Populist rhetoric threatens to undermine subclass 457 visa program

Back in June, FCB Smart Visa reported on the ALP’s pre-election immigration policy platform concerning work-related visas.  The recent political upset in the U.S. has given Bill Shorten (amongst others) new political impetus in bringing immigration squarely back on to the agenda.

At last week’s Migration Institute of Australia National Conference, Shadow immigration spokesman – Shayne Neumann MP – reiterated his party’s commitment to an ‘Australia first’ policy and the use of labour market testing (LMT) to protect Australian jobs from overseas workers (at any given time, there are around 1.4 million temporary residents with some form of work rights in Australia).   Nobody would deny the political and economic significance of strong workforce participation, but the ALP’s LMT proposition appears to be mere political rhetoric, and the value of a new labour market testing regime is highly questionable on account of the following:

  1. Labour market testing for 457 visa applications is only relevant to around 3% of temporary visas carrying work rights in Australia
  2. It already exists for the majority of trade occupations, nursing occupations and engineering roles. The irony is that these are amongst the very occupations that have been cited by the ALP as jobs in need of protection through LMT
  3. It already exists by proxy for every occupation through the ‘market salary’ requirement – a test of the labour market to ascertain the appropriate salary to be paid to the primary visa holder
  4. It already exists by stealth for every occupation through the ‘genuine position’ requirement
  5. Unless case officers are required to sift through, and draw subjective conclusions from responses to job ads, it will be a futile exercise
  6. And if case officers are required to sift through, and draw subjective conclusions from responses to LMT efforts, it will be an unworkable, and extremely resource intensive exercise
  7. The overwhelming majority of industry and employer groups oppose it, the most recent Independent review of the 457 visa program recommended against it, and the OECD found it unreliable for such purposes
  8. Many will recall that universal LMT is effectively a ‘back to the future’ policy having been abolished over 10 years ago (until the qualified re-introduction of the current LMT regime in 2013)

 

Canary in the coal mine

There is a distinct correlation between the volume of 457 visas sought, and Australia’s unemployment rate.  Over the years, the writer has observed a substantial upswing of 457 visa work when national unemployment dips below 5%.  With a current seasonally adjusted unemployment rate of 5.8% and the lowest number of 457 visa grants in 7 years, this correlation appears to be intact, and is testament to the effectiveness of a demand-driven program.  The proposed adjustments are therefore unnecessary and seemingly contemptuous of Australian business’ needs.

Australia’s focal shift from primary and extractive industries to STEM-based economic outputs will require the input and skill of the world’s contemporary leaders in the field.  This can be achieved via collaborative research and other initiatives, but the international labour market is the most significant and obvious conduit to meeting skill shortages in this area.  Atlassian has been particularly vocal in citing the 457 visa program as a key determinant in its ability to operate a base in Australia.  With approximately 200 staff holding 457 visas, Atlassian is unashamedly a ‘power user’ of the program.  However the real story here is the 700 additional Australian employees who have a career in a strategic growth industry because of the 457 program; the significance of which rarely makes its way into populist political discourse.

There are any number of home-grown innovators in Atlassian’s position who plan to remain in Australia with the support of talent supplemented from overseas.  It is self-defeating for any business-friendly government to hamper access to this pool of expertise whilst baying for Australian business to be globally competitive in these industries in real time.

More than one solution

If the government and opposition want to weed out opportunistic sponsors, a more workable solution would be to simply shift the major cost base to the sponsor.  At present, the lodgement fees that must be borne by an existing business sponsor to nominate a 457 visa holder is $330 (or $750 for a first-time sponsor).  By contrast, unless the sponsoring business elects to pay for tor the visa charges on behalf of applicants (as many do), a family of four needs to pay a minimum of $2,650 in visa lodgement fees.  A premium on the Nomination stage would arguably ‘separate the wheat from the chaff’ without affecting sponsors doing the right thing.  At a minimum, this would be a fair exchange for an onerous and ineffectual universal LMT regime.

It is time to ditch the political bombast in favour of pragmatic solutions, and to prioritise the passage of the key recommendations made by the extensive independent review into this economically vital visa program.

Alex Kaufman

FCB Smart Visa

Changes to the temporary activity visa framework

The Department of Immigration and Border Protection (DIBP) has introduced a new temporary activity visa framework, which will come into effect on 19 November 2016. This change is designed to streamline the application process for individuals and businesses.

From 19 November, the following Subclasses will be closed for new applications:

  • Subclass 401 Temporary Work (Long Stay Activity) visa
  • Subclass 402 Training and Research visa
  • Subclass 416 Special Program visa
  • Subclass 420 Temporary Work (Entertainment) visa
  • Subclass 488 Superyacht Crew visa

These will be replaced by or amalgamated into:

  • Subclass 400 Temporary Work (Short Stay Specialist) visa

This visa would be for people who want to come to Australia on a temporary basis to:

  • undertake short-term, highly specialised, non-ongoing work
  • in limited circumstances, participate in an activity or work relating to Australia’s interests
  • Subclass 403 Temporary Work (International Relations) visa

This visa would be for people who want to come to Australia on a temporary basis:

  • in relation to a bilateral agreement
  • to represent a foreign government or to teach a foreign language in an Australian school
  • to undertake full-time domestic work for a diplomat
  • as a person with statutory privileges and immunities
  • to participate in the Seasonal Worker Programme
  • Subclass 407 Training visa

This visa would be for people who want to come to Australia on a temporary basis to undertake occupational training or participate in classroom based professional development activities.

  • Subclass 408 Temporary Activity visa

This visa would be for people who want to come to Australia on a temporary basis to:

  • work in the entertainment industry
  • participate in a non-ongoing cultural or social activities at the invitation of an Australian organisation
  • observe or participate as an academic in a research project
  • undertake full-time religious work
  • participate in a special programme to enhance international relations and cultural exchange
  • participate in high-level sports (including training)
  • work in a skilled position under a staff exchange arrangement
  • participate in an Australian government endorsed event
  • work as a superyacht crew member
  • undertake full-time domestic work in the household of certain senior foreign executives

The chart below, produced by the DIPB, shows the changes:

picture2

Points to note regarding these changes:

  • The majority of applications will be lodged online, with the exception of the Subclass 403 International Relations Visa, which will remain a paper-based application
  • The new 407 Training Visa will require a Nomination and Sponsorship, regardless of intended stay period. No Nomination is required if the Sponsor is a Commonwealth agency
  • One Sponsorship type will replace the existing six Sponsorship types, and this will be valid for a period of five years. Currently valid Sponsorships can only be used to sponsor new Visa applications until 19 May 2017
  • If applying for a Subclass 408 Temporary Activity Visa, the Visa applicant will not require a Nomination, and the following will also apply:
    • You will not need to be sponsored if applying outside Australia, and your intended stay period will be 3 months or less. If the intended stay period is beyond 3 months, a Sponsorship will be required
    • A Sponsorship will still be required if you apply from within Australia, regardless of the intended stay period

FCB Smart Visa will continue to provide updates on changes to the temporary activity visa framework when they become available.

If you have any migration matters that you would like to discuss, please call one of our migration agents on 02 9922 5188.