes, which allow employers to
nominate skilled workers for permanent residence to fill genuine vacancies in their
business. These skilled workers can be overseas or already in Australia on
temporary visas.
6
Further information about how a sponsor can nominate a skilled overseas worker can be found at:
http://www.border.gov.au/Trav/Visa-1/457-#tab-content-4
7
A list of exempted occupations can be found in the Legislative Instrument: Specification of Occupations
for Nominations in Relation to Subclass 457 (Temporary Work (Skilled)) for Positions other than in the
Business of the Nominator - IMMI 13/067.
33
14. While ENS applies nation-wide, the RSMS helps businesses in regional, remote or
low population growth areas (outside the major metropolitan centres of Brisbane,
Gold Coast, Sydney, Newcastle, Wollongong and Melbourne) to recruit the skilled
workers they need to manage and grow their operations.
15. The ENS and RSMS visas each have three streams:
the Temporary Residence Transition (TRT) stream is for subclass 457 visa
holders who are nominated by their employer after having worked for two
years in the same occupation;
the Work agreement stream is for skilled migrants nominated by an employer
who is party to a work agreement; and
the Direct Entry (DE) stream is for other employer nominated skilled migrants.
16. In the 2016-17 programme year to 31 March 2017, there were 17,044 primary ENS
visa grants and 5,228 primary RSMS visa grants. To be granted an ENS or RSMS
visa, applicants must meet certain requirements including:
having been nominated by an approved Australian employer (in regional
Australia for RSMS) within the six months before the application;
being under the age of 50 at the time of application, unless exempt;
demonstrating that they have the skills and experience necessary to work in the
nominated occupation, which may include an assessment by the relevant
assessing authority;
holding any mandatory registration, license or professional membership;
demonstrating that they meet the required English language skills, unless
exempt;
meeting health and character requirements; and
meeting other requirements of the relevant visa stream.
17. In the 2016-17 programme year to 31 March 2017, 8,315 individual businesses
utilised the ENS and 2,933 individual businesses utilised the RSMS. To nominate a
worker for an ENS or RSMS visa, a business must:
actively and lawfully operate in Australia (in regional Australia for RSMS);
have a genuine need for a paid employee to fill a skilled position;
34
offer a skilled position in the applicant's field that is full time and ongoing for
at least two years;
pay a market salary rate;
comply with Australian immigration and workplace relations laws;
have no adverse information known about the business or any person
associated with the business; and
nominate the applicant in one of the three streams and meet the requirements of
that stream.
Training benchmark requirements
18. The current training benchmark requirements are applicable to the 457 visa and the
DE stream of the 186 visa. The current framework requires employers nominating a
457 visa applicant or 186 visa applicant in the DE stream to meet either:
training benchmark A -The business must provide evidence of recent
expenditure, to the equivalent of at least 2 per cent of the payroll of the
business, in payments allocated to an industry-training fund that operates in the
same industry as the business; or
training benchmark B - The business must provide evidence of recent
expenditure, to the equivalent of at least 1 per cent of the payroll of the
business, in the provision of training to employees of the business.
The problem
19. The employer sponsored skilled visa framework is not effectively meeting the
Australian Government's policy objective of enabling businesses to access skilled
labour from overseas, when an appropriately skilled Australian is unavailable,
while maintaining visa programme integrity. The current framework settings have
resulted in:
some businesses using the programmes where Australian workers are
available.8 This problem resulted from an inability of the policy settings to
make certain that businesses only access overseas migrants for occupations
which had been identified as in shortage in the Australian labour market;
8
In 2016, the Department received approximately 15,000 enquiries, complaints, suggestions or
compliments regarding the 457 visa programme. One of the main issues raised is that overseas workers are
using the 457 programme to take Australian jobs.
35
some businesses and visa applicants not meeting the intended requirements of
the programmes. This problem has arisen due to a number of legislative
inconsistencies and gaps relating to the current policy settings, including
English language, training benchmarks, genuine need, and skills assessment
requirements;
some individuals and businesses using the temporary visa programme
primarily to seek longer term or permanent residence without a further control
to determine they continue to meet Australia's social, economic, and skill
needs.9 This has resulted from current policy settings, such as eligible
occupation, English language and age requirements, failing to be set at the
requisite levels;
skills supplied by the visa programme not fully aligning with Australia's short
or long term needs.10 This problem resulted from failures in the occupation lists
to ensure that the occupations eligible for temporary skilled migration visas
reflect Australia's short or medium to long term needs; and
widespread criticism that the programme does not successfully balance the
facilitation of skilled workers, and prevention of negative impacts on
Australian and overseas workers.
20. The employer sponsored skilled visa programmes allow employers to address
labour shortages by bringing in skilled overseas workers where there is no
appropriately skilled Australian workers available. Whilst it is against the intent of
the programme, there are many reasons that employers may seek to use an overseas
worker instead of an available Australian worker. Some of these reasons may be
that the employer:
finds it more expeditious to employ an overseas worker than train an Australian
worker;
perceives the overseas worker to have desirable attributes that are lacking in an
equivalent Australian worker; or
is helping to achieve a migration outcome for the overseas worker.
21. The above shortcomings have led to:
9
Departmental data indicates that this pathway is taken by many, with 84 per cent of 186 and 187 visas
granted from 1 July 2016 to 31 March 2017 being to individuals whose last substantive visa was a 457 visa.
10
This is supported by labour market analysis undertaken by the Department of Employment who provided
advice to the Department in April 2017 identifying over 200 occupations, which were extraneous to
Australia's labour market needs.
36
some overseas workers transitioning to permanent residence without having the
attributes which optimise their economic contribution and settlement outcomes;
displacement of Australian workers;11
continuing skills gaps; and
overreliance on and an over-supply of skilled overseas workers in some
occupations.
22. The 457 programme has been the subject of a number of enquiries and reviews.
These reviews have involved wide consultation and feedback from a broad range of
stakeholders, including industry peak bodies/associations, unions, government,
businesses, migration agents and academics. The policy options set out in this
document take this feedback into consideration.
23. Evidence of the problems within the employer sponsored skilled visa programmes
can be found in:
the 2014 Independent Review into Integrity in the Subclass 457 Programme
(the 457 Integrity Review);
the 2016 Senate Inquiry, A National Disgrace: The Exploitation of Temporary
Work Visa Holders (the 2016 Senate Inquiry);
the 2016 Productivity Commission Inquiry Report: Migrant Intake into
Australia (the 2016 Productivity Commission Report);
departmental sponsor monitoring activities outlined in the Department of
Immigration and Border Protection Annual Report 2015-16 (the 2015-16
Annual Report); and
in the continuing stakeholder representations received by the Department.
24. The purpose of the 457 Integrity Review was to recommend a system that,
operating in the national interest12, was sound and resistant to misuse, and, at the
same time, flexible and able to respond quickly to economic and business changes.
The review examined:
the level of non-compliance in the 457 visa programme;
11
The 2016 Senate Inquiry received evidence from several unions that 457 visa holders were being used to
fill positions that could have been taken by qualified Australian workers, and were also displacing some
Australian workers.
12
As noted in the 2016 Productivity Commission Report, it is the broad intent of the visa programmes to
meet Australia's national interest (including national security and economic and social development).
37
the current framework to better understand whether the existing requirements
balance the needs of business with the integrity of the programme;
the viability of a deregulation strategy of the current programme; and
the appropriateness of the current compliance and sanctions.
25. The 457 Integrity Review found that, whilst contentious, there was strong support
from businesses for a programme that enabled them to fill genuine workforce
shortages. Unions also supported this function whilst highlighting the need to
protect Australian jobs and vulnerable overseas workers. The Review found that
Australians who experience difficulties in finding work see 457 visa holders as a
threat.13
26. The 457 Integrity Review found that there was a "lack of responsiveness of the
current occupation list" and that "employees ... say that [the current system] is too
easily subverted and, in practice, can turn into a free-for-all, to the disadvantage of
Australians".14 The 457 Integrity Review also found that the training benchmarks
were flawed and should be abolished. The review made 22 recommendations,
including reviewing the occupation lists, introducing a national training fund,
publishing sponsor sanctions and providing the Department with tax file numbers
(TFN).
27. The 2016 Productivity Commission Report examined the costs and benefits of
temporary and permanent migration and looked at the scope for reforms within the
current system that could deliver superior overall outcomes for the Australian
community. The report found that younger and more skilled immigrants are more
likely to make a positive economic contribution to Australia. It also noted that
employment is a key indicator of integration, and that high levels of English
language ability and qualifications result in better employment outcomes.
28. The 2016 Productivity Commission Report identified that significant gains could be
made by recalibrating the intake of permanent skilled immigrants, by tightening
entry requirements relating to age, skills and English language proficiency. For
example, the Productivity Commission found that the fiscal benefit of skilled
migrants decreases with age and recommended that the current 50 year age limit for
the permanent employer sponsored skilled visa programmes be reduced. Migrants
who arrive at a relatively young age, particularly those who are highly educated,
generally contribute more tax revenue over their lifetime and make comparatively
lower use of government-funded services.
13
The 457 Integrity Review, p23.
14
The 457 Integrity Review, p8.
38
29. The 2016 Senate Inquiry looked at the impact that the 457 visa programme has on
employment opportunities for Australian permanent residents and citizens. The
inquiry looked at concerns raised by employers seeking to efficiently supplement
their workforce with overseas workers, and concerns raised by unions seeking to
protect the wages, conditions and job opportunities of Australian workers.
30. The 2016 Senate Inquiry noted that for the 457 programme to be effective "the
employment of 457 visa workers must match genuine, short-term skill shortages".
However, the inquiry found that there was evidence that there are occupations
eligible for the current 457 programme where there is no skill shortage.
31. As indicated in the 2015-16 Annual Report, in 2015-16 the Department finalised
the monitoring of 1390 temporary work sponsors, the majority of which were 457
sponsors. Approximately 58 per cent of sponsors monitored were considered to
have satisfactorily met their obligations, while the remaining 42 per cent were
found to be in breach of their obligations. Of the sponsors found to be in breach, a
total of 372 sponsors were sanctioned (cancelling and/or barring the sponsor), 210
received a formal warning and 28 were issued with infringement notices totalling
just under $272,580. The top industries where employers were found to be in
breach were Accommodation and Food Services, Other Services, Construction and
Retail Trade. This rate is higher than in past years, reflecting improved targeting of
risk. These results are indicative of the continued misuse of the programme by
some businesses.
32. In 2016, the Department received approximately 15,000 enquiries, complaints,
suggestions or compliments regarding the 457 visa programme by a range of
stakeholders including individuals, legal and industry peak bodies, businesses and
migration agents who use the employer sponsored skilled visa programmes and
domestic and foreign government representatives. Broadly, the issues raised
include:
overseas workers using the 457 programme to take Australian jobs;
overseas workers being exploited; and
certain programme settings make it more difficult for overseas workers to use
the programme and prevent businesses and industries from meeting their needs.
33. The Government has already implemented several measures to address this
problem. In particular, the Government has implemented the majority of the
recommendations by the 457 Integrity Review, which included measures to
strengthen integrity in the 457 visa programme, prevent abuse and protect
Australian workers. However, whilst the measures implemented have gone some
way to address the problem they have not completely solved it.
39
Why is Government action needed
34. The Government regulates the entry and stay of overseas workers in Australia.
Given the competing views from employers, employees and employee
organisations, the Government is required to balance these views to meet the
national interest. It is therefore appropriate that the Government take action on this
matter.
35. External reviews outlined above, and the Department, have identified several
failures in the current employer sponsored skilled visa programmes, such as
occupation lists that do not sufficiently support Australia's skills needs and policy
settings that do not ensure sufficient programme compliance, are not set at requisite
levels and have a number of legislative inconsistencies and gaps.
36. To resolve issues in the employer sponsored skilled visa programmes, the
Government aims to achieve the following objectives:
ensure that that employers only seek to fill vacancies with overseas workers
where appropriately skilled Australian workers are not available;
enhance integrity measures to prevent the misuse of the employer sponsored
skilled programmes;
ensure that skilled overseas workers have the necessary attributes to
successfully contribute to Australia's social and economic prosperity, either
temporarily or permanently; and
meet Australia's skills needs through policy settings which distinguish between
short and medium to long term needs.
37. To resolve issues in the employer sponsored skilled visa programmes, the
Government needs to address the areas in which the programmes are currently
failing, by:
regularly reviewing and updating the occupation lists to ensure they support
Australia's short and medium to long term skills needs;
tightening policy settings to support programme compliance;
ensuring that policy settings distinguish between short and medium to long
term needs and are set at requisite levels to support settlement outcomes; and
address legislative inconsistencies and gaps identified within the policy
settings.
40
38. There are barriers that will impact the Government's ability to achieve its
objectives:
the Australian economy is dynamic. Policy settings will need to be responsive
to Australia's changing skill needs while prioritising Australian workers; and
there will continue to be people who seek to misuse the employer sponsored
skilled visa programmes. Policy settings will need to mitigate risks as they
arise.
39. If the Government does not take action, then the failures identified in the current
employer sponsored skilled visa programmes will continue to result in integrity
issues and suboptimal economic benefits.
Policy options
40. Three policy options have been considered:
abolish and replace the 457 visa, and implement complementary reforms to the
temporary and permanent employer sponsored skilled visas;
reform the 457 visa; and
retain the employer sponsored skilled visa framework without changes.
Option 1
Overview of Option 1
Temporary skill shortage visa
41. Under Option 1, by March 2018 the 457 visa would be abolished and replaced with
a new Temporary Skill Shortage (TSS) visa with two streams. The two streams
would enable greater control over settings by distinguishing between short-term and
medium-term skills needs.
42. The Short-Term stream would enable employers to source genuinely temporary
overseas skilled workers to fill short-term positions in a range of occupations for up
to 24 months, until they can recruit and train an Australian if the role continues.
This would be supported by a genuine temporary entrant requirement and provision
for renewal of the visa onshore once only. The Short-Term stream would be
underpinned by the STSOL.
43. The Medium-Term stream would enable employers to source highly skilled overseas
workers to fill medium-term critical skill gaps for up to four years, with eligibility
41
to apply for permanent residence after three years. The medium-term stream would
be underpinned by the MLTSSL.
44. Other key features of the TSS visa, distinguishing it from the current 457 visa,
include:
a requirement that the primary applicant has at least two years relevant work
experience;
mandatory LMT in a prescribed manner, with limited exemptions to
accommodate international obligations;
a higher English language requirement for the Medium-Term stream of an
International English Language Testing System (IELTS) score of level 5
overall, with a minimum of 5 in each component score; and
a non-discriminatory workforce test to allow closer examination of applications
from employers whose workforce is predominantly made up of overseas
workers.
Complementary reforms
45. From the date of announcement, the Department would implement a number of
complementary reforms leading up to the abolition and replacement of the 457 visa
in March 2018.
Changes to temporary skilled employer sponsored visas
46. Changes to the 457 visa before the introduction of the TSS visa include:
reducing the maximum duration of 457 visas issued for occupations that are on
the STSOL to two years (unless international trade obligations require a longer
period);
removing the English language salary exemption threshold, which exempts
applicants whose salary is over $96,400 from the English language
requirement;
Processing efficiencies to expand the expand the scope of sponsorship
accreditation and streamline nominations for lower risk-sponsors, including
trusted traders and government agencies;
mandatory provision of penal clearance certificates;
expanded skills assessments; and
42
authorising the Department to publicly disclose the details of sponsors who are
sanctioned for breaching the sponsor obligations framework.
Changes to temporary and permanent employer sponsored skilled visas
47. Proposed changes to both the temporary and permanent employer sponsored skilled
visa programmes include:
authorising the Department to collect and use TFNs of temporary and
permanent skilled visa holders; and
tightening and clarifying the training benchmarks policy settings, including
regarding the requirements a training fund must meet, and the types of
acceptable training expenditure. Then, from March 2018, replacing the training
benchmarks with a levy to a government managed training fund payable by
employers nominating a temporary or permanent skilled migrant.
Changes to permanent employer sponsored visas
48. Proposed changes to the permanent employer sponsored skilled visas include:
specifying eligible occupations in the MLTSSL, with additional occupations
available to support regional employers using the RSMS;
extending the residence period required to apply for permanent residence from
two to three years;
paying a market rate salary not less than the TSMIT;15
more stringent age, English language, and relevant work experience
requirements;
requiring migrants who accessed regional concessions for their temporary visa
to have lived in regional Australia in order to be eligible for permanent
residency;
requiring nominators to provide evidence of 'genuine need' for the person to
work in the nominated position;
removing the exemptions to the skills assessment and English language
requirements for applicants earning at least $180,001; and
15
Currently, employers are required to pay the market salary rate to permanent skilled employer sponsored
visa holders.
43
providing the ability to refund application fees where an application must be
refused or withdrawn at no fault of the applicant.
Likely outcomes of Option 1
Australian labour market
49. As Australia's skills needs are constantly evolving and the skilled migration
programme is designed to respond to those needs, use of the programme, and the
impact of this option, will depend on labour market circumstances in the years
ahead. In April 2017, 457 workers accounted for less than one per cent of the
Australian workforce,16 and between 0.17 - 4.47 per cent of any industry.17
Therefore, the impact that the option 1 measures might have on the overall
economy and particular industries is limited but will vary by industry and
occupation. A key aspect of option 1 is six-monthly reviews of the occupation list
to ensure it remains responsive to Australia's skills needs.
50. The measures in option 1 will have a higher impact on occupations that have the
highest percentage of 457 workers compared to total employment. The maximum
visa period of two years for occupations on the STSOL, such as Cooks, may result
in an increase in the training and employment of Australians and/or a higher
turnover of temporary skilled migrants. Of the top ten ANZSCO occupation groups
with the highest percentage of 457 visa holders, there is only one ANSZCO
occupation group (with the smallest historic 457 use) that does not have an
occupation eligible for the 457 programme.18
Top ten ANZSCO occupation groups with highest percentage of 457 visa holders19
Employed 457 visa % of 457
Total in holders at visa
ANZSCO ANZSCO occupation group May 2017 31 May 2017 holders
code ('000) to total
employm
ent
16
As at 18 April 2017, there were 92,896 primary 457 visa holders in Australia. This accounted for 0.78 per
cent of the total Australian workforce, which was 11,922,100 as at February 2016.
17
Based on the same data as footnote 15, primary 457 visa holders accounted for between 0.17 - 4.47 per
cent of the Australian workforce in an industry. The highest percentage (4.47 per cent) of primary 457 visa
holders are in the Information Media and Telecommunications industry.
18
The Graphic Pre-press Trade Workers group only has one occupation, 392211 Graphic Pre-press Trades
Worker, which is not currently eligible for the 457 programme.
19
Sources: Department of Immigration and Border Protection, BP0014 Temporary Work (Skilled) visa
holders 2017-05-31 ULv100, and Australian Bureau of Statistics, 6291.0.55.003 - EQ08 - Employed
persons by Occupation unit group of main job (ANSSCO), Sex, State and Territory, August 1986 onwards,
released 22 June 2017.
44
3514 Cooks 43.6 6168 14.16%
3125 Mechanical Engineering 5.3 692 13.05%
Draftspersons and Technicians
2632 ICT Support and Test Engineers 12.2 1373 11.28%
2611 ICT Business and Systems Analysts 27.3 2900 10.63%
3922 Graphic Pre-press Trades Workers 1.2 109 9.15%
2252 ICT Sales Professionals 12.8 1133 8.86%
6392 Retail and Wool Buyers 4.3 291 6.74%
1411 Cafe and Restaurant Managers 67.5 4391 6.50%
2613 Software and Applications 106.8 6545 6.13%
Programmers
3123 Electrical Engineering Draftspersons 8.7 509 5.82%
and Technicians
51. There are differing expert opinions on the impact that the option 1 measures might
have on the Australian labour market. For example, Dr Birrell has argued that there
it is very likely that these measures would significantly reduce the number of
overseas workers on the employer sponsored skilled visa programmes, which will
benefit domestic job seekers.20 Whereas, Dr Wright has argued that whilst he agrees
that the measures could reduce the number of overseas workers in these
programmes, "any claim that a major reduction in workers on temporary visas
would have a significant impact upon the Australian labour market is a bit far-
fetched".21
Australia's ability to attract overseas skilled workers
52. The measures in option 1 are not expected to substantially affect Australia's
competitive position among its peers (Canada, New Zealand, the United Kingdom
and the United States) in attracting and retaining the best and brightest skilled
20
The Australian Population Research Institute's research report: The Coalition's 457 Visa Reset: Tougher
Than You Think, August 2017
21
Dr Wright, of the University of Sydney specialises in labour market regulation and immigration. Quotes
sourced from A., 'Numerically insignificant': 457 visa overhaul unlikely to be a game changer for local
jobs', SBS News, viewed 11 August 2017, < http://www.sbs.com.au/news/article/2017/08/10/numerically-
insignificant-457-visa-overhaul-unlikely-be-game-changer-local-jobs>
45
migrant workers from around the globe that are in need in the Australian labour
market. Visa settings are only one factor in a migrant's choice of destination, with
other key aspects including lifestyle, taxation, and education. There are also other
skilled migration options, such as Work agreements which allow employers with a
demonstrated skill need that cannot be met by the Australian labour market to
access skilled migrants in occupations outside the skilled occupation lists.
53. Some industries have expressed concern that the option 1 measures will impact on
their international competitiveness to attract talent. This issue has predominately
stemmed from removing the eligibility for permanent residency for some
occupations. Some of those who expressed concern are:
the tertiary education sector, which raised concerns about their ability to attract
PhDs, researchers and academics; and
multinational businesses, which raised concerns about their ability to attract
Chief Executive Officers.
54. These concerns were considered as part of the review of occupation lists on 1 July
2017, and resulted in 23 occupations moving from the STSOL to the MLTSSL.
Occupations on the MLTSSL are eligible for a visa of up to four years, and the
option to apply for permanent residency. Occupations which moved from the
STSOL to the MLTSSL include Chemist, Chief Executive or Managing Director,
Environmental Research Scientist, Software & Applications Programmers (nec),
and University Lecturer.
55. Option 1 will also affect the ability for employers to retain a temporary skilled
migrant. This will only affect employers who are employing overseas workers in an
occupation on the STSOL, which is subject to biannual reviews. These occupations
will be restricted to visas of up to two years (unless international trade obligations
require a longer period), and the visa holder will only be able to renew once
onshore. However, these settings reflect the policy intent to address short term skill
needs and encourage the training of Australians rather than reliance of overseas
migrants. The industries that have the highest proportion of visa holders in
occupations that are on the STSOL compared the MLTSSL are:
Accommodation and Food Services;
Arts and Recreation Services;
Administrative and Support Services;
Retail Trade; and
46
Wholesale Trade.22
Improving the quality of migrants
56. The tighter settings would improve the quality of temporary and permanent
migrants and ensure they have the necessary attributes to successfully contribute to
Australia's social and economic prosperity. They would also ensure that migrants
have the necessary attributes to improve employment and community integration
outcomes, and are able to successfully transition to permanent residency, if they are
eligible. Key aspects include:
more targeted occupation lists based on labour market analysis and stakeholder
consultation that differentiate between short-term and long-term skills that are
needed in the Australian labour market;
reducing the current age limit for the permanent employer sponsored skilled
visa programmes from 50 to 45 years will improve the fiscal contribution of
these migrants;23
the increased work experience requirement for temporary and permanent
employer sponsored skilled migrants recognises the importance of this attribute
for effective productivity, workplace contributions and enhanced fiscal
outcomes;
higher English language requirements ensure that migrants are less vulnerable
to exploitation, are able to integrate more easily in the workforce and
community, and enable the transfer of skills from migrants to Australian
workers; and
enhanced character checking for the temporary employer sponsored skilled
visa programme supports visa integrity and aligns with the way in which other
visa programmes operate.24 While applicants would incur regulatory costs
associated with police checks, there is benefit in assessing this requirement
before permanent residence to ensure that the Australian community is
protected and that persons of concern are identified as early as possible.
57. Whilst the option 1 measures will improve the quality of migrants, they will also
result in some migrants not being eligible to use the programmes. For example,
recent graduates or those over 45 years old may not meet the new work experience
or age requirements respectively. However, employers may look at other options to
22
This is based on visa holder data from 1 July 2012 to 30 June 2017 and the breakdown is for occupations
that are on the STSOL or MLTSSL as at 1 July 2017.
23
2016 Productivity Commission Inquiry Report: Migrant Intake into Australia
24
Further details on character and police certificate requirements can be found here:
http://www.border.gov.au/Trav/Visa/Char
47
source skilled migrants who meet the new requirements where Australian workers
are not available and there will continue to be exemptions to the age requirement.
Supporting Australia's skill needs
58. The proposed TSS settings under Option 1 would bring a sharper focus on
Australia's labour market and skill needs by implementing more targeted, evidence
based occupations lists that differentiate between short and medium term skill
shortages. Option 1 supports Australia's skill needs by ensuring employers can only
nominate occupations in short-term need for shorter visa periods with limited
renewal (under the Short-Term stream), but can nominate occupations in medium to
long-term need for longer visa periods (under the Medium-Term stream, and
through permanent visas) and with no renewal limits.
59. Whether an occupation is, or is not, eligible for the employer sponsored skilled visa
programmes will have the most significant impact on employers. For other option 1
measures such as increased English language, skill, age requirements or enhanced
LMT, employers will still be able to source an overseas worker if there is a genuine
need to fill a skills need. However, employers may need to source skilled overseas
workers from outside of existing sources if those sources cannot meet the
requirements. In some cases, this may delay, although not prevent, an employer
from sourcing skill labour. Some employers may instead choose to recruit an
Australian worker.
60. The 1 July 2017 occupation lists update considered several factors including labour
market analysis, and advice from government departments. Stakeholder feedback
was also considered, in particular feedback regarding skilled occupations that had
been removed from eligibility on 19 April 2017 and that employers considered
were still needed to fill skills gaps. For the for the subclass 186 and 457 visa
programmes, the 1 July 2017 update included the addition of:
16 occupations to the STSOL. This included Aeroplane Pilot which had been
removed from eligibility on 19 April 2017; and
20 occupations to the MLTSSL.25
Regular review of the occupation lists enables stakeholders to provide timely
feedback, and ensures the lists meet Australia's skill needs.
61. There will inevitably be differences of opinion as to the need to source overseas
migrants in a particular occupation. The occupation lists review process continues
to be refined and is designed to consider qualitative labour market data as well as
25
More information on the 1 July 2017 changes to the lists of eligible skilled occupations can be found:
http://www.border.gov.au/WorkinginAustralia/Pages/summary-of-1-july-2017-changes-to-list-of-eligible-
skilled-occupations.aspx
48
qualitative feedback from industry, unions and the general community. The broad
range of stakeholders that have provided input to the occupation list reviews
demonstrates the interest in engaging in regular updates of occupation lists.
62. Work agreements will remain an avenue to sponsor skilled migrants in occupations
not on the lists where there is a demonstrated need that cannot be met by the
Australian labour market. Work agreements are formal arrangements negotiated
between an employer and the Australian Government that let an employer recruit an
agreed number of skilled workers from outside Australia. They provide a flexible,
tailored skilled migration arrangement for businesses and sectors with specific
needs that sit outside the mainstream skilled migration programme.
63. The impact on business and visa holders who have made investments on the basis
of meeting previous permanent residency criteria would be mitigated by
grandfathering access to the permanent skilled employer sponsored visa pathway
for existing 457 visa holders and applicants at the time of the Government
announcement.
Incentivising employers to give priority to Australian workers
64. Option 1 would incentivise employers to give preference to appropriately skilled
and available Australian workers by tightening the circumstances in which overseas
workers could be employed. Measures that would incentivise employers to look to
the Australian labour market include:
better targeted occupation lists, and visa duration linked to the lists;
limited onshore renewal, and a genuine temporary entrant requirement for the
Short-Term stream of the TSS visa. These criteria reinforce the temporary
nature of the Short-Term stream, and provide mechanisms to refuse a visa
where a migrant is seeking to use temporary visas to establish longer term
residence in Australia;
restricting the ability to access permanent residence through the Temporary
Transition stream to the Medium-Term stream of the TSS visa only;
a national training fund levy which would improve training and employment
outcomes for Australians, and reduce longer term reliance on overseas
workers;
a non-discriminatory workforce test to ensure employers are not actively
discriminating against Australian workers; and
mandatory LMT in a prescribed manner, with exemptions to accommodate
international trade obligations.
49
65. The LMT measure will impact employers who have not previously needed to meet
this criteria. In particular, this will affect employers of professional occupations.
There is expected to be minimal impact employers who have previously sought to
find an available and appropriately skilled Australian prior to hiring an overseas
worker. Employers whose default approach was to source overseas workers will
now have to first test the local labour market.
International obligations
66. Currently, the 457 visa is the primary visa that facilitates Australia's international
trade obligations on the movement of natural persons. The measures in option 1 are
consistent with Australia's international trade obligations, which include
commitments regarding visa duration, and not imposing LMT and occupations.
Settlement Outcomes
67. As the Department's submission to the Joint Standing Committee on Migration's
inquiry into migrant settlement outcomes notes, "poor settlement outcomes can
have a detrimental effect on individual migrants' lives as well as on the economy
and society as a whole. Migrants must be equipped with the tools that assist with
positive settlement outcomes, an ability and willingness to integrate, and an
understanding of Australia."26 Characteristics of positive settlement outcomes
include social and economic participation, and economic and physical well-being.27
Settlement outcomes can be improved by measures in option 1 such as:
extending the period from two to three years that employer-sponsored migrants
must remain in their nominated position before being eligible for permanent
residence, because they have had additional time to settle in Australia; and
increasing, and removing exemptions to, the English language requirements.28
Increased training opportunities for Australians
68. As the 2016 Productivity Commission Report noted, "ready access to temporary
skilled immigration dampens incentives for employers to invest in skills and
training". This highlights the importance of a strengthened mechanism to improve
Australian training outcomes. An overarching requirement for employers
nominating an overseas skilled worker to pay a levy to a government managed
26
Further information on the inquiry can be found at:
http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Migration/settlementoutcomes
27
As noted in Appendix 20 to the Department of Immigration and Multicultural and Indigenous Affairs
submission to the Joint Standing Committee on Migration report, To make a contribution: Review of skilled
labour migration programs 2004.
28
As noted in the 2016 Productivity Commission Report, an overseas worker's English language ability is
an important factor in integration and settlement outcomes.
50
training fund would improve training and employment outcomes for Australians
and reduce longer-term reliance on overseas workers. This would also address the
integrity concerns with the current training benchmark requirements, which were
raised by the 457 Integrity Review.
69. The proposed new training fund contribution model aims to make compliance and
monitoring simpler by removing the need to maintain complex records to
demonstrate expenditure to meet the current training benchmark requirements, and
replacing it with a levy paid to the Skilling Australians Fund (SAF).
70. It is expected that for most employers the cost of the SAF levy will be less than the
costs under the training benchmarks, and Australian citizens and permanent
residents will have improved training opportunities, with more transparent
outcomes.
Addressing integrity risks
71. The Department has identified several legislative inconsistencies and gaps that
present integrity risks, which make it easier for employers to misuse the
programme. These risks would be addressed by the following measures:
tightening the current training benchmarks and then replacing them with a
national training fund levy;
removing salary-based exemptions to English language (including the English
Language Salary Exemption Threshold (ELSET)) and skills assessments
requirements to address misuse, improve social cohesion, and decrease the risk
of vulnerability in the workplace. This would have regulatory costs to
individuals who otherwise would not have been required to provide evidence
of English language competence or skills assessments and do not possess that
evidence;
requiring nominators to provide evidence of 'genuine need' for the person to
work in the nominated position. This is to prevent positions from being
fraudulently created for the purpose of facilitating the grant of a permanent
visa;
providing the ability to refund application fees where an application must be
refused or withdrawn at no fault of the applicant;
publishing details of sponsor sanctions. This would help to deter businesses
from breaching their sponsor obligations by misusing the employer sponsored
skilled visa programme, and address public about the integrity of this
programme;
51
enabling the Department to collect and use TFNs to strengthen compliance
monitoring and targeting;
expanding the skills assessment to cover cohorts of concern, for example,
where particular combinations of occupation and nationality have been
identified as an integrity risk; and
requiring nominators to provide evidence of 'genuine need' for the person to
work in the nominated position.
Regional Australia
72. Option 1 is likely to have a positive overall impact on regional Australia. It would
recognise that employers in regional areas can find it harder to attract and retain
skilled employees in comparison to metropolitan employers, and seek to address
this through a number of mechanisms:
regional employers would have access to a broader range of eligible
occupations than would be available to metropolitan employers. This broader
occupation list available under the RSMS would be extended to also apply to
the two streams of the TSS visa;
the maximum age at time of application for a permanent employer sponsored
visa would be reduced from 50 to 45 years of age. However, there are existing
age exemptions based on occupation, region (for medical practitioners),
employer, salary, and for New Zealand citizens. If needed, these exemptions
could be expanded in future to support regional Australia; and
a requirement for temporary visa holders who accessed a regional occupation
concession to have lived in a regional area for three years to be eligible for a
permanent employer sponsored visa would ensure that migrants have a strong
incentive to live and settle in regional Australia.
Addressing public concerns
73. The new framework addresses public concerns regarding negative impacts of the
existing 457 visa programme on the Australian labour market. Implementing
reforms from July 2017 to tighten the 457 visa and permanent skilled employer
sponsored visa settings would address the concerns while the new framework is
being built, and more closely align the current legislative framework with the future
state of the employer sponsored skilled visa programme.
52
Regulatory costs
74. The Office of Best Practice Regulation (the OBPR) has agreed to the regulatory
cost savings of $1.193 million on average per annum for option 1. Not all measures
in option 1 are expected to have a regulatory impact on businesses or individuals.
The ones that do have been outlined below. Since the proposal is deregulatory, no
regulatory offsets are identified.
Table 1: Regulatory burden estimate (RBE) table
Average annual regulatory costs (from business as usual)
Change in costs ($ million) Business Individuals Total
change in
costs
Extended LMT - $1.839 - $1.839
Enhanced character assessment - $3.819 - $3.819
Removal of ELSET - $1.596 - $1.596
Educate sponsors on new visa framework - $0.445 - $0.445
Expanded skills assessment - $0.116 - $0.116
SAF levy - $0.351 - $0.351
Removal of training benchmarks $9.359 $9.359
Total, by sector $6.724 - $ 5.531 $ 1.193
Option 2
Overview of Option 2
75. Option 2 would involve retaining the 457 visa, and only implementing integrity
reforms to the 457 visa. The key differences between Option 2 and Option 1 are:
the 457 visa would be retained; and
the Department would not reform the permanent employer sponsored skilled
visas, but would instead consider changes as part of future visa reform.
53
76. The Department would introduce integrity measures to the 457 visa, including:
condensing the occupation list and including additional occupation caveats;
removing the ELSET;
expanded skills assessments;
enhanced character checking;
publishing details of sponsors who have been sanctioned; and
allowing the Department to collect and use TFNs of temporary and permanent
skilled visa holders.
Likely outcomes of Option 2
77. Option 2 would go some way to improve quality and integrity outcomes for the 457
visa. However, it would not fix all the problems identified in the temporary
employer sponsored skilled visa programme and would not address any of the
issues with the permanent employer sponsored skilled visa programme until
broader visa reforms were introduced. Waiting for broader visa reform means that
these programmes will continue to face integrity issues and will in some cases be
inconsistent with the temporary 457 visa programme.
78. Option 2 would not address some current issues inherent in the 457 visa framework.
This includes not clearly distinguishing between short-term and medium-term skill
needs. Occupation lists and visa validity policy settings which differentiate
between short and medium-term skills needs would go some way to addressing this
issue. However there would be no mechanism to prevent longer term residence for
skills that were only in temporary need and for preventing visa holders and
sponsors from seeking to use the temporary programme as a vehicle for permanent
migration.
79. Option 2 would also run the risk of creating an imbalance between the temporary
and permanent employer sponsored skilled visa settings, with permanent settings
being lower in some cases, and create uncertainty as to potential future further
changes to permanent residence.
80. Like option 1, it is expected that the measures in option 2 will have a limited impact
on the overall economy and particular industries, which would vary by industry and
occupation. Also, the measures in option 2 are not expected to substantially affect
Australia's ability to attract and retain talent. Unlike option 1, the measures in
option 2 won't affect the ability for employers to retain a temporary skilled migrant,
as there is no shortened visa stream with restrictions on onshore renewal.
54
81. Industry stakeholders and migration programme users are expected to be less critical
of the changes in Option 2 than Option 1. However, the Department expects there
would still be criticism of tightening access to the Australian labour market for
overseas workers.
Addressing integrity risks
82. There would be no measures implemented to address the integrity risks in the
permanent employer sponsored skilled visa programmes. This would result in
continuing misuse by some employers. However, some but not all of the integrity
risks for the 457 visa programme would be addressed through the following
measures:
publicly disclosing the details of sponsors who are sanctioned for breaching the
sponsor obligations framework;
enabling the Department to collect and use TFNs to strengthen compliance
targeting and outcomes;
updating the skilled occupation lists;
expanded skills assessments; and
removing the ELSET.
83. The current training benchmarks would continue to exist unchanged. Therefore, the
following problems would also continue:
a lack of transparency;
no demonstrable training outcomes; and
the benchmarks are overly complex and inequitable.
84. As mentioned in Option 1, removing the ELSET and introducing enhanced
character checking would increase regulatory costs to individuals.
Addressing public concerns
85. Not replacing the 457 visa would fail to address public concerns about the
employer sponsored skilled migration visa programme. This could impede effective
reform to the temporary skilled migration visa programmes and the Government's
ability to support the Australian economy by facilitating access to skilled labour.
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Supporting Australia's skill needs
86. One of the problems with the current settings of the 457 visa programme is that
migrant intake is not necessarily reflecting Australia's short, medium and long-term
needs. A significant factor is that the 457 programme has become a de-facto
pathway to permanent residency. This issue would continue with Option 2 and
would result in the skills needs of the Australian economy not being adequately
met, as visa settings other than the occupation lists would not differentiate between
short and medium-term skills shortages.
87. The occupation list would be condensed, more targeted, and would differentiate
between short and medium-term skills shortages. However, the current 457 visa
framework would not effectively implement these changes as it lacks the regulatory
mechanisms proposed under Option 1 for the Short-Term and Medium-Term
stream of the TSS.
Improving the quality of migrants
88. The tighter settings would slightly increase the quality of overseas migrants using
the 457 visa programme. Key aspects include:
more targeted occupation lists based on labour market analysis and stakeholder
consultation that differentiate between short-term and long-term skill needs;
and
mandatory penal clearance certificates.
89. Option 2 would not ensure that policy settings are set at requisite levels to support
settlement outcomes support. It would not include measures to support skilled
overseas workers to have the necessary attributes to successfully contribute to
Australia's social and economic prosperity on a permanent basis.
Incentivising employers to give priority to Australian workers
90. Whilst the 457 visa programme currently has some incentives to prioritise
Australian workers, Option 2 would not provide further incentives. Therefore,
situations would continue where employers do not use the 457 visa programme to
meet genuine temporary skill needs, and instead hire skilled overseas workers
rather than training and or employing appropriately skilled Australians.
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Option 3
Overview of Option 3
91. Option 3 would involve retaining the employer sponsored skilled visa programmes
with no changes (status quo).
Likely outcomes of Option 3
92. Option 3 would not address the current problems with the temporary and permanent
employer sponsored skilled visas. In particular, it would not address the issues
within the current framework settings which have resulted in:
some businesses using the programmes where Australian workers are
available;
some businesses and visa applicants not meeting the intended requirements of
the programmes;
some individuals and businesses using the temporary visa programme
primarily to seek longer term or permanent residence without a further control
to determine they continue to meet Australia's social, economic, and skill
needs; and
skills supplied by the visa programme not fully aligning with Australia's short
or long term needs.
Consultation
93. The Department provided an interim Regulatory Impact Statement (RIS) to the
OBPR at an earlier decision point. The OBPR agreed to the provision of an interim
RIS on the basis that a final RIS would be prepared to inform the final decision
point.
94. The Department has drawn on consultation with and feedback received from a
broad range of stakeholders to identify issues addressed through the reform, and to
obtain stakeholder views on the proposed reforms. The Department identified the
following interested stakeholders:
individuals, legal and industry peak bodies, and businesses who use the
employer sponsored skilled visa programmes;
migration agents whose clients use the employer sponsored skilled visa
programmes;
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foreign government representatives; and
federal government departments and agencies, including:
o the Department of Foreign Affairs and Trade;
o the Attorney-General's Department;
o the Department of the Prime Minister and Cabinet;
o the Department of Finance;
o the Australian Tax Office;
o the Department of Health, Austrade;
o the Department of Education & Training;
o the Department of Employment;
o the Department of Human Services;
o the Department of Industry, Innovation and Science;
o the Department of Social Services; and
o the Treasury.
95. The Department's consultation process included individual meetings, roundtables,
interdepartmental committee (IDC) meetings, submissions, and feedback received
through other channels. A range of reforms developed as a result of these
consultations have already been implemented. The main consultative processes
included:
the 457 Integrity Review, which met with over 150 stakeholders and received
189 written submissions;
the 2016 Productivity Commission Report, which received over 100 public
submissions, met with a range of stakeholders in Canada, New Zealand, the
United States and Australia;
the 2016 Review of the Temporary Skilled Migration Income Threshold, which
involved consultation through 19 one-on-one meetings, a forum with 11
attendees and 40 written submissions;
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the 2016 Senate Inquiry, from the Senate Education and Employment
References Committee;
consultation with and input from the Ministerial Advisory Council on Skilled
Migration;
meetings of the Skilled Migration Officials Group;
IDC meetings between the Department and other federal government agencies
and departments;
eight roundtables in Melbourne, Sydney and Canberra; and
meetings, and associated correspondence, with individual stakeholders.
Stakeholder feedback
96. The feedback from the consultations can be summarised as follows:
there is broad support for the intent of the reforms and the use of skilled
overseas workers where skilled Australians are not available, so long as those
employing them offer employment and training opportunities for Australians;
there are some concerns about the impact of the reforms in limiting access to
skilled migrants (expanded on below); and
there is some support to further tighten policy settings than is proposed.
Stakeholder feedback
97. Stakeholder consultation shows that the Government needs to consider a wide
range of varying, and often opposing views. The Department continues to
consider feedback raised by stakeholders in the development of the TSS visa and
future reviews of the occupation list.
98. During the consultation, the Department has considered and subsequently
addressed many concerns raised by stakeholders. Some of these have been
outlined previously in this RIS and others are outlined in this section.
Initial feedback
99. Initial media after the Government's reform announcement made 18 April 2017
(which reflect the option 1 measures) highlighted both support for and concerns of
some stakeholders. Some stakeholders, such as the Australian Industry Group,
agreed that the programme needed significant reform, and this could be achieved
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by replacing it with a new visa that more clearly defined its purpose - to address
skill shortages that exist in the Australian economy29. The Australian Chamber of
Commerce and Industry supported the need for a reset in the way in which the
Government handled temporary skilled visas30. Other feedback was mixed where
stakeholders expressed support for certain aspects of reform, and concerns
regarding other measures.
100. Concerns raised centred on the occupation changes which had immediate impact.
Through the consultation process, the Department considered a number of
concerns raised by stakeholders and made some adjustments to address these
concerns, such as:
expanding the number of eligible occupations, particularly on the MLTSSL, on
1 July 2017 where there was evidence to support an ongoing need for particular
occupations. This took into account feedback from employers within the horse
racing sector, science and research sector, IT tech and retail sector, tertiary
sector and the aviation industry;
clarifying that the work experience requirement would be assessed in a way
that reflects the nature of the particular occupation, including experience in
related occupations where relevant. This feedback addresses concerns raised by
the tertiary education industry, the medical sector, arts and performance sector
and the science and research sector; and
providing for a high salary exemption to the English language requirement for
intra-company transferees. This addressed concerns raised by some of
Australia's trading partners about the impact of removing the ELSET.
New policy settings for the TSS visa
101. Stakeholders raised concerns regarding the new policy settings for the TSS visa,
including:
the reduced visa lengths and access to permanent residence, and whether this
would impact on Australia's ability to attract talent;
the reduction in occupations available, and whether this would impact
application numbers for permanent skilled employer sponsored visas;
29
Sydney Morning Herald, Business welcomes 457 visa changes, warns on red tape, 18 April 2017
30
Australian Chamber of Commerce and Industry, Media Release: migration changes will help make
system sustainable, 18 April 2017
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the two years' work experience requirement, which would negatively impact
the tertiary industry, the medical sector, arts and performance sector and the
science and research sector;
increased English language requirements, ELSET removal and introduction of
mandatory police checks, which could negatively impact an employer's ability
to access and recruit overseas workers;
replacing the training benchmarks with a government managed training fund
levy would add to existing training costs for some businesses, and may not
address specific skills gaps in those businesses; and
the reforms could increase red tape and negatively impact businesses.
Australian labour market
102. Some members of the public and unions raised concerns about the negative impact
of the current temporary employer sponsored skilled visa programme on the wages,
conditions and job opportunities for Australian workers will continue under the new
TSS visa.
Transitional arrangements
103. Concerns were raised about how the reforms would impact existing and future visa
holders and applicants, particularly regarding:
how existing 457 visa holders would be affected where their occupation has
been removed from the relevant skilled occupation list; and
how exemptions, such as to the age and English language requirements, would
apply.
Integrity of the employer sponsored skilled visa programmes
104. Stakeholders raised concerns about whether the integrity measures would go far
enough to address the exploitation of overseas workers.
Consultation
105. Stakeholders were critical about the lack of transparency and engagement about the
reforms prior to the Government's announcement. Notwithstanding this criticism,
stakeholders appreciated the early engagement by the Department on the specific
policy settings, following the announcement.
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Regional Australia
106. Stakeholders sought clarification on how the reforms would provide regional
concessions. Stakeholders suggested that the Government should consult further
with regional Australia and the agricultural sectors on the reforms.
Visa processing
107. Stakeholders sought clarification on whether the reforms would lead to processing
efficiencies or impact visa processing timeframes.
Best option
108. The recommended option is to abolish and replace the 457 visa, and implement
complementary reforms to the temporary and permanent employer sponsored
skilled visas (option 1). This option has a deregulatory impact.
109. Option 1 is the preferred option as it:
provides a comprehensive and complementary package of reforms to the
temporary and permanent employer sponsored skilled visa framework;
incentivises employers to only seek to fill vacancies with overseas workers
where appropriately skilled Australian workers are not available;
has enhanced integrity measures to prevent the misuse of the employer
sponsored skilled programmes;
meets Australia's skill needs through policy settings which distinguish between
short and medium to long term needs;
ensures that skilled overseas workers have the necessary attributes to
successfully contribute to Australia's social and economic prosperity, either
temporarily or permanently; and
provides increased training outcomes for Australians.
110. Options 2 and 3 would not fully differentiate between the short, medium and
longer-term skilled labour needs of the Australian economy, and would run the risk
creating an imbalance in temporary and permanent employer sponsored skilled visa
settings.
111. Options 2 and 3 would not enable the employer sponsored skilled visa programmes
to better meet Australia's labour market and economic needs.
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Implementation and evaluation
112. Option 1 would have IT systems, processing, resourcing and legislative
implications. The Department undertakes changes to legislation and systems using
its Change Management Framework. This includes a detailed implementation plan
with risk management strategies.
113. The Department proposes a phased approach for implementing Option 1, with
integrity and quality measures introduced between April and December 2017, and
the new TSS visa and SAF levy introduced in March 2018. The Department would
leverage existing systems, processes and monitoring governance arrangements.
114. Amendments to the Migration Act 1958, Migration Regulations 1994, legislative
instruments, and policy would be required to change settings for the temporary and
permanent employer sponsored skilled visas. Publishing sponsor sanctions and
sharing TFNs may also require changes to the Tax Administration Act 1953 and the
Income Tax Assessment Act 1936. The proposal to establish a government managed
training fund would require taxing Bills.
115. It is possible that legislation to enable the Department will not be passed by
Parliament. This would mean:
in the case of sharing TFNs, the Department would not benefit from an
enhanced compliance targeting or enhanced long term research on skilled
migration employment outcomes. The overall rating for these risks has been
assessed as medium. If this legislation were not to pass, the Department would
continue compliance targeting and research using other client identifiers,
however this would be less effective than TFN sharing;
in the case of publishing sponsor sanctions, the Department would not publish
sponsor sanctions. This has been assessed as a medium risk. If this legislation
were not to pass, the Department would consider other public facing
communication strategies to further deter sponsors from breaching their
obligations, however, these would be less effective; and
in the case of the government managed training fund, the Department would
have to consider other options to improve training outcomes for Australians.
This has been assessed as a high risk.
116. To prepare stakeholders to transition to these arrangements, the Department has
developed a communications plan and is continuing to engage closely with
stakeholders about the reforms. This engagement plan includes:
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maintaining up to date information about the reforms on the department's
website, including factsheets with timelines and frequently asked questions and
answers;
maintaining a register of issues to inform future policy directions;
ongoing feedback through broader visa reform stakeholder consultation; and
engagement with stakeholders through existing fora:
o Ministerial Advisory Council on Skilled Migration;
o Senior Migration Officials Group;
o annual migration planning;
o net overseas migration forecasting;
o migration agents; and
o public information.
117. After the measures have been implemented, the Department will evaluate them
through existing processes, as well as specific reviews as required. The Department
will take into account both internal and external stakeholder feedback to determine
if the Government's objectives have been met. As previously stated, the
Government aims to achieve the following objectives:
ensure that that employers only seek to fill vacancies with overseas workers
where appropriately skilled Australian workers are not available;
enhance integrity measures to prevent the misuse of the employer sponsored
skilled programmes;
ensure that skilled overseas workers have the necessary attributes to
successfully contribute to Australia's social and economic prosperity, either
temporarily or permanently; and
meet Australia's skill needs through policy settings which distinguish between
short and medium to long term needs.