Shutting the Borders: The Impact of Visa Restrictions in Australia

By on 22 June 2017

Great Britain’s decision to leave the European Union, partly by the wish to try to protect UK jobs for British citizens last year, was a major turning point globally in the changing mindset of governments.

Following his campaign pledge to put “America First” US president Donald Trump has initiated a review of the US visa program to modify or replace the current lottery for H-1B visas with a merit-based system that would restrict the visas to highly skilled workers.


Australia Set to Take a Protectionist Path in Restricting Visas

In April of this year, Malcolm Turnbull announced that the Australian government would be axing the Temporary Work Skilled Visa (subclass 457 visa), exchanging the framework for a new structure which allows fewer allocations and much tighter and restricted criteria. The new arrangement labelled as a Temporary Skill Shortage (TSS) Visa is set to come into play in March of 2018 and has been designed to give Australian citizens a better chance of obtaining jobs in their own country.

The TSS visa comprises a Short-Term stream allowing up to two years in the country and a Medium-Term stream allowing up to four years with no options to apply for permanent residency at the end of the term, which the current 457 allows. The new TSS visa also cuts occupations eligible for temporary visa status from 651 to 435, disallowing professionals in positions such as Scientist & Biochemist, Manufacturing Manager, Human Resources Advisor & Aviation Pilot/Engineer from ever being eligible to apply for a TSS Visa.

The Australian workforce of 12 million includes only 95,000 temporary 457 workers. This represents less than 1% of the workforce. Is this area of high skills need really the place to start……

Statistics are showing that most employers are welcoming the change but trade unions have dismissed the new arrangements stating that there will unlikely be any real changes or improvements.

Even though the Australian government has stated that the changes are being rolled out to improve standards of living for the Australian people, there are some vast issues that most likely weren’t taken into consideration when the reform was being confirmed.

Issue #1: It is a Disincentive for International Businesses Operating in Australia

For some international businesses with a base in Australia, the changes are set to make things difficult. In the past, when skill shortages have surfaced and difficulties associated with sourcing appropriate talent in Australia has come to light, many businesses have looked overseas to hire the specific skilled professionals they require. Regulations impacting 457 visas will make hiring initiatives extremely difficult for companies in this predicament and over time will most likely turn organisations who continuously suffer from this challenge to develop their businesses in other countries.

This point alone raises discussions that the changes demonstrate a potential “sovereign risk” to the Australian economy. For global organisations weighing up their options as to which nations they will choose to expand in next, one would think that countries that demonstrate a potential operational risk due to workforce limitations and hiring restrictions would be immediately crossed off the list.

Issue #2: Certain Domestic Industries Requiring ‘Scientists’ Are Immediately Affected

The visa changes have also immediately thrown doubt over the future and potential for growth within some specific industries in Australia. Pharmaceuticals and life sciences being a space which has been effected immediately due to the role title of ‘scientist’ being scratched from the list of available jobs to warrant a visa.

It’s well known that many of the worlds star scientists are in countries outside of Australia and thus, at times, Australian medical corporations have been required to target candidates overseas to source specific skills and knowledge to execute components of study taking place in areas such as cancer and HIV cure research.

Recently, one of Australia’s top medical research heads advised that the visa changes have supposedly caused at least six Australian medical institutes to have their job offers turned down by overseas candidates following the federal government’s recent visa overhaul. This point making a very bold statement for the future of medical research in Australia.

Issue #3: Even Key C-Level Roles in Government Entities Will be Impacted

Funnily enough, the visa changes also hit some of the government’s own entities with high profile CEO’s such as NBN’s Bill Morrow and Head of Australian Energy Market Operator, Audrey Zibelman, both being on 457’s.

Under the current reform, even high-level executives who could contribute to profound success for the Australian economy via business excellence in whichever way, will be restricted to mere 2 year stints with no option to apply for permanent residency. This factor surely lowering interest of Australian opportunity to the world’s leading executive pool.

Issue #4: The Pathways to Residency Are Needed to get the Best People Working For Australia

The issue for all roles on the TSS Short term stream is that the lack of ability for a pathway to permanent residency removes the incentive for many to make the move.

Why would an experienced individual in an excellent job overseas uproot their family, potentially changing schools for their children for a 2-year stint overseas with no option to stay?? 

I know for a fact that there are professionals in our business who have made a substantial contribution to the Australian economy who would never have relocated had that been the case.

The fact that there has been immense lobbying from many areas of industry, and there are signs that there will be some alterations and changes to both the lists of approved occupations and potentially some of the ruling, shows that this was a piece of legislation rolled out too quickly without sufficient thought.

The Visa Restrictions Represent Significant Risk With Little Potential Gain

The above is only a small representation of the damage which is already apparent because of the visa overhauls. One must think, is shutting out less than 1% percent of the Australian immigrant temporary workforce worth the potential overall setbacks to the country? It’s already known that global powerhouse organisations might potentially choose to invest and expand elsewhere, medical research and advancements are set to be impeded, technology start-ups will be pressured and the Australian aviation and defence space will be under pressure because of not being able to bring in high-end military pilot skillsets from overseas.

Yes, there is likely to be some more jobs available for Australia citizens and residents. However, one can potentially argue that the issue of more jobs for Australians isn’t best answered by simply shutting the borders.

A Better Way to Create Jobs for Australian Residents

Surely, we should be looking at how we can encourage greater business growth and investment which will lead to more jobs for Australians rather than retreating and acting scared to protect the ones we have??
Can education and training really solve the issues around our skill shortages in Australia, I believe in the long term possibly but certainly not in the short term.  I truly believe that transferable skills need to be considered in all industries.  There is still a very closed mind frame of many employers to look at transferring skills e.g. resources industry to public infrastructure?
Will these changes push work overseas to be outsourced and performed  remotely so still not improving local employment but also losing all wages and taxes from Australia?

I would love to know how you think we can tackle this problem and whether you think this approach is the best one for Australia?

Please feel free to comment below….