IT sector abusing 457 visa program, says Gillard



news Julia Gillard this morning stated that the nation’s IT sector was taking jobs away from Australians by importing foreign workers en-masse under the 457 visa program, a situation which the Prime Minister said was “just not acceptable”.

The 457 visa program is an initiative which sees overseas workers sponsored to work in Australia temporarily (between three months and four years) with the aim of meeting demand for skills not immediately available in Australia. Eventually, 457 visa holders are able to convert to Australian permanent residency status.

The program is used to a certain extent by IT firms operating in Australia to import skilled labor, as the list of supported professions under the program’s terms include a number of popular IT professions such as ICT business analyst, systems analyst, analyst programmer, developer programmer, softare engineer, computer network and systems engineer and telecommunications engineer. The IT portion of the program is administered through progressional group the Australian Computer Society.

However, in a fiery speech this morning to a conference held by the Australian Council of Trade Unions, which is typically associated with the Australian Labor Party, Prime Minister Julia Gillard slammed the IT sector’s participation in the program.

“Fact: there is clear evidence that in some growing sectors, importing workers on 457 visas is a substitute for spreading important economic opportunity to Australian working people,” Gillard said. “Outside the resource states of Queensland and Western Australia, the single largest sector for temporary overseas work isn’t mining – or even construction – it is information technology. One in twenty temporary overseas workers in Australia is doing IT work in New South Wales alone.”

“It is just not acceptable that information technology jobs, the quintessential jobs of the future, the very opportunities being created by the digital economy, precisely where the big picture is for our kids, should be such a big area of imported skills.”

“An occupation where we have brought in 5,800 temporary workers in just seven months – compared to just 4,500 Australian IT undergraduate student completions in 2011. Fact: the areas where temporary work from overseas is growing show that this is work for which we can and should train young Australians.”

Gillard’s comments come as Immigration Minister Brendan O’Connor has also been recently slamming the IT sector’s usage of the 457 visa program. In February O’Connor issued a media release stating that the number of 457 visa applications jumped by 9.5 per cent this year, while the number of 457 visas granted grew by 6.6 per cent.

At the time, O’Connor said the figures backed the Gillard Government’s decision to take action to close loopholes in the 457 program to ensure that local jobseekers were not disadvantaged by unscrupulous employers bringing in temporary workers from overseas.

“These January figures show that after the traditional December lull, 457s have continued to increase,” O’Connor said. “At January 31, there were more than 105,000 people in Australia working on temporary 457 visas. That is an increase of 22.4 per cent compared to January 2012. “The overall trend is clear – more people are coming in on temporary skilled worker visas. This comes at a time when the unemployment rate is flat, not dropping.”

“We know that in the IT industry, for example, 457 visas have increased by 68 per cent while vacancies for local IT workers are decreasing.” O’Connor subsequently announced a range of measures to tighten the 457 visa program.

I haven’t personally seen much evidence of Australians finding it hard to obtain work in the IT industry; on the contrary, there appears to be a great deal of work around, with both large organisations (the Government in particular is always hiring skilled IT professionals) and small to medium-sized business (including startups) having a great deal of jobs on offer.

What I am seeing a great deal of at the moment is major corporations offshoring IT jobs. When this happens, I tend to see some local redundancies, but those IT professionals laid off are usually quickly soaked up by other companies and/or trained to higher skill levels.

I would interpret these comments by Gillard and O’Connor as political moves designed to appeal to Labor’s ‘working class’ power base. However … this does seem a little strange, given that very few IT professionals would class themselves as working class per se. The IT profession tends to be more dominated by white collar IT professionals who would be middle class; and often vote Liberal. You don’t really tend to see too many IT professionals get politically active in the Australian Labor Party.

Are Gillard’s comments here a little misplaced? Yes, personally I think they are. What the Government should be focusing on instead in this area, in my opinion, is setting up incentives for IT firms to startup, grow and expand massively their operations in Australia, through tax concessions and the like. Incentivising major IT companies to stay in Australia instead of letting them be sold off to global companies would be one way to help grow Australia’s digital economy and foster jobs. Another way would be to provide even more significant incentives to the local video game industry, which has been basically wiped out under the current Labor Government, due in part, I would argue, to a complete lack of Government attention to the sector.

It would be nice if the Gillard Government stopped ranting about the fairly insignificant 457 visa scheme, stopped propping up ageing industries such as car manufacturing, and started directly supporting local IT firms, especially video game development companies, to operate in Australia. It would be very nice.

But then, politics isn’t always about real outcomes: Usually politics is just about politics, no matter that it often makes no sense to those outside politics.

Image credit: Office of the Prime Minister


      • What crap – techies are generally educated and not generally conservative in my experience of over 10 years in IT. You only need look at the progressive skew of online social media populated by IT techies to see it isn’t conservative.

      • cmon pal
        you saying you would rather be a taxi driver than a system administrator
        somebody should do a research how many uni graduates actually get a graduate job
        many are jobless too, even I can’t work in IT

      • Then there are the rest of us who are in IT because we love it – first and foremost. Pay is second (at least for me and many others I know). I also want to produce qaulity work. Many 457 Visa candidates don’t love it and don’t produce quality(I’m often fixing their work actually – soemtimes it’s a lost cause and you have tio start over again), and for them it’s a stepping stone to management STATUS, oh, and the US.

  1. If i was to expect to see this rampant I’d expect to see it in and around Perth/WA.
    I haven’t seen more that two or three Visa workers in the IT industry for the last few years…

    No idea what she’s blathering on about.

    • There is a 150 million IT project about to kick off in WA. 75 million is for a greenfields SAP implementation – all jobs are reserved for onshore and offshore resources by one of the major consultancies. I know this for a fact because I have a friend who visisted there recently and was told unless he’s Indian he has no chance in hell of getting on the project – he is a highly skilled IT professional. So, basically , go and learn some facts.

      • If thats the case he can take them to the anti-discrimination commission and maybe fair work australia

  2. I think it is more indicative of how global IT companies are generally most people working here in IT here on a 457 will have worked for the company OS and have been promoted into a role in Australia.
    Obviously there needs to be some protections in place for locals but I don’t think the high proportion of workers in IT on 457’s has anything to do with rorting.

  3. Maybe the real question is why are Australian IT graduates so unemployable? Maybe they are trained up in the wrong stuff?

    • An indian IT worker probably gets about 15000 USD (so approx. 15000 AUS) . A graduate probably costs about 40000- 55000. It’s all about the dollars and wage abritration. I’ve worked with some of the 457 Visa guys and I’d choose an Aussie grad any day over them if I wanted qaulity, ability, competence and loyalty – but it’s not these things Aussie businesses are looking for – just bang for buck( allbeit low quality bang) . Aussie business’s are not that interested in building relationships with theior IT staff these days. You may surmise that’s because they get trained and then move on to the next job – that’s true for some, but for most they want a place that will giove opportunities to learn , promotion and challenges- give them that and be fair about the pay and they will reward that with loyalty

  4. I work in a large, well known organisation, and I know of people directly impacted. We had a medium size influx of work, so contractors (mostly on 457’s, a couple of locals) were brought in to perform those tasks. Before that work finished, they were expanded onto other basic tasks. That’s continued to expand – most of the workers have returned to their country of origin and the work has gone with them. Everyone I speak with is of the clear opinion that it’s only a matter of time before that business unit is fully off-shored to contractors – it used to be a team of over 200 locals. Some have not found work yet, some have come back as contractors in exactly the same work.

    That crosses the line between 457’s and off-shoring, but it demonstrates how 457’s can be the foot in the door. I’m glad I got out of that business unit.

    And for the record, white collar, middle class IT professional who votes Labor here (but I wouldn’t call myself “politically active”).

  5. I think you’ll find that its entry level IT staff who are on the 457’s .. I’d say at least 1/4 of our help desk at work (externally provided) are foreigners, I don’t know who’s on what visa .. but once upon a time i worked in IT in a large ISP and at the time they paid Network Ops staff less than the call centre and no award rates (thankfully Work place agreements no longer exist)

    So what Labor are talking about is the exodus of entry level graduate positions in Australia due to Off shoring and temporary visas (off shoring is probably a larger factor but harder to control), so if your a Grad now you need to start somewhere and if you want a job in IT your likely to get paid less than your friends at the local burger joint.

    Most of the people i know who still are in IT jobs started in a call centre or grad program.

    Well that’s my experience since 2001 to now in WA

    • Have worked in IT for almost 30 years. You are right in saying ‘ entry level’ – beacuse that’s where most of their skills are at – but many of these guys either present themselves or are presented by their employers as being highly skilled. The sad fact is that many are just downright incompetent, but they are cheap – that’s the point. And it’s not only my experience.

  6. “It would be nice if the Gillard Government stopped ranting about the fairly insignificant 457 visa scheme … and started directly supporting local IT firms, especially video game development companies”

    +1 to this, we can’t afford to hire juniors because we’re struggling to stay afloat and don’t have time to train them. Stop whinging, put Australia on an even footing with the Canadian tax incentives, and then we’ll be able to create more jobs and hire more locals, especially juniors. You want “big picture” for the next generation? That’s it right there.

  7. Companies like TCS and Infosys always bring in workers contracted to many of the big companies we have here.

  8. I disagree with your opinion Renai. Accenture brought in a tonne of developers from India to work at the ATO, while the rest of us were forced to join the dole queue.

    It was once a vibrant economy for IT….once, a long time pre-GFC ago.

  9. I work in a very big coal fiered power station ,and there are always big maintanance shutdowns, these shutdowns are always carried out by contractors that employs many skilled workers to carry out the maintananc work . These shutdowns have been going on for many years, and all the skilled workers has always been Australian workers , there has never been one single person on 457 visas employed by these contractors. The reason is because these big contractors never had any problems getting Australian workers to fill in each job. The treath off loosing jobs in Australuia are not those on 457 visas but from the greens and other idiotic enviromental groups that want these power stations shut down, and a labor government bringing in a carbon tax. that made no difference to the climate whatsoever.

  10. Nice that you don’t see this as a problem, Renai. But then IT Journalist isn’t the kind of job that gets outsourced to India, is it?

    I worked at company where this happened (and is still happening) and I can assure you that when you’re told that you won’t have a job in a few months it’s pretty bloody “significant”.

    Worse still when you’re told, as many of my then colleagues were, that you have to personally train up a 457 visa “shadow” in how to do your job. He then documents it up for his colleagues back in India and you’re out on your arse after 20 or 30 years loyal service.

    Worse still when you’re told that it’s all because these outsourcers are “highly skilled professionals”, which makes you what, some bumbling amateur?

    Worse still when those “highly skilled professionals” turn out to be completely clueless about… well, just about anything, really.

    Remember, 457 visas are for skills shortage jobs; those jobs for which no Australians can be found. Instead, they’re abused to fire Australians and replace them with cheap labour.

    Gillard is totally right on this, whatever her motives might be. The only problem with her rant is that it’s over a year too late.

  11. The ‘news’ mentioned the Government’s concern for students graduating/moving into IT, but the op/an didn’t seem to tackle it at all.

    Getting the best qualified people for the job is important, but at what cost to locals trying to climb the ladder and are stymied by lack of experience in those roles?

    I say this with respect to wondering what the Government or private enterprise can do to remedy this – if it’s actually an issue – rather than trying to sound protectionist.

    Also, is it a common assumption that all 457 employees are Asian/Indian?

    • No, not all 457’s are Indian or Asian – some are European, British, American – any nationality, really. The problem is they were originally designed to allow people with special or unique skills to be able to come here to perform certain jobs, but it appears there are ways to circumvent the original intention of the Visas and bring in pretty much anyone. That’s lead to mass importation of cheap labour to replace local workers. Most of this cheap labour will be relatively low skilled (despite what their resumes might say), which means they’ll be taking up positions that would otherwise be filled by graduates. Guess what happens if graduates can’t get jobs? In 10 years you have a dearth of skilled, experienced staff because those graduates that should have been working their way up through the industry were forced to get a job doing something else.

      I’m intrigued at the direction you’ve taken in this article Ren – you disagree with the premise of the Govt’s issue with 457 visas because in your personal experience you haven’t come across this. Surely you can see the flaw in this argument? Your evidence is anecdotal and extremely limited in scope (a few large Govt contractors could be guilty of this activity and you’d only know if you came into direct contact with them), vs their evidence consisting of hard facts and statistics…

      As numerous comments here have demonstrated, this is a problem, and one that seems to be getting worse at an accelerating rate.

      Should the Govt be looking at other ways to support and stimulate the IT industry? Of course. But that doesn’t mean they should ignore what has become a toxic and perverse use of working visa legislation that’s not just hurting the staff who are being replaced with cheap labour, but also customers who are receiving lower quality service and products, with potential knock on effects for the whole industry.

  12. Its not about available local employees, its the local employers that are the problem.

    Recruitment for most IT companies is done by people who dont know shit about the position they are recruiting for, they cant differentiate between skilled and unskilled workers anyway.
    They are me too employers, they employ people because they “look” like other employees, or have similar wording on their resume.

    It should not surprise anyone that there are so many IT disasters in Aus, disfunctional local industry with no vision trying to throw money at problems for short term fixes.

    AS for the 457 visas beign managed by the ACS, WOW, thats the first ive heard of the ACS in 30 years… i dont think they are actually relevent to anything.

    If aus wants to have a functional IT industry it needs to have an industry wide research to see how things are, develop a national policy to guide development of the INDUSTRY, and look at 457 visas as a part of that.

    Trying to fix aus’s IT problems by bringing in employees is like using bandaids on an axe wound… its just not significant to the problem.

  13. 20 years in IT myself. Many times out of work in the past 7 years. The company I work for now has 90 staff, and 8 are Australians. Xenophobia AGAINST Aussies by overseas owned IT companies.

  14. No wonder there are many Indians working as contractors in my office. They must have been 457.
    In accounting, hospitality etc all affected by 457. Typically they have undergrad degree in their countries before they come here as a post grad student to help getting 457 visa after graduation. Doing payroll or replacing computers with newer ones anyone can doit, you don’t need to import workers.

  15. At least workers on 457 visas are paying taxes here and contributing to the local economy. It is one step better than being outsourced.

    Renai is correct. We should expect to see more political grandstanding as Labor try everything in a futile attempt to avoid defeat at the next election. Hopefully the damage will be limited.

    • Anyone can pay tax, salary is bigger than the tax
      Only politicians see tax as good that is how pollies get paid, the average joe wants INCOME and a JOB

    • “At least workers on 457 visas are paying taxes here and contributing to the local economy.”

      Err, if they’re making 15 to $20,000 a year, they’re actually paying next to no income tax. On that kind of salary they’ll also be spending as little as possible locally just to survive, let alone sending money ‘back home’, so they will be spending the minimum on food, house sharing to minimise rent, won’t be buying expensive retail items (especially when clothes and electronics are several times more expensive in Australia than Asia) so essentially hardly anything they make will end up in the local economy.

      Next argument, Mat?

  16. For every tax the visa holder pays, there is another long termed unemployed person on a centrelink benefit.

    Many 457 visa holder also sends money back home

  17. Accenture was used where I worked and the IT project was so badly done by their imported labour that even after 3 re-writes the application was still not working well. It was a web site!!

    Imported labour in Australia is nearly always going to be bad because we do not have big enough projects to warrant having the A team sent over. We always get the C or below team, which have no clue. They were asking questions about how to use simple tools like wireshark, or writing basic socket code.

    Luckily they went 3 years over budget and the outsourcing has now effectively stopped, for now anyway. It was definitely looking like our entire IT department was going to be outsourced to India.

    The government is meant to look after the local economy, there will not be an economy left if we dont start focusing on ensuring local jobs are not off-shored, or outsourced to imported labour. Who will they tax, when everyone is on the dole?

    Part of the problem in Aus is also that overseas companies want to mark everything up so much to our local retailers, that it is cheaper to import than buy local. So how can a retail company make ends meat in Australia if our local prices cant compete with overseas? This means there are going to be less retail jobs. Everything is pointing towards a long recession in Aus. As always we lag behind the world by a few years, the Depression is only now starting to hit Aus.

    Our government is too soft, and easily run over by countries like the US. I can’t see Julia or Abbott changing this, but a list of Independants and the Greens may help to guide the country, they key is to have a hung government.

    Dump the “free trade” agreement and write a new one that is fair to all countries, ie dictate that international wholesale pricing should match local wholesale pricing (excluding shipping and taxes) for the country or origin, ie no price descrimination. It should be up to the local economy and competition to set pricing but with a fixed wholesale price for all. This would allow all countries to compete and have a viable local economy.

    Rant over.
    That feels a bit better :)

  18. What is the ACS response to this? If it’s a representative body, it should present some stats to support or counter this position.

    Oh wait. What’s that I hear, 457 Visa holders don’t join ACS? Oh, and their employers, they don’t believe in ACS?

    Oh dear.

    Won’t somebody think of the children!

  19. Wow. A few xenophobic folks about. :)

    I’m an ex-pat NZer without a degree (does that mean I am to be stoned for such blasphemy?) but with a whole bunch of experience (who also holds a bunch of rather useful external certifications, but I digress) who hasn’t really found it difficult to find work.

    And I’m not on a 457 either. I’m on the reciprocal visa that allows NZer’s and Australians to work either side of the ditch. So maybe quasi-Australian?

    I don’t hold a degree (really, unless you’re going for a very narrow range of roles or consultancy, uni education is a bit pointless; businesses want experience and vendor qualifications, in my experience) a degree doesn’t seem to be relevant in many sectors.

    I’ve looked at university degrees for this industry, simply out of curiosity. They’re frankly appalling (and have been so for many years) and won’t help anyone find a job; really are just a waste.

    In my opinion (for what little it might be worth, since I’m not “Australian” and thus probably hold an irrelevant view) 457’s aren’t the issue. They’re a symptom of a far bigger issue. The way the industry works and is worked (expectations, budgets, timeframes) is where the cause resides.

    Reason? Computing used to be a mystical art; people were extremely valued for that skill set and there was a huge demand for smart people who could perform computer magics. Now it’s commodity computing. In this respect “the cloud” has been horrific in devaluing skills.

    Indeed the entire industry has become so devalued that it’s changed the way businesses operate.

    This is just my humble observation.

    Gillard (and the Coalition, for what little they’ve added to education of late) would be far better served introducing new policies and budgets to help modernise University degrees, and to perhaps provide the same sorts of schemes that exist in many trades to ensure people gain exposure and experience.

    That and help businesses fund external vendor qualifications – some require considerable expenditure to achieve.

    I can see what’s trying to be achieved, but it’s really targeting the wrong group.

    You can’t stop the almighty race to the bottom that exists in any market and industry, and you won’t ever put the commodity computing genie back in the bottle, but you can at least better prepare the Australian workforce to be able to respond to the ever changing demand.

    That starts with sorting out better education. Funding NBN to build a network that allows for a far broader array of technologies and services (which, by the way, will generate a lot of jobs) and perhaps shifting the debate and policy to better address why 457’s are so prevalant.

    • Reciprocal visa should be abolished too, that is the answer.
      Not many AUS citizens go to NZ to stay.
      it is abused by people from other parts of the world who took a NZ passport to gain access to Australia. It is easier to migrate to NZ and then use it as a stepping stone to AUS.

  20. What I always find interesting about government talking about close skilled shortages is not even looking at the root cause. One of the largest training organization was privatized I wonder how many Comms and Electrical apprentices are being turnout by Telstra now, not to mention the IT development that was done in Australia by telecom in the early days of the industry it was a great source of opportunity for staff to upskill and graduates to get experience. We also have our largest RTO closing down its trade schools as those functions have been contracted out private enterprises, petty they need those skills in war zones also. Do you think privatization of the power industry is going to see a reduction apprenticeships in related fields? What is frequently with the privatization kick and “the market can deliver it better” mantra is that these GBE did a lot more than deliver electricity, built our communications system, feed or troops and maintained our defense forces equipment, they also trained a generation of baby boomers, how soon they forget.

  21. The government structured, introduced, and oversaw the current 457 visa system. If it is operating so badly now (as has been proposed by the PM and her ministers) then it is probably to do with the structure and/or management of the system. I wonder who is responsible for this then?

    • The 457 legislation was brought in by the Howard Govt. The department for Immigration can only perform their job within the scope of the legislation. If that was poorly written and there’s nothing technically illegal about this practice (which it appears there isn’t) then the current Govt bringing the issue to the attention of the public and changing my the legislation to stop the exploitation of loopholes is exactly what they should be doing to fix such a problem.

  22. Who are these white collar IT professionals that vote liberal?

    I and all my colleges over several companies all vote Labor and Green’s…
    who would support a party that privatizes core infrastructure and wouldn’t support renewal, on top of that who would support a party that actively tried to crush the IT union and succeeded.

    I have been in the industry well over 10 years worked as a graduate all the way to management, and i certainly dont support liberal, we also support 457’s… why? because there are 1000’s of graduate but there is no skilled work, and most orgs can not afford to but a grad on for 2 years waiting for them to get the skills required to do their job, we have 2 grads and 2 457’s start recently and i can tell you who is doing the work.

    is this the right solution? no but when there is not skilled work and nothing but uni grads who will not go to the effort to get a mcitp there are few options, i would personally kill for some more server engineers but there is not a soul out there.

  23. I have read all most all comments. It is quite interesting when we Australian find difficult together a job, people are coming on 457 visa. I know some of them work only 5 6 hours a day and getting overand getting120000per year. Why does this government not taking any action to support its locals. All most457 should be stopped.let the people of Australia be safe

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