On Tuesday 14 October the Government issued a joint media statement with Prime Minister Tony Abbott, Minister for Industry Ian McFarlane and Minister for Immigration and Border Protection Scott Morrison commenting on the 457 visa programme. The review aims to reform skilled migration to improve Australia’s competitiveness.

The statement is a response to the independent review conducted last month by former public servant John Azarias (see FCB Smart Visa’s 12 Sept news story).

The Government has committed to:

  • streamline the processing of sponsorship, nomination and visa applications to reward low risk applicants and refocus compliance and monitoring activities on high risk applicants;
  • increase the sponsorship approval period from 12 to 18 months for start-up businesses, to give start-ups more time to make their businesses sustainable;
  • provide greater flexibility in relation to English language testing and skill requirements for 457 applicants, to ensure that the standards required are appropriate for the industries and occupations being sought; and
  • retain the Temporary Skilled Migration Income Threshold at $53 900, ahead of a review within the next two years.

What does this mean for employers?

Full details of the changes will be released in due course but it is clear the programme seeks to identify and fill genuine gaps in the local labour market while taking some of the administrative burden away from businesses.

Additionally, the increased flexibility around language testing requirements will come as a relief to employers who require the ability to place people urgently.

It should however be noted that there were 22 recommendations in the recently released review of the 457 Programme, and these included the abolishment of Labour Market Testing, examination of the application fee structure, and simplified access to Labour Agreements, among many others.

Employers are likely to be hoping for more of the recommendations to be included in the final changes to be implemented; it is very difficult to tell whether this will be the case given the summarised nature of the media release.

FCB Smart Visa will update you on any further developments as information is released.

The widely anticipated report into the subclass 457 programme has just been released. The Hon Minister Morrison has stated that the report’s 22 recommendations are “balanced and measured”.


Highlights of the recommendations include:

  • A new tripartite ministerial advisory council for skilled migration issues
  • Labour Market Testing should be abolished as ineffective
  • Consolidated Sponsored Occupations List (CSOL) be retained but amended through addition of occupations outside ANZSCO and other “refinements”
  • Market Salary Rate should continue but high salary exemption be changed to $180K (instead of $250K)
  • Temporary Skilled Migration Income Threshold (TSMIT) should continue but be clarified and some exemptions possibly allowed
  • Training Benchmarks should be replaced by an annual training fund contribution
  • English language requirement be changed to IELTS average 5 and further exemptions allowed
  • Genuine Position requirement changes to help ensure appropriate assessment
  • Skills Assessments should recognise employment experience more appropriately
  • Standard Business Sponsorship (SBS) approval for 5 years; start-ups for 18 months; simplified renewal process; 28 days to inform DIBP of certain events (instead of 10)
  • Review of application charges, particularly for secondary applicants and for renewals
  • Visa holder rights, obligations and Fair Work information be included in employment contracts for 457 applicants
  • New system for streamlining applications
  • Labour Agreements should be reformed and more accessible
  • Changes to requirements for transition to Permanent Residence for 457 holders
  • More education for sponsors, more monitoring, more inter-agency cooperation, expanded sanctions

Jacob Wyllie, Migration Manager at FCB Smart Visa discusses the report and recommendations.

The overall tone and content of the report is good, and goes some way to bringing the programme back to the middle ground. General opinion is that it correctly identifies the vast majority of issues currently facing the programme, and recommends reasonable and consistent solutions.

As an interested observer with first-hand experience, I’m not sure Australian businesses will take kindly to the proposed training requirements; they seem to require a “pay-per-view” style arrangement for sponsors, who are forced to pay to a “national fund” for every 457 holder they sponsor, on a sliding scale, rather than proving that they train their own Australian staff.

It seems slightly unfair that the victims of skills shortages (at the “pointy end”) are forced to pay more to fix these problems by accessing the 457 programme than other businesses.

For example, if there are two companies attempting to hire a highly skilled worker, and two available workers, one Australian and one from overseas, reasonably one company would hire the Australian and one the overseas worker. Assuming that employing 457 holders is generally not a choice but a necessity based on skills shortages, punishing those who are forced to access this programme seems unfair on some level.

It is difficult to see how this new system is an entirely adequate replacement of the old system as it appears to reward organisations which provide little or no training to their employees, rather than those who are trying to upskill their own workforce through appropriate training. While Training Benchmark B is somewhat clunky, and was always intended as an interim measure, it did provide “reward” for organisations which trained their own Australian employees, in terms of their ability to access the 457 programme when they were forced to look offshore for skilled workers, and I’m not sure this is a bad thing.

Regardless of this, the attempt to make the whole subclass 457 programme more transparent and clearly defined is to be applauded.

What’s next?

There is not yet any information as to exactly which of these recommendations will be accepted and when they will be implemented. FCB Smart Visa will keep you updated as this develops.

I would only finally offer that these things do appear cyclical, so this is probably not the end of the story. Given that the Coalition commissioned this report, it’s likely that the vast majority of the recommendations will be implemented. I just can’t help but think of Gonski at these times though … but that’s what keeps things interesting.

To view the report, Robust New Foundations: A Streamlined, Transparent and Responsive System for the 457 Programme, on the Department of Immigration and Border Protection’s website please click here.