The new programme will ensure that foreign workers are brought into Australia in order to fill critical skill gaps and not brought in because an employer finds it easier to recruit a foreign worker than going through the trouble of hiring an Australian.
Australian Prime Minister Malcolm Turnbull on April 18 said that his government will abolish a popular work visa used by over 95,000 foreign workers, the majority of them are Indians, to tackle the growing unemployment and replace it with a new programme requiring higher English-language proficiency and job skills.
Turnbull, who visited India earlier this month, said Australia will adopt a new 'Australians first' approach to skilled migration.
"We are an immigration nation, but the fact remains: Australian workers must have priority for Australian jobs, so we are abolishing the 457 visa, the visa that brings temporary foreign workers into our country," he said.
The programme known as 457 visa allows businesses to employ foreign workers for a period up to four years in skilled jobs where there is a shortage of Australian workers.
The majority of the visa holders under this category were from India, accounting almost a quarter of the intake, followed by the UK and China at 19.5 percent and 5.8 percent respectively, the Australian Broadcasting Corporation (ABC) reported.
The business visa allowed people to live in Australia with their immediate family. It was designed to fill gaps in skilled labour, but it had been criticised as being too accessible.
In 2016, the most 457 visas were granted to cooks, developers, programmers and medical workers.
"We will no longer allow 457 visa to be passports to jobs that could and should go to Australians," he said.
As at September 30 last year there were 95,757 workers in Australia on primary 457 visas and 76,430 secondary visa holders (members of their family), the report said. The programme will be replaced by another visa programme, with new restrictions.
"It is important 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 brightest in the national interest," Turnbull said.
Turnbull said the new programme will ensure that foreign workers are brought into Australia in order to fill critical skill gaps and not brought in because an employer finds it easier to recruit a foreign worker than going through the trouble of hiring an Australian.
The new visa will include mandatory criminal checks and tighter English language requirements.
The new 'Temporary Skill Shortage Visa' programme will comprise two streams – Short Term and Medium Term – and will be underpinned by more focused occupation lists that are responsive to genuine skill needs and regional variations across Australia.
Short term visas will be issued for two years, while medium term visas will be issued only for more critical skills shortages and for up to four years.
Both streams will include mandatory labour market testing with limited exemptions, a new non-discriminatory workforce test; mandatory criminal history checks, a market salary rate assessment and a new two-year work experience requirement. Additionally, there will be tightened English language requirements for the Medium Term Stream.
The new visa will also include a strengthened training obligation for employers sponsoring foreign skilled workers to provide enhanced training outcomes for Australians in high-need industries and occupations. These changes will give Australian job seekers more opportunity to find work while finding the right balance so businesses can prosper by acquiring the expertise they need.
Turnbull stressed that migration was an integral part of the Australian story and its success had helped the nation to become the world's most successful multicultural nation. "There is no doubt foreign workers have played a significant role in the remarkable economic growth of the nation," he said.
"More than 100,000 workers from 30 countries helped build the Snowy Hydro Scheme while John Howard's (former Australian prime minister) decision to focus our permanent migration programme on bringing in skills has helped the nation enjoy more than two decades of continued economic growth," Turnbull added.
Implementation of the new visa will begin immediately, with full implementation to be completed by March 2018.
Australia India Business Council (AIBC) national chair Sheba Nandkeolyar said the news about 457 visa scrapping has come as a surprise. "This may perhaps impact not merely Indian companies in Australia but also Australian companies - many of who tap into international skills in digital, analytical and engineering areas," Nandkeolyar said.
"However, the Prime Minister did advise that there will be a new visa category introduced for the critical skills shortage areas, and I hope this will impact positively on the Indian IT/ICT industry, among others," she said.
The 457 visa was introduced in the 1990s to quicken the entry of business professionals and highly skilled migrants, but over time it was opened up for a broad category of workers. The programme was hit by controversy with allegations that the visa was being misused by employers to import cheap workers who lack necessary skills.
Turnbull's announcement comes days after he visited India where a range of issues, including national security, counter-terrorism, education and energy, were discussed and six agreements were signed.