Government's plan to slash migrant workers not very smart

Yet again we're faced with an invidious choice: is the federal government especially stupid, or is it wilfully misleading an electorate that it regards as especially stupid?

Yet again we're faced with an invidious choice: is the federal government especially stupid, or is it wilfully misleading an electorate that it regards as especially stupid?

Brendan O'Connor was hard at it over the weekend, doing one or the other, maybe both, in his thankless role of Immigration Minister. The portfolio is a hospital pass to begin with, but when also burdened with trying to justify the Prime Minister's xenophobic slash at 457 visas, it looks more like a ticket to the political morgue.

Here he was giving his best shot on ABC's Insiders: "I think the most significant evidence, is that the growth in visa applications, and the growth in 457s generally, over the last several years have far and away outstripped total employment growth. That's the macro evidence."

By the nature of 457 temporary worker visas, they are meant to fill gaps that open up in the rapidly expanding parts of the economy. Sometimes that's in places to which Australian residents who already have jobs don't want to move, but the skills shortages are not limited by geography.

Taking O'Connor's "several years" to mean seven, employment growth since January 2006 totals 1,519,300 - there are a few more than 11.5 million Australian residents in work. At the end of January, there were 105,330 primary 457 visa holders in Australia, up 22 per cent on the same time last year, but still less than 1 per cent of the workforce and less than 7 per cent of the jobs growth. What's more, the trend for new applications has been falling over the past three months.

As the word "temporary" suggests, 457 visas don't last. Sometimes 457s are renewed, sometimes the worker leaves the country, sometimes they become permanent residents, taking one of the positions available in our overall migration program.

And with a moment's thought, there should come the realisation that the work done by 457 visa holders has allowed a great many other people to have jobs - the good ol' multiplier effect. To use an example, the second-biggest nominated occupation for granted applications this financial year was cooks - 1690 of them. Without cooks you don't have waiters, mine sites, armies that can march very far or a whole pile of other jobs.

But the labour market is more complex than that. For a start, Australia is getting a bargain by picking up people with education and skills we didn't pay for.

And, to take in the bigger picture, without temporary workers providing a safety valve in several hot spots, we would have been more likely to have suffered inflationary pressures during the height of the resources construction boom that would mean higher interest rates and therefore lower economic growth with - you guessed it - fewer jobs.

Michael Pascoe is a BusinessDay contributing editor.

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