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Australia: Corporate Immigration Review 2017

By Anne O’Donoghue, Immigration Solutions Lawyers

Anne O’Donoghue at Immigration Solutions Lawyers discusses recent reforms in the Australian corporate immigration market and the need to address skill shortages as well as encourage domestic business and trade.

Immigration Solutions

Australia’s Corporate Migration Programme has recently experienced a substantial shift in direction, in the wake of recent reforms announced by the Liberal government on 18 April 2017. These changes were announced as part of the government’s long-term plan to “strengthen the integrity and quality of Australia’s temporary and permanent sponsored skilled migration programmes” and contains new safeguards that aim to ensure Australian employees are prioritised and not actively discriminated against. In combination with recent changes to applying for Australian citizenship, these reforms will help facilitate business and improve the quality and integrity of Australia’s skilled migration programmes and safeguard the privilege of Australian citizenship.

The Temporary Work (Skilled) visa (subclass 457) and the Employer Nominated Scheme (ENS) visa (subclass 186) are the two most common options for Australian businesses wishing to sponsor an overseas worker. Skilled migration programmes account for a large proportion of total migration in Australia each year, with the three main contributor countries currently including, India, China and the United Kingdom. Migration is a significant source of revenue for the Department of Immigration and Border Protection (the Department) and plays an important role in stimulating Australian economic growth and trade and helps facilitate the upskilling of Australian workers.

Strengthening the Integrity of Australia’s Corporate Immigration Programmes

Australia’s immigration law is governed by the Migration Act 1958 (Cth) (the Migration Act) and the Migration Regulations 1994 (Cth) (the Migration Regulations). These laws and regulations are arguably some of the most complex in the world and are subject to frequent amendment and reform in order to address the changing geopolitical and economic landscape of Australia. The recent changes to Australia’s immigration policy come at a time where there is a global increase in the tightening of migration pathways and border protection. In this context, there is a necessity to ensure that Australian standards keep up with those of the global community to ensure that Australian residency and citizenship preserves its highly privileged and revered standing.

In response to increasing scepticism of the integrity of skilled migration programmes and review of the Australian jobs market, the Department announced extensive reforms, including that the subclass 457 visa was to be abolished and replaced with a completely new Temporary Skills Shortage (TSS) visa in March 2018. Some of these reforms became effective from 19 April 2017 with others anticipated to be rolled out over the next year in the lead up to March 2018. The changes have particularly affected the subclass 457 visa and permanent employment-sponsored skilled migration programmes; and essentially restrict eligibility of visa applicants by tightening eligibility criteria.

These reforms focus on Australia’s national interests and the long-term benefits of migration, and effectively restrict the availability of temporary and permanent skilled migration visas in response to the exposed exploitation and high demand of existing schemes. The effective narrowing of eligibility for temporary and permanent skilled visa options also aims to prevent exploitation of migrant workers. Investigations by the Fair Work Ombudsman previously revealed systemic and widespread exploitation of workers in particular occupations, and the Department’s reforms, in part, aim to address this issue with a more extensive application process and greater monitoring of business sponsors.

Changes to the Occupation Lists

Under the recent reforms, the occupation lists that underpin a range of skilled working visas, including the subclass 457 and subclass 186 visa, have been dramatically reduced from 651 occupations to just 435. Formerly known as the Consolidated Sponsored Occupation List (CSOL) and the Skilled Occupations List (SOL) have been updated and renamed as the Short-Term Skilled Occupation List (STSOL) and the Medium and Long-Term Strategic Skills List (MLTSSL) respectively. Caveats have been placed on an additional 59 occupations that restrict the usage of certain occupations under the subclass 457 visa programme to usage in regional areas or to applicants who must demonstrate at least two years’ relevant work experience in their nominated occupation, among others.

The changes to the occupation lists have had and will continue to have an enormous impact on current and future visa applications. Occupations that have been removed from the lists are no longer eligible for employer-sponsored programmes such as the subclass 457 and 186 visas. Additionally occupations that are on the STSOL are now only eligible for a two-year subclass 457 visa and are not eligible to apply for permanent residency under the subclass 186 visa.

The reduction of eligible jobs for the subclass 457 and subsequently the TSS visa will pave the way for employers to actively hire from the local Australian labour market. The Department’s review of the occupation lists is a result of extensive research into Australia’s skill shortage, aiming to ensure only occupations that are of long-term national and economic importance form part of Australia’s skilled migration programme. This is turn will allow greater potential for Australian residents and citizens to be trained and enter the workforce.

As review and reform to corporate migration schemes continues, the STSOL will be reviewed and updated every six months based on advice from the Department of Employment. The MLTSSL will be subject to further review based on outcomes from the Department of Education and Training’s review. Constant revision and updates to the occupation lists aim to ensure that skilled working visa requirements are adequately framed to meet Australia’s economic needs and address relevant skills shortages.

What are the Changes?

The subclass 457 visa will continue to operate until March 2018 when the TSS visa comes into effect. New subclass 457 visas applications and any existing applications that were not determined by the Department prior to 19 April 2017 are subject to the reforms. In light of the changes, the Department has allowed visa applicants and sponsors whose applications were not determined prior to 19 April 2017 and who are affected by the changes to withdraw any applications and request a refund of fees. As additional reforms occur over the next 12 months, the Department will assess all applications as per current legislation, thus legislative requirements for the subclass 457 are subject to change.

Under the changes to the occupation lists, the subclass 457 visa allows Australian businesses to nominate foreign workers in skilled occupations for a maximum term of two years (if the occupation appears on the STSOL) or a maximum of four years (if the occupation appears on the MLTSSL) as opposed to the standard four-year visa under the former occupation lists. Applicants on the short-term visa are only eligible to renew their visa once and are not eligible for permanent residency. These reforms allow short-term working vacancies to be filled where the Australian labour market cannot fill the roles.

Additional changes to the subclass 457 visa includes: minimum salary threshold, the removal of English language exemptions; tightening required penal clearances; more extensive data matching with government agencies, publication of sponsors details who fail to meet their obligations under the Migration Regulations and integrity measures to support the role of the 457 programme as a supplement to the local labour market.

ENS (subclass 186) visa and Regional Skilled Migration Scheme (RSMS) visa (subclass 187) both provide pathways to permanent residency for skilled workers. Under recent and incoming reforms there has been and will continue to be a reduction in the availability of these pathways. These changes will include; limiting the eligible occupations to those on the MLTSSL (with additional occupations available to regional employers), lowering the age limit, strengthening the English-language requirements, data matching with the Australian Tax Office (ATO) and publication of sponsors who fail to meet their legal obligations. 

These reforms are part of a necessary response to the high demand and exploitation of the skilled migration pathways. Additionally, new policy aims to respond to public concern about the displacement of Australian workers and Australian labour market needs, specifically to those occupations that are considered of strategic value to Australia, by only providing these occupations a pathway to permanent residency.

Commitment to Training and Skilling Australian Workers

As the most commonly used avenue for corporate migration, the 457 visa programme has been the subject of constant scrutiny and review since its introduction under the 1996 Howard government. Recent reforms aim to address concerns over domestic job security for Australian workers, in particular public perception that increased skilled migration will lead to a decrease of domestic job availability.

The introduction of a levy on businesses who want to sponsor overseas skilled workers is to be effected from March 2018 and will be instrumental in helping promote domestic job and skills growth. This levy will replace current training benchmarks that business employers were required to adhere to under the old subclass 457 visa requirements. Businesses with a turnover of less than A$10 million per year will be required to pay A$1,200 per visa per year for each applicant on a TSS visa, and A$3,000 for each employee being sponsored under the ENS. Businesses with a turnover greater than A$10 million can expect to pay A$1,800 per TSS visa per year per applicant and A$5,000 for each employee sponsored under the ENS.

Revenue generated from this levy will contribute towards the new Commonwealth Skilling Australians Fund which will supersede the National Partnership Agreement of Skills Reform when it expires on 30 June 2017. The scheme will ensure that businesses that benefit from migrant employees support the training of Australians, with an estimated A$1.5 billion of revenue anticipated to be used to help train and up-skill Australians in regional areas and high-demand occupations over the next four years.

Addressing Skills Shortages

The Department’s reforms emphasise the need to use skilled migration as a supplement to the local labour force where necessary. The restricted occupations offered under the subclass 457 and TSS schemes will be instrumental in ensuring that migrant workers are addressing labour/skills shortages in specific regions throughout the country.

There is increasing demand for talent in the information and communication technology (ICT) sector, which inspired the Australian government’s National Innovation and Science agenda. This agenda proposes to boost innovation through a new entrepreneur visa designed to attract foreign business talent, as well as enhanced permanent residency pathways for international postgraduate research students with ICT and science, technology, engineering and mathematics qualifications. In September 2016, the Australian government responded by introducing an entrepreneur stream to the business innovation and investment visa programme (subclass 188) and including five additional points under the skilled migration points test for students who have completed an Australian postgraduate research qualification.

Going forward with Trade and Business Objectives

Australia’s corporate migration streams will continue to undergo redirection and review over the next 12 months, with the new policy objectives of safeguarding and promoting Australian skills and job growth and minimising migrant worker exploitation. Given the sensitive nature of the global political immigration climate, Australia is attempting to achieve a balance of promotion of wider business growth and trade objectives, with the cost of up-skilling the Australian workforce and ensuring maintenance of the efficiency and competitiveness of Australia’s business migration and trade. Trade is an essential requirement for Australia, especially with the Brexit changes. High quality free trade agreements (FTAs) play an important role in supporting global trade liberalisation. Australia currently has 10 FTAs in force with the United States, Thailand, Singapore, New Zealand. Chile, Malaysia, the Association of South East Asian Nations (ASEAN) (with New Zealand), Korea, Japan and China. 

The Department’s changes aim to ensure that the Australia’s skilled migration programme better meets Australia’s skills needs, increases the quality and economic contribution of skilled migrants and addresses public concern about the displacement of Australian workers. The main category of workers who can be expected to be affected by these changes are low-skilled and unskilled migrants, as the policy shift aims to ensure unskilled or low-skilled positions are filled from local labour markets rather than skilled migrants. With increased global mobility and increased demand for temporary and permanent visas in Australia, the government needs to ensure it is able to adequately safeguard the privileges of Australian citizenship and residency and ensure business and trade opportunities continue to expand.

Increasing the integrity and robustness of Australia’s migration programme will allow greater confidence in the system and attract greater foreign investment opportunities and will improve trade. Increased trade will see the creation of more Australian jobs and will deliver greater opportunities for Australian businesses.

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