Change in visa 457 will be a “bomb” to explore employment crisis in Australia

The Fact

Visa 457, also known as Temporary Work Visa, “lets a skilled worker travel to Australia to work in their nominated occupation for their approved sponsor for up to four years.” According to the immigration website, this visa provides an opportunity to foreign people with specific skills entering into Australia for temporary work. It not only provides benefit to employees, but also being beneficial to employers, as they can spend less money to hire more skilled and experienced people. Also , they can expand workforce form domestic into worldwide. On April 18 2017, Mr. Turnball said that the government would no longer allow 457 visas to be passports to jobs in Australian.

Benefits for domestic Australian

It suggests that the cancellation of visa 457 will reduce unemployment rate in Australia because the domestic companies left with no choice to hire domestic labour force. It also motivates the workers to develop in a more professional way and hence increases the productivity.

Potential issue

However, domestic workers may lack of skills in some areas, so that now companies may not be able to find a suitable worker only in Australia. For example, organisations such as universities, may have trouble in hiring overseas talented professors to do advanced research or provide development in certain field. It makes the university more difficult to find an easy way to hire qualified people from overseas, and it will take long time to get a relevant visa.

Response from government regarding potential issue

Evidently, Mr Turnball has considered this issue by replacing visa 457 to a new temporary visa specifically designed to recruit the best and brightest in the national interest with strict rules. Even though, there is a new chance to hire professionals from overseas, the boundary is dramatically high, such as the requirement of high level of English language proficiency. It still limits the chance for overseas workers entering into Australia

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11 Comments

  1. While an innovative solution to unemployment, and one likely to please his supporters, this isn’t the way to deal with this problem, and will have many negative side effects.
    The fact that companies choose to hire more skilled workers on 457 visa means that, at least temporarily, labour resources will be of lower quality, as less skilled Australians attempt to fill the gap. Additionally, our current unemployment rate is only 5.3%, not particularly high and certainly not high enough to require a measure such as this. Finally, the incentive to be a better employee and become more skilled is motivated by a desire to get a job or keep a job, and if an individual no longer has to compete with more skilled labour forces they will not attempt to improve accordingly. Companies will be forced to take a more active role in improving the skills of their workforce, decreasing productivity and increasing labour costs. Given all this I’m forced to wonder if economic goals are really the main motivation in this ‘economic decision’.

    Liked by 1 person

    1. I agree with your points completely. This is an extreme measure however, it could help Australia become more self-reliant and secure by forcing companies to hire domestic workers. Perhaps discrimination by the government is at play here as well.

      Liked by 2 people

  2. Turnbull may have chosen to do this in order to get votes, as we know in politics this is often the case. this decision comes at a bit of a weird time given the unemployment rates are not currently that low. However i think this decision will be very popular among Australians as it looks like a good one at face value, which is what i believe to be one reason behind the move, as many Australians will resonate with anti-immigration policies that keep jobs in Australia, particularly after recent years have seen the collapse of our car manufacturing industry and the closure of the SPC factory.
    But the decision may end up hindering out growth as productivity will likely decrease.

    Liked by 1 person

  3. It may be that the new replacement visa in fact makes no new changes or very few, it will prove is entire stunt is just political pandering. It is widly known The Prime Ministers rating have fallen recently and he is most likely desperate for some popular public opinion. This visa repeal action will increase the ratings of the PM, regardless of the eventual outcome.

    Liked by 1 person

  4. Jobs in Australia are for Australian citizens, not some imported worker. I think that this may cause unemployment to fall at least for the short term, however they still want to introduce a replacement visa system, so the problem is not totally fixed.

    Liked by 1 person

  5. The removal of the 457 visa will likely reduce the supply of labour, this would lead to a shortage and push up wages which would lead to aggregate supply to decrease as the cost of production of goods and service would increase. In turn an decrease in AS would result in inflationary pressures to increase. Luckily Australia’s inflation rate is low so this would actually help the economy and achieve the governments goal of 2-3% inflation

    Liked by 1 person

  6. I can see how the removal of the 457 visa will reduce unemployment but I believe it is more beneficial for Australia to be having people with the right skill set to be creating a more productive economy.

    Liked by 1 person

  7. This would should improve economic growth as only skilled workers will be able to stay and this’s would improve productivity and increase aggregate demand

    Liked by 1 person

  8. While this could reduce the amount of unemployed people, retraining existing unemployed could cost too much and therefor serve as a negative externalty

    Liked by 1 person

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