Government's plan to slash migrant workers not very smart
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.
Frequently Asked Questions about this Article…
A 457 visa is a temporary skilled-worker visa designed to fill skill gaps in rapidly expanding parts of the economy. For investors it matters because these workers can support growth in industries, create multiplier effects (for example, cooks enabling waiters and hospitality businesses), and help moderate cost pressures that can influence inflation, interest rates and overall economic growth.
At the end of January there were 105,330 primary 457 visa holders in Australia, up about 22% year‑on‑year. That total is still less than 1% of the workforce and accounted for under 7% of job growth since January 2006, so they are a relatively small but targeted part of the labour market.
According to the article, 457 visa holders often create a multiplier effect: by filling roles such as cooks, they enable other jobs (waitstaff, support roles and services) to exist. They’re intended to fill skills shortages rather than broadly displace local workers, and can allow many other people to have jobs.
The piece argues temporary workers acted as a safety valve in hot spots (for example during a resources construction boom). Without them we might have seen greater inflationary pressure, which could have led to higher interest rates and lower economic growth — and ultimately fewer jobs — so reducing 457s could have inflation and rate implications.
Although use of 457s rose over several years, the article notes that the trend for new applications had been falling over the past three months, indicating short‑term cooling in new demand.
457 visas are temporary by design. Sometimes they are renewed, sometimes the worker leaves Australia, and sometimes they convert to permanent residency as part of the broader migration program. They don’t automatically equate to permanent jobs.
The article highlights hospitality roles as a notable example — cooks were the second‑biggest nominated occupation for granted applications this financial year with 1,690 grants. More broadly, 457s are used in sectors experiencing skills shortages, including parts of resources and construction activity.
Investors should consider the labour‑supply and sectoral impacts: reducing temporary skilled workers can tighten labour markets in specific industries, potentially raise costs, and influence inflation and interest rates. The article also notes that 457 holders are a small share of the workforce but have multiplier effects, so policy changes may have concentrated effects rather than uniform outcomes across the economy.
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