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Thursday, 27 November 2008
Page: 7513

Senator ELLISON (12:57 PM) —The incorporated speech read as follows—

The Migration Legislation Amendment (Worker Protection) Bill 2008 amends the Migration Act 1958 and seeks to enhance the framework of the sponsorship of noncitizens to enter and work in Australia with the objective of ensuring the working conditions of 457 visa holders meet Australian standards and the costs of sponsorship are more fully identified and met by the sponsor.

The Coalition is supportive of the overall objectives of the legislation, believing that a framework for sponsor obligations is necessary but understanding that we have grave reservations about lack of availability of the regulations attached to this Bill. I understand that draft regulations are to be made available in the first part of 2009, and of course these will define the operation of the framework.

The failure by the Government to produce these regulations treats with contempt the needs of sponsors to have a clear understanding of their obligations and will keep in the dark many Australian businesses that have an overwhelming need for temporary sponsored visa holders in their workforce.

Even with the economic downturn in States like Western Australia and Queensland we are still hearing of skills shortages and the need for 457 visa holders.

The sponsorship framework provided for in the Bill is maintained by four main measures which:

  • Outline the framework for a system of statutory regulations for sponsorship obligations in relation to 457 visas;
  • Widen the sanctions that can be applied if a breach of those regulations is made by the sponsor;
  • Detail a system of monitoring, compliance and information sharing powers; and
  • Set out the transitional arrangements between the current and new regime.

On the face of it none of these measures, which are general in nature, could be termed controversial. It is the absence of detail going to cost, penalties and obligations of sponsors that causes concern.


It is firstly worthwhile however to review the background of the 457 visa scheme.

In 1996 the Coalition introduced new visa categories to allow employers to sponsor skilled workers on a temporary basis, between three months and four years, to help ease chronic labour shortages.

The Temporary (long stay) Business Visa (subclass 457) is the most commonly used category. After a specified time, workers and their families can apply for permanent skilled migration.

Size and growth of the program

The annual intake for the 457 visa program has steadily increased from some 15,000 in 1997-08 to 22,370 in 2003-04 to 46,680 in 2006-07. In February 2008 there were 125,390 457 visa holders in Australia including 67,410 skilled workers and 57,980 family members.

There are currently nearly 19,000 employers using 457 visas. Nearly 30% of 457s are employed in NSW.

On average 457 visa holders stay two years and approximately 50% move to permanent residence via the Employer Nomination Scheme or the Regional Sponsored Migration Scheme. Apart from providing a temporary supply of skilled workers, the 457 Scheme has also proved to be a good source of permanent skilled migration.

The Bill

Under the proposed Bill visa holders can be sponsored by employers who must meet a series of “undertakings”. These “undertakings” are now to be specified in the new (as yet unseen) regulations.

According to the Rudd Government the regulations will be drawn up in the following months, followed by six months of consultation and education about the changes. All currently engaged sponsors will ultimately be transferred to the new regime.

The Bill’s Framework:


In addition to the current options of barring or suspending a sponsor for breaching an agreement, there will be new civil penalties of a maximum of $6,600 for an individual and up to $33,000 for an incorporated body. The Minister may also issue an infringement notice with a fine of up to one fifth of the maximum penalty. It is essential that, in relation to any sanctions, any element of retrospectivity is avoided. This is something on which we will place careful scrutiny.

Monitoring and Compliance

The power of Inspectors to monitor and investigate is modelled on the Workplace Relations Act; with for example, the same powers to request a document etc. Again these powers will have to be carefully scrutinised.

Information Sharing

The Minister will be able to reveal information about the sponsor to the visa holder and vice versa.

The Bill also contains an amendment to the Tax Administration Act so the Commissioner of Taxation can provide information to DIAC to find out if the company is “a good corporate citizen”. Understandably for the individual and the sponsor there will be sensitivities which must be safeguarded. How one defines a ‘good corporate citizen’ remain to be seen.

Transition Provisions

When the new regime comes into effect, all 457 visa sponsors will be moved to the new regime. The expected commencement date is mid 2010.


While the framework in the Bill is supported by the Coalition as a further evolution of the obligations of sponsorship which the Coalition introduced through the Migration Amendment (Sponsorship Obligations) Bill in June 2007, a serious problem lies in the delay of the production of the regulations by the Rudd Labor Government. As I have said, the Coalition will subject them to close scrutiny when they are finally tabled.

The April discussion paper this year of regulation options released by DIAC does however give us some idea of potential new payment obligations for sponsors of 457 visa workers and their families.

These new options include:

  • meeting all of the education costs of minors accompanying the worker;
  • covering all medical costs, either through insurance or direct payment, including covering medical costs where the insurance company refuses to pay;
  • paying any migration agent’s fees, or other costs of recruitment up to a maximum specified;
  • paying all travel costs to Australia (before only travel from Australia was required);
  • paying any licence and registration fees associated with the worker taking up employment in Australia.

The Rudd Labor Government has also proposed that sponsors not be allowed to use temporary overseas labour during periods of lawful industrial action or to influence enterprise bargaining negotiations. This could have very interesting interpretation challenges.

The framework refers to a new system of compliance and monitoring work. We need to be concerned that employers and sponsored visa applicants are not frustrated by greater red tape burdens.

There are also proposals that 400 series temporary work visas which have not required sponsors in the past, eg for those staying for less than three months, may in future require sponsors who will also need processing and monitoring. The Rudd Government will need to ensure that this does not put even greater pressure on the capacity for the Department to deliver efficient processing of applications for this group of visas and undermine the high regard in which the Australian migration system is held. It is important that the accessibility and flexibility of this programme is maintained whilst ensuring its integrity is maintained.

Financial Impact

The 2008/2009 budget allocated $19.6 million over four years including $0.4million in capital funding for 2008/2009, to develop the legislation, better define employers obligations, improve investigative powers, a more robust sanctions framework and a detailed information campaign. It is essential that the Department of Immigration and Citizenship be adequately resourced to effectively implement these measures.


It would be detrimental to Australian employers if the cost of bringing in skilled labour and the time the process it takes leaves Australia less competitive in the global market for the highly mobile skilled worker. Indeed, in it’s submission to the Standing Committee on Legal and Constitutional Affairs the Australian Chamber of Commerce and Industry submitted that the changes ‘seemed disproportionate to the actual scale of sponsorship problems’ and thought that the cost of measures might be prohibitive for many businesses and would discourage the use of the programme by Australian employers experiencing genuine skills shortages.

Indeed the DIAC’s annual report for 2006/07 stated that only 1.67% of sponsors were found to have breached their sponsorship obligations. A representative from Australian Mines and Metals Association informed the committee ‘we seem to be at odds as to where the justification for such a bill came from.’ Even the Minister Senator Evans was reported in the Australian Financial Review on 11 November 2008 as conceding that the ‘majority of employers did the right thing’.

In conclusion while the Coalition will support the Bill it will reserve the right to assess the regulations on the basis of what is best for Australia.