Aimee Chanthadavong
July 9, 2019

457 visa was beneficial to firms

Skills

457 visa was beneficial to firms

Office of Chief Economist: 457 visa improved business turnover and employment levels

More than a year after the 457 visa program was scrapped by the federal government, a new research paper from the department of industry shows firms that used the visa sponsorship program outperformed those firms that did not use the program.

In the characteristics and performance of 457 Migrant Visa sponsoring businesses research paper, the data showed that sponsoring firms within the professional, scientific and technical (PST) sector had significantly better performing turnover and employment than those that did not use the 457 program between 2007 to 2014.

The data showed sponsoring PST firms achieved average turnovers of $6.9 million, compared to non-sponsoring firms that recorded an average $1.2 million during 2013-14. Similarly, the average full-time employment rate was 22.6 per cent for sponsoring PST firms versus 3.6 per cent during the same period.

However, the paper noted, “while access to temporary skilled migrants is likely to have contributed to these performance premiums, it is unlikely that they were the exclusive source.”

The research paper also indicated a majority of the sponsored talent through the 457 program were from India, the United Kingdom and China.

Software and applications programmers made up 10.6 per cent of occupations that were granted sponsorship through 457 visas during 2016-17, more than double any other position, the paper showed.

The 457 visa program was used by Australian companies to bring temporary foreign workers into the country. It was a popular among the local tech and startup community until it was terminated by the Turnbull government in March 2018, and replaced by the Temporary Skills Shortage (TSS) visa.

The TSS visa compromises of a short-term stream of up to two years and medium-term stream of up to four years.

The replacement visa also came with a number of stricter requirements, including a more specific occupation list, work experience, mandatory labour marketing testing, better English language proficiency and a criminal record check.

The short-term visa also does not allow for the option for permanent residency. The medium-term option would allow for up to four years and be “targeted at higher skills.”

The new scheme means that Australian businesses need to advertise job openings locally before attempting to fill the openings using foreign workers.

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