The Department of Immigration have released the highly-anticipated findings of their 457 review, including 22 recommendations aimed at enhancing the integrity and accessibility of the programme to Australian employers.

The report, entitled ‘Robust New Foundations,’ has proved to be a major source of interest for migration industry stakeholders everywhere.

However according to Migration Solutions Managing Director, Mark Glazbrook, majority of the recommendations featured in the report focus more on employer use of the programme, rather than the visa-holders themselves.

“The major change for visa applicants appears to be a slightly reduced English-language requirement, which now requires an average of 5.0 for the test overall, rather than the same score for each component,” he said.

“Regrettably, despite my recommendations to the review panel, there is no reference to the re-instatement of a regional 457 visa that would see the implementation of a greater range of eligible occupations and wages in-line with an award or market salary rates, rather than the existence of the TSMIT in regional and low population growth areas.”

“Despite the majority of proposed changes being directed towards employer requirements, the recommendations are still of interest to visa applicants, given how it will affect Australian employer’s abillity to hire them.”

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Regional employers are crying out for greater concessions to the 457 programme due to massive skill shortages.
Source: Shutterstock

For employers, perhaps the most eagerly-awaited point of the review in the minimum-salary level (or TSMIT) proved to be somewhat of a disappointment, with the panel recommending that the $53,900 TSMIT remain frozen for the next two years until further analysis could be completed.

The threshold is considered to be one of the biggest obstacles restricting access to the programme, particularly in regional areas where skill shortages are rife.

However Mr Glazbrook was quick to remind stakeholders that at this stage the recommendations contained within the report were just that.

“It is important to remember that the recommendation made by the review panel will not automatically be included into the 457 programme,” he said.

“I am extremely hopeful that the Minister and Assistant Minister for Immigration may still re-introduce the regional 457 visa, given its significant importance to regional and low-population growth areas such as South Australia.”

“I strongly disagree with the proposals and recommendations made for using Labour Agreements and other similar programs in regional areas to address skill shortages”

Here are six of the most important recommendations to come out of the report:

English-language requirements

The recommendation: The English-language requirement is one of the only recommended changes that looks like it will directly affect 457 applicants. The report proposes that the minimum English-language requirement be adjusted from 5.0 in each of the four bands of the IELTS to an average score of 5.0 across the test overall.

It also states that greater flexibility should be afforded to industries or businesses seeking concessions to the English language requirement, and that alternative English language assessment providers be accepted by the Department, such as the TOEFL and Pearson tests.

Exemptions were also recommended to be offered to applicants that have studied for a total of five years, rather than the current requirement for five years of continuous study under approved circumstances.

What this means: This recommendation is good news for applicants that have struggled to achieve consistent results in the IELTS, despite possessing functional English, costing them significant amounts of time and money. The improved accessibility to waivers of the English-language requirement may also be beneficial for some applicants that have been unable to attain the necessary English-language score.

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Employer-conducted Labour Market Testing is one of the recommended changes made by the panel. Source: Shutterstock

Minimum-salary threshold (TSMIT)

The recommendation: The report recommends that the salary threshold be kept at the current level of $53,900 for the next two years until it can be reviewed in greater detail sometime within the next two years. Also suggested is that “the government give further consideration to a regional concession to the TSMIT,” but only in “limited circumstances where evidence clearly supports such concession.”

What this means: The panel’s finding regarding the salary threshold was probably the most eagerly anticipated recommendation of the entire review, but the result is somewhat ambiguous. It appears as though the Immigration Department’s interpretation of ‘sufficient evidence’ will determine the ability for local businesses to access these concessions – so it will be interesting to see how this unfolds.  If concessions are to be afforded to regional areas such as South Australia, the degree to which they are offered will determine the level of benefit for local businesses and industries.

Changes to Labour Market Testing

The recommendation: In regards to the current LMT requirements for employers, the report states that the employer-conducted testing cannot be considered fully reliable, and “in the Australian context has proved ineffective.” Consequently, the panel has recommended the current LMT requirement be abolished for 457 visa sponsors, to be replaced by an independent labour market assessment body.

What this means: This is good news for 457 sponsors, particularly for small employers in regional areas that have an intimate knowledge of the local labour market. The existing guidelines force these employers to waste time and money advertising for a position that they knew couldn’t be filled purely to satisfy the Department’s criteria. An independent council that assesses skill shortages within a particular labour market will remove this responsibility from businesses, whilst maintaining the integrity of the programme’s use.

Training Benchmarks

The recommendation: The panel has recommended the introduction of a fixed-amount fee for each 457 worker an employer was to use (using a figure of $400 p.a. as an example), compared to the current practice of businesses contributing a certain percentage of their payroll to an industry training fund, or on training local staff for use of the 457 programme.

What this means: If implemented, this change would be positive step for small businesses, who would only have to pay a lesser amount for their modest use of the programme. However for larger organisations that already contributing significantly to an internal training fund for local staff, the measure could force them to fork out thousands more to meet the Immigration Department’s new criteria at the expense of more beneficial job training delivered by the sponsoring business itself.

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Cooks are one occupation that would significantly benefit from the reinstatement of the regional 457 visa. Source: Shutterstock

Validity of Sponsorship

The recommendation: The report also recommended that a Standard Business Sponsorship be extended from three years up to five years for existing businesses, and from 12 months up to 18 months for start-ups. It also recommends that the government simplify and streamline the process by which a sponsor must undergo in order to renew their sponsorship.

What this means: The extension of sponsorship periods and streamlined approach to renewals is another positive measure for businesses, reducing the amount of red tape they are forced to wade through in order to access the programme. How successful the Department is in achieving slashing red tape will ulitimately determine its effectiveness.

Labour Agreements

The recommendation: The report also recommends Labour Agreements be made more “open and accessible” for additional industry sectors, and that “negotiation times be significantly improved” in order to make the arrangements a more responsive and demand-driven pathway for temporary migration.

What this means: Whilst this sounds like a positive measure in theory, the encouraged use of Labour Agreements and the new Designated Area Migration Agreement (DAMA) makes it unlikely that the regional 457 visa will be reinstated anytime soon. The regional 457 programme would be a far more flexible and accessible option for small businesses and those in regional areas, which may find Labour Agreements to be too costly, cumbersome and time-consuming to apply for and to be processed by the Immigration Department.

You can see what South Australian industry leaders have said about the need for the reinstatement of the regional 457 programme below.

A link to the full Robust New Foundations report can be found here.

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