It’s now just over a year since Prime Minister Malcolm Turnbull proclaimed ‘Australian workers must have priority for Australian jobs’ in a bold pronouncement that called time on the 457 visa programme. Turnbull’s sweeping reforms brought an end to rules which allowed skilled overseas workers to stay in the country for four years and offer tougher, shorter terms steps in their place.
Now that the political dust has settled – and the reforms were finally introduced in March – what will this mean for the country and economy going forward?
The new rules explained
The replacement to the 457 program is the new Temporary Skill Shortage (TSS) visa – and this is split into two ‘streams’:
- A short-term stream which allows a stay of up to two years and can only be renewed once.
- A medium-term stream which allows stays of up to four years.
The short-term stream is subject to a new occupation list, which is about 200 smaller than that which was used for the 457 system, whereas the medium stream will use a similar list to the old regime.
In both streams, as SBS notes, there are tighter regulations for visa applicants, including:
- Higher requirements for work experience
- Increased English language requirements
- Mandatory labour market testing
- Set salary rates
- New rules on the requirements for character, anti-discrimination and training
As with the 457 rules, both visa streams require the support of an employer in Australia.
What will the impact be?
The true impact of the new rules will only be felt in time. It’ll be measured directly in terms of the numbers of skilled migrants coming here and unemployment figures. It’ll also be addressed indirectly when it comes to everything from GDP through to the sort of stock market indicators that people track on trading software and possibly even political polling. But how dramatic will the fall out really be?
Youth unemployment in Australia is just above 12% – yet there are some regions where this is almost 18%. In the short term, however, there needs to be a drive to deliver the training needed to arm both young and old with the skills needed to plug any potential shortages caused by tougher regulations. There’s no guarantee that this will have the desired effect but that’s certainly part of the political motivation behind this – as well as Turnbull’s desire for a tough-talking policy on immigration.
Stats show that last year there were 95,000 457 visa holders in Australia. Of those, India saw the highest number of workers approved, with the UK and China second and third respectively. It’s perhaps in these three countries where the impact might be most keenly felt.
Many fear that the rules will be tougher for students too, as younger people might well struggle to get around the tougher work experience requirements placed before them.
However, it is worth stressing that the rules won’t completely bar people who came under the 457 visa arrangements. People with good qualifications and relevant experience can still enter under permanent residency visas, which operate independently from these employer-sponsored schemes. This new scheme raises the bar – it doesn’t put up a wall.
An election crowd pleaser?
There’s even a chance that this might not even be a long-term measure either. Migration agent Youssef Haddad feels that the new rules are more about politics than economics, with the government having an eye on the federal elections in August, and that the focus might well turn to pragmatism post-election.
Mr Haddad said: “The statistics clearly tell us that if it wasn’t for our migration intake, we would have a negative birth rate. For a country the size of Australia to compete globally, we need our population to increase.
“I’m pretty sure that once the government has a feeling that they’re going to be re-elected, maybe they’ll ease things off again.”
Early evidence does suggest, however, that processing times for Visa applications has grown significantly – as has the refusal rate for regional-sponsored Visas. There’s also anecdotal evidence of people flouting the rules by working illegally, taking jobs in agriculture or restaurants, for example, while on a tourist Visa.
While it’s difficult to know the scale or scope of this type of activity, the fact that it might well be happening is a sign that this could be a tough policy to enforce and that there could well be plenty of people with the will to look for ways around it.
It’s likely, therefore, that a range of factors might well mean that the impact of this particular policy might be smaller than some of the rhetoric and reaction would have you believe – for good or for bad. The next year or so will demonstrate this one way or the other – and the tone of the rhetoric after August’s elections might well be telling.
