Mines and Metals Association 2008 National Conference
3 April 2008
Distinguished guests, ladies and gentlemen,
Australia's mining industry is one of the giants of our economy.
The Australian minerals sector is among the top five producers of most of the world's key minerals commodities.
In the five years to 2006-07, minerals industry exports have totalled over $300 billion.
During that period, Australian mine production has increased by 19 per cent.
But there is no doubt that the sector is facing challenges.
A report by the then Federal Department of Education, Science and Training found that by 2015, another 42 000 more employees will be needed in WA for proposed and existing projects.
Another 70 000 will be needed by the sector throughout the rest of Australia in the same period.
The report says that labour shortages are likely to be a major constraint on the growth of the Australian minerals sector over the next decade.
Recruitment firms are quoting shortages of 200 to 300 geologists, while mining engineers can name their price.
In this urgent climate where projects will stall if workers cannot be found, the Government is moving swiftly to examine all of the options available.
Today I will talk to you about the Subclass 457 visa, which is being used extensively throughout the mining industry to address labour shortfalls, and the background to much of the controversy that surrounds it.
I would also like to take this opportunity to thank the Australian Mines and Metals Association for its invitation to speak today on this important subject.
I know that the AMMA has done a lot of work around the skills shortage facing the mining sector in Australia, including a very recent submission to the Joint Standing Commission on Migration Inquiry into Temporary Business Visas.
Australia is competing with other countries for skilled labour to meet the needs of business in this sustained period of economic growth.
We are aware of the difficulty some employers, such as those in the mining sector, are experiencing in meeting their skill needs.
We also recognise that skilled overseas workers play an important role in helping to meet skilled labour supplies.
The Temporary Business (Long Stay) Subclass 457 visa has been successful in helping Australia to remain competitive in this global marketplace.
The reality is, the program is very successful.
Over 16 000 business sponsors currently employ more than 105 000 Subclass 457 visa holders across Australia.
The mining sector is one of the biggest users of the Subclass 457 visa.
The boom in the minerals and resources sector is certainly reflected in the growth occupations in the Subclass 457 program.
Comparing 2006-07 with 2007-08:
- electrical engineers increased by 102 per cent
- civil engineers increased by 93 per cent
- geologists increased by 89 per cent
- chemical engineers increased by 85 per cent
- civil engineering technicians increased by 84 per cent, and
- metallurgical and materials technicians increased by 71 per cent
However, the Subclass 457 visa program remains under intense public and media scrutiny.
Negative public perception has been fuelled by cases of exploitation of vulnerable overseas workers and by the media focus on, for example, the tragic workplace-related deaths of three Subclass 457 visa holders in 2007.
One key perception out in the public is that the 457 program is being managed poorly and without rigour.
Another perception is that the department's administration of the 457 program is reactive and that monitoring of 457 sponsor undertaking is inadequate.
In fact, the statistics show us that sponsor compliance is high.
Most sponsors realize that it is in their own interests to comply.
The department is tackling these challenges head-on by delivering a program supported by robust integrity measures both at visa processing and sponsor monitoring stages.
The Subclass 457 program has experienced strong growth over the last six years – there has been a 150 per cent increase in grants since 2001–02.
This upward trend is predicted to continue.
The program plays an important role in addressing the skills shortage by facilitating the employment of temporary foreign skilled workers to fill positions of need for up to four years.
Monitoring plays a vital role. It ensures that sponsors are complying with their obligations and ensures that sponsors and applicants are aware of their rights and responsibilities.
There has been significant growth in the trades-related occupations.
However, this increase has been accompanied by the emergence of integrity issues related to the skills, qualifications, actual tasks undertaken by 457 workers and sponsor compliance with their undertakings.
Managers, professionals and associate professionals make up 80 per cent of the Subclass 457 caseload.
The group that contains tradespeople makes up about 20 per cent of the caseload.
However, the growth in the tradespeople group has been very strong.
The figure of 3500 people in 2004-05, more than doubled to 8400 in 2005-06 and increased again in 2006-07 to 8650.
There have been significant changes to 457 monitoring in 2006-07.
Setting a 100 per cent monitoring target was unrealistic.
This approach proved to be unsatisfactory because it led to superficial monitoring and did not focus on areas of particular risk.
From November 2006, a risk-based approach has been adopted that now concentrates on higher-risk aspects of the caseload.
Most sponsors are doing the right thing by their 457 employees.
Risk focus has allowed us to look at specific issues in greater detail, particularly around salaries.
For the 2007–08 program year, our revised monitoring strategy is having a marked and immediate impact – in six months we've barred 123 sponsors.
In the whole of 2006–07, just 95 employers were barred.
Our revised strategy is an enforcement style approach to monitoring.
A range of penalties are currently imposed on sponsors found to be in breach of their subclass 457 sponsorship undertaking.
- a bar on making future sponsorship applications
- cancellation of existing sponsorships
- formal warnings for minor breaches, and
- cancellation of visas held by sponsored employees.
These sanctions are in addition to penalties that can be imposed by other agencies that have jurisdiction in matters covered by legislation, such as Workplace Relations laws.
This revised strategy has already provided results.
For instance, in 2006-07, around 50 per cent of allegations stemmed from DIAC-initiated monitoring and 47 per cent came from visa holders or third parties.
This year, around 30 per cent of allegations have stemmed from DIAC-initiated monitoring, while nearly 70 per cent came from third parties or visa holders.
Some other key changes that were introduced were:
- the new English language requirement to help protect both overseas and Australian workers and aims to ensure overseas employees are able to understand occupational health and safety and workplace requirements, as well as their rights and obligations, and
- larification of the Minimum Salary Level.
In its commitment to ensuring that the Subclass 457 visa is a robust and fair tool to address labour shortages throughout the country, the Government is seeking as much input as possible into the issue.
The Minister, Chris Evans announced in February, that not only would the Government increase the Skilled Migration program by 6000 places for 2007-08, but that he had appointed an External Reference Group of industry experts who would examine how selected temporary skilled migration measures could help ease labour shortages in the medium to long term.
The Group consists of:
- Peter Coates – former chairman of Xstrata Australia and former chairman of the Minerals Council of Australia
- Melinda Cilento – deputy chief executive of the Business Council of Australia
- Tim Shanahan – director of Energy and Minerals Initiative, University of Western Australia and former CEO of the WA Chamber of Minerals and Energy.
The construction, major infrastructure, tourism and the resources sectors are the focus of the group.
It has consulted widely in these sectors, some of you were no doubt contacted to provide input.
The Government is keen to know how it can improve temporary skilled migration programs to better meet the needs of business.
We know companies are running into problems with processing times for visas and would like a more responsive system.
The External Reference Group looked at these issues and have included recommendations that tackle these issues in their interim report to the Minister, which he is currently considering.
The Group will provide a final report to the Minister later this month.
While that report will be a good first step the Government does not view it as the end of the matter and will continue to engage with business on ways to improve how the migration system operates.
Ladies and gentlemen, the Government recognises the value of overseas skilled workers.
We recognise that we need a strong skilled migration program to meet the demands of our booming economy.
However, we are also concerned about the integrity of the current system.
While most sponsors under the system do the right thing by their overseas workers, a small percentage do not comply with their undertakings and they face significant consequences.
We intend to improve the transparency and accountability of the temporary skilled migration program to restore public confidence in it.
We are already heavily involved in meeting with unions and business groups to discuss all of the issues surrounding the Subclass 457 program.
There is no doubt that the 457 visa has its place in providing the labour force needed by the economy and we are committed to refining the program until we are satisfied that it provides the right balance between providing much-needed labour, while protecting the rights of workers.
Index of Speeches
Last update: 05 March 2012 at 16:27 AEST