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Thursday, 21 June 2007
Page: 6

Mr ANDREWS (Minister for Immigration and Citizenship) —I move:

That this bill be now read a second time.

The Migration Amendment (Sponsorship Obligations) Bill 2007 amends the Migration Act 1958 to introduce a regime of obligations to be met by employers who are approved business sponsors of certain visa holders. At this stage this will be temporary skilled subclass 457 business sponsors.

The subclass 457 visa was created in 1996. The main objectives of the visa are to enable key skilled personnel for Australian businesses to enter Australia quickly under streamlined processing arrangements in order to meet skilled labour shortages.

The 457 visa allows approved Australian or overseas businesses to sponsor, on a temporary basis for up to four years, overseas employees to come to Australia to fill skilled positions that meet minimum skill and salary levels.

For a sponsorship to be approved, the prospective employer must be an employer of good standing with an actively and lawfully operating business and must be able to demonstrate that the recruitment of overseas workers will provide some benefit to Australia, such as expansion of trade or enhanced competitiveness.

It is widely acknowledged by all levels of government, the business community and the union movement that there is a shortage of skilled labour. It is therefore in nobody’s interests, including business, if the community thinks that the 457 visa is merely a vehicle for driving down the wages and conditions of workers, which has been claimed by the opposition. The Australian government will not tolerate the abuse of 457 visas in this way.

In order to ensure that such abuse does not occur and that the integrity of the 457 visa is maintained and strengthened, this bill will provide further protections to workers sponsored under the 457 visa and ensure that employers who sponsor such workers must comply with certain obligations and failure to do so may result in the imposition of sanctions and penalties.

The new obligations introduced under this bill will replace the current undertakings arrangements. Importantly, the new regime also incorporates enforcement provisions:

  • inspectors can monitor an employer’s compliance with their sponsorship obligations; and
  • civil penalties may be imposed if an approved sponsor breaches an obligation.

There are also enhanced information exchange powers between my department and other prescribed Commonwealth, state and territory agencies.

The government has consistently emphasised the importance of a skilled visa program to the continued prosperity of the Australian economy, especially in times of record low unemployment and consequent temporary skill shortages.

Due to skill shortages and an unemployment rate at 32-year lows, the subclass 457 visa, for example, has provided business with a key source of temporary skilled labour and will continue to do so in the short to medium term.

However, the government also recognises that there is a small minority of employers who have sought to abuse the program.

While the abuse is not widespread, it can undermine the integrity of the overall migration program and confidence in the program as a factor in maintaining our national prosperity into the future.

Employers must recognise that access to skilled temporary overseas workers is a privilege, not a right, and if they abuse this privilege, then they will face strong penalties.

These changes complement other initiatives that the government has recently announced; namely, an English language requirement for 457 applicants to acknowledge the importance of licensing and registration requirements and focus on areas of key occupational health and safety risk and formal arrangements for the fast-tracking of applications from those employers who have a strong and demonstrated record of complying with the 457 visa program.

The New Obligations

Some of the new obligations reflect existing undertakings a business sponsor must make pursuant to the Migration Regulations 1994.

The government has elevated these requirements to the act as a reflection of their importance. The new obligations also now come into effect by operation of law.

There are eight such obligations. I would like to highlight the first two obligations in particular.

The first obligation is to pay visa holders at least the minimum salary level which is set out in a legislative instrument.

This obligation also acknowledges the fact that Australian employers must look first to employing and training Australians and that the subclass 457 visa program will not be used to erode the salaries and conditions of Australian employees.

The second obligation is not to employ a visa holder in a position that requires lesser skills than the position in respect of which the visa was granted. This obligation protects against the subclass 457 visa program being used to bring overseas workers to Australia to carry out unskilled jobs.

Other obligations include:

  • paying the return travel costs from Australia of overseas workers and their family;
  • paying certain medical costs on behalf of the overseas worker and his or her family which may involve the employer taking out insurance on their behalf;
  • paying any fees that must be paid for the overseas worker to work in the nominated activity and other fees associated with recruitment and migration agents;
  • keeping adequate records of compliance with these obligations and providing information to my department when requested in writing.

The New Investigative Powers

The bill also gives my department greater investigative powers.

These powers, to the extent possible, have been adapted from the investigative powers of Office of Workplace Services inspectors. 

Specially trained officers of my department will have the power to enter—unannounced and without force—any place of business or any other place which they have reasonable cause to believe there is information, documents or any other thing, relevant to monitoring the approved sponsor’s compliance with the obligations.

In support of inspectors’ information gathering powers, the bill also creates an offence for failing to produce a document requested by an inspector. This offence attracts a  maximum penalty of imprisonment for six months.

The New Enforcement Powers

The bill attaches civil penalties to breaches of obligations, with a maximum of $6,600 for an individual and $33,000 for a body corporate for each identified breach.

These penalties are complemented by other enforcement measures, both existing and others set up by this bill.

I will continue to have the power to cancel sponsorship approval or bar sponsors where they have failed to comply with a new obligation. I will also now be able to bar sponsors who have breached a law of the Commonwealth, state or territory where appropriate.

Where my department has identified a breach of an obligation and is pursuing civil remedy proceedings, the court, in addition to imposing a civil penalty on the employer, has the power to order the employer to pay a person moneys owed under an obligation.

Persons owed money under an obligation may also independently seek restitution. If, for example, a worker has been paid less than the ‘minimum salary level’, he or she may pursue an order for the amount of the underpayment.

As well as creating a right of recovery, the bill also provides a power to make regulations to set up an infringement notice regime, under which sponsors would be issued with infringement notices as an alternative to civil proceedings. The amount of the infringement notices cannot exceed one-fifth of the maximum amount of the civil penalty—$1,320 for an individual and $6,600 for a corporation.

Information Exchange

The bill authorises disclosure of personal information regarding sponsors and visa holders to prescribed agencies of the Commonwealth or of a state or territory.

For example, where in the course of performing his or her functions, an inspector finds a workplace that obviously appears to fall short of basic occupational health and safety standards, he or she would be able to make such an observation known to the state or territory body responsible for monitoring such standards.

I would expect my department to be informed of the outcome of any such investigation so consideration could be given to bar the sponsor for breach of a law of the Commonwealth, state or territory.

To facilitate information exchange with the Australian Taxation Office, the bill also includes necessary amendments to the Taxation Administration Act 1953.

This represents a whole-of-government approach to maintaining and improving workplace standards and improving the conditions of workers.


In summary, this bill is designed to encourage increased compliance by employers with all relevant laws, particularly those governing the subclass 457 visa program.

The new obligations combined with the enhanced investigative, enforcement and information exchange powers introduced by this bill will strengthen the integrity of the subclass 457 visa arrangements, preserve the integrity of the Australian labour market and ensure the working conditions of overseas workers.

My department will ensure that subclass 457 sponsors and visa holders are made aware of their respective rights and obligations under this legislation before the provisions come into effect.

The bill deserves the support of all members of this parliament.

I commend the bill to the House.

Debate (on motion by Mr Burke) adjourned.