Fate of Australia’s 457 visa hangs in balance

By @Len_IBTimes on
Fate of Australia 457 Visa Hangs in the Balance
Deliberations on Australia's 457 visa are due to take place over the next few weeks, so business owners are expressing concerns over hiring implications of restrictions. Jesse Collins/Unsplash

Australia’s tech industry has condemned Turnbull’s administration for pushing ahead with plans to restrict 457 visas. Further discussions regarding the future of the visa are due to take place over the next few weeks, but many tech leaders are deeply worried that Australian start-ups are going to find it increasingly difficult to keep up with the rest of the world.

457 visa restrictions are 'crazy'

Tech entrepreneurs have said that any restriction on the supply of skilled workers could be catastrophic for the industry. There is a real shortage of home-grown skilled people working in the tech industry, so any further restriction placed on skilled recruits from abroad could have catastrophic consequences for the tech industry. Steve Baxter, a prominent Australian tech investor, described the move as “crazy.”

Industry experts believe Australia should be taking a more aggressive approach to tech recruitment. Rather than making it difficult for start-ups to recruit overseas talent, they should be loosening 457 visa requirements and seizing the momentum. This would make the Australia tech industry more competitive, according to the experts.

Tech start-ups rely on skilled foreign workers

Many Australian entrepreneurs rely on talented workers from India, China, and the UK to provide expertise they don’t have. Sam Ovens, a successful entrepreneur from New Zealand, is a prime example. Multi-millionaire Ovens was able to create a successful app despite not having coding ability. He couldn’t have done this without help from skilled overseas workers.

Indeed, as Mike Cannon-Brookes, co-founder of an enterprise software start-up, said in a recent interview that “highly-skilled talent from overseas plays a crucial part in supporting and strengthening Australia’s local labour force.”

Skilled migrants make up large percentage of Australian workforce

Skilled migrant workers account for a large percentage of workforce in many Australian tech companies. Unlike China, India, and the UK, Australia doesn’t have a big tech industry. Students are more likely to go to university to study engineering than computer science, and this is reflected in the workforce. The home-grown tech industry is growing thanks to a decline in traditional industries such as mining and construction, but it is still around ten years behind many other countries, in particular, the US.

There is currently a major shortage of senior tech people with the right skills, so start-ups and established tech businesses have no choice but to recruit from overseas. They acknowledge the higher price to pay for such workers, but with the Australian tech industry still in its infancy, they don’t have much choice.

457 visa sub-class

A 457 visa is a subclass of the Temporary Work visa. It allows Australian companies to hire skilled migrants to fill gaps in the workforce. Foreign workers can come and work for an Australian company for up to four years if they can prove that there are not enough suitably skilled Australians. The 457 visa program is very popular in Australia, but the Prime Minister wants to place further restriction on it so Australian workers are given more chances to win jobs.

There are currently around 95,000 people in Australia on a 457 visa. The number of approvals for 457 visas has fallen by a huge margin since 2012 to 2013. Back then, 68,480 457 visas were issued, but in 2015 to 2016, the number was only at 45,400, a fall of 11 percent. Just over a quarter of workers entering Australia on a 457 visa come from India. A further 15 percent arrive from the UK, while 6.6 percent come from China.

The decrease in visa approvals over the last few years is largely down due to the fact that the Turnbull administration has placed restrictions on foreign workers trying to enter the country using the skilled migrant pathway. But if the government has its way, the number of 457 visa approvals will decline even further.