Government abolishes 457 visas

The federal government will abolish the controversial 457 skilled visa program, Prime Minister Malcolm Turnbull announced today.

Prime Minister Malcolm Turnbull

Turnbull released a video message on his Facebook page this afternoon revealing 457 visas - which are most heavily used by the IT industry - would be scrapped in favour of a new temporary migration scheme that will come into effect in March 2018.

The new scheme would be tougher on labour market testing, previous work experience, and demonstrated English language skills, he said.

“We are an immigration nation but the fact remains: Australian workers must have priority for Australian jobs,” Turnbull said.

“We will no longer allow 457 visas to be passports to jobs that could and should go to Australians.”

The changes won't affect current 457 visa holders, whose terms of residency will be protected by "grandfathering arrangements" built into the reforms.

Two new classes of temporary skilled visas will be introduced in the 457's place:

• A two-year, short-term visa that will be available to applicants in a reduced list of skills categories. Turnbull said the list of eligible occupations will be cut by about 200.
• A four-year, longer-term visa that will be available to an even smaller list of higher skilled occupations.

Turnbull said both visas will require appplicants to have:

• Two years' prior work experience
• A higher standard of English than previously required
• Cleared a criminal history check
• Employers to have completed mandatory labour market testing in almost all cases.

The government has removed the option for permanent residency under the two-year scheme.

Two-year visa holders can only apply for one onshore renewal. Visa holders in the four-year category can apply for onshore renewal and permanent residency after three years.

An application fee of $1150 will apply to the two-year visa and $2400 will be the cost of the four-year visa.

The full list of conditions is available here.

The Prime Minister insisted the new scheme would still allow business to access the “skills they need to grow and to invest” but flagged a tougher stance, claiming the new program would only extend visa privileges in cases of “genuine skills shortages”.

The canning of 457 visas is part of a package of reforms that will also feature a training fund to help train local workers to meet gaps in the skills market.

The IT industry is the biggest sponsor of 457 workers. There were 7530 IT workers on 457 visas in Australia last June, according to the Immigration department [pdf], a 6 percent increase on the prior year.

The opposition Labor party late last year similarly indicated its intention to tighten the 457 program by making businesses look harder locally to fill jobs.

Turnbull said there are currently 95,000 457 visa holders in Australia.