The 457 visa was replaced over the weekend by the new Temporary Skill Shortage (TSS) visa – the culmination of nearly a year of gradual changes being implemented and uncertainty for many businesses and individuals. Since the government’s announcement of the reforms to the 457 visa programme, the changes have largely been criticised by many prominent figures in the tech industry and start-up scene in Australia.
On 19 March 2018, the government also announced a new visa scheme to attract highly skilled global talent to Australia, which will be piloted for 12 months from 1 July of this year. This will be known as the ‘Global Talent Scheme’ which will comprise of two streams under the TSS visa.
Global Talent Scheme
The Global Talent Scheme will assist companies that fall under one of two categories:
- Established businesses with an annual turnover of over AUD 4 million for each of the past 2 years; and
- Technology/STEM start-up businesses.
In both cases, visa applicants under one of the two streams will be eligible for four year TSS visas, simpler applications and faster processing, and potentially eligibility to transition to permanent residency under the Employer Nomination Scheme (ENS) Subclass 186 visa. Currently, no details exist as to whether an occupation list will be applicable.
Under both streams, companies need to demonstrate that:
- their recruitment policy gives first preference to Australian workers (by reference to the percentage of workforce that is Australian);
- Labour Market Testing (LMT) was undertaken for the specific position; and
- the business has no breaches of workplace/immigration laws and that employees are paid in accordance with relevant industrial instruments or an internal salary table consistent with market rates.
Amongst the other requisite criteria for the TSS visa, visa applicants must be able to pass on their skills or development to Australians and have at least 3 years of work experience directly relevant to the position (as opposed to the two years currently mandated by the TSS visa).
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Established business stream
This stream is available to companies that are publically listed or have an annual turnover of at least AUD 4 million for each of the past 2 years.
Further, visa applicants under this stream must have minimum annual earnings of AUD 180,000.
It is expected that a company would have access to up to 20 positions per year under this stream, and have some degree of flexibility in certain visa criteria (yet to be determined).
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Start-up stream
Aside from the criteria outlined above, businesses will need to demonstrate that:
- they operate in a STEM-related field;
- a ‘start-up authority’ will endorse the business (yet to be determined); and
- they satisfy financial criteria (also yet to be determined but could include demonstrating working capital or that capital has been raised).
It is expected that the business will have access for up to 5 positions per year under this stream, have some degree of flexibility with respect of certain visa criteria, and involve minimum annual earnings at a market salary rate (which can take into account equity).
Analysis
Hannan Tew previously provided our analysis on how the initial changes to the 457 visa program would affect those in the tech sector, which were later reiterated by Google.
Companies with at least AUD 4 million turnover should already be accredited sponsors, which means that their visa applications would already be subject to streamlined arrangements. Similarly, the “medium to long term” stream of the new TSS visa already allows individuals access to four year TSS visas and pathways to permanent residency. This means that individuals who have occupations that are eligible for the ‘medium to long term’ stream of the TSS visa are unlikely to be selected for this new stream.
Effectively, the “established business stream” allows larger organisations to ‘elect’ 20 well remunerated visa applicants with occupations that would not otherwise have been eligible for the “medium to long term” stream of the TSS visa, to have the above benefits.
It therefore makes little sense to have an occupation list for these streams given that the company are attesting that these individuals are sufficiently integral enough to the company to use one of the valued spots.
The start-up stream provides more benefit to new companies looking to retain skilled staff. The benefits include:
- having access to streamlined arrangements (as start-ups may have difficulty obtaining sponsorship accreditation);
- being able to elect 5 visa applicants to have the above benefits (i.e. individuals who would not have been eligible for the “medium to long term” stream, and/or individuals who require streamlined processing); and
- recognition that certain individuals employed at early stages may receive equity as part of their compensation package.
Of particular interest will be how certain aspects of the stream play out. For example:
- What constitutes a ‘start-up’: Previously in the context of applying for business sponsorship, the Department assessed ‘start-ups’ as companies that had operated for less than 12 months. We hope for a broader interpretation as to what classifies as a ‘start-up’ to allow an extended period of access to this stream;
- Financial criteria – while this will be determined following consultation with stakeholders, this should obviously be at a level that is not prohibitive (i.e. bootstrapping start-ups that have yet to hit a certain revenue target may fall foul of the provisions outlined above)
- Start-up authority endorsement – the government also previously announced an initiative to be piloted in South Australia as an alternative to the Entrepreneur stream of the Business Innovation visa. Instead of the $200k capital backing threshold, it was proposed that applicants for this visa could be nominated by State/Federal entities in partnership with local incubators and accelerators. Accordingly, this aspect should be as streamlined as possible to avoid unnecessary bureaucracy – for example also allowing reputable incubators/accelerators to provide this endorsement.
While the above still represents positive steps in the right direction, we remain hopeful that the final product will provide tangible benefits to Australian businesses and in particular start-ups.
Next Steps
A consultation phrase will be commencing prior to the Global Talent Scheme being piloted in July 2018. Please feel free to contact us by email at [email protected] or phone +61 3 9016 0484 if you have further comments or queries or would like some guidance.
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