The Australian startup scene has traditionally been one of the stronger ones, not only in that part of the world but in global terms. Atlassian, Canva, Freelancer, 99Designs, and BigCommerce are just some of the companies to come from the Australian startup ecosystem.
Traditionally, Australia has been a popular destination for many of the world’s brightest minds thanks to the high quality of life and the vicinity of Asian markets.
Earlier this month, however, Australian Prime Minister Malcolm Turnbull announced that the government will be abolishing Visa 457, a program aimed specifically at skilled immigrants. Today, we will be looking at ways in which the death of Visa 457 and the introduction of two new visa programs will affect the traditionally strong Australian startup scene.
What was Visa 457?
Before we explain what the changes are, we should probably say a thing or two about Visa 457, a program that helped hundreds and thousands of skilled workers work legally in Australia and, in many cases, get permanent residency Down Under.
Visa 457 was a government program through which Australian businesses, many of them startups, would sponsor immigrants from anywhere in the world, enabling them to get 4-year-long visas. In order for those visas to be approved, the companies in question first had to prove that no Australians could fill the position, so it had its limitations. If you want to learn more about Visa 457, you can check out this great article from the Rigas Law website.
The Australian federal government has been on Visa 457’s tail for a while now, claiming that it was responsible for taking away jobs from skilled Australians. And when they finally decided to do something about it, they really went after it.
They effectively killed off the entire concept and they introduced two new visa programs.
They are called Temporary Skill Shortage Visa programs and they last two and four years respectively.
One of the more noticeable changes is that the new program cut the list of jobs available for skilled foreign workers by almost a third, from 650 to about 450.
In addition to this, under the new law, these skilled immigrants will have to have a better knowledge of English, a clean police record, a two-year work experience, and every single case will have to come with a mandatory labor market testing to ensure no Australian can do the job.
The Effect on Startups
Startups often rely on people with very specific sets of skills and, often times, there is a need for someone to come over from another country to fill the position. While on paper this should be possible under the new laws, the cutting of the job list will most likely prevent a number of startups from sponsoring immigrant employees that they need.
There has already been much talk about a case like this where a corporate catering startup called Caitre’d be unable to continue to sponsor their marketing specialist called Iris van der Staak who is Dutch and who has single-handedly tripled the startup’s revenue. The reason? Her job was one of the 200 that were cut from the eligibility list.
Certain requirements for sponsorships such as $1 million in revenue is impossible for many startups to meet, further diminishing their chances of sponsoring the professionals they need.
The opponents of the new law also point out that many educational and otherwise innovation-enabling jobs have been cut from the list of eligible ones and that this will have a very negative effect down the line as Australian young people are deprived of the experience and knowledge of these people.
Of course, this kind of approach also makes skilled professionals feel unwanted in Australia and it reduces the chances of startup employees and founders coming over regardless of whether they will be eligible for these new visas.
At the moment, it is still early to tell but things are definitely not looking great for the Australian startup scene. The changes to the visa program for a skilled worker will yet have to be evaluated, but the amount of resistance coming from the Australian startup community speaks volumes.