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Tag Archives: domestic labour

Australian Unions and changing the laws regarding 457 visas

A few days ago, the Australian Government, proposed a bill to Parliament that, if passed, would change the laws regarding 457 visas. A 457 visa is a temporary work visa that allows an Australian employer to sponsor a foreign worker to come work in Australia temporarily. The idea is that when there is a shortage of local work for a specific job that an employer needs done, he or she can call in a foreign worker who is willing to do the job, through a 457 visa. e.g. If a mining company has a shortage of worker to work in the dangerous conditions of the mines, the company can call a much more willing foreign worker from a country such as Iraq to work in the mine, under a 457 visa. This is a great solution for a common problem faced by Australian businesses. The downside to this scheme, is that it makes it possible for certain employers to exploit the scheme by hiring many ‘cheap’ workers, reducing their labour costs.

The main change that these visa law changes would implement is that employers would now be forced to search for local employment from Australians for six months before being allowed to call for a 457 visa worker, with hefty fines enforcing the law. The problem with this law, apart from it being one of the most racist laws to be proposed in Australia since the laws of the White Australia policy, could be disastrous for businesses, as if said business is desperately in need of work on something like a burst sewer pipe, and can’t afford to pay the exorbitant fee that an Australian contractor would charge for the job, the business would have to wait six whole months with a burst sewerage pipe before they could sponsor a foreign worker willing to do the job to come to Australia and do the job. In this scenario, the business would face bankruptcy, as apart from the business not being able to function for six whole months without a sewerage pipe, the Government would slap fine after fine on the business for not having the pipe fixed quickly enough. Talk about being in deep shit (eheh).

The Unions’ logic behind this policy is that since every single 457 visa worker is brought into the country by cheap employers specifically to undercut Australian jobs, culling the amount of 457 visas is important to guarantee jobs staying in the country. The reality is different. Misuse of 457 visas by unscrupulous employers remains very low and there is only a small minority of employers who take advantage of the scheme. In fact, it is true that all employers who sponsor an overseas worker through the 457 visa scheme sign an obligation to not misuse the program and there are already existing laws regarding 457 visas that have been working well. What the Unions are actually doing is making life more and more difficult for employers and business by forcing businesses to pay high fees to Australian contractors or go bankrupt due to unfixed problems. The vast majority of the time, the 457 visa scheme is used when there is a legitimate shortage of domestic labour.

The main issue I have with the Unions in this case is that they seem to misunderstand the dilemma of Higher Wages = Higher Unemployment. Through forcing businesses to wait 6 months before they can fix issues at an affordable price, they are inevitably going to force many businesses to close and go out of business. See where this is heading? Less open businesses means less employment opportunities for everyone, raising the unemployment rate. It is in this area that Unions seem to be self-defeating, creating the problems that they themselves are trying to fix, dragging down as many businesses as possible in the cycle. Are Unions just being spiteful organisations?

Don’t get me wrong. I do not hate unions. I think that they have their place in any stable economy to promote workers rights and to give a worker a voice. However, I do think that this 457 law is ridiculously racist and a stupid idea that will ultimately lead to the deaths of many businesses and when unions behave in this manner, I can only describe their actions as “thuggery”. Since the current Labor Government is a minority government, the bill would need approval from five of the seven “crossbenchers” in the Australian House of Representatives to pass parliament. With four crossbencher members of parliament already supporting the proposed change, one openly against it and two members of parliament not having stated their intentions, it is a very close decision. The bill will be debated in Parliament for the next couple of weeks until it is voted on. Hopefully, it will be blocked, but it ultimately all falls down to two independents: Tony Windsor and Peter Slipper. We’ll have to wait and see how this turns out and hope that Australia doesn’t start regressing back to the days of the White Australia policy.