Australian government to replace 457 temporary work visa

The government will replace skilled 457 visas with a new category to give Australians priority for Australian jobs, Malcolm Turnbull said in a shock announcement on Tuesday.

Turnbull used Facebook to announce the policy, which he said would “put jobs first” and “Australians first”, signalling a reduction in the occupations available to skilled foreign workers and raising the threshold to qualify.

“Australians must have priority for Australian jobs – so we’re abolishing the [class] 457 visas, the visas that bring temporary foreign workers into our country,” he said.

“We’ll no longer let 457 visas be passports to jobs that could and should go to Australians.

“It’s important that businesses still get access to the skills they need to grow and invest.

“So the 457 visa will be replaced by a new temporary visa specifically designed to recruit the best and the brightest in the national interest.”

Turnbull said the new visa would “better target genuine skills shortages” and would include new requirements such as previous work experience, better English-language proficiency and labour market testing.

He said the government would establish “a new training fund” for Australians to fill skills gaps.

“Our reforms will have a simple focus: Australian jobs and Australian values.”

Currently 95,758 people are in Australia on a 457 visa. The highest proportion of foreign workers came from India (24.6%), the United Kingdom (19.5%) and China (5.8%).

At a press conference in Canberra, Turnbull said the 457 visa system needed to be replaced because it had “lost its credibility”.

It would be replaced with a new temporary work visa, available for two or four years, requiring visa-holders to have two years’ work experience, a criminal record check, and “in the majority of cases” mandatory labour market testing.

For the two-year stream, Turnbull said a broad list of occupations would be eligible but there would be a “substantial reduction”, removing more than 200 jobs from the list.

The immigration minister, Peter Dutton, said the list of eligible jobs would be “even tighter” for the four-year visa. Those workers will also require “a higher standard of English”, Turnbull said.

The arrangements will be grandfathered, meaning current 457 visa-holders will be unaffected.

Dutton said the current program allowed foreign workers to apply for permanent residency and become a citizen “which is a significant part of the attraction of using the 457 visa”.

Dutton said the two-year visa would not produce a pathway to permanent residency, but details released online show those on the medium-term visa will be eligible after three years.

The One Nation leader, Pauline Hanson, was quick to claim the government’s announcement was prompted by her party’s anti-immigration stance.

Asked about Hanson’s claim, Turnbull said it was “a decision of my government” that followed a “very careful examination of many of these issues”.

Responding to the announcement, Business Council of Australia chief executive, Jennifer Westacott said the ability to hire temporary skilled labour had been “an overall boon” for business, and in some cases was the “deciding factor in whether or not a large investment goes ahead”.

“Now that the government has taken this decision, it is crucial that they work with employers to get the details right and ensure industry’s ability to fill genuine skills shortages is enhanced, not degraded,” she said.

Acting Labor employment spokesman, Ed Husic, said the opposition “had been campaigning for ages to see improvements to this visa scheme”.

“We’ll be waiting to see the detail. From the looks of it this is more of a rebadging exercise than a fair dinkum attempt to address concerns about the 457 system,” he said.

Greens employment spokesman, Adam Bandt, said his party had consistently called for changes to 457 visas including local advertising of jobs but “we’ve done it without the racist ‘Australia First’ rhetoric”.

“As the government follows One Nation, we’re getting the worst of both worlds: nationalistic rhetoric without meaningful change.”

The government had previously sought to tinker with the scheme by forcing foreign workers on 457 visas to leave Australia within 60 days instead of 90 if they lost their jobs and banning some fast-food chains from sponsoring foreign workers.

In December, Dutton ordered a review of the list of jobs eligible for 457 visa-holders “to ensure it better reflects genuine labour market needs”.

Labor’s Bill Shorten has previously promised to crack down on the use of 457 visas, including through strengthening labour market testing and reviewing the list of jobs qualified for the scheme.

In escalating economic nationalist rhetoric since the July election, Labor has promised to “build and buy Australian” and “employ Australians”.

In November, Shorten warned that nearly one million people with temporary work rights were coming to Australia, some of whom were “getting ripped off and exploited ... lowering wage outcomes and taking the jobs of nurses, motor mechanics, carpenters, auto-electricians”.

Turnbull said the number of 457 visa-holders had increased by two-thirds when Shorten was workplace relations minister, accusing him of “failing” to protect Australian jobs.