Much has been written and said about the major reforms to Australia’s skilled migration programme that were suddenly announced by the Prime Minister Malcom Turnbull MP and the Minister for Immigration and Border Protection Peter Dutton MP on 18 April 2017.
While we have certainly been busy over the past couple of months helping our clients understand and respond to these reforms, we thought it might be timely to reflect upon what’s driving these reforms, share our perspectives on some key changes and offer an insight into what might unfold between now and March 2018.
A storm was brewing
Immigration law and policy can shift quickly with the political winds. Experience tells us that wholesale change agendas may be easy to announce but the challenge of implementation can be difficult and indeed offers stakeholders an opportunity to shape the emerging framework.
We had an inkling earlier this year that something was brewing in Canberra. The government had been awfully quiet about concerns raised by the Productivity Commission in its April 2016 Migrant intake into Australia report that the 457 visa pathway to permanent residence under the Temporary Residence Transition stream was too easy and that this was “not a trivial concern” because the “poorer English skills” of some migrants using this pathway translated to “poorer social and economic outcomes”.
Throughout 2016, as reports of foreign worker exploitation dominated the media, the Australian Labor Party was gaining traction on the issue of youth unemployment. The government found itself pressured to respond to Bill Shorten’s plan to crackdown on the 457 visa programme and his introduction to Parliament on 28 November 2016 of a private members’ bill entitled Migration Amendment (Putting Local Workers First) Bill 2016. Meanwhile, 457 visa processing times had blown out more than ever before as the under-resourced Department of Immigration and Border Protection (DIBP) struggled to process applications in line with increasingly prescriptive and confusing policy guidelines that sought to deal with various occupations of “integrity concern”.
While the government’s Putting Australian Workers First announcement on 18 April 2017 was huge, it was clearly rushed. The slogan speaks for itself – a mimicry of Shorten’s Putting Local Workers First policy branding influenced by a touch of Hansonist nationalism by replacing “Local” with “Australian”. The populist flavour of the message was abundantly clear as it was announced by way of a video on the Prime Minister’s Facebook page in which the Prime Minister stood in front of an Australian flag and incanted the words “Australia” and “Australian” nine times in a broadcast lasting just under 90 seconds. Even more telling was the fact that the legal framework and detail supporting the changes was simply not there yet and would be “rolled out” over the next year as the 457 visa would be abolished – eventually.
Like many, we were blindsided by the breadth of the proposed reforms and concerned about the pall of uncertainty they could bring to the Australian immigration landscape. But, as our mission statement says, Nomos is all about “restoring balance, clarity, order and harmony” – so we had our work cut out for us!
Nomos’ initial response
Like all migration lawyers and agents, at Nomos Legal our clients were our first priority. We gave immediate attention to ensuring that we minimised any adverse impacts the changes would bring – we lodged applications and facilitated faster processing to secure favourable outcomes before any further changes took effect. In some instances, we strategically delayed lodgment to take advantage of potentially favourable 1 July 2017 changes and found alternate visa pathways for other clients. We helped many of our larger clients recalibrate their foreign worker recruitment and sponsorship plans to minimise potential business disruption.
On 19 April 2017, we wrote our first blog on the changes which explained the government’s message and outlined the reform change agenda. We drew attention to concerns about the lawfulness of the new 457 visa caveat system and the need to seek strategic advice.
We listened to our clients and then started actively engaging with government, industry peak bodies, colleagues, lobbyists and the media in order to participate in and influence the ongoing reform process. Our aim was to ensure that any further reforms would be balanced, widely understood and shaped so as not to unduly disrupt our clients.
Where’s the law?
On behalf of the Law Council of Australia, we attended the Department of Immigration and Border Protection’s Stakeholder Roundtable Meeting in Sydney on 27 April 2017 where the first strategic, and most welcome, discussion about the reforms was brokered by senior DIBP officials. At that meeting, we raised our concerns in relation to the utility and legal invalidity of the new 457 visa caveat system and our position that the previous legal framework already enabled the refusal of non-genuine applicants where DIBP held “integrity concerns”. We were told that that the new caveat system was a “belts and braces” approach. We then recommended that if the government was inclined to continue pursuing its policy agenda through a new caveat system then, for the sake of certainty and in respect for the rule of law, the 457 visa legal framework should be properly amended so that any decision made in relation to the caveats would be lawful. A DIBP official took notes and we were told that they would “take our feedback back to Canberra”. Then there was radio silence and we began to wonder whether DIBP also had concerns about the new 457 visa caveat system because no decisions were being made in relation to caveat-affected applications. We spoke with a variety of senior colleagues in the legal profession about our concerns and these were later reported in The Australian Financial Review on 7 June 2017.
The Budget blow
On 9 May 2017, we got in touch with our colleagues in Canberra on Budget night and the next morning we blogged about the impact of the proposed Skilling Australians Fund. The Budget revealed the government’s plan to establish this fund in March 2018 which would collect over $1.2 billion over four years from employers seeking to access Australia’s skilled migration programmes. The revenue raised will be spent towards achieving the goal of “skilling up” more than 300,000 Australian apprentices and trainees. This revenue will be collected by way of a levy to be paid by an employer each time they seek to nominate a foreigner to work in their business. The levy amounts are as follows:
- Businesses with annual turnovers less than AUD 10 million
- Temporary work visa levy: AUD 1,200 per 12 month period (or part thereof)
- Permanent work visa levy: AUD 3,000
- Businesses with annual turnovers greater than AUD 10 million
- Temporary work visa levy: AUD 1,800 per 12 month period (or part thereof)
- Permanent work visa levy: AUD 5,000
- no business would be exempt from paying a levy when they lodge a nomination for a temporary or permanent sponsored work visa, regardless of the business’ size, location, industry and the extent to which they might already be training Australians
- no refunds would be available to businesses that have paid the levy even if a visa holder later abandons their employment, transfers their employment to another employer that must also pay a levy, changes their visa status or simply decides to leave Australia before their sponsored work visa expires.
- Short-Term TSS visa (permitting work for up to 2 years)
- Primary visa applicant: AUD 1,150
- Adult dependent: AUD 1,150
- Child dependent: AUD 290
- Medium-Term TSS visa (permitting work for up to 4 years)
- Primary visa applicant: AUD 2,400
- Adult dependent: AUD 2,400
- Child dependent: AUD 600
- ensuring that the 457 visa legal framework would be appropriately amended to support lawful decision-making, presuming that the government would continue pursuing a caveat system
- including certain occupations on the forthcoming 1 July 2017 editions of the Medium and Long-term Strategic Skills List (MLTSSL) or Short-term Skilled Occupations List (STSOL)
- removing, varying and defining any caveats as they might continue to apply to occupations on these lists
- inserting grandfathering provisions into the proposed March 2018 permanent residence skilled visa legal framework so that certain businesses and visa applicants would not be unduly affected by the pending introduction of a proposed 3 year residency requirement
- The legal validity of the regulation underpinning the revised caveat system – Nomos looks forward to decisions being made in relation to caveat-affected applications and the prospect that an affected person will seek judicial review in relation to the invalidity of the law underpinning the scheme.
- The application of the caveats by decision makers at DIBP and the Administrative Appeals Tribunal – Nomos anticipates the prospect of some inconsistent and unlawful decision-making in the near future as conflicts will emerge over the precise legal definition and scope of various important terms specified by the Minister in the new caveat system e.g. annual turnover, base salary, business etc.
- The legal validity of the retrospective application of various changes made on 1 July 2017. Essentially, these changes removed the eligibility for skill and English language requirement exemptions which had applied to many permanent residence visa applicants who lodged applications before 1 July 2017 and are still awaiting a decision – Nomos understands that this matter has already been brought to DIBP’s attention and notes that it could be readily addressed by way of a further instrument being released. We recall a similar problem occurred in April 2009 when the removal of an English language testing exemption by way of legislative instrument adversely affected many Chefs and Head Chefs who were awaiting a decision on their 457 visa applications at that time. After further consultation with stakeholders, including the legal profession, it transpired that then Minister for Immigration re-instated the exemption for that group of people by way of issuing a new legislative instrument in May 2009.*
- Which occupations the Department of Education and Training will flag for possible removal from the MLTSSL on 1 July 2018 – Based upon last year’s Skilled Occupations List Review timetable, Nomos expects this announcement in October / November 2017 will prompt further lobbying activity.
- Whether the levy system to be introduced in March 2018 will undergo further changes.
- The need for further legislative and policy detail in relation to how, before the end of 2017, DIBP will start:
- collecting Tax File Numbers for 457 visa holders (and other employer sponsored migrants), and commence data-matching with Australian Tax Office records to ensure that visa holders are not paid less than their nominated salary
- publishing on its website details relating to sponsors sanctioned for failing to meet various statutory obligations, including their migration law sponsorship obligations.
- The ongoing lack of clarity in relation to key eligibility criteria issues including:
- if, when and how any remaining skill, age and English language testing exemptions will be removed from the temporary and permanent employer sponsored programmes
- how DIBP will assess specific caveat requirements, particularly in relation to start-up businesses
- how DIBP will assess the “genuine temporary entrant” requirement to be met by persons applying under the Short-Term stream of the proposed Temporary Skills Shortage (TSS) visa, after that visa replaces the 457 visa in March 2018
- details of the legislative and policy framework that is proposed for March 2018, especially whether grandfathering provisions will be inserted into legal the framework so that employers and visa applicants will not be adversely affected by the pending introduction of a 3 year residency requirement under the permanent residence programme.
In return for having to pay the levy from March 2018, the government will no longer require these businesses to meet the current migration law training benchmarks after March 2018. Many employers, especially larger employers with extensive staff training programmes, raised concerns about the levy imposing an undue cost on their businesses and that the removal of the training benchmark requirements was little consolation.
While the proposed legislative and administrative framework in relation to the levy system remains largely unknown, we were surprised to learn from DIBP officials at a Migration Institute of Australia event in Sydney on 8 June 2017 that as at that date, DIBP staff had been told:
The Budget also revealed the following higher visa application charges that will need to be paid for the proposed Temporary Skills Shortage (TSS) visa (which will replace the current 457 visa) from March 2018:
It became immediately apparent that accessing employer sponsored skilled migration after March 2018 would involve higher costs for employers and visa applicants and that this might well put pressure on other parts of the migration programme if people pursued cheaper alternate visa options conferring work rights.
Explaining the changes and listening to our colleagues
Meanwhile, Nomos Education became increasingly busy providing mentoring services to migration lawyers and agents who sought our help in dealing with clients who now had an occupation that was caveat-affected or removed from the lists altogether. We gave a lot of guidance in relation to whether to withdraw applications, application withdrawal and re-lodgment strategies as well as how to challenge the new caveat system.
We took time out to talk about the migration law reform agenda to leading business, property and family lawyers at The College of Law’s specialist legal conferences in Sydney on 26 May 2017 and 2 June 2017 where attendees reported that the higher levels of uncertainty and potential costs brought about by the changes was already having an adverse impact on Australian businesses and families.
We also ran two full-day continuing professional development workshops in Sydney and Brisbane in June 2017 to help more than 60 migration lawyers and agents understand the changes. We all shared insights in relation to how we were all dealing with the impact upon clients and within our businesses. Many practitioners at these workshops expressed concern about the lack of consultation with stakeholders outside government in relation to the occupational lists that were released on 19 April 2017 as well as the government’s ongoing failure to provide timely and definitive information in relation to many key aspects of the proposed reform agenda. Some suggested that this breakdown of communication might be explained by DIBP Secretary Mike Pezzullo’s comments at a Senate Estimates hearing on 23 May 2017 that the migration agent sector was in some way responsible for distorting Australia’s employer-sponsored visa programmes.
Engaging with government to shape the reform agenda
By way of influencing the parameters of the pending 1 July 2017 framework, Nomos Advisory collated evidence from clients and colleagues and made representations and submissions to government, either directly or through lobbyists and peak industry bodies, in relation to:
So what happened on 1 July 2017?
Most of the 1 July 2017 changes had been foreshadowed in previous government announcements. Some changes clearly showed that the government had listened to and taken steps to address various stakeholder concerns.
We were pleased to see the government address our concerns in relation to the legal framework underpinning the 457 visa caveat system. However, in our view, the government’s effort to clarify the legal basis of its new revised caveat system, which was further extended to the Direct Entry stream of the permanent visa programme, remains open to legal challenge. Our views in that regard have recently been reported in The Australian Financial Review on 7 July 2017.
Despite this, along with many of our clients, we were pleased to see some balance restored to the occupational lists and the framework’s accommodation of Australia’s international trade obligations. However, like many, we were shocked by the introduction of some retrospective changes to the permanent sponsored visa programme that had not been foreshadowed.*
For a breakdown of the key 1 July 2017 changes, click here.
The Nomos forecast
As many stakeholders have now had a chance to digest the 1 July 2017 changes and prepare to take their next steps, it feels as if we are in the eye of the storm. Nomos forecasts some rough weather ahead as we expect the following key issues will dominate the reform agenda conversation between now and March 2018:
Nomos remains committed to engaging in and shaping the reform agenda. We will continue to advocate for our clients, share our knowledge and raise concerns in relation to any adverse impact these reforms may have upon the viability of many Australian businesses whose growth relies on attracting and retaining foreign talent. We are pleased that the government continues to provide opportunities for consultation and dialogue and trust that further changes will not undermine Australia’s reputation as a country with a stable regulatory environment within which business may be readily conducted.
* UPDATE 11 July 2017: In response to our concerns about these retrospective changes that were brought to the attention of The Australian Financial Review last week and subsequently reported on 11 July 2017, DIBP has responded by way of Media Release on 11 July 2017 stating that the government will not apply these changes retrospectively. While this development is welcome, we now look forward to an amendment to the legislation to support the government’s revised position and trust that any future changes are first informed by proper consideration of their impacts and lawfully implemented thereafter.
If you require further information or any advice or assistance from Nomos Legal, Nomos Advisory or Nomos Education, please contact us.