May 2, 2017 by Dymphna 14 Comments

Truth Bomb Tuesdays: What they don’t want you to know about 457’s

When I put on my economist hat, 457 visas look like a real problem.

We seem to live in an era where the most outrageous and proactive opinions are the ones that get the most air, and the debate around 457 visas is no exception.

As an “exceptionally white” person I need to be particularly careful. If I start talking about immigration (even purely as an economic concept) someone is going to think I’m talking about race and accuse me of being a Nazi.

(I’m serious.)

So at the risk of throwing the wolves a bone, I want to talk about immigration and 457 visas. And if the outragists want to skip the rest and jump straight to the comments, I’m going to say 457s are bad news for Australia.

(Knock yourself out.)

Ok, to start, what’s the point of 457 visas?

Proponents will tell you they’re about making sure that our economy has the skilled workers it needs to deliver the prosperity Australians deserve. Something like that, right?

With that in mind, they can criticise anyone who has a problem with 457 visas as being ‘economically reckless’.

But let’s take a look at that.

First up, there’s this story: 457 Visas Used To Import Prostitutes. Basically, people were brought in on a skilled visa as massage therapists, and then put to work as prostitutes.

The secret documents, obtained by, reveal that “massage therapists” was one of many “occupations of concern” identified by an independent review into the 457 program commissioned by the government in 2014.

… “The government has been aware that 457 visas are being used to exploit people for prostitution for some time,” the insider told, on condition of anonymity…

Ok, I’m sure this isn’t all that wide-spread, and all government policies have problems with implementation, but that’s not what struck me. What struck me is that “massage therapist” was on the priority skills list.


The article goes on:

Other occupations of concern identified were “hair or beauty salon managers” who were in fact sales assistants or beauty therapists, “transport and company managers” who were in fact truck drivers, “importers and exporters” who were in fact low-skilled clerks and even “animal attendants and trainers”, which could include someone working in a piggery.

Hair and beauty salon managers?

Is there really a shortage of massage therapists and hair and beauty salon managers in Australia? Does that shortage really threaten our economic performance?

And is it really something unemployed Australians couldn’t do with a little bit of training? Isn’t unemployment a real issue already?

But even around University-level skill sets, there are real questions about the need for the skills being prioritised. Joanna Howe, senior lecturer in Law and the University of Adelaide noted that the priority list targets nursing, teaching, engineering, law, accounting and IT – all areas where current graduates are struggling to find employment.

(It’s hard to imagine, but we currently have a glut of accountants in Australia!)

So why are we still importing them like nobody’s business?

Here’s another interesting thing. The Australian published a Freedom of Information request in November last year about how the priority list was determined.

Briefing notes for Vocational Education and Skills Minister Scott Ryan, obtained under Freedom of Information laws, emphasise that since its establishment in 2010 “the list has remained relatively stable with only a few occupations being added or removed in any given year”.

“Major changes to the list from year to year would signal that it is being used to manage short-term labour market fluctuations,” the briefs state.

Hang-on. I thought managing short-term labour market fluctuations was exactly the point, wasn’t it? Remember those dreaded skills shortages?

And why would they be worried about the public realising that’s what they’re there for?

Let me tell you.

A skilled migration program aimed at patching up holes in the skills spectrum totally interferes with the normal functioning of the market.

Normally, if there’s a skills shortage, wages rise. This in turn is a signal for more people to skill up in that area, and it incentivises businesses to invest in training.

But that doesn’t happen with skilled migration.

Wages are held down so people don’t invest in their training. Employers don’t take on trainees, they just import the people they need.

And if we’re running a very loose immigration program (which we seem to be doing), why invest in skills at all? Maybe there’s a shortage of economists. That might encourage me to study economics, but by the time I finish my degree three or four years down the track, that shortage might have been ‘imported’ away.

I might be joining my accountant friends on the unemployment line.

So this is the secret the government doesn’t want you to now.

Skilled migration in Australia is currently used as a short-term fix for profitability, even though it holds down wages and totally derails the signals our training and education systems rely on.

Eventually, training systems will be undermined completely, and importing skills will be the only option available to us.

And I’m sure there are valid and important uses for 457s – doctors in regional areas for example. (Hair-dressers in Melbourne, less so.)

But I think this is probably a case of less is more from the government. Get out the way and let the market do it’s thing. Or if you need to get involved, invest in training and education systems.

But this system of short-term band-aids clearly isn’t working. Not in theory and definitely not in practice.

And what does it mean for the property market? I think we’re going to see a pivot away from untargeted to targeted migration – making sure that migration energises our regional areas, rather than just contributing affordability problems in our capital city ‘bubbles’ (not my word).

So I think this could be a net positive for rural property markets, especially for the major regional centres.

There’s broad support for that kind of targeting, and it’s hard to argue that it wouldn’t be a good thing on many fronts.

There. Turns out I’m pro-immigration after all.

What do you make of the 457 visa saga?