Australia dumps 457 visa for skilled overseas workers

The popular subclass 457 visa category allowing skilled overseas workers to take jobs in Australia has been abolished.

The Australian government’s announcement came as a shock to skilled expat workers hoping to enter the country to work and eventually gain permanent residency. Around 90,000 expatriate workers are already on the visa, with some 22 per cent originating from the Indian sub-continent. To replace the visa, the Oz government is offering a Temporary Skills Shortage (TSS) visa which is far more restrictive than the cancelled visa.

Whilst still allowing skilled foreign workers to take jobs in Australia, the new visa will require at least two years’ work experience in the relevant sector, and firms intending to sponsor workers from overseas will be forced to contribute to a ‘skills fund’. Labour-testing norms ensuring jobs are first offered to local workers before opening them up to expat workers are expected to become more stringent, although rules governing the practice have not yet been announced.

The announcement was the second hit on overseas workers since the introduction of a migration reform process at the beginning of the year. An updated skills list was published, including significant pruning of job sectors and reshuffles of skill categories. Another list is expected later this year. The 457 visa was attractive to overseas applicant sdue to its four-year maximum duration, after which holders could apply for permanent residency, whereas the new TSS visa only allows two years’ work, but can be extended to four years if the skill-set is on the Short Term Occupation Skills List.

Another version of the TSS visa does allow four-year hirings for expats with skills set out on the Medium and Long-Term Strategic Skills List, and permanent residency can be had at the end of the third year of the four year period if the skill set is on the right list. Otherwise, access to permanent residency options is restrictive at best and impossible at worst. Basically, the skills lists are user-friendly for certain sectors including higher-level positions, but exclude the international student stream now disallowed from applying for company-sponsored permanent residency.

Quite simply, the new visa is aimed at highly skilled, highly qualified expats looking for permanent migration to Australia. It remains to be seen whether suitable candidates will choose Australia over a good number of other countries looking for the same skills in the same sectors.