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New Regional Visa Push – a visa of last resort

New Regional Visa Push

The Federal government has touted the creation of two new ‘Regional Visas’, as being critical to achieving its ‘congestion busting’ agenda to promote regional migration. But analysis has quickly revealed that the visas themselves are unlikely to achieve this goal. In fact, the visa program design is so flawed they are essentially visas of ‘last resort’. This article looks at some of the ‘big picture’ issues that arise from the recently launched Skilled Work Regional (Provisional) visa (subclass 491) and Skilled Employer Sponsored Regional (Provisional) (subclass 494) visas.

New Regional Visa Push – Overview

The Morrison government has made ‘congestion busting’ a central plank of its migration policy. To achieve this goal, the government announced the creation of two new ‘regional’ visas subclasses, the Provisional 491 and 494, as well as changing the definition of ‘Regional’ for migration purposes.

The government has announced its intention to allocate 25,000 places for the regional migration planning level for the 2019-20 financial year. By all accounts, this is an aggressive goal, and one it appears the government is likely to fall short of, or at least fudge the numbers.

Both visas are ‘provisional’, meaning they are temporary visas with a defined pathway to permanent residency. Permanent residency is only accessible if the applicant meets a number of criteria during the 5 year period.

The 491 is intended to provide additional pathways for migrants seeking to perform skilled work in regional areas for a sponsoring employer. The visa is valid for 5 years and available to a wider range of occupations than the current 482 visa.

The 491 is an independent skilled visa, operating under the ‘SkillSelect’ program formerly known as ‘General Skilled Migration’, which uses a points test. Applicants are allocated points based on age, English ability, qualifications, work experience, and so on. The 491 requires state or family sponsorship.

Why regional migration?

Australia would benefit greatly from a well-tuned regional migration program. As a nation, we are dominated by several major cities which draw a disproportionate share of migrants. Despite this, cities such as Melbourne and Sydney are struggling to absorb the high volume of new arrivals due to a lack of infrastructure.

Australia’s regions have the potential for significant growth and recent studies suggest that Australians are decreasingly inclined to internal migration. Encouraging new migrants to settle in regional areas, therefore, has the potential to support communities and unlock growth opportunities by providing skills that support industrial and commercial activity.

Encouraging these migrants to remain in regional areas is more challenging and historically attempts to encourage new arrivals to remain in these areas have been plagued by a lack of infrastructure including limited local labour markets, lack of public services, and in some cases a lack of welcome from the local community. To address these challenges the Federal Government needs to adopt a whole of government approach by incorporating local and state governments, community services providers and local communities.

From a visa perspective, there are a number of lessons that can be drawn from past experience. A longer period of temporary residence can provide new migrants the opportunity to better connect with the community, discouraging relocation to major centres after permanent residency is obtained. The nature of employment is often different in regional areas, where salaries are often lower and employment opportunities potentially more limited.

What’s good

Making the visas ‘provisional’ with a clearly defined pathway to permanent residency is a positive move. It creates a policy framework which recognises migrant ‘rights’ in relation to accessing permanent residency (while requiring additional criteria to be met). Infamously, the Secretary of Home Affairs, claimed previously that one of the key problems with the 457 visa was visa holder’s sense of entitlement to access permanent residency, despite the policy record that this was an explicit goal of the 457 program. Hopefully, the establishment of the visa as ‘provisional’ will ensure that the government and Department cannot depict visa holders as undeserving of a pathway to permanent residency.

The visas give access to Medicare. This will provide visa holders with a greater degree of personal and financial security, as medical insurance and healthcare access can pose substantial issues to temporary visa holders. Studies on why recent migrants shift from regional to urban centres have emphasised that the lack of access to public services and infrastructure play a critical part in decision making. Providing access to Medicare is a step in the right direction.

Finally, the inclusion of a broader range of occupations on the occupation list will enable a greater number of applicants, and regional employers, to access the program. While the range of occupations is broader than those available under the MLTSSL, ROL, and STSOL for the 482 visa, there does not appear to be recognition of the occupations which may be required in regional communities.

Unfortunately, these positive elements, however, appear outweighed by several issues that suggest a lack of hindsight or understanding of past regional migration failures.

What’s bad

One of the biggest problems with the new regional visas is complexity. Both the 491 and 494 include elements that potentially make them less desirable than existing visa programs. Rather than setting a lower threshold for these regional visas, it appears the government has opted for higher thresholds and a greater number of requirements.

In theory, providing State Governments with the ability to set regional requirements for the 491 visa gives greater flexibility to tailor requirements to local conditions. The downside is that states develop divergent frameworks with completely different criteria. This means that it is difficult for prospective applicants to assess and understand the different programs and whether they will be eligible for each program. It also means that applicants will need to commit a large amount of time to monitor awareness of the changing requirements over time and identify opportunities. This may appear a minimal commitment, however in reality, it requires significant effort to monitor and maintain an understanding of the shifting criteria.

On the other hand, the ‘complexity’ associated with the employer sponsored 494 visa, relates to multiple high threshold requirements. Firstly, there are more requirements for the 494 than for most other visas. These include skills assessments, authorisation from a Regional Certifying Body, having a job offer that meets relevant criteria, and being in an occupation on the relevant skilled occupation list. Secondly, many of the criteria are higher than those required for the main 482 Temporary Skill Shortage work visa. This means that the visa is less attractive than the 482 unless the occupation is not listed on another Skilled Occupation List, or only appears on the Short Term Skill Shortage List. A more logical policy to encourage migrants to regional areas would be to make the threshold lower than the standard 482 work visa.

It is worth mentioning that the 494 visa is more expensive than the 482 visa, and the 494 pricing is aligned to a permanent residency application charge. Price is highly relevant when considering the issues that may arise from a change of employer or role for 494 visa holders. It appears that there are no arrangements for lodgement of a new Nomination to transfer employment (which is how the 482 visa operates). Rather, the employer must lodge a new nomination and the visa holder must lodge a new visa, including paying the substantial additional charges. The result is that visa holders are more reliant on the goodwill of their employers than under the 482 program and more at risk should they lose their employment. This inflexible approach suggests policy makers have failed to learn some of the key lessons of how employer sponsored visa holders can be vulnerable to exploitation.

The new definition of ‘regional’ also has potentially negative consequences for less dynamic regions. The new definition includes all of Australia, with the exception of Sydney, Brisbane, and Melbourne. While this broader definition may assist the government to deliver its proposed visa allocation, the inclusion of major centres such as Brisbane, Gold Coast, and Perth, will mean that migrants are likely to be attracted to these larger cities, rather than more remote communities.

There are a number of other issues with the program such as:

  • Concerns the use of the standard ‘Temporary Skilled Migration Income Threshold’ salary floor of $53,900 makes the visa redundant for many regional areas
  • Concerns this relatively high salary threshold increases potential for exploitation
  • The lack of occupations related to agriculture and horticulture or occupations in regional demand

Conclusion

The goal of improving regional migration outcomes is laudable. However, it is unclear what the government has really learnt from past attempts to improve regional outcomes.

Overall both visas appear to have either (a) higher thresholds and/or (b) a greater number of criteria than existing visa programs. This means the visas are likely more difficult to obtain than existing visas for most prospective applicants. This raises the question of why applicants would consider them in lieu of existing visa programs.

The purported answer may be that there are a number of occupations that are eligible on the 494 (for example) which cannot be accessed through existing programs and these applicants will seek to access the 484. Or that applicants may meet the assortment of state government criteria and benefit from the different points arrangement for the 491, therefore preferring this visa. However, both of these answers are marginal, in the sense that they do not address the underlying demand for skilled labour in regional areas. All things considered, a visa applicant would likely be better served by a 482 visa in the MLTSSL or ROL stream than one of the new visas.

Given these factors, it appears unlikely the government will achieve the number of places allocated for these visas in this financial year or even future financial years without substantial amendment to the program.

The government’s focus on increasing the period of stay in regional areas prior to obtaining permanent residency demonstrates an appreciation that time in regional communities is critical to creating ‘stickiness’ and increasing the likelihood migrants will remain in these areas. However, time spent in the community is only one of a number of factors that must be considered in improving outcomes. The potential for exploitation, setting lower visa criteria than for the main visas in each program, and focusing on how non-visa related pull factors can support migrants are all factors which deserve greater emphasis.

Overall, the new visas appear more like visas of last resort than any real driver for regional migration.

If you would like to understand your visa options, and consider that a regional visa may be the best option for you, contact Hammond Taylor today.