Mass Immigration Producing a Discount Workforce
The Macrobusiness item (link below) sits on top of a real labour-market pattern. Sham contracting is how a high-migration intake gets turned into a discount workforce without anyone having to say the word "discount." Australia still tells itself a tidy story about migration. We are short of workers. We import them. They fill gaps, pay tax, and join the award system that is supposed to be the point of this country. Sham contracting is what that story looks like after it has been put through a blender and poured into an ABN.
The trick is simple. A job that is employment in everything but the paperwork, set hours, one boss, no real right to send a substitute, told how to do the work, is labelled "independent contracting." The worker is sent to register an Australian Business Number. The business then pretends it does not owe the minimum wage, penalty rates, casual loading, super, leave, or workers compensation in the ordinary way. Cash-in-hand used to do this job. Researchers who have surveyed migrants at scale say cash has been falling and the ABN has been rising to take its place. In the largest recent study, more than a third of migrant workers were on an ABN, more than four times the rate in the general workforce. Two in three migrant employees were paid below their legal minimum. A slice of casual and ABN workers were under the national minimum wage itself. The same research puts international-student underpayment in the region of $61 million a week, more than $3 billion a year. Those are estimates, not bank statements. They are large enough that the direction is not a rounding error.
This is not a mystery industry. The ATO and the Fair Work Ombudsman named the pattern in March 2026 and pointed at building and construction and road freight, with hospitality, cleaning and labour hire in the same swamp. In one year the tax office took more than 7,000 construction tip-offs; about one in five alleged sham contracting. That is the pub test failing in public. A "subbie" who only invoices one builder, uses the builder's kit, and shows up when told is not running a business. He is an employee with the entitlements stripped off and the risk parked on his own name.
Migration makes the dodge cheaper to run. A citizen who knows the award can walk. A student with work-hour caps, a graduate on a temporary visa, or a sponsored worker whose stay is tied to a boss, cannot walk as easily. The job is not only pay. It is the visa, the hours that keep the enrolment alive, the hope of a pathway. Employers know it. Workers say they stay quiet because losing the job can mean losing the country. There is now a visa that lets some people stay to pursue an exploitation claim. Uptake is poor, which is what you would expect when the person who has to use it is the person who has the most to lose by using it.
Call that what it is. High immigration is sold as a labour-supply policy. Sham contracting is how part of that supply is converted into a wage-suppression policy. The honest café, the builder who pays super, the trucking firm on the award, they are competing with a shop that has outsourced its legal obligations to a twenty-year-old with an ABN. The migrant does not get the Australian bargain. The resident worker does not get the scarce labour that was supposed to bid wages up. The Treasury still gets the population print and the consumption. The leakage sits in unpaid super, missing tax withholding, and a Fair Work system that arrives after the shift has already been worked.
None of this requires a cartoon in which every migrant is a victim and every contractor is a fraud. Plenty of trades run real businesses. Plenty of migrants are paid properly. The scandal is the overlap: a migration program large enough to keep a permanent pool of new, precarious labour, plus a classification trick that turns "employee" into "tiny firm" with a form. Closing Loopholes already tightened the sham-contracting test and jacked penalties. The ATO and FWO are running a joint crackdown. If the survey numbers still look like this after the law changed, the constraint is not a missing subsection. It is volume, visa leverage, and enforcement that cannot visit every kitchen and every site.
Mass immigration is not a scam because people move. It becomes a scam when the receiving country pretends the award still governs the work while a parallel market is built on people who cannot afford to insist on the award. Sham contracting is that parallel market with a government number on it.
https://www.macrobusiness.com.au/2026/09/aussie-migrants-turn-to-sham-contracting/
