Tuesday, March 26, 2013

Changes to 457 Visa do not address fundamental problems of costs and productivity


457 visa changes  has all the appearance of pro-Australian, and few remaining lifeline for a lame government struggling to survive and praying for a slim victory in the coming elections.

It may help to temporarily placate local workers under the current difficult employment market but nothing more to boost the employment of locals. Besides, outsourcing renders import of skilled labour irrelevant.



As in other countries that had pandered to political pressures to give priority to locals seeking employment, artificial imposition of regulations would inevitably raise costs, limit options and unpopular with employers. It would be costly to fill higher skilled and niche vacancies. That could only spell trouble for the future, making Australia less competitive and short of skills.

Moreover, restriction on migration does not remove the prospect of Australians being made redundant and laid off through outsourcing to India, China and Indonesia. This trend has been ongoing for years unabated.

From call centres, IT to finance, employers are opting for cheaper foreign workers based overseas. With modern communications, there is less dependency on foreigners.

In reality, migrants by and large fill the gaps and taking over jobs that Australians shun or are unable to perform well. On the contrary, local born and bred are already enjoying a headstart and advantages as employers and recruiters do place a lot on the familiar sounding names and elementary education of applicants. Changes in 457 would indeed add more economic disadvantages to longstanding racial discrimination encountered by migrants. But whether it would be beneficial to Australians is doubtful.
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The anti-foreign image of Australia will be more pronounced, as seen in earlier restrictions on employment for overseas students and graduates from Australian universities.

On the other hand, the government's shift to focus on a AUD 5 million investment visa has only started to kickoff. What impact would wealthy individuals seeking PR by investing in bonds and companies remains to be seen. It may not necessarily translate directly into more jobs for Australians if investors are playing safe with bonds and equity.



I have also heard from inside sources that some of these investors plan to import semi-processed or outsource some of the jobs overseas. All businesses, whether Australian, foreign or global, are very concerned with bottomline. The only way out is that Australians improve productivity, raise skills level, value add and offer products and services in high demand by the international market.

Protectionism by legislation would not help to solve fundamental and structural economic problems, not even in the short term.

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