Will Australia’s New Visa Rules Harm Growth?

In 2015-2016, it was reported that Australia hired foreign applicants under the 457 Visa Scheme, from the following industries: Information Media and Telecommunications, Professional, Scientific and Technical, Other services, Accommodation and Food Services, Healthcare and Social Assistance, Construction. These are employees coming from India, UK, China, Philippines, US, and Ireland. News broke that 457 Visa scheme was abolished by the Australian Government under the leadership of Prime Minister Turnbull, introducing 2 new visa schemes for foreign workers. The first is a short-term visa of 2 years which is extendable but provides only a slim chance for the approval of permanent residency after its completion. The second is a medium-term visa of 4 years which requires a higher level of English proficiency and stricter background and criminal check on the applicants. The announcement was made just April of this year and the events that will result from this major reform in the immigration are still unknown. One can merely speculate.

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With the new scheme that will come into play, stakeholders are both concerned and some troubled by the said change. These stakeholders are composed primarily of business and applicants (both local and foreign). In the end, for it to become reasonable for all stakeholders, is the value of nationalism. This is the understanding and embracing the fact that the policy was made to support Australia’s own interest. If not, this will entail another problem for each stakeholder.

For Enterprises – recruitment agencies included.

It is understandable that there are other companies who are honest and are not inclined to abuse the privilege in the 457 Visa. However, it is clear that the government refuses to move forward with this system in good faith. As for business, this reform may result to increase in cost in terms of training and talent acquisition. The sponsorship requirement may be abolished, if it is true that the Australian Citizens are not fit for the vacancies, this implies that more skill-gap training will be needed for the local applicants. The question is if there are even citizens who are willing to apply? Again, this can increase cost in marketing and all efforts in talent acquisition in general.  Another angle that should also be taken into consideration is that when budget allotted for these departments increase, will product or service prices be increased to compensate? There is indeed more to the situation than just diverting human resources to Australian Citizens.

For Applicants.

The foreign applicants are probably the most affected by this immigration reform. A lot of applicants especially those coming third world countries like India and the Philippines, together comprising more than 30% of the 457 Visas last year, were most like motivated to fill in the jobs because of the pathway to citizenship. For the applicants coming from other countries like UK, China, and the US, the situation may be more tolerable as pay rates are relatively more competitive than the first two countries. The US in particular, in Trump administration news, are starting to move labor back to Americans. This is the same approach that Prime Minister Turnbull is trying to execute. Hence, US applicants may be more privileged as they will expect more opportunities in their home country.

Some industries are more interested in hiring foreign workers, not because of the compensation difference, but because they prefer the work ethic and the expertise of foreign applicants. In Healthcare for example, in Australia, even UK, are both in the shortage of healthcare staff and are most likely to hire candidates from Asia – primarily the Philippines. The main concern of these candidates is if they can eventually bring their families with them to the country of their workplace. As for Australian Citizens, another information that is yet to be discovered is how ready the Australians are to occupy the positions that will be left vacant once the new policy is fully implemented. Is the position attractive enough for them in terms of suitability and compensation? The commitment to fill-in the skill gap should also be present in order for the new policy to work.

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