THE latest report on temporary work visas reveals that the numbers granted fell sharply in the last four months of last year from a record 7000 visas issued in August to 4400 by December.
In September iron ore and coal prices tumbled, leading resource companies to rein in their expansion plans. Business profits across the economy slumped and surveys showed companies were cutting their workforces.
The unemployment rate rose from 5.1 per cent to 5.4 per cent but there was surprise, shared by Treasury and the Reserve Bank, that it did not jump further.
An important reason is that temporary workers provide a safety valve for the labour market. When demand surges, as in 2007-08, the ability to take on temporary labour means the economy is not choked by labour shortages and spiralling wages. When demand falls, as in the last four months of last year, temporary workers are the first to go, enabling the economy to adjust without unemployment rising.
Temporary workers were similarly crucial in dealing with the global financial crisis without the level of unemployment that affected so many other countries.
It is not just the 70,000 people on the 457 temporary work visa program that deliver this flexibility; there are about 250,000 foreign students with work rights, and 150,000 working holidaymakers. New Zealanders also come and go as they please. In all, about 5 per cent of the labour force comprises temporary workers from overseas who respond to downturns by going home rather than applying for the Newstart allowance.
But the 457 visa program also makes an important contribution to permanent skills. Australian National University demographer Peter McDonald notes that about 40 per cent of people on 457 visas remain here permanently and are the largest single source of skilled migration.
They are great migrants. They come with skills and their "try before you buy" approach brings faster integration.
By contrast, people who apply for skilled migration visas from overseas can have difficulty getting qualifications recognised and sometimes end up working in jobs below their skill level or becoming unemployed.
When McDonald described the 457 program as "the centrepiece of the Australian migration" on ABC radio yesterday, the Construction Forestry Mining and Energy Union national office tweeted: "So Peter McDonald, you are saying that the best way for migrants to come to Australia is as bonded labour?"
McDonald and CFMEU national secretary Dave Noonan sit on the government's nine-member advisory council on skilled migration, so the debate over migration policy is close and personal.
The argument being advanced by Julia Gillard - that foreign workers are jumping to the head of the queue ahead of dinkum Aussies and driving down wages - is pure political theatre devised for an election year. It is intended to tap into the job insecurity of lower-paid workers by exploiting the fear of the foreigner.
But it betrays a complete lack of understanding of the contribution the 457 visa program, or indeed migration, makes to the economy.
Yes, a worker coming from overseas will take a job that might be filled by a local, if a suitable candidate could be found. But the foreign worker will spend on housing, goods and services that will generate more jobs. The best estimates show that the two effects balance, with migration contributing equally to the supply and demand for jobs.
It is one thing for the unions, obsessed with their declining membership, to focus only on the competition for jobs but it is a travesty that the federal government should be similarly blind to the national interest.
The notion that foreign workers drive down wages, as argued yesterday by Immigration Minister Brendan O'Connor, is without foundation. Wages paid to people on 457 visas exceed average wages by 15 per cent on average. For example, the average worker in the construction industry covered by the CFMEU earns $73,300, while construction workers on temporary work visas earn $90,600.
The point of employers using the 457 program is to get someone with the right skill, and they are prepared to pay for it. In no industry is there such a weight of workers on temporary visas that it has a material effect on average wages.
Both the Prime Minister and Tony Abbott played the migration card in the run-up to the 2010 election.
Gillard sought to differentiate herself from her predecessor, Kevin Rudd, declaring she did not support "hurtling down the track to a 36 million or 40 million population". The Opposition Leader sought to go one better, saying he would impose a cap on net overseas migration of 170,000 people a year. This ignored the fact many aspects of the migration program are demand-driven and cannot be capped, including the 457 visas, New Zealanders, working holidaymakers and students.
The 457 visa program, like any government operation, has integrity issues and may need tinkering from time to time to avoid abuse. But exploiting these issues for narrow political ends risks undermining support for a scheme that makes an important contribution to national prosperity.
In September iron ore and coal prices tumbled, leading resource companies to rein in their expansion plans. Business profits across the economy slumped and surveys showed companies were cutting their workforces.
The unemployment rate rose from 5.1 per cent to 5.4 per cent but there was surprise, shared by Treasury and the Reserve Bank, that it did not jump further.
An important reason is that temporary workers provide a safety valve for the labour market. When demand surges, as in 2007-08, the ability to take on temporary labour means the economy is not choked by labour shortages and spiralling wages. When demand falls, as in the last four months of last year, temporary workers are the first to go, enabling the economy to adjust without unemployment rising.
Temporary workers were similarly crucial in dealing with the global financial crisis without the level of unemployment that affected so many other countries.
It is not just the 70,000 people on the 457 temporary work visa program that deliver this flexibility; there are about 250,000 foreign students with work rights, and 150,000 working holidaymakers. New Zealanders also come and go as they please. In all, about 5 per cent of the labour force comprises temporary workers from overseas who respond to downturns by going home rather than applying for the Newstart allowance.
But the 457 visa program also makes an important contribution to permanent skills. Australian National University demographer Peter McDonald notes that about 40 per cent of people on 457 visas remain here permanently and are the largest single source of skilled migration.
They are great migrants. They come with skills and their "try before you buy" approach brings faster integration.
By contrast, people who apply for skilled migration visas from overseas can have difficulty getting qualifications recognised and sometimes end up working in jobs below their skill level or becoming unemployed.
When McDonald described the 457 program as "the centrepiece of the Australian migration" on ABC radio yesterday, the Construction Forestry Mining and Energy Union national office tweeted: "So Peter McDonald, you are saying that the best way for migrants to come to Australia is as bonded labour?"
McDonald and CFMEU national secretary Dave Noonan sit on the government's nine-member advisory council on skilled migration, so the debate over migration policy is close and personal.
The argument being advanced by Julia Gillard - that foreign workers are jumping to the head of the queue ahead of dinkum Aussies and driving down wages - is pure political theatre devised for an election year. It is intended to tap into the job insecurity of lower-paid workers by exploiting the fear of the foreigner.
But it betrays a complete lack of understanding of the contribution the 457 visa program, or indeed migration, makes to the economy.
Yes, a worker coming from overseas will take a job that might be filled by a local, if a suitable candidate could be found. But the foreign worker will spend on housing, goods and services that will generate more jobs. The best estimates show that the two effects balance, with migration contributing equally to the supply and demand for jobs.
It is one thing for the unions, obsessed with their declining membership, to focus only on the competition for jobs but it is a travesty that the federal government should be similarly blind to the national interest.
The notion that foreign workers drive down wages, as argued yesterday by Immigration Minister Brendan O'Connor, is without foundation. Wages paid to people on 457 visas exceed average wages by 15 per cent on average. For example, the average worker in the construction industry covered by the CFMEU earns $73,300, while construction workers on temporary work visas earn $90,600.
The point of employers using the 457 program is to get someone with the right skill, and they are prepared to pay for it. In no industry is there such a weight of workers on temporary visas that it has a material effect on average wages.
Both the Prime Minister and Tony Abbott played the migration card in the run-up to the 2010 election.
Gillard sought to differentiate herself from her predecessor, Kevin Rudd, declaring she did not support "hurtling down the track to a 36 million or 40 million population". The Opposition Leader sought to go one better, saying he would impose a cap on net overseas migration of 170,000 people a year. This ignored the fact many aspects of the migration program are demand-driven and cannot be capped, including the 457 visas, New Zealanders, working holidaymakers and students.
The 457 visa program, like any government operation, has integrity issues and may need tinkering from time to time to avoid abuse. But exploiting these issues for narrow political ends risks undermining support for a scheme that makes an important contribution to national prosperity.
