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Workforce challenges facing the Australian tourism sector

CHAIR —I welcome representatives of the Department of Immigration and Citizenship. Although the committee does not require you to give evidence under oath, I should advise you that these hearings are formal proceedings of the parliament and consequently warrant the same respect as proceedings of the House itself. It is customary to remind witnesses that giving false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. Are there any opening remarks that you would care to make?

Mr Job —Yes, Chair. You have our submission. The only thing I would highlight from the submission is the fact that we have got highlighted in there a number of visa options that we have outlined in general terms that provide opportunities for people to come to Australia and to work, to come to Australia and undertake other activities, or to indeed come to Australia and remain permanently. We have identified these as key visas amongst some of the 130 in all that we have that would be most relevant to the tourism industry and the possible contributions that it can make in terms of the skill and labour shortages in that regard. We learn from the secretary that you were particularly keen on talking about working holiday maker arrangements and also the 457 visas, so we should be able to handle most of your concerns or queries in those areas. We would be happy to take any questions that you have.

Mr HAYES —One of the issues that have been raised with us by operators, particularly out of Queensland, is that there is a further need to allow student participation in the country, particularly backpackers coming in on working holidays. I know it has been extended, but from the perspective of administering the schemes, is there a real concern for the department or is this just what we get from an operator who wants a form of cheap labour?

Mr Job —The concern obviously from the employment perspective is always going to be about rigor and integrity in the visas and exploitation being the main issue of concern at all times. In the Working Holiday Maker Scheme they do have the flexibility at least to be able to move on to other employers if there are concerns in that relationship with their employer. We do see the benefits of the working holiday maker scheme as being significantly positive to the Australian economy, both in terms of the economic contribution that the working holiday makers make in net terms but also in terms of the contributions in some areas of employment where they are able to fill gaps as they go through. Our efforts continue to invite other nations to join this scheme. We are up to 19 now that have working holiday arrangements with us and we have another system called work and holiday, where we have already got arrangements with Iran, Thailand and Chile and we are looking to expand that into Bangladesh and Turkey. In fact, Turkey should be very soon. So we are looking to expand the base in the first instance but also hopefully to encourage larger numbers within those areas because of the positive contributions that they make to the industry.

CHAIR —It has been suggested to us that, when looking at the issues, that there should be some further flexibility in those arrangements. For instance, it was put to us by the people in Queensland that they just really wanted a constant supply of backpackers, whereas the Australian alpine ski industry wanted to be able to access people such as ski instructors et cetera. What they are saying is that the working holiday visa restricts them for about one week on either side of when they are going to be used in the industry for actually having a working holiday, whereas those of the industry who just want a supply of backpackers for housekeeping purposes are not terribly fazed by that. What the ski industry put to us last week was a review of whether to allow some flexibility to attract those sorts of professional people into an industry which is as seasonally based as the Australian ski industry is.

Mr Job —I will let my colleague Jacqueline Daly cover some of those on the skilled industry, because there are a lot of opportunities already in place and, indeed, a lot of the businesses in the alpine area are already using these opportunities to bring in the skilled workers. I got the impression from the submission that they made that they might have been referring to the three-month problem that occurred under the working holiday scheme. Primarily, in response to the hospitality industry, particularly the accommodation industry, you will have noticed that we have expanded that from three months to six months, effective from last July. That was in direct response to the tourism industry and, in particular, the accommodation sector. Quite often people are only up to speed after three months employment in that area—and then they lose them.

The two features that we have noted are that the six months will provide a greater return for that three months of training, and also that there seemed to be a tendency to move within like industries. So they may have been trained in the hospitality, the restaurant or the accommodation industries in Queensland, and when they move into another state they may well follow in the same industry area. So the training is not totally lost and may be being recycled through the industry in that way. We hope and we expect that the six months from 1 July will help the alpine industry, particularly in the low-skilled types of areas—and it does attract a lot of people in that regard.

CHAIR —Are you saying that the six-month requirement starts on 1 July?

Mr Job —It started last July, in 2006. It has already started. I think that will, to some extent, address the concerns of a significant element in both the alpine area and the accommodation area generally.

CHAIR —I suspect you are right, given some of the things that some people in the restaurant industry, for instance, have said. They have literally run on saying, ‘I have got this fellow for three months and you can have him for three months.’ There has been a lot of this sort of flicking between. I do not think there is anything offensive about that in the sense that they have been trying to get a quality, trained person shared around, if you like, while they are holidaying here. You have now responded to this and added a sensible period of, say, six months.

Mr Job —Yes.

CHAIR —That is being employed by one employer; that is the point, it is not?

Mr Job —Yes, that is so. But what we are keen to remember is that the visa is a tourist visa. The idea is that we want people to move around Australia. They might be working for one employer in some instances but, at least if they are in different locations, that is regarded as meeting our needs—that they have gone from Victoria and they have worked for a similar or a related company in another state. To us, that is fine.

CHAIR —I know you are going to say, ‘Yes,’ in answer to this question. Those requirements are rigorously enforced, I am sure. You are going to say, ‘Yes,’ but, in a practical sense, you are just relying on people to do the right thing under those visa requirements. Do you find many people breaching those requirements and move them along to another area or boot them out?

Mr Job —No. If they do breach, the difficulty is that they do come within the scope of having their visas cancelled. In many areas of that in terms of our priorities on compliance and field actions, the risk in this group is not particularly high. There is not a concerted effort in chasing those sorts of—

CHAIR —Is there an age limit on people able to access working holiday maker visas?

Mr Job —Yes, 18 to 30. So it is the young people. As might have been alluded to earlier, the trouble is that they get only one visa in this area and they cannot come back in later years. That has often been seen as a problem. People would like a chance to get another working holiday visa in a couple of years time, and they wonder why we cannot give more because it is an easy source to get overseas workers in quickly.

CHAIR —What happens if somebody comes on a working holiday maker visa, works for an employer for six months and then leaves? Do you see that simply as someone who has come and worked for six months and left—and that is a really rotten holiday; it is the sort of silly holiday I would have? Is this a problem in itself?

Mr Job —Research that was done by one of the groups in Melbourne—I do not know if you have seen it at all—the Melbourne Institute of Applied Economic and Social Research, talked about people having, on average, at least two jobs whilst they are in Australia and said that just over 50 per cent tended to work while they are here. We certainly have had indications from some quarters in the industry that more and more people under the working holiday scheme are actually coming out here to holiday rather than to work and that industry are losing some of the sources of labour that they might have otherwise got in past years.

CHAIR —That is an interesting piece of evidence.

Ms HALL —A number of submissions in a variety of places have said that one of the avenues for increasing the workforce would be to use older workers, yet I notice that you still have age limits on many of your visas. Is that something that you have thought of addressing, particularly in relation to this area and also in other areas?

Mr Job —It is an interesting question. Certainly our working holiday scheme program is deliberately and consciously designed for youth, as part of our international, cultural and social exchange and relationship development. In terms of our other migration programs, the age limitation generally does not apply in some of the temporary entry skilled areas. Ms Daly can talk to you about the 457 visa and the fact that there is no age limit there.

CHAIR —We will get to that in a second.

Mr Job —A lot of permanent entry is done on the basis of economic modelling and advice to government, and government has decided that that is the age that provides the major benefits to the Australian community overall through the immigration visa programs.

Ms HALL —It does seem to be a bit of an anomaly.

Mr Job —We have received considerable evidence about the 457 visa. The flexibility has been appreciated by a number of witnesses, but they believe it should be even more flexible, that it should be for a longer period of time, and industry sees that that would benefit them a lot more. Would you like to comment on that?

Ms Daly —The 457 visa actually can be granted for periods of up to four years and there is no impediment to renewals. So a person can apply onshore for a second and a third 457 visa should they then require them. I think the government’s intention is that if people intended to have multiple visas they should move into a permanent stream well before that happens.

Mr BAKER —There are a number of regional migration initiatives. Has the tourism industry taken advantage of these or is it making any use of them?

Mr Job —There are two sides to the regional dimensions to our programs under the temporary entry. The working holiday maker scheme now has a program that says that, as of 1 November 2005, if anybody works in regional areas of Australia and in seasonal work or in primary industry work, they will be able to get a second working holiday visa. That is one of the regional initiatives.

The other regional initiatives relate to migration, in terms of our general skilled concessions, and finally to 457 and employer-sponsored categories—and Jacqueline can give you more information on those dimensions. We know from the high focus of a lot of the working holiday visa holders in the tourism and hospitality industries that, having got the second visa, the pattern continues: they often go on to work in the tourism and hospitality industries on their second year visa. Since that was brought in on 1 November 2005, just over 6,000 people have already accessed that option of getting a second visa and staying in Australia for two years.

CHAIR —Is it still the case that half the people who come to Australia go to Sydney?

Mr Job —There is no doubt that it is the biggest attraction. In fact, I think the figure is much more than half the people.

CHAIR —The big drawcards are still family, jobs and so forth. If they have a family member in Sydney, they are going to want to visit Sydney. For a lot of people overseas, Sydney is Australia.

Mr Job —Yes, Sydney is Australia and it is the focus. It has the beach scene and it is a popular idea for Europeans and Japanese to go there. I suspect it is the first place they want to go.

CHAIR —For once I can profess a little inside knowledge about your department. There was once a five-step sliding assessment scale from the capital cities to regional Australia. Central Australia was the fifth most likely place that people would go to. It might be helpful to the committee if we started to talk about regions. For Mr Baker especially it would be helpful to know where Tasmania fits into it, and we could see where North Queensland fits into it. Could we break it down into regional migration? There seems to be an ever-receding set of concentric circles away from Sydney. It is important, when we start to talk about the various migration mechanisms that exist, that there is an appreciation that there is a bonus paid to people the further away they go from Sydney and Melbourne. I think that is the case, isn’t it?

Mr Job —We can look at the stats and see what we can get.

CHAIR —But people go to Sydney or Melbourne, then they go to Brisbane or Perth, then they go to country places an elsewhere. The last place they go to is Alice Springs. I think there is some evidence of that within the department of immigration. It is not my view. I am just saying that I think there is some evidence that shows what the likely patterns are.

Mr Job —I will see if we can get something on that.

Mr BAKER —What is the requirement in terms of the length of time they need to spend in defined regional areas before they can qualify?

Mr Job —For the second visa?

Mr BAKER —The first and second visa.

Mr Job —On the working holiday visa, there is no time requirement to qualify for the first visa. But to get a second visa they have to work and live in regional Australia for a minimum of three months and the work they undertake has to be seasonal work in primary industry.

Mr BAKER —Three months of the two years?

Mr Job —Yes.

Ms Daly —For the 457 program there is no distinction; you can basically work and move between sponsors as you like.

Mr BAKER —Do you have any views on extending it to a second or third visa and increasing the time they need to spend within those industries? You could create a schedule.

CHAIR —Mr Baker is right. Evidence has been given to this committee that working holiday visas should be extended to two years. Is any work being done on those sorts of matters?

Mr Job —No. We have not been keen to do it across the board, but we have tried to use that initiative as best we can to encourage people to go to regional Australia. The idea was that we could say: ‘Here’s your one-year visa. Go to regional Australia and we will give you another year.’ Rather than do that across the board, it has been used as an incentive to encourage people.

Mr BAKER —But you could take that to the next step, where the younger people from overseas would look at Australia as a destination, not as a stopgap as they move to other areas around the world. They could move to Australia for two years or four years. I see some benefits in that.

Mr Job —That is an important dimension for us, and we have very deliberately and consciously created pathways through our visa scheme. If we can encourage someone to come out on a working holiday visa to work with some businesses and that works well, the options then are for them to move onto the 457 visa or go on to permanent residency. That has been deliberately encouraged through that process, because employers will have a greater appreciation of the individual and visa versa, having worked with them for a period of time. We see that as a positive.

Mr BAKER —But if you extended that, that would give a broader base when they do apply for permanent residency. If they were here longer than 12 months, 14 months or two years—if they were here for three or four years before they applied—that would give the department a greater base on which to make their decision on.

Mr Job —The focus in terms of that end game of permanent residency is still on skilled workers. That is not changing; that is our ultimate arrangement. There are concessions for regional Australia under the programs that Jacqueline manages—the regional sponsored migration scheme, for example. Many of those coming through the working holiday scheme often start off in lower qualified skilled areas, find opportunities in the areas where their training or background might have been and move into that field. From that, they can move on to permanent residency or another temporary resident visa. But it then stops for the unskilled worker.

CHAIR —Once they become a permanent resident, can’t any time of temporary residency be tacked on from the point of view of applying later on for citizenship? There was some move to make that change at one stage.

Mr Job —There are certain discretions in certain circumstances. This is not my area—you would probably be better able to respond to that than me.

CHAIR —Possibly. I am a bit scratchy.

Mr Job —Generally, it is from permanent residence.

CHAIR —You have to be a permanent resident to apply for citizenship, but times of temporary residency can count towards it in certain circumstances.

Mr Job —In certain compelling circumstances.

CHAIR —I have a couple of quick questions. You may well have covered this with the change to the working holiday visa, but I will give you the scenario that was put to me. The Kaohsiung Hospitality College in Taiwan put to me 12 months ago that their chefs and their wait staff—all of the people trained at the hospitality college—go off to Europe for six months work experience. At the time, it would have been true to say that they could not have come to Australia for work experience as such because there was no such thing as a work experience visa. But they could come here under a working holiday visa for six months to go and work in a hotel and gather some appreciation of Australia, couldn’t they, if they wanted to?

Mr Job —If they have training in a particular field and they want to come and do further on the job training in Australia, there are also other visa options, such as the occupational trainee visa. This is done in a number of areas.

CHAIR —What is that visa number? What is that called?

Mr Job —The occupational trainee visa. We know that some of the areas that have already appeared before you use that visa a fair bit. They bring out people with qualifications in that field—and maybe some experience in that field in their home countries—with a view to them getting Australian on the job training in those fields. This is done in the hospitality or accommodation fields.

CHAIR —This is in itself part of the problem, because in this sector there is not necessarily quick recognition of people’s experience as being a qualification. When you say that they have a qualification from their home country, you mean that they have book learnt something and that they have a certificate to say that. In Australia, we do not quickly recognise people’s practical experience. Unless they have gone and done a TAFE course, we do not think that they actually have a qualification. Can you get around that? Can you work with industry? I am thinking of the alpine skiing people. They were saying that they have people who work for them for 13 weeks of the year who then flip off to Vail and work for them for five months. It must be a horrible lifestyle, but that is what they do.

Mr BRENDAN O’CONNOR —They would be always cold. Those chalets would get boring after a while.

CHAIR —The chalets would get boring, yes. How would immigration officials greet someone who for five years has been working hard in the Vail front office and wants to come and work at Thredbo who says, ‘I’ve got a qualification, as I’ve been at Vail for five years’? Would that satisfy you?

Ms Daly —A number of countries do not have trades equivalent certificates or the like. There is scope to look at experience as a substitute for those certificate III requirements in the skilled requirements.

CHAIR —How long does that take?

Ms Daly —It depends a little on the risk nature and the profile of the country. As is often the case from China, we see people who come forward with certificate IIIs that they have probably acquired in two or three weeks rather than a trades equivalent type certificate or the work skills. For example, they may make claim to three years experience in certain occupations but they are not of an international or Australian standard level of experience. It is very hard to tell you how long it would take.

CHAIR —Would you look more empathetically at somebody, say, on the working holiday maker list or the electronic visa list? Someone from a country with an electronic visa is less of a risk.

Ms Daly —I think the high-risk profiles are well known.

CHAIR —The recognition of front-of-house staff is an issue that has been raised. You don’t set the list; it is a DEWR list—is that right? The whole modal is listed off DEWR’s advice, isn’t it?

Ms Daly —I would add that labour agreements are also available and we do have a number of labour agreements with the alpine industries.

CHAIR —That is just one recent example.

Ms Daly —I have had a quick flick through—and I cannot think of the numbers—but we are talking about hundreds of visa nominations that can be made under those labour agreements. There is not an insignificant supply of skilled workers for that industry. Sorry, I have lost track of the question.

CHAIR —That is okay. I keep interrupting you. I was asking about front-of-house staff. It has been put to me in a private conversation in my previous role—and it may have been put to the committee—that maitre d’s in restaurants are not regarded as a skilled category, for instance. You are nodding your head because you have obviously had the same conversation.

Mr BRENDAN O’CONNOR —You would not say that in Paris.

CHAIR —I think the member for Gorton is right; they would not say it in Paris. How do we get maitre d’s, wait staff and wine waiters, people who actually make your experience at a restaurant or a hotel in the tourism industry, measure up to the expectations you have? How do we get those people recognised by the system? If we do not have enough here, we can bring people in or, indeed, we can bring people in to help train good people here.

Mr Job —In a lot of this of course we are guided by DEWR, as the department responsible for advice on those sorts of things. That is where we take our advice from.

CHAIR —I understand that. I just wanted you to say it. In regard to the 457 matter, we have been told that the approval process is too long. The 457 debate over the last couple of years has been pedestrian, at best, I think. People in industry now, obviously, are heavily engaging with the department of immigration, probably more than they have ever done before. Can you give us a feel about the sort of direct industry linkages Immigration is involved in to help you get a better understanding about how your processes can effectively work to not only get approvals for 457s faster but also make sure Australians in those same industries are not being left out of a job because someone from overseas displaces them? What sort of work are you doing to make sure that sort of middle ground is achieved?

Ms Daly —I think the timing for processing of the visa applications is one that has had a little media coverage of late—we have looked at it afresh. Our service standard for the 457 processing is 30 days to six weeks. That is the median processing time. If you could excuse me for a moment, I will find the precise data so that I do not mislead and end up needing to apologise.

CHAIR —Sure.

Ms Daly —For the low-risk groups, the processing time is between one month and six weeks—

Mr BRENDAN O’CONNOR —What is the low-risk group?

Mr Job —With all of our clients around the world we have gone through and done risk assessments based on historical performance on visitor visas.

Mr BRENDAN O’CONNOR —Low risk to the country?

Mr Job —The country itself is a low-risk country.

CHAIR —Why go back when they are required to go back? They meet the visa requirements.

Mr BRENDAN O’CONNOR —I understand, but you are defining the country from where they come, not any of the other categories.

Mr Job —Yes, and we have 33 countries for whom we give electronic travel authorities and they are effectively the low-risk countries.

CHAIR —Can you provide that list for us for the record; could you send it to us?

Mr Job —Yes.

Mr BRENDAN O’CONNOR —So there are obviously other categories—

Ms Daly —There are only two categories.

Mr BRENDAN O’CONNOR —There is no medium risk then?

Ms Daly —No medium risk. And they have a service standard of between six weeks and three months. I will have to check the way that one is worded. In any event, to give a comparison with last year, for the median of the totality, last year the processing time was 28 days and we have gone to 34 days, but you can see it is still within the published service standard. There is a growing attention to those higher risk applications. If we split some of the risk factors to give you a sense, in the ASCO 1 to 3—and they are the highest skilled occupations—the service standard for 2005-06 was 21 days and that has increased to 26 days. For the ASCO 4 to 9, which capture a lot more of the higher risk nationalities as well as the occupations that are associated, the processing times have increased from 29 days to 46 days. So it is a much larger increase in the processing time there.

CHAIR —The further along that list that you go, the higher the risk that you have identified, the more effort you put in, because you are conscious of the criticism that does come from 457 visa holders maybe displacing Australians in particular occupations?

Ms Daly —There is a higher level of referrals back to overseas posts, which can add time. If they need to go to outer regions for a particular company, they would schedule that in a group. There are other factors.

Mr BRENDAN O’CONNOR —The deliberation the department would engage in would include ensuring that the reason for the application is genuine—that is, firstly, there is a skills shortage in that area?

Ms Daly —The fact that the position is required is usually at the Australian end, so it would be the Australian employer who would come forward and say that they—

Mr BRENDAN O’CONNOR —Do you take that for granted or do you actually challenge that assertion?

Ms Daly —We do not labour market test on most occupations. If they are regional, we will ask—

Mr BRENDAN O’CONNOR —If you said you wanted a clerical officer in Geelong, you would think that was hardly a good argument to get a 457 visa?

Ms Daly —No, and usually in those instances there would be some involvement of what is called a regional certifying body in the area to attest that the position cannot be filled locally, if it hits the skill register that is appropriate for that area.

Mr BRENDAN O’CONNOR —But, generally, other than the absurd proposition I put then about looking for a clerical worker, if an employer were to assert that it required a particular highly skilled type of worker and believed it needed to have that worker come in from overseas and take up a 457 application visa, that would be accepted prima facie as evidence of the need?

Ms Daly —It is accepted on the balance of the program’s construction, if you like. The pricing signals that are in place are part of what are being used to make it more attractive for people to recruit Australia, but they would themselves choose only to go offshore to find these skills—

Mr BRENDAN O’CONNOR —So the assumption is: why would an employer even bother if he or she could find an employee locally?

Ms Daly —Find an Australian. With a minimum salary level of the $41,850 at the moment for the 38-hour period, it is not a cheap option to go overseas at those lower skill level occupations. There is also the factor of the employment rates. At the moment, they are at a level that makes it very hard.

Mr BRENDAN O’CONNOR —Of course. That is also evidence that would lead people to conclude that there would be a paucity of skills out there—those waiting to be employed. In terms of the high-skill cohort of countries, have you got a list of those countries?

Ms Daly —Where we recruit the higher skilled—

Mr BRENDAN O’CONNOR —I meant to say high risk.

Ms Daly —We have undertaken to provide that list.

Mr BRENDAN O’CONNOR —And how many countries are in the high risk group?

Ms Daly —I am not sure.

Mr Job —Other than the 33 that are in the low risk, all others are high risk.

Mr BRENDAN O’CONNOR —So there is no medium risk.

Mr Job —No.

Mr BRENDAN O’CONNOR —It is either low or high. You are saying there are 33 in the low risk, and every other country is a high-risk country.

Mr Job —Yes.


CHAIR —You are high risk until advised otherwise.

Mr BRENDAN O’CONNOR —Yes, pretty much, unless you get into the exclusive group of 33.

Mr BAKER —It is A minus B equals C.

Mr Job —The last part of your question that I was also interested in was the relationships with industry. You might be aware that there are Immigration industry outreach officers already in the community working closely with a full range of industries in a number of locations. That program is being extended for a further period. They have already done just on 18 months and they will be looking for another 18 months. We also have regional outreach officers who are working out of our various state and territory business centres, and they engage employers and industry groups throughout Australia as well.

We have also been running a series of expos around the world and I must say, from experience, I am a little surprised that there are not many in this industry that take up those opportunities. They are very much dominated by health industries, mining industries and the like which have taken up those opportunities to go to all of these international expos to recruit skilled workers for their industries.

CHAIR —That is a very good statement, very helpful to the committee. The question that begs to be asked is: would it be fair to say that you basically hear from people at the last minute? They cannot find a staff member, so they say: ‘We’ll import them from overseas. Come on, hurry up, approve it. Forty-six days or 33 days or whatever, it’s all too long.’ Is there much workforce planning across industry generally and the tourism sector in particular? In other words, are they using immigration to fill the gap, very much so, at the last minute?

Mr Job —It is a difficult question to answer with any attempt at precision because you see a lot of anecdotal situations, as you have seen before you, where people have to run the business as their priority and then, at the last minute, they are racing around trying to fix up a loose end of a staff vacancy or a person who has left them with no notice. Yes, they are going to be anxious and we can try to work with them as best we can, but it is not an immediate solution to their problem.

CHAIR —But what are your field officers and your industry placement officers saying? Are they saying to industry, are they saying in regional areas: ‘Look, you’ve got to plan what you’re workforce requirements are going to be. The unemployment market is very low, the people being trained—you’re either training them or you’re not. Immigration is going to be your answer for the people you’re going to need in the months ahead.’ Are you saying those sorts of messages to people, or are you still going to be in this dreadful position of dealing with little crises as they come up, anecdotally or otherwise?

Mr Job —Part of the whole promotional program has been about making people aware at a very early stage of the opportunities for immigration and to factor that into their strategic planning arrangements, rather than a last-minute contingency afterthought. That is happening more and more now, and we have been quite impressed with the extent that industry is doing a lot more forward planning and engaging us in those discussions about getting sponsorships, getting nominations and the like prepared.

CHAIR —But from what you said before, not enough in this particular tourism sector.

Mr Job —There does not appear, necessarily, to be the same extent in this industry as we are seeing in some of the others.

CHAIR —Unless there are any further questions, I thank you very much for your time today. I wish you well in your work on behalf of the people of Australia.

Resolved (on motion by Mr Baker):

That this committee authorises publication of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 12.34 pm