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Friday, 28 June 2013
Page: 4488


Senator LUNDY (Australian Capital TerritoryMinister Assisting for Industry and Innovation, Minister for Multicultural Affairs and Minister for Sport) (14:56): I table a revised explanatory memorandum relating to the bill and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

MIGRATION AMENDMENT (TEMPORARY SPONSORED VISAS) BILL 2013

The purpose of this Bill is to propose a package of integrity measures that seek to enhance the government's ability to deter sponsor behaviour which is inconsistent with the policy intent of the Subclass 457 visa program and other temporary employer sponsored visa programs. Together with proposed amendments to the Migration Regulations 1994, this Bill presents a comprehensive package of reforms which would balance the interests of Australian workers with the need to strengthen protection for overseas workers.

Importantly, the Bill gives powers to the Fair Work Ombudsman (and Fair Work Inspectors) to monitor and investigate compliance with sponsorship obligations, to ensure workers are working in their nominated occupation and being paid market salary rates.

It will require Subclass 457 sponsors to undertake Labour Market Testing in relation to a nominated occupation, in a manner consistent with Australia's relevant international trade obligations, to ensure that Australian citizens, permanent residents and eligible temporary visa holders are given first opportunity to apply for skilled vacancies in the domestic labour market.

The government has always said that the Subclass 457 visa plays an important role in allowing employers to address skilled shortages when skilled local labour is unavailable. It is intended as a vehicle to allow employers to quickly supplement the Australian labour market, including the use of Enterprise Migration Agreements and Regional Migration Agreements, where a genuine skill shortage exists.

It is an important component of our overall non-discriminatory migration program, which is roughly comprised of one third families and two thirds skilled migration. Just over half of the current holders of Subclass 457 visas go on to apply for permanent residence and we think that's appropriate.

Usage of the Subclass 457 visa program has been growing strongly in recent years. The number of primary Subclass 457 visa holders in Australia has risen from 68 400 in June 2010 to 106 680 as at 31 May 2013, an increase of 56 per cent.

Many growing industries including those connected with the resources boom, such as mining, as well as non-resource sector users of the program, such as health care and information and communications technology (ICT), accounted for a large portion of all Subclass 457 visa grants in 2011-12.

However, strong growth has also been recorded in industries in which employment has fallen recently, such as accommodation and food service, and retail trade.

It concerns the government that, at a time when the labour market has been flattening and some sectors and regions have experienced lay-offs and increased unemployment, the Subclass 457 program has continued to grow.

Coupled with this strong growth is a tendency for some employers to source foreign labour through the Subclass 457 program without regard to the Australian domestic labour force.

These trends highlight that current requirements do not commit sponsors to using the Subclass 457 program as a supplement to, rather than a substitute for, the domestic labour force.

In the recently released report of the Migration Council Australia, survey data of Subclass 457 employer sponsors revealed that 15% of employers say that they have no difficulty finding suitable labour locally and yet they sponsor employees from overseas under this scheme.

Further, 7% of primary visa holders surveyed said that they were remunerated differently to their Australian counterparts doing the same work, while 2% stated they were paid well under the minimum salary for a 457 employee which is currently $51,400.

Indeed, the reforms at the heart of this Bill are not unique to the Australian context. As recently as the 7th of May this year, the Canadian Prime Minister, Mr Stephen Harper - a conservative - stated in relation to his country's equivalent of the Subclass 457 scheme:

"Not only has the government indicated for some time that it would be reforming the temporary foreign workers program, but in the budget last year specifically we brought in measures to better match job vacancies with people who are seeking work or in the employment insurance system. We have been very clear. We need to do a better job of matching the demand for employment insurance and the demand for temporary foreign workers. That is precisely what the government has been doing for a year and a half … The minister brought in changes last year to make sure people who are on employment insurance get first crack at jobs rather than temporary foreign workers."

The Canadian Government is taking steps to tighten the provisions of their program to ensure that only genuine skill shortages are being filled by temporary overseas labour.

Likewise, academics from the Law School of The University of Adelaide recently submitted to a Senate enquiry that the 457 scheme had shifted in focus since its introduction in 1996 from a focus on filling high skill jobs in areas of skill shortage to satisfying broader employer demand for labour. It is worth noting that back in 1996, Labour Market Testing was a requirement of the scheme.

The Australian Hotels Association underlines this shift in recently arguing for a lowering of the minimum salary threshold of $51,400, such that employers in their industry could use the scheme more extensively. I remind the Chamber that in the past 12 months the use of 457s in the hospitality industry has doubled - yes, it has doubled in the past year.

This Bill, together with the package of reforms announced in February 2013, seeks to realign the program to ensure a balance between job opportunities for Australian citizens and permanent residents, enabling employers to fill skills shortages, while protecting overseas workers. The measures will be implemented in a manner consistent with Australia's relevant international trade obligations.

The purpose of the Subclass 457 visa program is to address genuine shortages without displacing employment and training opportunities for Australian citizens and permanent residents and without serving as the mainstay of the skilled migration program.

The government has concerns that some employers are turning to overseas workers first, rather than investing in local training and recruitment. There has also been evidence of some sponsors paying overseas workers below the market rate, failing to commit to the training requirements of the program, and using the visa fraudulently to help family and friends migrate.

In February, the Government announced a package of reforms to the Subclass 457 visa program to strengthen its capacity to identify and prevent employer practices that are not in keeping with the intent of the program.

These reforms will build on the Worker Protection reforms of 2009 that introduced a sponsorship framework designed to ensure that the working conditions of sponsored visa holders meet Australian standards and provided certain cost incentives to encourage employers to seek to recruit Australians before looking to sponsor overseas skilled workers. The 2009 reforms also introduced a civil penalty regime, including infringement notices to enhance the powers of the Department to take action against sponsors who fail to meet their sponsorship obligations.

The proposed changes to the Migration Regulations will seek to reduce the risk of nominations for non-genuine positions; strengthen the market salary rate requirement; align the English language requirement with that of the permanent Employer Nomination Scheme; introduce an obligation that sponsors meet the training requirement for the term of sponsorship approval; remove potential for the exploitation of temporary overseas skilled workers; and restore public confidence in the program.

To complement the reforms to the Migration Regulations announced in February 2013, the Bill will enshrine in the Migration Act the kinds of sponsorship obligations which are to be prescribed in the Migration Regulations.

This will ensure that the Migration Regulations include existing sponsorship obligations requiring sponsors to among other things:

ensure equivalent terms and conditions of employment (including payment of a 'market salary rate'),

keep information and provide information to the Department, and

cooperate with inspectors;

as well new and strengthened sponsorship obligations proposed to come into effect on 1 July 2013 to:

meet training requirements for the term of sponsorship approval, not transfer, charge or recover certain costs from sponsored visa holders and restrict on-hiring arrangements.

Exactly how the new obligations will be spelt out in the Migration Regulations proposed to commence on 1 July 2013.

The Bill will further strengthen the integrity of the Subclass 457 visa program by expanding the government's capacity to detect and take action against sponsors who do the wrong thing and ensure that overseas workers are not used as a substitute for Australian workers.

The government believes that Australian citizens and Australian permanent residents deserve the opportunity to get local jobs on local projects.

The government also announced in February an expansion of the Fair Work Ombudsman and Inspector powers.

This Bill expands the government's capacity to monitor and investigate compliance with the temporary sponsored work visa program by enabling Fair Work Inspectors to exercise powers for the purposes of the Migration Act.

The Bill will make it clear that a Fair Work inspector is also an inspector for the purposes of the Migration Act and is able to exercise all the powers conferred on inspectors by the Migration Act.

The Department currently has 32 active inspectors appointed under the Migration Act to monitor compliance with sponsorship obligations. An expansion of inspector powers to over 300 Fair Work inspectors will significantly increase the government's capacity to monitor compliance with the Subclass 457 visa program and other sponsored visas.

Fair Work inspectors will focus in particular on monitoring a sponsor's compliance with the following obligations:

to ensure equivalent terms and conditions of employment which requires sponsors to ensure the subclass 457 visa holders are receiving at least the same salary as that which was approved at nomination; and

to ensure the sponsored person works or participates in the nominated occupation and is performing the duties of the occupation, approved at nomination.

The Migration Act contains an enforcement framework relating to the sponsor monitoring regime which includes administrative sanctions (to bar or cancel the approval of a person as a sponsor), an infringement notice and civil penalty scheme.

The Bill provides for enforceable undertakings as an additional enforcement option under the Migration Act where a sponsor has failed to satisfy a sponsorship obligation.

Enforceable undertakings are promises enforceable in court which would be agreed between the Minister and a sponsor.

Enforceable undertakings would be used as an alternative to, or work in combination with, barring a sponsor or cancelling a sponsor's approval.

Enforceable undertakings might also avoid the substantial legal costs associated with litigation in the courts. They are designed to be flexible and secure compensation for any loss resulting from contraventions (for example, payment to compensate for underpayment of workers).

The amendment will also allow the Minister to publish enforceable undertakings on the Department's website. This is an important tool to encourage compliance by all sponsors and a means of providing transparency to the Australian public on the monitoring of sponsors.

A key objective of this Bill is to strengthen the government's capacity to manage the Temporary Sponsored Work visa program (in particular, the Subclass 457 visa program). It will seek assurance from employers that they are only utilising the 457 visa program in circumstances where there is a genuine skills shortage in Australia. To enable this outcome, the Bill introduces a requirement that sponsors must undertake Labour Market Testing in relation to nominated occupations, in a manner consistent with Australia's relevant international trade obligations.

In recognition that the Subclass 457 visa is the primary visa that delivers our World Trade Organization and Free Trade Agreement obligations for the Movement of Natural Persons, the Bill ensures that Australia continues to meet our obligations not to Labour Market Test certain categories of persons.

The Bill allows the Minister for Immigration and Citizenship to determine by legislative instrument how to give effect to relevant categories of persons for whom international obligations are owed. The legislative instrument will reflect the relevant commitments with respect to Labour Market Testing under Australia's international trade agreements.

The labour market testing requirement will be met if the Minister is satisfied that a suitably qualified Australian citizen, Australian permanent resident or eligible temporary visa holder is not readily available to fill the nominated position. An eligible temporary visa holder is defined as a person who, at the time the application for the nomination is made, holds a Work and Holiday (462) visa or a Working Holiday (417) visa and who is lawfully employed in the agricultural sector by the sponsor (or an associated entity of the sponsor).

It is proposed that the Labour Market Testing requirement will initially require a sponsor to demonstrate that they have sought to find a suitably qualified Australian citizen or Australian permanent resident anytime within the four months prior to submission of an application for nomination approval. There has been some misinformation regarding the time period; so I reiterate, labour market testing can be undertaken anytime within the four months prior to application for nomination approval, it is not required to be undertaken for four months. This will provide a balance between giving Australians the opportunity to apply for jobs, and ensuring that Australian businesses do not experience undue delays in filling skilled labour shortages which would negatively impact on their businesses. As part of the evidentiary requirement, a sponsor may include research on labour market trends generally and in relation to relevant occupations that was released in the four months prior to a sponsor lodging a nomination.

In addition, the Bill proposes a mandatory requirement for sponsors to provide information if one or more Australian citizens or Australian permanent residents were made redundant or retrenched from positions in the nominated occupation in a sponsor's business or associated entity in the four months prior to lodging a nomination.

If there have been redundancies or retrenchments, labour market testing must be undertaken by the sponsor after those redundancies and retrenchments.

In relation to the evidentiary requirements for sponsors, the Bill proposes that it be mandatory for a sponsor to provide information about their attempts to recruit suitably qualified and experienced Australian citizens or Australian permanent residents to the position and any similar positions. Sponsors must also provide details of any advertising (paid or unpaid) of the position, and any similar positions, commissioned or authorised by the approved sponsor, and fees and other expenses paid (or payable) for that advertising.

If the approved sponsor elects to provide evidence and information other than evidence of advertising and fees, or payment of fees, to support their claim to have tested the labour market, the Minister may take that evidence into account. The nomination will not, however, be treated less favourably if the approved sponsor elects not to provide such additional evidence or information.

The Bill proposes a delayed commencement for the Labour Market Testing requirement to allow sufficient time for the implementation of Labour Market Testing and ensure that sponsors are given a period of time to undertake Labour Market Testing.

Further, the Bill includes an exemption to the Labour Market Testing requirement in the event of a major disaster, natural or otherwise, in order to assist disaster relief or recovery.

This exemption will give the government flexibility to respond to situations of national or state emergency and would facilitate the speedy entry of overseas skilled workers without the delay caused by requiring a sponsor to undertake labour market testing.

The Bill allows for skill and occupational exemptions to the labour market testing requirement to apply to specific occupations, by legislative instrument, within Skill Levels 1 or 2 as currently described in the Australian and New Zealand Standard Classification of Occupations. The legislation will however, require that nominations made by approved sponsors requiring either or both experience or a qualification in engineering (including shipping engineering) or nursing cannot be exempt from labour market testing.

At present all primary Subclass 457 visa holders are subject to visa condition 8107 which provides the visa holder must not cease employment for 28 consecutive days. If a visa holder does not comply with this condition there are grounds to cancel their visa.

This Bill amends the Migration Regulations 1994 to extend the period from 28 days to 90 consecutive days, enabling a more socially just outcome for visa holders as they will have more time find an alternative job with an employer sponsor or to arrange their personal affairs at the conclusion of sponsored employment.

This amendment is in line with recommendations of the 2008 Deegan review of the Subclass 457 visa program and the Migration Council Australia in its report of 11 May 2013.

Lastly, to ensure that the views of relevant stakeholders are considered in any regulatory changes to the Subclass 457 visa program, and in recognition of the advisory function of the Ministerial Advisory Council on Skilled Migration, the Bill proposes the inclusion of the requirement that the Minister must take all reasonable steps to ensure that, at all times, there is in existence the Migration Advisory Council on Skilled Migration, a body which includes representatives of unions, industry and State and Territory governments and other members if any nominated by the Minister, and that meets at least on a quarterly basis. Without limiting the functions, the Ministerial Advisory Council on Skilled Migration is to provide advice to the Minister in relation to the temporary sponsored work visa program.

The Government intends to review the efficacy of these reforms within three years of their implementation to ascertain whether further refinements are required. We have some major changes in our labour market over recent years and it is appropriate that we re-examine these policy settings.

The totality of the Government's reforms will close loopholes in the current legislative and policy settings to ensure that the program can only be used by appropriately skilled persons and to fill genuine skills shortages as was intended. Put another way, they aim to ensure the program better meets its overarching intent of acting as a supplement to rather than a substitute for the Australian labour market, in a manner consistent with Australia's relevant international trade obligations.

The government is confident that the revised legislative and policy settings for the Subclass 457 program will achieve this balance, and will further enhance an already successful program.

I commend the Bill to the Senate.