THE HON BRENDAN O’CONNOR MP

Minister for Immigration and Citizenship

THE HON BILL SHORTEN MP

Minister for Employment and Workplace Relations

 E&OE TRANSCRIPT

DOORSTOP

PARLIAMENT HOUSE, CANBERRA

MONDAY, 18 MARCH 2013

11.40AM

SUBJECT: FAIR WORK INSPECTORS TO MONITOR ROGUE 457 EMPLOYERS

 

BRENDAN O'CONNOR: Thanks for coming. I'm here with Minister Shorten to make an important announcement about providing sufficient support so that we can attend to the problems with the 457 visa.

 As I said on 23 February, this Government is concerned about the way in which that 457 scheme is being used and indeed this was identified by the department more than 12 months ago and reported to my predecessor.

 Chris Bowen then referred that matter to - and those reforms too, after the problems were identified to the Ministerial Advisory Council on Skilled Migration and that Advisory Council affirmed the reforms which I announced on the 23rd.

 Those reforms went to ensuring that we enabled the Government to properly determine whether sponsoring employers genuinely demonstrated that there are skill shortages and therefore a need for a 457 application.

 Those reforms also went to ensuring that sponsoring employers demonstrated that they are providing a level of training to local employees before making such an application, and those reforms also went to ensuring that sponsoring employers demonstrate a willingness to employ local workers.

 I also made very clear on that day that the Gillard Government supports immigration and indeed, supports that two-thirds of the permanent migration should be made up of the skilled stream, as is the case now and should be the case certainly for the foreseeable future and beyond. It's absolutely vital that we use that permanent stream in that matter.

 I also indicated very clearly that we support the capacity to use student visas and working holiday maker visas so that we can provide labour that's needed in areas of acute shortages around the country. That's absolutely important that there are limited work rights for students and holiday makers under those visas that can provide support where there is short demand for labour.

 And finally I said we do believe there is an absolute legitimate use of the 457 scheme, and when used legitimately we absolutely have no problem at all, because you do need a type of scheme that attends to temporary skill shortages.

 However, the problems we identified were that there were employers that, on occasion, did not comply with those arrangements and for that reason, as I say, we announced those reforms. I said subsequent to that day that we needed to make sure there was sufficient resources in place to enforce those provisions, and today with Minister Shorten I announce that the Government will be changing the law to enable the Fair Work Ombudsman's inspectors to inspect these employer-sponsoring arrangements so that they comply with the laws today and the laws that we will enact in keeping with the reforms I announced on 23 February.

 This is very important. At the moment we have 34 inspectors under the Department of Immigration that are able to investigate these matters and examine the integrity of the 457 scheme. Of course, there are over 300 inspectors with the Fair Work Ombudsman and combined with the inspectors under the Department of Immigration we will have now a much greater capacity of oversight to ensure that the scheme that's in place has the confidence of not only employers who want to sponsor applicants where there are genuine shortages, but for all of those who are in the market place.

 My concern has been all along that we don't want to see 457 applicants exploited. We do not want to see local workers unfairly missing out because there were no genuine shortages, and we do not want to see other employers who do the right thing be adversely affected by those rogue employers who do the wrong thing.

These reforms are vital. They are important to the scheme, they will ensure a greater level of confidence in the efficacy of these arrangements, they will ensure that employers will do the right thing and they will ensure that local workers will get the jobs when there are not genuine skill shortages in our economy. That is important.

 And it will also ensure, I believe, that we won't take the easy way out and not train young people that need to acquire skills to fill the jobs and use instead the 457 scheme improperly. Now, I say all of that and remind you of this: the Opposition has said that they will remove the current protections in place for the 457 scheme.

 They said that recently, and indeed, the Shadow Minister said that in a speech to the AMMA Conference in August last year. He also said he wanted to remove the blockages of the 457 scheme. He also said he wanted to remove even the capacity to need sponsoring of 457 applicants.

 Now, that would be a radical departure from the current arrangements. And finally, of course, the Opposition leader did indicate he wants 457s to be a mainstay of immigration. We don't think that was the basis upon which this scheme was determined. We're focused on ensuring the integrity of the scheme, of protecting all of those that are potentially victims if this scheme is used improperly.

 And I might just hand over to Bill. Thanks, Bill.

 BILL SHORTEN: Thanks very much, Brendan. Good morning everyone, and I have also with me Nick Wilson, who is the Fair Work Ombudsman. Today, from my portfolio we are announcing that we will seek to immediately empower the Fair Work Ombudsman, who is the industrial relations version of the cop on the beat, to make sure that people are getting treated properly and that everyone is getting a fair go all round.

 The Ombudsman will make sure that there is appropriate compliance with the 457 visa conditions, specifically the Fair Work Ombudsman, who has skills and visits workplaces - 10,000 workplaces a year in Australia, with over 300 inspectors, will be able to ensure that visa holders are being paid at market rates specified in the approved visa.

 In other words what's on paper matches up with what's really happening, and that the job to be performed by the visa holder actually matches the job title and description that's on the paperwork on the visa.

 This announcement that we're making is about ensuring that we have one body responsible for ensuring compliance in terms of our workplace relations. It's about making sure that the jobs that people perform, the training opportunities that people are promised, both for Australians and for visitors and guest workers in our country, that they're actually the promises are being kept.

 The protection of the pay and condition of all workers no matter what background they come from is a core Labor value. This Labor Government is about making sure that our workplaces are both cooperative, productive and fair.

 Regardless of the country of origin you come from, you shouldn't come to Australia and be exploited or ripped off. So what we're seeking to do is to make sure the people on visas are not exploited, are not taken advantage of.

 We know that this can happen in Australian workplaces and we will be significantly reinforcing the resources of the Fair Work Ombudsman to continue the significant work that they already do. People may be interested to know that the Fair Work Ombudsman collected something like $33 million in the last financial year for underpayment of wages and a portion of that - there were 157 specific complaints with regard to 457 visa holders. So, we are seeking, as we do, to make sure that everyone in Australian workplaces gets a fair go all round.

 QUESTION: The Ombudsman already has, you know, been able to recover money that was underpaid to 457 visa holders, so what exactly is changing and how will the responsibilities between inspectors and immigration inspectors with the Fair Work Ombudsman - where does the division lie?

 BILL SHORTEN: Well, there's been a - I would call it a gap in the system but there’s been a part of the system which has left a lot of this work to the Department of Immigration on what once people are in the workplace should also be appropriately a workplace relations matter.

 So, specifically the ombudsman will be empowered to monitor key aspects of compliance with visa conditions, namely that the visa holders are being paid at market rates that are specified in their approved visa, and the job being done by the visa holder actually matches the job title and description on the visa. Currently they don't have that capacity to have that oversight.

 QUESTION: What is the cost to the budget of this and when will you introduce legislation?

 BRENDAN O'CONNOR: Well, can I say, in relation to the cost, obviously we're looking to ensure we absorb as much as we possibly can by using this, I think, efficient approach, but we'll obviously look at a cost in the normal processing of doing the Budget.

 In relation to this matter, this does allow the inspectors to investigate breaches of migration law and just to add to Minister Shorten's point of view and a very important insight that not only has there been a gap in the arrangements in our view, this does provide Fair Work inspectors to investigate immigration law where they have never been able to before. But immigration law that really goes to employment matters and I think that's very significant.

 QUESTION: So you don't know the cost to the Budget, and my second question is -

 BRENDAN O'CONNOR: Well, we will determine that as I say - We will determine that through the budget process.

QUESTION: And legislation –

 BRENDAN O'CONNOR: And insofar as legislation, obviously this is a priority, so we will be looking to legislate as soon as we can.

 QUESTION: This week or –

 QUESTION: Can you rule out - can you rule out charging the employer for the inspections?

 BRENDAN O'CONNOR: Look, as I say, we will consider this through the Budget process. There has been no contemplation of charging those employers or any employer for that matter for these fees or these costs. That is something - what I say is we're looking at the Budget process. We want to make sure we use our inspectors efficiently. I think this is a very good way of having Fair Work inspectors and immigration inspectors working together to ensure greater oversight over a scheme that has become problematic, as identified by the department a year ago.

 QUESTION: So just –

 BILL SHORTEN: Just to assist with - just in terms of the operations, I just checked with the Fair Work Ombudsman, The Australian newspaper will be pleased to know that the Government provides a free service to all Australian businesses and there will be no charge.

 QUESTION: So just practically does this mean a lot more on-site random inspections that businesses could be –

 BRENDAN O'CONNOR: Well, obviously with more inspectors it means we're able to investigate matters that arise, and as Minister Shorten said, the Fair Work inspectors have investigated 10,000 worksites. This doesn't change any compliance arrangements. There's no extra red tape for employers. This is really ensuring we investigate any suspicion around the failure to properly sponsor an applicant, and I think that's important for the majority of employers - and it is the majority of employers who do the right thing - they would have no concern for these arrangements.

 It would be only for those who might intentionally or improperly offend the current compliance arrangements.

 QUESTION: Minister, is that [indistinct] on –

 BILL SHORTEN: Just to assist, David, in terms of the operation of the Fair Work Ombudsman, the inspectors are able to visit work sites but this particular matter which we explained, they will be now empowered to look at - they haven't been able to have the ability to look at that. So there's 10,000 work sites get inspected, frankly, they go very well, there's no outcry from industry, there's an education campaign.

 All we're doing is making sure that - I mean, you wouldn't have cars driving up and down a road and you've got two different sets of traffic police with different - you know, trying to pull over the same cars and have different powers. What we're trying to do here is, I think, overdue common sense in an area which is causing concern, which is to allow the Fair Work Ombudsman to have the powers which we grant through the legislation to make sure that if there is a problem it gets dealt with effectively.

 QUESTION: Minister, do you have more evidence of rorting the 457 scheme and what do you make of the criticisms from some of the members of your own advisory council about the figures that you’ve used?

 BRENDAN O'CONNOR: Well, I firstly want to note that all members of the council support the reforms. There is a question as to the scale, but even the most conservative estimation, I think, by Professor McDonald, was three per cent. That would mean thousands of breaches of the compliance arrangements that are in place today.

 Look, you know, people have different views about the level and scale of the problem but what we're seeing through the changes in nominal and real rates in certain occupations in certain sectors is that there is a problem where there's been a very significant hike in the applications of 457s and them being granted and the impact on certain rates in certain occupations in certain sectors.

 I've never said this is an en masse matter but we are identifying problems in certain areas. For example, things that are coming to me about 457 applicants being trained by local workers to do the work and then local workers being made redundant.

 One of the problems of gathering this information though - if you can understand this - is that this is held - the information itself is quite often held by the sponsoring employers. And the detail of this information is not gathered by any departments.

 One of the reasons why we need greater oversight whether there is suspicious activity is to ensure that we determine whether there is, in fact, breaches of compliance, and one of the reasons why we needed the reforms is that we can then ensure that the department can gather the relevant information to determine whether there are offences.

 The problem we're getting is we've got clear examples where there is wrongdoing. The scale of it is very hard to determine. We need this oversight to ensure we do just that, but I'm worried about the trend, for example, in certain sectors where we've seen a fall in rates of occupational groups when there is supposed to be a shortage.

 That doesn't make economic sense. That shouldn't happen when you've got a very high demand for a particular skill, and it's a worrying trend that I think we need to attend to. It's for that reason, remember, a year ago the department identified these problems and over the period of that time developed reforms that were affirmed by the council that you've just referred to.

 QUESTION: How can you reconcile that –

 QUESTION: Minister, your council - sorry, the department said on 3 February the program was working well [indistinct]

 BRENDAN O'CONNOR: Well, I'm saying to you that the department had identified these reforms. These reforms predate me. They were quite properly referred to the Minister. The Minister referred them, quite properly, to the Ministerial Advisory Council on Skilled Migration. They affirmed the reforms.

 But as to the scale of the problem, I say to you it is hard to precisely determine it, but we are getting increasingly more people raising complaints about the way in which this is operated. Now, if we're going to make sure that we maintain or improve the confidence of this scheme, we have to have confidence that the provisions are being - the criteria's being complied with, and that there is sufficient capacity to investigate any breaches of the compliance arrangements.

 I think this announcement today will provide that opportunity and I think that's the best way forward so that local workers are not missing out when there are claims that there are genuine shortages and there are not. We don't want to see 457 applicants exploited, and we don't want to see employers who do the right thing missing out in competition with an employer who may be doing the wrong thing. So this is a serious matter, we will continue to gather information, but the macro-evidence is very clear - we've had in some situations increases by 100 per cent in certain occupation groups in one year.

 QUESTION: [indistinct] what groups they are, exactly?

 BRENDAN O'CONNOR: Well, I've mentioned these in Parliament and mentioned them before. There are certain groups in the IT sector. We have situations where we have people that have been identified who came in on what was called a human resources manager position and they're making pizzas, we've got situations in Melbourne where people have come in on program administrator classifications and they're security guards.

 There is sufficient evidence of misuse for us to ensure greater oversight so that we can, one, not just determine the scale, but really deter people from acting in that manner in the future. This is really about maintaining confidence or improving the confidence in a scheme that's under question, and I think that's very important.

 QUESTION: But Minister, the statistics, for example, on the ICT sector show that it's one of the largest users, if not the largest user of 457 visas, and currently the number of graduates in the ICT sector is falling. Isn't there - don't the stats therefore actually prove that the program's working?

 BRENDAN O'CONNOR: No. I think what it points to is that on occasion we might take the wrong approach. We have to make sure that we of course attend to temporary skill needs, but we need to also train our local workforce. I mean you see a situation in Geelong where we had the Victorian Government write to the Commonwealth, ask for us to make a special consideration for 457s in Geelong, and at the same time take $300 million out of TAFE and certainly reduce the places in Geelong for training.

 Now, if you cut training and at the same time try to expand the 457 scheme, that is, in my view, a misuse of a scheme that was there to attend to genuine skills shortages, and it's taking the easy way out because you don't have to train your own workforce. That is not the way this country should proceed. We should be ensuring that the temporary scheme, when it was constructed, is used in the manner in which it was intended, and not used in a way to avoid training locals or offering locals jobs when there are not genuine shortages. The problem is that the mistyping of occupational groups is a problem, when you say that you want a person for one reason and then you put them in another job where there isn't a shortage - that is misuse.

 QUESTION: Despite a month's focus on this, the polls still haven't changed, Newspoll showing there's still a 12-point gap between the Labor Party and the Coalition. Isn't that proof that this campaign against 457 visas isn't working?

 BRENDAN O'CONNOR: Well, look, this is a policy matter that came up 12 months ago or started 12 months ago within the department, referred to my predecessor. My predecessor referred that to the Advisory Council, which is entirely proper, and then he agreed with those reforms and I announced them on the 23rd. This is 12 months of work, and we will continue to do the right thing to ensure that we have the integrity of this scheme in place. There are too many questions about the efficacy of the scheme, and therefore it's absolutely critical we do the right thing by not only those people who might be exploited on 457 applications, but local workers and employers doing the right thing.

 QUESTION: Gentlemen, can Labor win the election with a primary vote of 31 per cent, and why is it bogged at such a low level, and does this - do you still support the Prime Minister?

 BILL SHORTEN: The election isn't being held today. The election will be held on September 14. This election will be fought on who has the most positive vision for the future of Australia. That's a positive vision which involves the creation and maintenance of jobs, that's vision about creating a National Disability Insurance Scheme, that's vision about making sure our kids get the best education in the world. On election day Australians will have to weigh up who is actually doing the work on jobs, who is doing the work about improving our education, who cares about people with disability and their carers in this community, who stands up for fair workplace laws.

 That's what the election will be fought on, Sid, and in terms of supporting the Prime Minister, yes.

 QUESTION: Can you tell us more about the powers the inspectors will have? Will they have the power to detain?

 BRENDAN O’CONNOR: Excuse me?  [Laughs] No, inspection powers, rights to enter.

 BILL SHORTEN: It's the same powers that Fair Work Ombudsman inspectors have now in all sites. What we're doing is allowing them to look at more matters than they'd previously been able to look at. So, it's the same powers, but what it is, is the remit of the information they can look at and observe and check, that's what we're looking to extend in Minister O'Connor's legislation.

 QUESTION: So they previously just passed on info to Immigration?

 BRENDAN O’CONNOR: They didn't - they weren't in a position to examine those matters that went to sponsorship because under the Migration Act –

 QUESTION: So they referred it to Immigration?

 BRENDAN O’CONNOR: They can refer it now, or they certainly can examine it themselves, they can ask for documents to make sure that the system is working.

 QUESTION: Mr Shorten, are you concerned about the MUAs draft EBA which seems to have a $495 a day allowance to work on the Impex project - the Inpex project, I'm sorry, and also has clauses in it for sort of $60 a day if there's not a DVD player in the vessel's cabin?

 BILL SHORTEN: Mr Maher, thank you for your question. In terms of negotiations between unions and employers, they always start at one spot, but in my experience they always finish much closer together. It's an age-old issue to sort of whip up a bit of union baiting, to have a look at the initial log of claims or the initial proposition that gets put up and say, “Wow, look at this, if they get all of this, wow, it'll be, you know, terrible,” but of course the back story which needs to be written is that then there's a process called negotiations.

 So to me it's a bit like saying, we've just had the Melbourne Grand Prix - you can look at where the start line is, actually what matters is where the finish line is. And what I do know is the companies involved are highly professional, the organisations representing the employees, the unions, they'll know how to work these issues through, so I think that just simply the old trick of pulling up a claim which starts at the start and saying, “Oh, look at that, how terrible that is,” judge it by the end, not the start.

 QUESTION: Mr Shorten, will you introduce the second tranche of amendments to the Fair Work Act this week, and secondly just to pick up on Sid's question, Julia Gillard has trailed Tony Abbott in every single Nielsen Poll since the 2010 election. While I understand you support her, at what point does the Labor Party actually start to get concerned about the fact that they're heading towards an electoral annihilation?

 BILL SHORTEN: That's such a long question I've got to go and remember the first part of it.

 QUESTION: I can ask it again if you'd like.

 BILL SHORTEN: No, I think I captured it. Okay, the first part was about –

 QUESTION: Fair Work and the second tranche.

 BILL SHORTEN: It would be our hope that we could introduce our second tranche of amendments to make Australian workplaces fair and more productive this week. At the centrepiece of that is our efforts to ensure more family-friendly provisions, the right to request unpaid leave in circumstances such as domestic violence, in circumstances such as caring for a child of school age, in circumstances such as being a carer of someone with severe or profound disability.

 We're also seeking to introduce for the first time - it's new, that shouldn't immediately scare everyone - to do something about workplace bullying, because as we know, the current system of workplace bullying in Australia, the current protections aren't working. It's a much more widespread issue I think than people thought years ago, and so what we're seeking to do is to be able to provide victims of workplace bullying the opportunity to have a speedy mechanism to start dealing with it.

 We have great optimism that these proposals and others which we introduced this week which will be sensibly debated in Parliament and in the pages of Australian newspapers, well, that we can achieve win/win outcomes for Australian workplaces in terms of their profitability, productivity, cooperation and fairness. In terms of your second question, can you remind me again?

 QUESTION: Julia Gillard has trailed Tony Abbott in every single Nielsen poll since the 2010 election. At what point does Labor actually look at the lay of the landscape and think, “We're heading towards electoral annihilation. We need to do something about this”?

 BILL SHORTEN: In the 2010 election Julia Gillard did better than Tony Abbott. At the next election Julia Gillard will do better than Tony Abbott. The real issue in Australia at the moment is which political party is talking about the issues that matter to Australian households? The issues that matter to Australian households, with respect to the Nielsen poll, is not the Nielsen poll. The Nielsen poll doesn't create many jobs. It creates some, I guess, in the newspapers, but beyond that what matters is have we got the policies which are creating jobs?

 Look at our innovation announcement by Minister Combet. What people want is the kids to get good-quality education. Look at the work that Minister Garrett's doing. And if you want to really care about the future of this country, look at what we're doing with the National Disability Insurance Scheme which will provide long-overdue relief - historic, and I think even the fairest observers say that one of the issues which should be at stake at the election is who has got the better plans to look after people with disabilities and their carers, and I tell you, on all those boxes, plus of course fair workplaces, Labor ticks each box.

 QUESTION: But if the last 27 polls are to be believed, then people aren't hearing that message and you're not going to get a chance to do those things. That's why we ask the questions?

 BILL SHORTEN: Well, I appreciate the question, I appreciate the opportunity to give that answer, thanks.

 QUESTION: Mr O'Connor, you've been very quiet on this. Would you like to have your two bobs' worth?

 BRENDAN O'CONNOR: Well, I think - we're one on this. Look, there's been challenging times for the Government. There's been challenging times for all governments, but what we do know is you focus on the things that matter to the Australian people, and come polling day I think they'll make the decision on the real decisions, not the circus.

 QUESTION: You said challenging times - are you expecting a challenge?

 BRENDAN O'CONNOR: I think there will be challenging times, as there always are when you are trying to bring about important reforms, Phil. I think today is an announcement of an important reform. There might be some naysayers. I think it's absolutely critical that we have in place protection for those workers who are on 457 applications, for those workers who might have missed out because there were no genuine shortages, and for those young people who deserve training. Thanks.

 ENDS