457 visas 'may cost local-born jobs' | Australian IT
Paul Maley | February 20, 2009
AUSTRALIA'S record intake of temporary skilled migrants during the economic downturn could boost the number of Australian-born unemployed, as research suggests it is being used as a "back door" to permanent entry by low-wage workers.
The claim comes from Monash University population expert Bob Birrell, who said more of Australia's permanent skilled migrants were being sourced from the 457 visa program, which was drawing on workers from low-wage countries in increasing numbers. The visas are widely used in the ICT industry.
"People at the lower end of the spectrum are becoming permanent residents," Professor Birrell said. "They're vulnerable to exploitation because the employer knows they're not going to quibble with what he's offering them because they're desperate to get the permanent resident nomination."
As the global recession worsens, Professor Birrell said it was time for the Rudd Government to rethink its record high migration intake.
He said the tough economic climate would give employers added incentives to employ or retain cheap overseas labour in the place of local workers.
Professor Birrell, a long-time critic of a high migration quota, said the research, which was co-authored by Ernest Healy and 457 visa expert Bob Kinnaird, was in response to Immigration Minister Chris Evans's decision in December to give priority to migrants with a job or with critically needed skills.
That decision was seen as an alternative to cutting the migrant quota, an option flagged by Kevin Rudd last year in response to the worsening economic conditions.
Last May, Senator Evans announced an increase in the permanent migration program of 37,500. The increase brought the total number of skilled migrants to 133,500, plus 56,500 family reunion places and 13,500 humanitarian visas.
Overall, Australia is taking more than 200,000 new migrants a year.
In 2007-08, about 58,050 migrants came in under the 457 program, a figure that excludes their family members.
Professor Birrell said, in that year, about 90 per cent of the 17,760 permanent migrants who were sponsored by an employer onshore were former 457 visa holders.
Holders of 457 visas are subject to less stringent language requirements and there is no labour market testing, meaning employers do not have to demonstrate that the position cannot be filled locally.
A minimum salary level of $43,440 applies for most 457 visa workers.
In a trend that has alarmed unions, who fear the 457 program is being exploited by business to undercut wages, the program is increasingly sourcing workers from the developing world.
In 2007-08, 8250 Indian workers came in under the program, compared with 2880 in 2004-05.
Over the same period, the number of Filipino workers jumped from 600 to 5120, and the number of Chinese workers rose from 930 to 3360.
A spokesman for Senator Evans said yesterday the 457 program had sharply declined amid worsening financial conditions. "Figures show that application rates for subclass 457 visas in January 2009 are now 30per cent lower than in September 2008, when the economic downturn struck," the spokesman said.
Furthermore, plans to introduce market rates for 457 workers would effectively make them a more expensive option, the spokesman said.
A cut in next year's migration program was also likely, he added.
RBA governor Glenn Stevens says the economy faces a 'difficult year ahead' | The AustralianNOTHING could have protected Australia from the fallout of the financial crisis, and we face a difficult year ahead, RBA governor Glenn Stevens says.
And it is unlikely interest rates will drop to zero, he told a House of Representatives Economics Committee hearing.
So many countries have lowered their benchmark interest rates to zero or near enough "that it no longer matters''.
"It is not my present expectation we're going to find ourselves at nothing,'' Mr Stevens said.
Australia's cash rate of 3.25 per cent is one of the higher cash interest rates in the advanced world.
Mr Stevens said that no policy could have protected the economy from the effects of the global economic crisis.
"The deterioration in international conditions was so rapid that no policy response could prevent a period of near-term weakness in the Australian economy or for that matter other economies,'' Mr Stevens said.
"We are being effected by the global downturn and we cannot realistically expect other than weak conditions, at least in the first part of 2009."
"This is a weak near-term outlook to be sure.''
Mr Stevens said large interest rate cuts, the stimulus plans and a lower exchange rate will support demand "increasingly so as the year goes on''.
"Australia will come through this episode not unscathed, but well placed to benefit from this,'' he said.
"Things will be difficult over the next year.
"But as I have said before, the long-run prospects for Australia have not deteriorated by as much as we may all be feeling just now.''
China's growth not yet finished
Mr Stevens said China, one of Australia's biggest trading partners, still had plenty of growth potential.
"China's emergence, for example, has not finished. It has years to run and Australia will benefit from it,'' he said.
"We can have confidence in our long-run future and in our demonstrated ability to adapt to changing circumstances.
"If we retain that, there is no reason for any downturn to be a deep one.''
Australia's financial system was healthier than other countries, he said.
"Credit standards do seem to have tightened further over recent months and banks are seeing the inevitable increase in bad debts as the economy slows.
"But our major financial institutions are still in a strong condition, have access to debt and equity markets, are still earning good profits, and are in position to lend for sound proposals.''
Mr Stevens said housing affordability was likely to improve.
"Our housing sector is not overbuilt; instead there is considerable pent-up demand, and affordability is improving quickly,'' he said.
Mr Stevens said the effects of interest rate cuts - 400 basis points since September last year brought the cash rate to 3.25 per cent - were only beginning to impact.
"Those effects are yet to be seen in many of the figures, though they are being felt in businesses around the country. The effects of the policy adjustments are only beginning.
A chat with the ex is a good idea | The AustralianBROKE bread with a former prime minister the other day. We share a native habitat, Sydney's lower north shore. We reminisced about old times. He recalled his best bowling figures, 6 for 76, and I mine, 8 for 2 off 10 overs. For cricket tragics, the passage of 50 years does not eliminate memory of one's most gratifying achievements.
Just back from a short trip to Canada, the ex-PM looked roseate and relaxed. He is 40,000 words into his memoirs, though this count may not hold up, since he lets it all rip as he talks into a recorder but plans to cut and edit the transcripts. Asked if he would settle a few scores with his book, he hesitated only briefly before replying, "I don't think so. There's a lot of real stuff to write about."
The former PM talks to a lot of people and is up to date with current events, but in the detached way appropriate for an ex.
I've indulged in this rather long-winded prelude to make the point that the former PM seems entirely content with his formerness and nourishes no fantasies about being monarch in exile. He has opinions, though, and believes Kevin Rudd's $42 billion spending package will do little or nothing to stimulate the economy.
"What would have been a better move?" I asked.
"Set aside $16 billion to compensate the states for suspending payroll taxes for a year."
I was taken aback. Though it has been only a little over 12 months, I had virtually forgotten directness and simplicity as a tool of politics.
But a vague recollection came to me, sharpened subsequently with the aid of Google, of the reaction by Rudy Giuliani, damp squib US presidential candidate but triumphant mayor of New York, when he first heard of our payroll tax from an Australian Financial Review interviewer: "I don't understand that. We have about 20 forms of taxation in New York city and some of them are strange, but nothing like that one."
The federal government started levying a 2per cent tax on wages and salaries paid out by employers in 1941, with the specific purpose of financing child endowments. In 1971 the feds handed the right to tax payrolls over to the states and territories as part of the payback for grabbing their income taxing powers. They immediately doubled the rate.
Nowadays every state and territory has a different starting point and imposes a different taxation rate. South Australia starts earliest, hitting payrolls over $504,000 with a 5.5per cent tax. Tasmania lets its employers pay out $1,010,000 before imposing a 6.1 per cent tax.
Queensland has a sliding scale for payrolls between $850,000 and $3.4 million, which means, I guess, that you jump a bracket if you get careless about hiring a tea lady.
Payroll tax is a major earner, second only to land taxes as a source of revenue for the states and territories.
Being a bit worn down by global thinking, I shaped my thoughts about a suspension of payroll taxes in the context of the effect on myneighbourhood.
At the heart of the lower north shore is the electorate of North Sydney, held by the new shadow treasurer, Joe Hockey, who is almost inordinately proud of it. North Sydney, Hockey boasts, is home to 25,000 small businesses and has the highest proportion among federal electorates of working women and people with professional and trade qualifications.
That's a profile of a community with heavy shocks coming its way in the event of drastic economic reverses.
On the other hand, a cost saving of 6per cent achieved by release from NSW's tax on payrolls over $600,000, plus removal of the considerable cost in time and money of compliance with a complex system, might see many established enterprises remain in the hands of experienced, creative, aspiring (or desperate) individuals, able to employ sufficient staff to hold the line and even to grow and flourish.
Moreover, this admirable outcome might be achieved by the federal Treasury's signing only eight cheques a month, instead of the tens of thousands that will be required just for Sydney's lower north shore, to launch and sustain Rudd's suite of favoured industries: school refurbishing, home insulation, building bicycle tracks. Not to mention the pointillist detail involved in distributing all those $900 handouts.
I am not in a position to say with confidence whether Rudd's $42 billion spending package will stimulate anything. Nor, from the sound of it, is he.
But I know governments will make heavy weather of disbursing that kind of money throughout the country and that the very fact of its availability will inspire unprecedented snorting at the trough.
When coaching young cricketers, Mark Taylor constantly urged them: "Keep it simple. Keep it simple."
Pity he didn't go into politics.
Migrants won't cancel job boost - Gillard | The AustralianTHE Federal Government has rejected research which shows its $42 billion economic stimulus package will not save jobs unless Australia's immigration intake is slashed.
In a paper to be released today, demographic experts warn that new permanent and temporary migrant workers will soak up the 90,000 jobs the package is supposed to support.
That is because the immigration intake will exceed the number of jobs the Commonwealth was trying to protect, The Australian Financial Review reports.
The experts advocate cutting the skilled intake to between 40,000 and 50,000 visas - down from a projected 133,500 - and forcing employers who want to import staff to prove that local skills are not available.
"It seems to me that this research could not be right,'' federal Employment Minister Julia Gillard told ABC Television.
"We are expediting the immigration of people who have the skills that we need.''
Clinton heralds new era in Jakarta | The AustralianTHE US had embarked on a new era of a "robust partnership with Indonesia", which would help Washington "reach out to the Muslim world", Secretary of State Hillary Clinton said in Jakarta last night.
After meeting Foreign Minister Hassan Wirajuda for about 90 minutes, Ms Clinton affirmed that Indonesia was a place where "Islam, democracy and modernity can not only co-exist but can thrive" and drove home the importance of the relationship to the Barack Obama administration.
She also announced that the two countries would be undertaking a review of strategies to encourage democracy in Burma, including working through the medium of the Association of Southeast Asian Nations, of which Burma is a member and whose secretariat is in Jakarta.
Declaring that she brought "greetings from President Obama", Ms Clinton will also take home with her a message for her new boss from Mr Wirajuda: the Indonesian Government's fervent hope that the US leader will schedule a trip to Jakarta soon.
"President Obama has a very strong constituency here in Indonesia, and the Government and people of Indonesia would like very much to welcome President Obama on his trip to Indonesia," the Foreign Minister said.
"I will say we cannot wait too long and I wish that Hillary Clinton conveys this to President Obama."
The US President, who attended primary school for several years in the Indonesian capital, has indicated his enthusiasm for a trip to the country and last year told his counterpart, Susilo Bambang Yudhoyono, how he fondly recalled nasi goreng (fried rice) and bakso (meatball soup) from that time.
And an Obama donor recalled in December that Mr Obama had promised an early trip to Indonesia, the donor telling the respected Politico blog that the then presidential candidate had said his first words, on disembarking from Air Force One in Jakarta, would be the Indonesian for "I am back, dudes".
Ms Clinton's visit to the Indonesian capital, after Japan and ahead of stopovers in South Korea and China, also included a symbolically important meeting late yesterday with ASEAN Secretary-General Surin Pitsuwan.
Indonesia is hoping for a stronger US engagement with the grouping, whose constituent states boast a total population of 575 million. There were expectations the Obama administration could even sign up to ASEAN's 1976 Treaty of Amity and
Co-operation, allowing it to take part in the next East Asia Summit, a foreign ministry spokeswoman said.
Noting that the trip was her "first as Secretary of State but not my first to Indonesia", Ms Clinton said it was "wonderful to be back" and that she had "very high hopes for the United States-Indonesia relationship" -- a relationship she went on to describe as entering a new form of "comprehensive partnership".
As well as the fraught issue of Burma, on which she acknowledged neither "sanctions (nor) reaching out to" the military junta had had any effect, the pair discussed climate change, the global financial crisis, the middle east situation in general and Palestine in particular, as well as disarmament issues.
"I'm very committed to the relationship between the two countries," Ms Clinton said. "The Obama administration wants to reach out to the entire world. The United States and Asia have a common future -- the question is, how will we share it?"
She is due to meet Dr Yudhoyono at the presidential palace this morning to carry Mr Obama's greetings directly to the Indonesian leader, after accepting a declaration from the Foreign Minister that the country was "honoured and humbled" by her visit.
With national parliamentary elections less than two months away, and presidential polls to follow, Indonesia's political landscape is wide open, giving Ms Clinton's robust defence of its progress towards democracy an added edge.
The US-based Asia analyst Walter Lohman wrote yesterday that Indonesia was "a developing democracy under assault from a determined Islamist minority", noting that the Secretary of State's visit could help balance this tendency.
