Labors $11,000 boost to foreign worker

Labor will mandate an immediate 21 per cent increase to the minimum wage paid to foreign workers to stop what it says is the use of cheap imported labour to undercut locals and keep wages flat.

With wages the focus of Labors election campaign this week, Opposition Leader Bill Shorten will announce today that the minimum wage for workers on a 457-style visa – known as a Temporary Skilled Migration Income Threshold – will be increased from the current level of $53,900 to $65,000.

Bill Shorten says foreign worker visas contribute to wage stagnation. AFR

In addition, the wage, which has been frozen since 2013, would have to be indexed annually and loopholes” used to inflate wages to the minium level would be closed.

These include providing substandard accommodation and inflated or excessive overtime hours, Mr
Shorten said.

The policy makes good on a warning Labor sounded in October last year that it would crack down on the issue of foreign worker visas. There are about 1.6 million overseas workers in Australia at any one time on such visas.

“When businesses use overseas workers as a cheap replacement for local workers it it contributes to wage stagnation,” Mr Shorten said.

“There are more than 1 million underemployed Australians wanting more work and youth unemployment is at 11.7 per cent.”

“At the same time, there are almost 1.6 million temporary visa holders with work rights in Australia, with the top end of town turning to temporary work visas to undercut local jobs, wages and conditions.”

Visa still being exploited

In May 2017, the Turnbull government dumped the 457 visa scheme and replaced it with a new visa regime that was much more tightly targeted.

Labor says the scheme is still being exploited and has already proposed tighter labour market testing, higher fees for using temporary foreign labour, and further limits to the eligible range of occupations. The revenue from the fees would be used to establish a SkillUP Training Fund to better train Australia workers.

The latest announcement follows a reaffirmation over the weekend that a Labor government would reverse cuts to Sunday and public holiday penalty rates and a pledge on Monday that it would try to force a bigger increase to the minimum wage this year before a more permanent increase is made through the introduction of a living wage.

Mr Shorten said a Labor government would make a submission to the Fair Work Commission to grant a “real” increase on July 1, meaning it must be above inflation.

“We are going to use the full force of the Commonwealth advocacy to support a wage improvement, a wage increase, for 2.2 million Australians,” Mr Shorten said.

Labor is separately promising to change legislation so that Fair Work Commission permanently increases the minimum wage to a “living wage” by taking into account more cost-of-living factors than it currently does when setting the wage.

Labor has already made a submission for a “real increase” as opposition but declined to nominate an amount, unlike Queensland and Victoria, which proposed increases of 3.5 per cent and 5.7 per cent respectively.

The Australian Industry Group also supports a “real” wage increase this year of 2 per cent, which is above inflation of 1.8 per cent in the most recent data released in January.

Despite no quantum, opposition employment spokesman Brendan O’Connor said the submission would be “full-throated” and “full-bodied”.

“If you have a government that actually supports workers and make those statements, they are considered very seriously by the commission. It’s completely different to what we’ve seen over the last six years,” he said.