457 Visa Review - Government response

457 Review

In September 2014, after four months of consultations, with feedback from 189 submissions and more than 150 stakeholders, the results of the independent review into the 457 program were published.  22 recommendations were made overall in the pursuit of increased deregulation and liberalisation to improve the flexibility, responsiveness and certainty of the 457 program.

On 18 March 2015 the Government published its response which, with the exception of the extension of the list of countries exempted from English language testing and the continuation of Labour Market Testing, supported or supported ‘in principle’ all the recommendations.

Among those recommendations, the most important appear to be the following:

Recommendation   Government Response
Relaxing of the English Language Requirement The report recommended a relaxation of the current English Language requirement by accepting the average score, extending the number of testing authorities, increasing the number of countries exempt from English language testing.	The English language level will be altered to an IELTS average of 5 overall, with no less than 4.5 in any band. Alternate English language test providers are likely to be announced next month. The exemption for demonstrating English language competency will not be extended to further countries, although the current exemption for 5 years continuous study in English will be changed to 5 years ‘cumulative’ study.
Increasing validity period for Standard Business Sponsorship The report recommended extending the approval period from 3 to 5 years for established businesses and from the current 12 months to 18 months for start-up businesses.	SBS approvals will be extended from 3 to 5 years and from 12 to 18 months for start-up businesses. These new approval time frames will commence from the time of renewal or new applications for SBS. Current approvals will not be extended to these time frames.
Halving the time with the 457 sponsoring employer to access the 186 visa   The report recommended maintaining the two year period on a 457 for the Temporary Residence Transition stream but decreasing to one year the amount a 186 applicant needs to spend with the sponsoring employer.	The age limitations and the TRT time frames for transition to ENS will be reviewed as part of the Skilled Migration and 400 Visa Series Review, but the recommendations on these from the 457 review are supported.
Simplifying Training Requirement for 457 Sponsors The review recommended the abandonment of the current training benchmarks in favour of an annual "training levy" for each sponsored 457 holder (between $400 and $800) depending on the size of the business.	Training Benchmarks A and B will be replaced with an annual training fund contribution based on the number of 457 sponsored and with the contributions scaled according to the size of the sponsoring organisation These contributions will be made to the Department of Industry and directed to areas of identified training need. Training expenditure cost may decrease for sponsors under this new arrangement.
Enhanced Compliance The report recommended that the Department of Immigration should follow more closely the model of the ATO identifying discrepancies by risk tiering and data matching techniques. Furthermore, more funding should be allocated to monitoring and sanctions, as well as improving linkages with other agencies such as the Fair Work Ombudsman.	The ATO and the Department have signed an MOU which allows information to be shared on 457 visa holder salaries. The MOU allows the Department to request salary compliance checks across a broader range of the sponsored employees and businesses, without increasing the number of work site visits.
Reviewing the Occupations List for 457 Occupations and the Labour Market Testing requirement by a Tripartite Advisory Council The report recommended that a new Ministerial Advisory Council be set up in place of the current one. The new entity should be composed by representatives from Government, Unions and Industries and be supported by a dedicated market analysis team. The report recommended that the current Labour Market Testing be abolished.	The Ministerial Advisory Council on Skilled Migration cannot be replaced, but advice is being sought on whether it can be reconstituted to be more responsive on labour market issues.
Labour Market Testing   The report recommended that  employer-conducted labour market testing be abolished as not “fully reliable” and, in the Australian context, ineffective.	Labour market testing will not be abolished, however, the Department will examine ways to reduce the burden to employers and red tape in this process.