The controversial 457 visa has been axed by the Australian Government.

In a surprise Facebook announcement late yesterday, Prime Minister Malcolm Turnbull said Australian workers must have priority for Australian jobs.

“We will no longer allow 457 visas to be passports to jobs that could go -- and should go – to Australians.”

The 457 is a temporary visa that allows overseas workers to come to Australia and work for a company which has sponsored them.

The new visa will be known as the TSS visa, or Temporary Skills Shortage visa.

At a press conference with Immigration Minister Peter Dutton, the Prime Minister said the number of categories under which an applicant can apply for the new visa had been reduced by 200.

As part of the visa program reform, the government will be introducing a new two-stream system.

The first will be a short-term stream visa of up to 2 years, and the second will be a medium-term stream visa of up to 4-years.

Dutton said the short-term visa would no longer result in permanent residency for the foreign worker.

Turnbull said the new temporary visa will “better target genuine skills shortages” and be specifically designed to recruit “the best and brightest in the national interest”.

He also promised a new training fund “to help train Australians to fill skills gaps”.

There will more stringent requirements for the new visas, including:

  • at least 2 years of work experience
  • better English language proficiency
  • a criminal check.

Other key reforms include:

  • a minimum market salary rate which ensures overseas workers cannot be hired to undercut Australian workers
  • labour market testing, making it mandatory for employers to ensure there is no suitable candidate in the local labour market
  • extending the permanent residency pathway from two years to three years.

The Prime Minister said there are currently 95,000 457 visas in Australia which will continue on a “grandfathering arrangement”, where the old rules continue to apply to existing 457 visa holders but new rules will apply to all future applicants.

The 2-year visa will have application costs of $1,150, while the 4-year visa will be $2,400.

The new visa arrangements are effective immediately and may take up until March 2018 to fully implement.