by George Nott

457 visas abolished: The good news and the bad news for CIOs

Apr 19, 2017

Yesterday Prime Minister, Malcolm Turnbull showed his simultaneous dedication to both ‘putting Australians first’ and US-based, local-tax-loving corporate giants, by posting a video on Facebook to tell the world he was abolishing the 457 visa programme.

The initial, woolly announcement caused the sector to lose their collective marbles. “Do you know how hard it is to find specialised IT people in this country?! They don’t exist!” said one understandably concerned consultancy chief.

PR agencies rushed out reactions from their clients that varied from “the end is nigh” to “Best. News. Ever.” but in any case Company Name’s Amazing Product would not be affected.

Eventually the government later clarified the new visa landscape – sort of – to reveal the changes were perhaps not as drastic as first thought.

The 457 visa is no more, but it will be replaced by the new Temporary Skill Shortage (TSS) visa which has two-year and four-year streams. Minister for Immigration and Border Protection Peter Dutton even sort-of-slipped that perhaps the whole thing was little more than a 457 ‘brand’ redesign. Unions agreed and Labor called the changes “cosmetic”, “not real” and said they would make “no real difference”.

However, there are important and significant changes afoot. For CIOs and tech leaders there’s good news and bad news.

The Good News

Grandad clause: The changes are going to be grandfathered meaning those currently working on a 457 visa can continue to do so.

“They will continue under the conditions of that visa,” Turnbull said of present visa holders yesterday.

However, it is not clear what happens when existing 457’s expire.

Better pay: Associations like the Information Technology Professionals Association (ITPA) say that “local IT workers [are] being sold out by rorts in the 457 visa system” which had led to employers paying reduced wages”.

If their analysis is correct, local workers are likely to no longer have their salaries depressed by competition from lower-paid workers originating from overseas.

Drain blocker: Higher pay available locally could help towards stemming the so called ‘brain drain’ of talented Australian workers to other countries.

“ICT is Australia’s fastest growing sector – growing at a rate of 2 per cent compared to 1.4 per cent per annum growth for the workforce as a whole – yet we are still losing skilled workers to a globally competitive market,” said CEO of the Australian Information Industry Association Rob Fitzpatrick.

“While industry wasn’t consulted prior to this announcement, we encourage the government to work with us on the details for the new policy.”

All in a name: The visa changes have seen 200 jobs cut from the eligible skilled occupations including web developer, ICT support and test engineers, ICT support technicians, telecommunications technician.

However, many equivalent roles can be found in the revised visa pools including ‘developer programmer’, software engineer, software tester and ‘telecommunications technical officer or technologist’.

The Bad News

Higher fees: Companies bringing in foreign workers on the new visas are expected to be charged increased fees (around double current rates), the money from which will go into a fund to train Australian workers. “The visa charges in the, for the visas in, you know, to apply for the visas, will be around $1,200 for the two-year, $1,150 for the short-term stream and $2,400 for the longer, medium-term stream,” Turnbull said on ABC Radio on Wednesday morning.

The total amount payable could also depend on the size of the company making the application.

“The arrangements of the training fund will be announced in the Budget,” Turnbull added.

Some experts have cast doubt on the effectiveness of the training fund. Dr Chris F Wright, an immigration and labour expert from the University of Sydney Business School, said: “The Turnbull Government’s decision to establish a training fund is welcome but there are significant inadequacies with the education and training system that also must be fixed. This requires extensive changes to labour market and skills policies.”

One strike naming and shaming: Part of the 457 visa application process is the employer’s requirement to demonstrate that there are no suitably qualified and experienced Australian citizen or permanent resident readily available to fill that position.

Companies will now be required to “demonstrate that their market testing has worked,” Turnbull said this morning.

“And if they fail to meet their requirements, details of their failure will be published. We are going to be very transparent about this,” Turnbull added.

If companies breach their obligations, the Prime Minister said, “then they won’t be able to get further people in under visas”.

Attracting talent to Australia even harder: Guess what, Australia’s incredibly overblown house prices, ban on fun, and nanny-state reputation aren’t all that appealing to tech talent overseas.

“It’s a bit hard to build a technology industry when every second 20-year-old wants to leave because you’ve turned the place into a bumpkin country town,” Freelancer CEO Matt Barrie said last year.

There were similar difficulties in attracting more established talent too said Atlassian co-founder Mike Cannon-Brookes last year: “We’re trying to pull the best talent out of the Valley. A lot of those guys and girls have four other options down the street, so how am I going to convince them to move to Sydney?”

The changes mean, according to Dutton, that “there won’t be permanent residency outcomes at the end” of the two-year visa – part of the appeal for many skilled workers to come in the first place.

The permanent residence eligibility period for the four-year visa holders has been extended from two to three years.

Matched with the ‘Australians first’ mantra (applauded by the likes of Pauline Hanson) around the announcement and any potential overseas workers will be striking unwelcoming Australia from their list of options.