In the March 1996 issue of People and Place, Bob Kinnaird reported on the proposals of the August 1995 Report chaired by Mr Neville Roach entitled Business Temporary Entry - Future Directions.

1 The Report's proposals amounted to a radical deregulation of existing Temporary Entry procedures, including 'considerable self regulation' by businesses recruiting foreign nationals for periods of up to four years.

The Report was accepted by the Labor Government and by the subsequent Coalition Government. New rules reflecting the committee's advice were implemented as of 1 August 1996. The purpose of this note is to describe the main features of these rules.

First some background. Under the pre-Roach arrangements the Australian Government sought to ensure migrants entering Australia under short term employment contracts did not jeopardise the prospects of Australian workers. Employers wishing to sponsor specialists for between 12 months and four years had to 'labor market test' for the position in question, usually by national advertising and by listing the position with the Commonwealth Employment Service. Employers were also required (at least in principle) to establish that in recruiting foreign specialists they were not neglecting their own training responsibilities and that the migrant appointments would result in some technological or skills transfer to Australians. The only exception was with 'Labor Agreements' where employers, trade unions or professional associations and the Government negotiated entry 'quotas' free from labour market testing - but usually on the condition of improvements in training for Australian citizens and permanent residents.

The temporary workers in question included executives and specialists. In 1993-94 some 2,675 visas were issued for the former category and 8,839 for the latter - mostly for periods more than 12 months. A similar number of visas were issued in 1995-96. Though the numbers may look small, because almost all were principal applicants and, in the case of the specialists, generally possessed professional skills, they added significant numbers to Australia's workforce, at least in certain occupations like computing (see Table 1 below).

The Australian Government has encouraged temporary entry migration because of a desire to allow firms operating in Australia to better access overseas expertise in order to improve the competitiveness of the Australian economy. While these motives are admirable in themselves there remains the question put by Kinnaird about balancing access to foreign skills against the interests and rights of Australian workers. The issue is important because employers clearly favour sponsored temporary entry recruitment relative to permanent entry via the Employer Nomination System (ENS). For example, in 1995-96 only 19 computing professionals arrived in Australia who were sponsored offshore through ENS, compared with over 1,000 under the Temporary Resident specialist category (see Table 1). As North notes in the accompanying article on the US experience, the advantage is that the sponsored person is tied to the employer in a temporary entry situation.

There is much to be said, in principle, for shifting the focus of Australia's skilled migration intake from permanent entrants to temporary entrants. The temporary entry system ensures that there is an actual job for the migrant on arrival and involves lower downstream settlement costs or family reunion linkages. It also allows the possibility of adjusting local training arrangements such that Australians can ultimately fill the positions in question. The contentious issue, as noted, is that of balancing any expansion resulting from liberalising entry requirements against Australian workers interests and rights.

POST-ROACH RULES

In all but a few instances the new rules follow Roach closely. They give employers a high level of autonomy in the sponsorship process once they are granted the status of sponsors.

a) Becoming a sponsor

In order to sponsor a business person or highly skilled specialist under the new regime, an employer must first apply to become either a Pre-Qualified or Standard Business Sponsor. The requirements include, that the employer have a 'reputable business background', be able to convince the Government that the employer can meet the various sponsorship obligations (like medical costs and the repatriation of the sponsored person) and can show that there will be some improvement in the capacity of the firm to compete nationally or internationally. In addition there is the crucial requirement that the employer meets one of the two following conditions (stated on the Business sponsorship application form no.1067):

ii) that the employer demonstrate a satisfactory training record, 'or a demonstrated commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia'.

As is evident, the wide ambit of condition i) effectively removes the previous requirement that the employer establish a good training record.

The Department of Employment Training and Youth Affairs (DEETYA) is involved in the assessment of sponsors. All applications are sent to DEETYA. But officers only have five working days to respond and thus have little opportunity to check the firm's reputation or training record, where relevant. Though the sponsorship application is likely to include something about the kind of skills the sponsor has in mind recruiting, there is no requirement for detailed information of this sort at this stage. Thus, DEETYA only has a limited idea of the likely employment consequences of the approval of the sponsorship application.

Between 1 August and 31 October 1996, DIMA received 1,702 applications for Standard Business Sponsors (SBS), 567 of which had been approved with the rest pending (none as yet refused) and 96 applications for Pre-Qualified Sponsors (PQS) of which 42 had been approved (again none at this stage refused). Data on the industries likely to be affected is not yet available. However, the high number of application indicate great interest amongst employers. The PQS status allows the employer greater flexibility in sponsoring personnel. It has not been popular because of the decision (not included in the Roach recommendations) of the Minister, Mr Ruddock to debar subsequent applications for permanent residence from those entering under PQS arrangements. No such prohibition exists for those entering under the SBS system.

b) Nomination of positions to be filled on a temporary entry basis

Once having gained Sponsorship status the employer fills in a Nomination form specifying the positions to be recruited on a temporary basis (either off-shore or on-shore). This information does include detail on the qualifications, skills and experience required, as well as salary information. However this material does not go to DEETYA. or to any other Department potentially affected, like Industrial Relations.

PQS sponsors can nominate as many positions as they wish. SBS sponsors can also nominate as many positions as they require but need DIMA approval before proceeding. Once approved, as long as the positions can be shown to be 'key activities' in the business there is no requirement for any labor market testing in Australia. For specialists, a 'key business activity' is defined (in the Nomination form 1068) as one 'which is essential to the overall operations of the organisation', and which involves the following attributes; 'possessing knowledge at an advanced level of expertise and proprietorial knowledge of the company's product, customer service, research equipment, techniques or management (not necessarily formal skills), and/or 'with in-depth knowledge of the culture of the organisation or who are able to assist the business to integrate its Australian operations with those elsewhere in the world.

The definition covers the full ambit of positions for engineers, computing professionals, management specialists and the like. Also it extends to persons who may hold sub-professional positions like clerks, but have an insider's knowledge of the firms activities (like knowing the filing system of a Japanese firm). This broad definition of a 'key business activity' largely removes the need for the previous time consuming and costly labour-market testing arrangements. In addition, no labour-market testing is required if the appointment is for less than 3 months, and is discretionary for appointments of 3 to 12 months for 'non-key activities'.

The final stage of the process involves an application for a 'long -stay temporary business visa' (visa 457) from the worker the employer wishes to appoint to one of the nominated positions. It is the responsibility of DIMA officers to decide whether the applicant possesses the required skills (including credentials acceptable in the profession in question, where relevant).

PROTECTIONS FOR AUSTRALIAN WORKERS?

As is evident, the new rules implement the radically deregulated system recommended by Roach. It remains to be seen how many temporary entrants will be recruited and in what occupations. The potential numbers should not be exaggerated, since the constraint of costs (transport, accommodation and so on), where these are met by the sponsoring firm, put some limits to the numbers. However, there are grounds for concern about the effects on the training opportunities and careers for Australians. Unlike the US temporary entry system, Australian sponsors do not have to lodge information on the positions (including pay and conditions) nominated in a form accessible to unions and professional associations or even to DEETYA, so that they can evaluate what is going on.²

In addition, though the Government has promised to monitor the operation of the system, there is no assurance as to when information will be made public and in what detail. When signing their sponsorship undertaking, sponsors accept that 'the recruitment of labour from overseas must not counter Government training policies and objectives of producing a highly skilled and flexible Australian workforce'. According to DIMA officials this aspect of the sponsors performance will be part of the monitoring process.

There is much concern amongst professional associations and educationalists that, in the present economic context, employers will take advantage of the new rules to sharply increase their recruitment of foreign specialists - perhaps to the detriment of opportunities for Australians. Large sections of Australian industry are controlled by foreign firms. The attraction of recruiting overseas personnel for the transfer of technology, installation of equipment, the preparation of design work for engineering projects and so on is obvious, especially given the current highly competitive environment and 'just in time' attitude towards the availability of skills. If a business can procure specialist skills 'off the shelf' quickly from overseas, even if at a substantial transfer cost it is unlikely to go to the trouble and delay of training Australians. The increasing incidence of privatisation of professional services once provided in-house in public authorities like Telstra add to such pressures. So too does the greater usage of sub-contractors across the economy - many of whom may not be able to afford the time or costs of local training if competing with firms readily able to call on foreign temporary specialists.

The computing professional field is a case in point. Experience in the US indicates that temporary entry is an attractive option to employers, not only to augment local skills but also to gain cheaper skills, as with the recruitment of programmers from countries like India. So far in Australia, the pattern seems more that of foreign companies drawing on their own staff who are familiar with the company's specialist computing languages rather than training locals for the task (Table 1 shows most programmers are recruited from the US and UK). Under Roach, the possibility is that employers may take up the opportunity to bring in lower cost specialists as well. The inducement of opportunities for permanent residence (via SBS sponsorships) certainly will add to the attraction of employment here and as well, increase the potential influence of the sponsoring employer over the terms and conditions of employment.

References

1 Bob Kinnaird, 'Temporary-entry migration: balancing corporate rights and Australian work opportunities', People and Place, vol. 4, no. 1, 1996, pp. 55-62

2 David North, Soothing the Establishment, the Impact of Foreign-born Scientists and Engineers on America, University Press of America, NY, 1995, pp. 114-116

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