Scrapped 457 visa: 'Putting Australians first'
Changes to the rules around skilled migrants and residency are causing potentially serious issues for Australian businesses. Chris Sheedy investigates.
When Australian Prime Minister Malcolm Turnbull announced major changes to the 457 visa system in April, some said it was the result of pressure from right-wing political groups such as Pauline Hanson’s One Nation. Others claimed it reflected politics around the globe, including in the US and UK.
Mr Turnbull said the purpose of the policy change was to ensure subclass 457 visas were no longer considered “passports to jobs that could and should go to Australians”. In other words, his party was simply putting Australians first.
The previous 457 visa system allowed a foreign skilled worker to stay in Australia for up to four years then, at the end of the four years, to apply for permanent residency. The new system generally allows only a two-year temporary visa without a permanent residency sweetener at the end of the period.
Some of the changes were immediate, although they do not affect the 95,000 skilled migrants, including accountants, already holding 457 visas. Other changes will be introduced in the new financial year, with the new system completely operational by March 2018.
How has business reacted to the news?
The decision to restrict foreign talent has been perceived as a negative one by many in the business world. In an interview with the Sydney Morning Herald (SMH), Chief Executive of Sydney start-up precinct Lighthouse, Annie Parker (who herself came to Australia on a 457 visa from the UK), said start-ups and SMEs, in particular, will suffer.
“The two-year visa doesn't qualify you to apply for permanent residency afterwards and to attract really great talent I don't think that's good enough," said Annie.
"My worry is that something that was meant to appeal maybe to the nationalist part of the Australian government has backfired into impacting an area of early-stage innovation and growth that can genuinely help the Australian economy in the long term.”
These changes will be felt by businesses and other entities across Australia.
What’s on the occupations list?
The list of occupations that can be sponsored for what will now be known as a TSS (Temporary Skills Shortage) visa has been reduced from 651 to 435, with 24 of these restricted to regional Australia.
Occupations have been split into a short-term list and a medium to long-term list. Those on the short-term list can only apply for a two-year visa, but those on the medium and long-term list may still be eligible for a four-year visa and a permanent residence pathway after three years.
These changes will be felt by businesses and other entities across Australia, many of which commonly look offshore to fill roles. From hairdressers to church parishes (Catholic churches famously suffer from a shortage of local priests, for instance), many entities rely on foreign talent.
An ‘over-supply’ of Oz accountants?
Traditionally, the number of accountants entering the country via the skilled migrant scheme made up a large percentage of all 457 visa entrants.
“According to the government data, accountants are in the top 15 nominated occupations for 457 visa holders, with 270 visas granted to accountants in three months from July to September last year alone,” said a recent report in the Australian Financial Review.
The perceived over-supply of accountants is partly because traditional accounting firms are actively employing specialists from other professions.
An argument has now emerged around why, after the policy changes, accountants (general) and various types of auditors have remained on the medium to long-term skilled migrant list.
Evidence suggests that there is an over-supply of accountants in Australia. Indeed, three years ago, the Department of Employment asked for accounting to be removed from the Skilled Occupation List for migrants.
What does this mean for accounting in the future?
The perceived over-supply of accountants is partly because traditional accounting firms are actively employing specialists from other professions. As they pivot towards full-service offerings, these firms actively seek experts in IT, data analytics, law, psychology and more.
The ‘accountant (general)’ occupation on the list excludes clerical and bookkeeping positions. It also does not allow for the visa to be awarded for a position in a business with annual turnover of less than $1 million or with fewer than five staff.
Both Chartered Accountants ANZ (CAANZ) and the Institute of Public Accountants (IPA) support the continued inclusion of accountants on the list.
Accounting jobs are set to increase by over 10,000 annually over the coming years, they say. And if they are partly staffed by people from a broad variety of cultural backgrounds, accounting firms and other businesses will be better able to survive and thrive in an increasingly global marketplace.
About the author
Chris Sheedy is one of Australia’s busiest and most successful freelance writers. He has been published regularly in the Sydney Morning Herald, Virgin Australia Voyeur, The Australian Magazine, GQ, In The Black, Cadillac, Management Today, Men’s Fitness and countless other big-brand publications. He is frequently commissioned to carry out copywriting and corporate writing projects for organisations, including banks, universities, television networks, restaurant chains and major charities, through his business The Hard Word.