‘Australians first’ ban on 457 visa scheme for skilled migrants will only hurt the economy

Manjit Bhatia says Prime Minister Malcolm Turnbull is making scapegoats of qualified immigrants, when the real problem is the failure of successive governments to frame farsighted policies to prepare Australia for a post-mining future

PUBLISHED : Friday, 28 April, 2017, 11:12am
UPDATED : Friday, 28 April, 2017, 8:05pm

A week after his visit to India, Australian Prime Minister Malcolm Turnbull put up the “No Vacancy” sign, saying the 457 temporary visa programme would be scrapped. Introduced in the 1990s, the visa scheme signalled a major shift in Australian immigration policy: it allowed businesses to hire foreign workers for jobs locals could not or would not fill.

Something changed between the India visit and Turnbull’s “Australia first” decree: he looks suspiciously to have taken Donald Trump’s populism playbook to heart. Twenty months after taking on the job, Turnbull has wrapped himself in the flag and cotton wool. He still wants free trade but is happy to jettison his enlightened, moderate and globalist credo.

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That has left Pauline Hanson ecstatic. Turnbull needs critical legislative and electoral support from Hanson and her One Nation party, which wants non-white immigration and citizenship frozen indefinitely.

It is conservative Australia whose raw nerve over “unstoppable” population growth from immigration, including via the 457 scheme, that Turnbull has touched. Foreigners, they argue, have been abusing the visa scheme to become citizens. And they’re taking Australian jobs. These are dubious claims when unemployment has remained close to 6 per cent for five years at least, while wages have stayed stagnant and inflation was 1.5 per cent at the end of the year.

Such claims are gross exaggerations. For starters, Turnbull had bragged in India about Australia being the world’s “most successful multicultural nation”. This, then, denies Australia is racist and Turnbull is not targeting migrants.

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He praised Indian immigrants in Australia, their “integration” with “Australian society” and their contribution to economic growth. At least there is now tentative recognition that immigration creates aggregate demand and that supply-side economics is just bunkum.

To be fair, 457 visa holders aren’t only Asians and Pacific islanders; they are also Westerners, including New Zealanders. Also, they represent 0.7 per cent of Australia’s total workforce. Ironically, as he cut some 260 occupations on the 457 list, Turnbull pitched for millions more Indians to study in Australia, many of whom will want to stay on beyond their programmes. The Australian economy needs foreign students as much as its tourism depends on foreign, mainly Chinese, visitors.

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He is also open to giving A$1 billion ­(HK$5.8 billion)of taxpayers’ money as a government soft loan to Indian conglomerate Adani for their proposed coal mine along the fraught Great Barrier Reef. This demonstrates Australia’s growing dependence on foreign investments – as on foreign tourists, students and immigrants – to generate critical foreign revenue, as the budget deficit and foreign debt hobble towards a crisis. It would be foolish for Australia to think it can revisit the self-destructive inwardness of “White Australia”.

A skills shortage exists because successive governments have directly failed Australians and Australia

Also clear is that the mining boom is petering out – jobs are being lost down the supply chain. Successive governments have squandered billions in foreign earnings over the past 25 years on absurd policies. The government hasn’t invested in human capital development – shunning job training, retraining the unemployed, or creating enough jobs to bolster economic capacity. Along with drastic cuts to education and the growing casualisation of the workforce, a skills shortage exists because successive governments have directly failed Australians and Australia.

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Instead, Turnbull is building warships and submarines that will be antiquated by the time they are rolled out. Even these jobs require specialists: highly skilled professionals who usually come to work in Australia on 457 visas.

The 457 visa holders haven’t taken jobs from Australians; they have filled jobs that locals lack the training and skills to do

The 457 visa holders haven’t taken jobs from Australians; they have filled jobs that locals lack the educational background, training and skills to do. Australians refuse jobs that highly qualified immigrants take on, like driving buses and taxis, or as sports security officers and health professionals in regional Australia.

The Turnbull government is making foreigners the scapegoat for its inability to produce intelligent, farsighted policies to enable the transition to a post-mining economy. This is not “clever politics”. Quite the opposite. It is the politics of popularity polls and political desperation. The big losers, inevitably, will be local and foreign talent and the economy – what is left of it.

Manjit Bhatia is an Australian research scholar. He is also research director of AsiaRisk, an economic and political risk consultancy