On 18 April 2017, the Australian Federal Government announced the abolition of the subclass 457 visa program, to be replaced by two streams of ‘temporary skill shortage’ work visas for skilled foreign workers. Under the government’s plan, foreign skilled workers would be eligible for one of two visas – a ‘short-term’ two-year visa extendable for a further two years, and a ‘medium-term’ four year visa.
As part of the overhaul, the government plans to substantially reduce the number of eligible occupations and positions subject to work visas. Occupations slated for elimination include farmers, actors, musicians and artists, journalists and media presenters, commissioned fire and police officers, and a variety of administrative managerial positions.
The new visas will also require the visa holder to have at least two years of work experience in the specified occupation. The ‘medium-term’ visa will additionally require the visa holder to undergo a criminal record and English proficiency check. Employers will also be subject to stricter labour market testing, except where the foreign workers are recruited from countries which are parties to a free-trade agreement with Australia (e.g. China).
The Federal Government justified its decision to abolish the 457 visa program on the grounds that the program made it too easy for employers to recruit cheap foreign workers at the expense of the local labour pool, and that the program effectively constituted a residence pathway for foreign workers. Currently, 457 visa holders are eligible for permanent residency after two years. The new visas do not provide an automatic permanent residency outcome at the end of their respective terms.
As part of the government’s plan, businesses that seek to hire foreign workers under the new ‘temporary skill shortage’ work visas will have to pay a tax for the privilege. This tax would contribute to a proposed training fund for Australian workers.
The 457 visa program was originally introduced in 1996 by the Howard government, in order to satisfy increasing employee demands during the mining and manufacturing booms of the nineties.
The changes are in effect immediately and will be fully implemented by 2018. Current 457 visa holders will not be affected by the change.
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