Denham Sadler
April 18, 2017

Visa shock: 457 program scrapped

Skills

Visa shock: 457 program scrapped

Cabinet discussion: What discussion? The 457 visa scheme dumped without warning

Prime Minister Malcolm Turnbull has abolished Australia’s 457 visa program in a surprise move that has sent shockwaves through the local tech and startup community.

Announced via a Facebook video post on Tuesday afternoon, the 457 visas scheme will be scrapped entirely from March next year, and replaced by two new temporary migrant worker visas with more stringent requirements.

Mr Turnbull said the move was made with a “laser-like focus” on Australia’s national interest, marking out the new program in Trump-esque terms.

“We’re putting jobs first. We’re putting Australians first. Australia is the most successful multicultural nation in the world – we are an immigration nation. But the fact remains that Australian workers must have priority for Australian jobs,” Mr Turnbull said.

“We will no longer allow 457 visas to be passports to jobs that could and should go to Australians.”

The 457 visa is used by Australian companies to bring temporary foreign workers into the country. It is popular among the local tech and startup community, with ‘software programmers’ the most common job classification issued via the scheme.

It is to be replaced by the Temporary Skills Shortage visa, comprising of a short-term stream of up to two years and a medium-term stream of up to four years.

This new scheme would allow businesses to “address genuine skill shortages in their workforce and will contain a number of safeguards which prioritise Australian workers”, according to the Department of Immigration and Border Protection.

The new visa scheme will come with a number of stricter requirements, including a “more targeted” occupation list, work experience, mandatory labour market testing, better English language proficiency and a criminal record check.

This new short-term visa would not allow for permanent residency. The medium-term option would allow for up to four years and be “targeted at higher skills”.

The new scheme means that Australian businesses need to advertise job openings locally before attempting to fill the openings using foreign workers.

There are presently more than 95,000 people in Australia on a 457 visa, with a grandfathering arrangement allowing these people to remain in the country under the old conditions.

The number of skill classifications under the scheme would be reduced by about 200, according to Immigration Minister Peter Dutton said.

This “significant condensing” of the occupation list used for skilled migration visas would be implemented on Wednesday.

The government is yet to provide further information about the new visa scheme or what skill classifications have been cut.

The move has shocked the Australian tech community, which is heavily reliant on 457s. BlueChilli CEO Sebastien Eckersley-Maslin said the 457 scheme is the “lifeblood” of the tech and startup ecosystem.

“In a global ecosystem, the economies who will succeed in the future are the ones who can attract the best global talent today – 457s have been the lifeblood to support technological development and growth,” Mr Eckersley-Maslin told InnovationAus.com.

“The tech ecosystem has been clear: we do not have enough local talent. We need to grow local capability and invite immigrants to address the shortfall,” he said.

“We’re already geographically isolated, I’m concerned that adopting ‘Australia-first’ language or policy will further shut us off from the rest of the world.”

Startup AUS CEO Alex McCauley said that the 457 visas were crucial to the growth of the local startup and tech communities, and any changes to the system could be disastrous.

“Visas, particularly the 457, are super important for startups. The uncertainty will have an immediate impact,” Mr McCauley told InnovationAus.com.

“It will be important to make sure the detail is finalised quickly and in favour of enabling high calibre professionals to continue to come here from overseas to help startups,” he said.

While Mr Turnbull said the changes were aimed to preventing businesses from using overseas workers when Australians could fill the roles, Mr McCauley said the visas are primarily used by startups to fill large skill gaps here.

“Startups aren’t hiring people that can be found here in Australia, they’re hiring experienced, well-classed technical staff. We need to make it easier for them to come to Australia if we want to grow the ecosystem here,” he said.

“For startups it’s very much about targeting world-class talent that doesn’t yet exist in Australia. High growth tech companies should have easier access to overseas workers.”

Several influential players in the local tech world have already spoken out about potential changes to the 457 visa.

The scrapping of the 457 could have a big impact on Atlassian, with a quarter of its 1000 employees in Australia currently on the visa.

“The success of our Australian operation is quite dependent on these visas,” Atlassian co-founder Mike Cannon-Brookes told ABC Radio National late last year.

“Australia has a problem with senior skilled technical talent and this is the way that a huge amount of the tech industry gets them into the country. It’s not a question of not looking or saving money, it’s quite the opposite.”

Australian tech giant SafetyCulture, which recently closed a massive $30 million capital raise, currently employs 12 staff on 457 visas out of its 100+ workforce. Its founder, Luke Anear said the scheme helped local firms to fill Australia’s skills gap.

“The 457 program was a way for us to fill the gap between a lack of skilled workers in Australia and finding experienced workers from overseas. The best and cheapest option is to have suitably trained workforce in Australia from Australia, but today we just don’t have it yet. We need to be able to continue to meet the demand and also provide the labour force to meet Australia’s current opportunity,” Mr Anear said.

Lighthouse CEO Annie Parker came to Australia on a 457 visa, and said she is “very concerned” about the proposed changes.

“I came into the country on a 457 visa and I think I’ve more than proven the value I’ve brought to the Australian economy. The general manager of Code Club Australia is also on a 457 visa – do I have to send her home now. Is someone who is daily educating primary school kids and their teachers on learning to code no longer covered?” Ms Parker said.

“To think that people with these skills are no longer welcome seems short-sighted at best and negligent at worst. We need to see the detail of what is replacing the 457 visa – I hope it still allows for people like me to come here and build awesome growth companies for Australia.”

The Opposition has already slammed the government’s move, with Labor Leader Bill Shorten saying on Twitter: “Make no mistake, the only job Malcolm Turnbull cares about saving is his own.”

But Mr Shorten promised just last week that Labor would “crack down on dodgy” 457 visas itself if it was elected.

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