Make Australia great again? HR grapples with 2017’s visa changes


For employers who use a visa programme to hire overseas workers, calling the legislative changes of 2017 “unpredictable” is an understatement. At the AHRI NSW IR/ER forum on July 4th, experts and affected HR professionals gathered to diagnose the issues. The event was all business, and highlighted the deep knowledge available in AHRI’s local network forums.

“Are we making Australia great again?”

This was the tongue-in-cheek question Neil Napper, partner at Lander & Rogers and panel host at the NSW IR/ER forum, posed to the assembled experts. The discussion briefly touched on the new global environment, and how many countries are lurching towards protectionism, but mostly focused on the scrapping of the 457 visa programme (announced this April) that will come into full effect in March 2018.

The stated reason behind the changes, explained immigration practice national leader at KPMG, Michael Wall, is that many felt the previous 457 visa system had lost its way. It was formed to address skill shortages but, in certain groups, the belief had grown that it was being abused. Wall was sceptical that the 457 system was as bad as all that.

“It might be the case in some circumstances and this should be addressed, but if you look at the trends of the 457 visa rates, when unemployment goes up, the 457 visa holders went down.” The government’s statistics support his pointthe 457 visa system was tied to the health of the economy, which is what you would and should expect.

Wall went on to say that it’s always been expensive to sponsor someone, and that by and large multinational corporations were not abusing the system. Which led to a discussion of an issue many are grappling with – isn’t the government also trying to encourage innovation and agility in Australia’s economy?

The words vs the reality

“How do the changes align with the government’s objectives? Ask anybody a week ago and they would have said ‘not very well’,” said Teresa Liu, co-managing partner Australia and New Zealand at Fragomen.

While the 1 July adjustments to sponsored visa programmes were welcomed by many at the forum, they did highlight the uncertainty employers are facing – it’s hard to plan when major policy is being made on the run.

For instance, it was only in mid-May that a new levy on businesses sponsoring foreign workers was revealed. Depending on the turnover of the business, they will incur either a fee of $1200 or $1800 per year per sponsored temporary employee.

Another particularly disruptive change flagged on July 1 was the removal of the English language skills and the skills assessment exemptions for those earning more than $180,000 a year. Companies that were planning on taking advantage of it now have a problem, because the exemption closure is effective retroactively.

Regardless of the merits of any of the changes, the ad hoc approach to legislation is not helping anybody. Businesses and markets thrive on certainty – this is not that.

One member of the forum referenced a client, who was a visa applicant from overseas. Both he and his wife had resigned, sold their home and removed the children from school in anticipation of his relocation to Australia under an intra-company transfer. His occupation was removed on 19 April, rendering the visa unapprovable. He had to cancel the sale of the home, try negotiate re-employment with his local employer and re-enrol the children in school. Once he achieved all of that, his occupation was reintroduced to the list on 1 July and he could apply again. He politely declined.

Advice for affected organisations

Each panel member stressed that there were no safe bets in such an unpredictable legislative environment, and managers and stakeholders need to be aware of that. “Put people on notice to expect the unexpected”, is how Liu put it.

Another panel member, Mandy Harris, managing director Immigration Matters, said the ability to“roll” visas over each year, as was common practice with the previous 457 system, is over. The new programme needs to be considered solely “for short term needs”. She also advised getting in contact with relevant industry bodies and getting them to lobby for any provisions your organisation would like.

If you currently have a group of  457 visa holders in your organisation, Wall advised gathering as much relevant data as possible on them. There have already been changes regarding age requirements and further adjustments might be required in the future.  “The better reporting you have, the better you can respond, the more agile you can be.”

For organisations planning on hiring temporary overseas workers in the future, Liu recommended a realistic, cautious approach. Keep an eye on the occupation lists, as they will be reassessed going forward.

“At its heart it’s knowing what your organisation needs. Start really considering the costs,” said Liu. For instance, the training levy (on top of the existing charges for visa sponsorship) make for a hefty sum, so be sure that you’re maximising the efficiency of each overseas hire, and don’t overextend them. “Do you need that person on a one year visa? Or is that role able to be handled in six months?”

Rounding back to Napper’s first question, are we making Australia great again? If by “great” you mean more uncertain, then sure. That.

To get access to industry experts on HR’s most pressing issues, , check out your local AHRI network forum.

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Paul
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Why does Australia, a wealthy country, have to continually rely on importing skilled overseas workers. I’ve been around in HR/ER for 40 years hearing about skills shortages. I have been fortunate to have worked in organisations who were committed to recruiting and developing Apprentices, Trainees and Graduates, it was regarded as a corporate and well as a social responsibility. However very many organisations haven’t and don’t, and seek to minimise or avoid the cost of training and development by importing skilled overseas workers. At the height of the resources boom it is understandable that ‘temporary’ skilled labour shortages arise, but… Read more »

Tanya
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Tanya

I work in the hospitality field and we really struggle to find Chefs (who remain on the skills shortage list). Since my time in this industry, we had 1 Chef on a 457, but recently just hired another. There is a big shortage of Chefs in the field, and it most likely does come down to some organisations training, but my observation is that the young kids don’t want to do apprenticeships anymore. Schools are putting the kids through VET courses, and getting their minor certificates in school so to come into an organisation and still do a three year… Read more »

More on HRM

Make Australia great again? HR grapples with 2017’s visa changes


For employers who use a visa programme to hire overseas workers, calling the legislative changes of 2017 “unpredictable” is an understatement. At the AHRI NSW IR/ER forum on July 4th, experts and affected HR professionals gathered to diagnose the issues. The event was all business, and highlighted the deep knowledge available in AHRI’s local network forums.

“Are we making Australia great again?”

This was the tongue-in-cheek question Neil Napper, partner at Lander & Rogers and panel host at the NSW IR/ER forum, posed to the assembled experts. The discussion briefly touched on the new global environment, and how many countries are lurching towards protectionism, but mostly focused on the scrapping of the 457 visa programme (announced this April) that will come into full effect in March 2018.

The stated reason behind the changes, explained immigration practice national leader at KPMG, Michael Wall, is that many felt the previous 457 visa system had lost its way. It was formed to address skill shortages but, in certain groups, the belief had grown that it was being abused. Wall was sceptical that the 457 system was as bad as all that.

“It might be the case in some circumstances and this should be addressed, but if you look at the trends of the 457 visa rates, when unemployment goes up, the 457 visa holders went down.” The government’s statistics support his pointthe 457 visa system was tied to the health of the economy, which is what you would and should expect.

Wall went on to say that it’s always been expensive to sponsor someone, and that by and large multinational corporations were not abusing the system. Which led to a discussion of an issue many are grappling with – isn’t the government also trying to encourage innovation and agility in Australia’s economy?

The words vs the reality

“How do the changes align with the government’s objectives? Ask anybody a week ago and they would have said ‘not very well’,” said Teresa Liu, co-managing partner Australia and New Zealand at Fragomen.

While the 1 July adjustments to sponsored visa programmes were welcomed by many at the forum, they did highlight the uncertainty employers are facing – it’s hard to plan when major policy is being made on the run.

For instance, it was only in mid-May that a new levy on businesses sponsoring foreign workers was revealed. Depending on the turnover of the business, they will incur either a fee of $1200 or $1800 per year per sponsored temporary employee.

Another particularly disruptive change flagged on July 1 was the removal of the English language skills and the skills assessment exemptions for those earning more than $180,000 a year. Companies that were planning on taking advantage of it now have a problem, because the exemption closure is effective retroactively.

Regardless of the merits of any of the changes, the ad hoc approach to legislation is not helping anybody. Businesses and markets thrive on certainty – this is not that.

One member of the forum referenced a client, who was a visa applicant from overseas. Both he and his wife had resigned, sold their home and removed the children from school in anticipation of his relocation to Australia under an intra-company transfer. His occupation was removed on 19 April, rendering the visa unapprovable. He had to cancel the sale of the home, try negotiate re-employment with his local employer and re-enrol the children in school. Once he achieved all of that, his occupation was reintroduced to the list on 1 July and he could apply again. He politely declined.

Advice for affected organisations

Each panel member stressed that there were no safe bets in such an unpredictable legislative environment, and managers and stakeholders need to be aware of that. “Put people on notice to expect the unexpected”, is how Liu put it.

Another panel member, Mandy Harris, managing director Immigration Matters, said the ability to“roll” visas over each year, as was common practice with the previous 457 system, is over. The new programme needs to be considered solely “for short term needs”. She also advised getting in contact with relevant industry bodies and getting them to lobby for any provisions your organisation would like.

If you currently have a group of  457 visa holders in your organisation, Wall advised gathering as much relevant data as possible on them. There have already been changes regarding age requirements and further adjustments might be required in the future.  “The better reporting you have, the better you can respond, the more agile you can be.”

For organisations planning on hiring temporary overseas workers in the future, Liu recommended a realistic, cautious approach. Keep an eye on the occupation lists, as they will be reassessed going forward.

“At its heart it’s knowing what your organisation needs. Start really considering the costs,” said Liu. For instance, the training levy (on top of the existing charges for visa sponsorship) make for a hefty sum, so be sure that you’re maximising the efficiency of each overseas hire, and don’t overextend them. “Do you need that person on a one year visa? Or is that role able to be handled in six months?”

Rounding back to Napper’s first question, are we making Australia great again? If by “great” you mean more uncertain, then sure. That.

To get access to industry experts on HR’s most pressing issues, , check out your local AHRI network forum.

2
Leave a reply

avatar
500
  Subscribe to receive comments  
Notify me of
Paul
Guest
Paul

Why does Australia, a wealthy country, have to continually rely on importing skilled overseas workers. I’ve been around in HR/ER for 40 years hearing about skills shortages. I have been fortunate to have worked in organisations who were committed to recruiting and developing Apprentices, Trainees and Graduates, it was regarded as a corporate and well as a social responsibility. However very many organisations haven’t and don’t, and seek to minimise or avoid the cost of training and development by importing skilled overseas workers. At the height of the resources boom it is understandable that ‘temporary’ skilled labour shortages arise, but… Read more »

Tanya
Guest
Tanya

I work in the hospitality field and we really struggle to find Chefs (who remain on the skills shortage list). Since my time in this industry, we had 1 Chef on a 457, but recently just hired another. There is a big shortage of Chefs in the field, and it most likely does come down to some organisations training, but my observation is that the young kids don’t want to do apprenticeships anymore. Schools are putting the kids through VET courses, and getting their minor certificates in school so to come into an organisation and still do a three year… Read more »

More on HRM