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PKF Australia

Accountants and Business Advisers

The end of the 457 Visa - What now?

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Darren Shone

Director

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The end of the 457 Visa - What now?

Posted 21 Apr 17 by Darren Shone

On Tuesday, 18 April, Malcolm Turnbull proudly announced to Australia that the Temporary Skilled Visa (subclass 457) would be abolished and replaced with two different visas for skilled foreign workers.

The need for reform

The 457 visa was designed to fill the skills shortage among the Australian workforce but has come under fire in recent times with accusations that employers are misusing the visa to give precedence to foreign workers over Australian workers in certain industries and job roles.

Turnbull and the LNP has responded to this criticism with the new changes which address these concerns through stricter compliance and checking on visa applicants and their employer sponsors.

The changes

From March 2018 the 457 visa will cease to exist. It will be replaced by:

  • Two year short term visa
  • Four year long term visa – targeted at higher skills
  • Before the abolition of the visa, other changes will come into play which are likely to affect employers of foreign workers include:
  • The number of occupations on the eligibility list will be reduced (it has already been reduced by over 200)
  • There will be training benchmarks put in place for employers to upskill Australian workers
  • There will be scrutiny of current 457 visa holders to ensure that they are not paid less than their nominated salary
  • Employer sponsors who fail to meet their obligations will be named and shamed.

Who will be affected?

Any business who currently employs skilled migrants will be affected by the changes. There will be a ‘grandfathering’ arrangement to reassure current visa holders however, long term plans for these visa holders are yet to be announced.

What people are saying

A number of industries are concerned about the effect this will have on their business with tech companies concerned about their ability to compete in the global marketplace, and the hospitality industry anxious that they won’t be able to attract staff who are in it for the long haul.

Others believe the changes will offer the spoils promised by Turnbull, to put Australians first and improve the job prospects of working Australians with some supporters believing the changes could go further to prioritise Australians in the workplace.

Will the repeal of the 457 visa leave a talent gap or does it not go far enough? Only time will tell but, in order to protect your business, now is the time to act.

What next?

If you’re an employer of skilled migrants there are a few things you should do now to prepare yourself and your workers for the inevitable changes:

  • Contact your employment lawyer or immigration lawyer to get advice on how this impacts you
  • Reassure your workers that you’re on top of the issue
  • Review your tax compliance for foreign workers to prepare yourself for scrutiny should the ATO come knocking. This means your employees need to make sure their tax affairs are in order and you need to ensure they are being paid market value salaries.

For more information contact Darren Shone, Taxation Partner on (02) 49 622 688, or click here to find your nearest expert.


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