PAF.
I think that the article quoted actually reinforces ASMS' argument. It describes REX's shortage as due to pilots LEAVING. So they used to have enough pilots, yet the question of WHY they are leaving or WHY they cant attract replacements is studiously ignored?
You continually quote dry economic theory which,, I am sure, most readers here can see through. As T&Cs have fallen to the point where a career as a pilot is not seen as desirable anymore, the result (according to your own arguments) is that T&Cs should rise until the supply and demand is balanced. What is actually happening (and this is where the real world infringes on theory) is that an attempt is being made to use 457 visas (or whatever version they are particularly called in this case) to manipulate the supply side of labour by increasing the labour pool using said visas. If you cannot see the problem with that, then further discussion is pointless.
For Kangaroo Court; if you use 457 visas to cherry pick which parts of the labour market you will manipulate, those particular professions suffer manipulation that distorts the market forces which operate in them. ie. Pilot T&Cs are artificially suppressed at the expense of aspiring/existing pilots for the gain of foreign nationals wanting to change their address (a non-economic gain). IMHO, that only exacerbates the problem, perpetuating the barriers to entry of that profession for Australians, and fails to address the cause (a symptomal solution). Ultimately, detrimental to the country on a number of levels- not the least of which is the delaying of the correction in ticket pricing (which must come sooner or later- maybe PAF can tell us why, although with the selectivity applied to theorical argument, I am not so sure).