JAMIE LINGHAM. 457 visa changes 95% political

May 15, 2017

On April 18, the Australian government made an ‘Australia First’ announcement that abolished the current 457 visa program and replaced it with the Temporary Skill Shortage (TSS) visa. And for political effect, the move eliminated any opportunity Pauline Hanson or Tony Abbott might have to slam the government by highlighting the abuses of the 457 program by unscrupulous immigration agents. What is clear now that the dust has settled is that this change was 95% political and 5% practical, torching local political challenges and appearing to offer an Australian response to the global anti-immigration sentiment across the western world. 

At a roundtable meeting to discuss the changes with Departmental officials on April 26, it became clear to this participant that there had been minimal consultation with industry groups or consideration of the impacts that this policy announcement would have on Australian business and the migrants who came to work here.

The most disturbing outcome from the meeting was the fact that the government was fully aware of the immediate effects this would have on visa applicants who worked in one of the 216 occupations removed from the list. There would not be any avenue for a 457 visa application already lodged, giving this group 35 days to pack up their lives, say their goodbyes and depart the country. There were to be no grandfathering provisions apparently designed for full political and public impact.

The announcement by the government took everybody by surprise. VETASSESS, one of the skills assessment organisations appointed by the government, closed for three days when the news was announced. They were processing 1,000 applications for 138 occupations that had been removed from the list of those eligible for sponsorship.

Not only were service providers left in the dark. Employees of the Department of Immigration itself were not aware of the changes.
The new TSS visa programme will have two streams: Short Term and Medium Term, with only the Medium Term offering a pathway to permanent residency.

The Skilled Occupation List (SOL) will be known as the Medium and Long-term Strategic Skills List (MLTSSL); and the Consolidated Sponsored Occupation List (CSOL) will be known as the Short-term Skilled Occupation List (STSOL). The occupations on the Medium and Long-term Strategic Skills List with a pathway to permanent residency can be found here: https://www.legislation.gov.au/Details/F2017L00450

An examination of a couple of job categories is instructive. Recruitment Consultants and Marketing Specialist occupations are now on the STSOL, meaning that applicants on this list will only be granted a two-year visa (subclass 457) and there will be no pathway to permanent residency for these people. In addition, companies looking to fill these roles will need to demonstrate they have an annual turnover of not less than $1M, employ five or more and pay applicants and annual salary of at least $65,000.00, plus superannuation.

This will have significant effects on the recruitment industry and the calibre of consultant that they are trying to attract.

Applications already lodged but not decided will receive a two-year visa and early indications are that only one more two-year visa will be available to applicants with occupations listed on the STSOL. It has not been determined whether these people can come back to Australia after a certain period once they have exhausted their allocation of four years on this visa.

The significance of this category and therefore labour shortage in Australia is easy to identify. In the 2015/16 financial year, the recruitment industry employed 1,490 Recruitment Consultants on subclass 457 visas and this was in the top 10 occupations used for this visa. The role of Marketing Specialist was also used for business development and there were more than 3,190 Nominations approved for these roles.

While it is impossible to gage how many approvals for 457 visas were for recruitment companies, in the six months from 1 July to 31 December 2016, there was a 41.2% increase in approved Nominations for Recruitment Consultants, with the overwhelming majority (75%) being approved for New South Wales.

The small piece of good news is that existing 457 visa holders will still have a pathway to permanent residency through the Temporary Residence Transition (TRT) stream, after working for two years on their current 457 visa. In addition, there is a small window until March 2018 for applications for permanent residency for candidates who have a relevant formal qualification (Bachelor degree or higher) and at least three years’ relevant work experience.

While the recent changes have had a major impact on the recruitment industry, there will be more variations on eligibility that include:

  • reduced age limits for permanent residency (45 years or younger as of 1 July 2017),
  • mandatory police checks from every country applicants have lived in for 12 months or more over the past 10 years);
  • expansion of occupations for which skills assessments are required;
  • changes to the training benchmarks for subclass 457 sponsors (potential levy to be imposed);
  • significant increase in visa application fees.

While there are some initiatives in the changes that can be supported, the majority do not speak to driving the innovation promised by the Turnbull government in 2016, nor do they take in to account the lack of local talent and significant retention issues faced by industry.

For an industry that already suffers significant rates of staff churn, the lack of long-term visas and pathway to permanent residency will only lead to short-term thinking and money making, which further enhance the perception issues in relation to the consultants that it employs.

And then there is the elephant in the middle of the room: those unscrupulous immigration agents who, for a hefty fee, organise migrants on work visas who are then paid their wages by money already paid to the employer by the applicant. The corruption is known to the government. It has failed to address the issue until now and has completely ignored it in the current reforms.

Given the political nature of the announcement, the only way forward is through lobbying and looking at strategic alternatives to the replacement for the 457 visa.

Jamie Lingham is an immigration agent and CEO of Absolute Immigration, a Melbourne based service

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