Getting the facts straight about 457 visas

457_visa

The issue of 457 visas for temporary skilled workers has been in the media spotlight again over the past week, with both major parties signalling an intent to reform the system. Here, to combat misinformation and to place the debate into its proper perspective, we’ve compiled all the key facts about the granting of 457 visas in Australia. 

What are 457 visas?

457 visas enable skilled workers to enter Australia and work for a sponsoring employer in a skilled occupation for a temporary period of up to four years. Strict eligibility criteria apply to both the employee and the employer.

Businesses can only sponsor a worker with a 457 visa if they cannot find an Australian citizen or permanent resident to do the skilled work. Only occupations on the Government’s Skilled Occupations List (SOL) are eligible. See here for a complete list of occupations that are currently on the Skilled Occupation List and eligible for 457 visa applications.

How many 457 visas are there?

The number of primary 457 visas granted annually has declined in every year since 2012-13, when they peaked at 68,481. In 2015-16, 45,395 primary 457 visas were granted (see chart below).

chart1

In addition, 40,216 ‘secondary’ 457 visas were granted to accompanying dependants who met the relevant eligibility criteria. This group is mainly the spouses and children of 457 visa holders. As dependants, many of this group would not be working while they are in Australia.

Despite the large amount of publicity of late, 457 visas are one of the smallest visa categories in Australia that have work rights attached. In 2015-16, there were also:

  • around 215,000 working holiday maker or ‘backpacker’ visas granted, which include a right to work on a temporary basis (up to 3 months in one job) for up to two years in total; and
  • around 311,000 student visas granted, which include a right to work up to 20 hours per week while studying in Australia.

These numbers can somewhat overstate the actual number of people receiving visas and arriving in Australia at any one time, since many people who are already located in Australia are granted more than one type of visa over an extended period of time. For example, some people might move from a student visa while studying in Australia, then to a temporary work visa because they have been offered skilled or professional work, and finally to a permanent skilled migration visa, because they are eligible for permanent settlement (that is, they meet the language, skills, age and other criteria).

In recent years, around 128,000 permanent skilled migration visas are granted each year (see chart), but this total includes people who are already in Australia on temporary visas (457, student, bridging or other temporary visa categories). Indeed, around 50,000 former 457 visa holders were granted permanent migration visas in each of 2014-15 and 2015-16, through the skilled migration stream. This successful transition suggests that many 457 visa holders are making a valuable long-term contribution and commitment to Australia.

Who are they?

People who are granted 457 visas must meet strict language, skill and other eligibility criteria. They must be fully qualified in their nominated occupation and have their qualifications recognised by the appropriate organisation in Australia. The English-language requirement means that a majority of 457 visas are granted to people from mainly English-speaking countries. In 2015-16:

  • 25% of people who were granted primary 457 visas came from India (plus 1.5% from Nepal),
  • 17% from the UK,
  • 6% from China (including Hong Kong),
  • around 5% from each of the USA, the Philippines and Ireland,
  • around 2% from each of South Africa, Canada.

Where are they working?

In 2015-16, 43% of primary 457 visas were granted for employment located in NSW, 25% were in Victoria, 13% were in Western Australia and 12% were in Queensland. The other states had very small numbers of 457 visas granted in 2015-16.

What jobs are they doing?

457 visas are available only for nominated skilled occupations, for which a local shortage can be demonstrated. Many of the roles are in specialised fields and/or less popular locations. In 2015-16:

  • 55% of primary 457 visas were for professional occupations in IT, business, health, engineering, education,
  • 23% were for technicians or trades, including 3,480 chefs and cooks (33% of this trades group) plus smaller numbers of mechanical, electrical, engineering and construction trades, and
  • 17% were for managerial roles, most commonly marketing or other specialist managers.

The most common skilled occupations for which 457 visas were granted in 2015-16 were:

  • ICT programmers, analysts, engineers and project managers (15%)
  • cooks and chefs (8%),
  • marketing or management specialists (7%),
  • medical officers or practitioners (5%),
  • café or restaurant manager (4%)
  • university lecturer (3%) and
  • accountant (2%).

Only 900 people were granted a 457 visa for ‘community & personal service’ occupations (e.g. healthcare workers at a lower skill level than a doctor, nurse or other medical professional) and just 100 people were granted a 457 visa for ‘machinery operator and driver’ jobs. Interestingly, the ‘machinery operators and drivers’ visa holders were paid a very high average salary ($107,400) for this type of work in 2015-16. Half of them were located in Western Australia. These two facts together suggest these 50 people were probably operating specialised mining machinery in Western Australia, rather than driving trucks or forklifts, which is typically paid at much lower annual rates than $100,000 per year, even in pricey Western Australia.

In 2015-16, 94% of 457 visas granted were for jobs in private sector businesses, but 6% were for Government jobs. Of the 2,650 government-related 457 visas granted, 2,510 were for a state or territory government. This is the level of government that employs most of the nation’s public-sector education and healthcare workers, so it is safe to assume that the majority of this sizeable group were working in specialist roles in state-run public hospitals, schools or related facilities.

Reflecting these occupations, 15% of the primary 457 visas granted in 2015-16 were working in the ICT industry, 14% were in the professions, 13% were in personal and other services, 12% were in hospitality and 10% were in healthcare. The giant construction sector (which employs 9% of the total Australian workforce) took 6% of 457 visas in 2015-16, while transport and warehousing (which employs 5% of the total workforce) took just 1% of 457 visas granted in 2015-16.

To put these numbers into perspective, 457 visas granted in 2015-16 accounted for just 0.38% of the total Australian workforce. Even for the occupational levels for which most of the 457 visas were granted, they accounted for just 0.9% of the total Australian professional workforce, 0.6% of the total technical and trades workforce and 0.5% of managers (see table below).

 

Top industries and occupation levels Total industry employment (May 2016) Primary 457 visas granted, 2015-16
Number
‘000
AWOTE
$ per year*
number % of industry Average base salary,
$ per year
ICT, Media & Telecomms. 198.7  $93,938 6,880 3.46 $81,100
Professional services 1,009.8  $90,802 6,490 0.64 $95,100
Hospitality (food & accomm) 843.5  $55,630 5,510 0.65 $58,000
Health Care 1,534.3  $74,927 4,810 0.31 $91,500
Construction 1,075.1  $78,151 3,000 0.28 $90,800
Education & Training 929.3  $85,311 2,333 0.25 $88,600
Manufacturing 883.5  $70,918 2,070 0.23 $90,900
Financial & Insurance 435.6  $94,791 1,690 0.39 $122,300
Retail trade 1,251.1  $57,975 1,650 0.13 $82,800
Mining 221.7 $135,060 1,090 0.49 $171,400
Managers 1,534.9 - 7,790 0.51 $120,000
Professionals 2,739.0 - 25,080 0.92 $89,500
Technicians and trades 1,661.6 - 10,400 0.63 $66,700
ALL INDUSTRIES 11,939.3 $77,132 45,395 0.38 $88,500

* Average weekly ordinary time earnings (AWOTE) per week in private sector industries, multiplied by 52 weeks. May 2016.

Click here for more information about 457 visa applications, eligibility and conditions.

Click here for data about 457 visa numbers, characteristics and trends.

You can also refer to Ai Group’s latest Fact Sheet about 457 visas in Australia.

The following two tabs change content below.
Julie Toth
Julie is Ai Group’s Chief Economist, producing economics research, comment and policy for Ai Group and its members. She has over two decades of experience in Australian public policy and economics research, working across the public and private sectors. Prior to joining Ai Group, Julie held senior economics roles with the ANZ Banking Group, the Productivity Commission and other Federal Government agencies.

2 Comments

  1. julie toth

    Thanks Dan, happy to chat anytime. You can contact me directly at Ai Group (i’m located in Melbourne). we have also put together a ‘factsheet’ version of these data that you are welcome to distribute if helpful to you.

    Reply
  2. Dan Engles

    Hi Julie, this is a very good article and I will refer some of our enquiries and clients here to sort out the fact from the fiction. If you make it to Perth, I would like to discuss the economics of immigration and work rights as the 457 visa is essentially a labour market issue and ought to be unrelated to achieving permanent residency.

    Reply

Leave a Reply to Dan Engles Cancel reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>