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Off the beaten path – towards a new world of immigration Reviewing the Skilled Migration and 400 Series Visa Programmes

24 October 2014

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Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au

Mr David Wilden Assistant Secretary Skilled Migration Policy Branch Department of Immigration and Border Protection

24 October 2014

Dear David Reviewing the Skilled Migration and 400 Series Visa Programmes

Thank you for the opportunity to contribute to this review.

EY is Australia’s second largest immigration service provider. We represent some of the world’s largest businesses as well as hundreds of medium and small businesses from industry sectors including engineering, telecommunications, finance, property development, insurance, shipping, banking, professional services, retail and recruitment.

In this submission, in addition to responding to the Discussion Paper, EY has taken the opportunity to propose transformational change and a new model (VisaArena) across all temporary and permanent migration categories as well as to the way the immigration department engages with trusted immigration partners. It is our view that these proposals offer the government and Australian business substantial cost savings and less red tape.

EY supports the Australia Government’s efforts and focus on strengthening the integrity of all visa programmes. It is also our view that the current framework for temporary and permanent visas is unnecessarily complex. There a many opportunities to streamline the current framework to remove some of the obstacles employers and individuals experience when engaging with migration to Australia.

Views of Australian and global business

In developing our submission EY sought the views of business. We consulted with more than 1500 Australian and global businesses in face to face forums and through an on-line survey to assist the department. The views contained in our submission reflect those of a cross section of the business community from large global corporations to smaller local businesses.

Kind regards.

Yours sincerely

Wayne Parcell PSM Partner & Oceania Leader, Global Immigration Human Capital MARN 9790656 Attachment

Off the beaten path- Reviewing the Skilled Migration and 400 Series Visa Programmes EY i

Table of contents

1. Stepping off the beaten path – a new model for migration ............................................... 1 1.1 Background ............................................................................................................ 1 1.2 The new model – VisaArena ...................................................................................... 2 1.3 Net contribution test ............................................................................................... 4 1.4 Examples ................................................................................................................ 7

2. Review the effectiveness of current programmes ........................................................... 9 2.1 Effectiveness of current programmes ........................................................................ 9 2.2 Reducing the red tape .............................................................................................12

3. Key visa components ...................................................................................................13 3.1 Views of business ...................................................................................................13 3.2 Visa components ....................................................................................................13

4. Visa categories proposed in Discussion Paper ...............................................................16 4.1 Short-term migration ..............................................................................................16 4.2 Skilled work ...........................................................................................................16 4.3 Business and Investment .........................................................................................16 4.4 Integrity ................................................................................................................17

Appendix A ...........................................................................................................................18

Appendix B ...........................................................................................................................19

Off the beaten path- Reviewing the Skilled Migration and 400 Series Visa Programmes EY 1

1. Stepping off the beaten path – a new model for migration

The terms of reference for the review include developing, in consultation with key stakeholders, new and innovative skilled migration visa models. EY considers that a major review of the migration programme as a whole – beyond skilled migration- is warranted and proposes a new simplified model with flexibility at its foundation.

1.1 Background The last significant review of Australia’s approach to immigration was the 1988 CAAIP Review. The time is past when migrants arrived in Australia on ships unlikely ever to return to the “old country”. People now catch planes like buses, picking up different passports and residences with an eye to the world as their home. Now is the time for the department’s programs to be reinvigorated in a fundamental way with transformational change in response to a dynamic global economy and different attitudes of people to temporary and permanent migration. It is time to challenge several key concepts in immigration policy: ► Is the model of linear migration pathways still useful? ► Is it still effective to segment the migration programme into the categories of family, skilled and

humanitarian migration then further into subcategories with annual quotas? ► Would a model offering the flexibility for migrants to switch or combine pathways be more

responsive to the needs of the labour market and the economy? ► Does the points test that focuses on one set of human capital attributes deliver those migrants who

can make most significant contribution to the economy and social fabric of Australia?

Some immediate problems with the current system that the proposed new model will address are: ► A diminishing pipeline of independent skilled migrants ► A backlog of skilled migrants with numerous human capital elements in long partner visa queues ► The annual freeze on permanent visa grants in employer nomination scheme as the quotas for that

subcategory are reached ► Lengthy administrative processes for employers to deploy temporary migrant workers ► Lack of a viable visa option for skilled workers on short-term projects ► Confusion for business and individuals created by the large number of purpose specific temporary

visas and streams within those visas subclasses. Skilled migrant pipeline As reported in the Department of Immigration and Border Protection Annual Report 2013-2014 (page 43), in the 2013-2014 programme year: ► 59,075 expressions of interest were submitted through SkillSelect ► 44,911 invitations to apply for general skilled migration were issued. ► SkillSelect delivered only 75.9% of visa grants in the independent and (non-employer) nominated

skilled migration program. With the pipeline of pre-SkillSelect general skilled migration applications diminished and some 71,000 independent and (non-employer) nominated skilled migration places allocated for 2014-2015 it appears likely that SkillSelect may not deliver an adequate number of sufficiently skilled independent migrants in the current programme year. A Skilled only visa category may not enable Australia to meet future migration programme goals. At the same time many thousands of skilled individuals who have applied in the Family visa category wait over a year for a provisional partner visa to be granted then at least a further two years to become permanent residents.


Recent research has demonstrated that family migrants make a significant contribution to the Australian economy, social cohesion and family welfare:

Family migrants make a substantial economic contribution through their participation in the Australian labour force. Family migrants also make a financial contribution to their families’ welfare through their participation in paid work. About 85 per cent of male partner migrants and 60 per cent of female partners in the Family and Skilled streams were employed during the first five years of settlement. Family migrants who are not working contribute in other ways, especially by caring for children, providing support to other family members, engaging in study or training, and being involved in social and community groups and activities. Family migrants are less likely to do volunteer work than other Australian residents, but they make a contribution to family welfare by doing housework and caring

for children and other family members.1

Temporary visas and the needs of the economy We recently asked clients How do Australia's current immigration rules restrict growth and innovation in your business? A number of responses are indicative of the frustrations with the current temporary visa programmes:

The current visa categories are not very flexible to cater for our company's business requirements. It makes it difficult for us to respond to our client's requirements, particularly the speed in which we can get people into Australia. Lack of flexibility to match global business needs to immigration scheme. … Lack of proper streams to manage project workers/short term development assignments which ultimately create jobs for local Australians

► What’s next? EY would like to propose for discussion: ► a new model with inherent flexibility ► the concept of a net contribution test ► a more expansive version of SkillSelect

1.2 The new model – VisaArena Our model, VisaArena, is illustrated by the Diagram 1 which consists of a number of concentric arcades with Australian citizenship centre stage. Each arcade represents a different level of commitment to life in Australia along with a differing level of impact for those visa holders, particularly in regards to the labour market. Central to the operation of the model is the concept of passageways of opportunity in lieu of linear pathways. The inherent flexibility in the model is represented in the diagram by the rings of arrows indicating that temporary migrants may be considered for permanent migration in a different category from that of their temporary visa by proceeding along the relevant passageway and then selecting a future visa doorway to move along the arcade or into the next arcade of options. Simplicity is delivered by dramatically reducing the number of visa options. 1 Australian National University’s Australian Demographic and Social Research Institute research paper Contribution of family

migration to Australia, www.immi.gov.au/pub-res/Documents/research/family-migration-contributionjanuary-2014.pdf


The reduction in visa subclass to a handful of visa categories would require a significant contraction in the regulatory framework with a greater emphasis place upon visa conditions that would govern the activities that would be permissible for a specified category of visa. ► Outer arcade – short term stays

At the outer arcade are visitor visas and student visas. Visitors, including business visitors, are typically in Australia for short periods only. We have proposed alternative visa options for long term family visitors below. Many individuals carrying out short-term activities, such as participating in an event, also fit this description. However, we have suggested a non-work activity visa be considered a temporary migration visa to allow for many other situations where individuals will remain in Australia for longer periods, such as for occupational training or under international government supported arrangements. While students are generally in Australia for some years and may have a long term interest in living and working in Australia, graduates generally do not yet possess sufficient human capital elements to enable them to make a net contribution to Australia.

► Second arcade – temporary migrants This arcade includes medium to long term temporary visa options for skilled and other temporary migrants. We suggest that the following five visa categories be considered: ► Family: for long term visits by family members. A long stay temporary family visa would accommodate immediate family, parents, and partners in particular. This visa could incorporate the existing subclass 461 visa for immediate family members of New Zealand citizens. By contrast, immediate family members of Australian permanent residents and citizens cannot access streamlined temporary entry. Due to long partner visa processing queues, many partner of members of Australian permanent residents and citizens apply for a subclass 457 visa in order to continue working in their skilled occupations while in Australia. The current partner and parent visas assume that all close family members are interested in permanent settlement in Australia which is not necessarily the case with an increasingly globally mobile population. Parents frequently spend their time in a number of countries, including those countries where their children are settled. We envisage that this visa would have mandatory health insurance and sponsorship requirements. It would also be appropriate to provide work rights to partners consistent with those offered to partners of New Zealand citizens on subclass 461 visas. ► Business: for people who want to own and manage a new or existing business in Australia, or to

invest in Australia. ► Work: for skilled temporary migrants undertaking longer-term paid work with a sponsoring

organization and for sponsored domestic workers. ► Non-work activity: for activities other than longer-term work such as short-term project activity

(often akin to work), occupational training, participating in an event, research and working under an international government supported arrangements.

► Humanitarian: for those subject to persecution and human rights violations under temporary visa provisions that may exist.


► Third arcade – permanent migrants This arcade accommodates permanent migration categories. We suggest that the following four visa categories be considered: ► Family: for immediate family members of Australian citizens and permanent residents. ► Economic: for skilled workers and business people who have demonstrated their contribution to

Australia’s human capital while holding a temporary visa. ► Humanitarian: for those subject to persecution and human rights violations. ► Direct entry: for skilled migrants who have demonstrated their potential contribution to Australia’s

human capital through an assessment under a net contribution test [see below]. They may or may not have resided, or be residing, in Australia.

► Transition to permanent migration The arrows in the diagram represent the concept that the various arcades may be rotated enabling skilled migrants holding a temporary visa in one category to obtain permanent migration through another category rather than continuing down a particular single pathway. Through these passageways of opportunity a visa applicant would be able, subject to meeting the relevant criteria, be able to choose an appropriate visa destination based on a target outcome rather than on the basis of an earlier choice that may no longer be desirable or appropriate. Under this model, the provisional visa concept may become redundant.

1.3 Net contribution test We propose a more flexible net contribution test to enhance the current points test. With its sole focus on skill and employability, the points test fails to take account of the net contribution to Australia of all of a potential migrant’s human capital elements. By this we mean factors such as, age, English, educational qualifications, employment experience and family relationship. EY sought the views of business on this issue. We asked survey respondents to rank some of the current visa components considered to generate the greatest contribution to the economy: The graph below illustrates the attributes that respondents valued. These responses should be given weight in any considerations of changes to the points test to ensure labour market compatibility. It is clear what is most highly valued: ► Work experience (not necessarily in Australia) ► Occupation ► English proficiency It is also important to note the lower significance given to age as a determinant of economic contribution.


Skilled migrants are selected with certain attributes to ensure they contribute to the Australian economy. Rank the attributes below from 1 to 9 in terms of the contribution to the economy, with 1 being the highest priority. Table 1 A net contribution test could go beyond these components and award points on the basis of a migrant’s economic, social and cultural contributions and hence assess the overall benefit to Australia of an individual migrant. This test could provide the framework for an assessment of elements a migrant will contribute across any of the proposed permanent migration categories. Under the current framework each category is assessed in isolation. Points which could be awarded under the net contribution test could be amended by instrument to readily respond to future labour market needs, and give lesser or greater weight to various key elements such as English, age, experience, family relationship, skills of spouse and so on.


Diagram 1 – the new model: VisaArena


1.4 Examples To illustrate the inherent flexibility and the potential opportunity with VisaArena we provide two examples: Example 1: Patrick

Patrick and Charlene met while Charlene was in Ireland on a working holiday. Charlene settled in Ireland for some years. Thinking of starting a family, the couple decided to relocate to Australia and both started a job search. Patrick, a qualified Electrician, was the first to be offered a job in Australia.

Existing law

VisaArena

Patrick’s options would be: 1. a sponsored subclass 457 visa, or 2. a Partner visa which is likely to take

approximately 12 months to process, or 3. he could arrive on an eVisitor visa, apply for a

Partner visa onshore and seek work rights on a Bridging visa which would be necessary as an onshore Partner visa is likely to take between 12 and 15 months to be processed.

Patrick applies for and is granted a four year sponsored Family temporary visa which enabled the couple to relocate quickly because: 1. Patrick has a job offer for a skilled role; 2. He has demonstrated he is in a spouse

relationship with an Australian; The visa condition permits work in Australia provided that Patrick remains in a committed spouse relationship for the duration of the temporary visa.

Unfortunately for Patrick, 12 months after arrival in Australia Charlene reconnected with her childhood sweetheart, Scott, and ended her relationship with Patrick. By this time Patrick had been promoted at work and was managing a team of junior Electricians and Apprentices. He felt settled in Australia and wished to remain. Patrick’s options for staying in Australia will be dependent upon the choices he made earlier: 1. remain on the subclass 457 visa, or 2. and 3. the provisional partner visa application

will be refused as Patrick no longer meets the criteria for grant of a Partner visa; Patrick will need to lodge a fresh visa application perhaps for a subclass 457 visa if he has the support of a sponsoring employer

Patrick applies for:

1. a change of visa category through a

subclass 457 nomination application only which, when approved, results in the grant of a Work visa with a new visa condition permitting work for his sponsoring employer, or

2. a permanent visa in the Economic category on the basis of the economic contribution of his skills and experience and a permanent job offer.

Under current legislation, Patrick’s dilemma would require him to switch pathways and first obtain a sponsored subclass 457 visa in order to remain in Australia. His permanent migration options would include SkillSelect or the employer nomination scheme which would require him to either work two years in the same position or obtain a skill assessment.

Both applications would be permitted by Patrick as the holder of a Family temporary visa who has complied with visa conditions. Usual qualifying criteria in respect of health and character would need to be met.


Example 2: Amaal

Amaal, who is an Engineer, was sponsored by her employer for a four year subclass 457 visa. During her time in Australia she met her Australian citizen partner. Due a downturn in business, Amaal was made redundant. Her work visa is valid for two more years. As the downturn impacts on the industry in which she has specialised her options for further employment and sponsorship in the regional centre she lives are limited.

Existing law

VisaArena

Amaal’s options for staying in Australia are limited, she must: 1. find another sponsor within 90 days, or 2. apply for a Partner visa.

Amaal is eligible to apply for and be granted quickly a temporary Family visa because she: 1. has been in skilled employment, and 2. has worked in a regional centre, and 3. is in a spouse relationship with an Australian The visa condition permits work in Australia provided that Amaal remains in a committed spouse relationship for the duration of the temporary visa.

Given the extended processing times for partner visas (over 12 months) and the work limitation on subclass 457 visas, Amaal will be unable to work unless she is sponsored by her new employer, or she seeks cancellation of her subclass 457 visa rendering her eligible only for a Bridging visa.

Amaal has two permanent migration options: 1. the Family category, or 2. the Direct entry category given her “net

contribution” which will also award points for her genuine ongoing relationship with an Australian citizen partner.


2. Review the effectiveness of current programmes

In this section of the submission we will provide comments in response to the first of the terms of reference of the review which aims to reduce unnecessary red tape and the impost on Australian business.

2.1 Effectiveness of current programmes EY shares the fundamental premise of the review that the visa programmes covered by this review are overly complicated and cause confusion among Australian employers and other organisations. EY has in-depth experience with a number of the current visa categories included in this review and makes the following comments in relation to those categories. ► Subclass 400 visa Feedback from our clients consistently reiterates that common challenges of the existing subclass 400 visa criteria and policy are: ► Inconsistency across overseas missions in documentation requests, fluctuating processing times

and decision-making ► Inflexible assessment of non-ongoing work ► Limitation of visa framework to recognise short-term, informal training needs, and ► Limited recognition of global organisations with a global workforce that undertake intra-company

transfers. Further information and specific examples of these ongoing challenges have been detailed in our recent submission in response to the proposal to extend subclass 400 visa validity settings, a copy of which is provided at Appendix A. In our survey conducted in recent weeks, we asked How do Australia's current immigration rules restrict growth and innovation in your business? Thirty five percent of respondents referred to the lack of an effective visa for short term projects, typically comments include the two below:

I think where the current immigration rules have a far greater impact is following the removal of the 456 visa. The 400 visa which replaced the 456 is too restrictive. Restricts movement of internal expertise for project work or fixed term assignments where internal expertise is required.

In particular, business continues to express the frustration that no current visa fills the gap between the subclass 400 and subclass 457 visas:

We need to allow short term transfers within companies. For example I have skills needs that can't be filled in Australia but are available in my US company. The project may only be for 6 months and I don't want the bureaucracy associated with a full 4 year 457 visa.

► Subclass 402 visa The Subclass 402 visa category is currently very complex with three streams and three nomination options within the Occupational training stream. The nomination stage could be simplified or even removed if there can be agreement around the requirements of the training program which is central to the current nomination requirements. At the very least a joining of the “enhance skills” and “capacity building” streams should be possible. The optimum outcome would be to merge this visa into one Global Mobility Visa as discussed in our submission to the independent review into the integrity in the subclass 457v visa programme.


The need to classify the occupation and the requirement to have prior experience in the role seems contradictory when the purpose of the visa is for training and the visa applicant has been identified has having this training need. Clients have difficulty understanding why a separate sponsorship is required and why the process cannot be better aligned with the subclass 457 visa programme:

… the current rules do make it difficult for individuals to come to Australia for training and development purposes. We are considering applying for sponsorship approval for 402 visas to allow graduates and younger employees to come to Australia for training. However, this application must be done as separate to the 457 sponsorship (Even though a lot of the information required by DIBP is the same). An integrated approval for 402/457s etc. would be sensible.

Significant processing delays also mean that it is a troublesome visa option for business. ► Subclass 420 visa The process is unnecessarily complicated and does not have the flexibility to accommodate high profile celebrity “entertainers” in particular. This visa subclass could be subsumed into one non-work activity visa. Some key points to note in relation to these individuals include: ► It is questionable whether they are entertainers, they are purely celebrities in their own right ► They are working and usually receive payments for their appearance on the TV shows which

prevents them from applying for a business visa ► The subclass 400 visa explicitly excludes entertainers ► The subclass 420 visa requires union consultation and a certificate from the Arts Minister which

adds additional steps and over complicates the process ► The Arts Minister is of the view that these celebrities fall outside the intent of the scheme ► The only option still appears to apply for the subclass 420 which is a very arduous process ► Condition 8109 restricts any change to an individual’s itinerary. These individuals are often

required at short notice and their itineraries are subject to change. The requirement to seek the department’s permission to change the itinerary following visa grant is over engineered

► Condition 8107 does not accommodate circumstances where an entertainer may work for multiple organisations often simultaneously not sequentially

► The visa period should allow the individual to remain in Australia as a tourist ► Subclass 457 visa EY’s detailed analysis of reforms required in the subclass 457 visa programme have been detailed in our submission to the Independent Review into integrity in the subclass 457 programme. Our recommendations can be summarised as follows. 1. Single Human Capital sponsorship framework for employment related temporary and permanent

visas 2. Improved efficiency and transparency in processing of labour agreements 3. Reward sponsors with history of compliance with streamlined application requirements, priority

processing and extended period of approval 4. Rolling sponsorship validity secured by simplified annual return 5. Extend 12 month sponsorship approval for newly established business 6. Simplify multiple assessments of training benchmarks and align reporting with financial year 7. New, streamlined Global Mobility visa for intra-company transfers, no English, no market salary,

no skills assessment 8. Reliance on ANZSCO be replaced by a focus on the skill level of the nominated position. The

Consolidated Sponsored Occupations List (CSOL) draws on ANZSCO which does not capture emerging occupations or accommodate roles that require multiskilling

9. Labour market testing be abolished


10. Remove formal skills assessments 11. Simplified market salary rate mechanism with greater flexibility and concessions for regional

employers 12. English language testing exemption for skilled occupations be reintroduced 13. Expand the list of countries whose passport holders are deemed to have Vocational English to

include South Africa, Singapore, The Philippines and India 14. Regional concessions for English and skill level 15. Obligation to notify of certain events within 28 days rather than 10 days 16. Re-examine visa application charge on a per person basis ► Employer nomination scheme for permanent residence The employer nomination scheme is a characteristic example of red tape getting in the way of streamlined permanent entry for skilled migrant. In addition, many of the current policy settings are not consistent with standard business practice. In many ways, this scheme is overly codified and the purpose of the programme has been obscured. One clear example is the requirement under the transition stream for a skilled employee to remain employed in the same position for two years prior to applying and two years after approval. This is significant interference with normal business operation and counterproductive to the policy framework to attract the “best and brightest”. The programme will benefit from the reintroduction of discretion regarding age and English language proficiency. A detailed submission was provided to Minister Cash in December 2013 and is attached to our submission to the independent review into integrity in the subclass 457 programme. ► Business and investment programme

The “Business Skills” precursor to the Business Innovation and Investment Programme regularly attracted enough applications to challenge the annual programme ceiling and delivered over 6500 primary grants in its final year. However, the revamped programme delivered only around 10 percent of that figure in primary grants for the first 21 months to March 2014. The overhauled business and investment migration regime and points test was arguably designed to select the cream of the crop in what was widely perceived to be a seller’s market for investor migrants. The reality has been more like cherry picking in a drought. It is true that the introduction of the significant investor visa has given a conspicuous lift to the programme, particularly in the context of the dismantling of the analogous Canadian program, but it is also fair to say that the programme has failed to deliver against most of its objectives. In rejuvenating the investment migration program, the immigration department should consider: ► Broadening the base of marketing of business and investment migration program. The introduction

of the premium investment visa might help achieve this given the universal appeal of fast-tracked PR schemes

► Enhancing the integrity of the programme (particularly the significant and premium investor visas), and international political comity by mandating an audit or assurance process against the pledged investment funds

► Adopting greater transparency in the nature and scope of information sharing arrangements with foreign agencies

► Resolving the inherent tension between disparate residence requirements across provisional to permanent residence and resident return visa stages, and en route to citizenship


► Retracting the proposal to mandate residence requirements for secondary significant investment visa holders

► Reinstating the ability for role swapping between stages (consistent with the flexibilities of our VisaArena model)

► Revamping the points test (if retained at all) to better canvass candidates based on their prospective ‘net contribution’

► Funding high value economic migration at appropriate levels to ensure processing standards of weeks or months, instead of years

The Department has largely adopted Austrade’s submissions in relation to it undertaking a defacto sponsorship role (in consultation with the state and territory governments for investor visa applications) and channelling investment to priority sectors. We can see the merit in-principle of such an arrangement, but not if it becomes overly prescriptive and at the expense of flexibility in the programme.

2.2 Reducing the red tape Key measures to reduce red tape and the impost to business that we recommend are: 1. the simplified VisaArena model proposed above 2. a single Human Capital sponsorship framework for employment related temporary and permanent

visas


3. Key visa components The Discussion Paper seeks input on the ongoing applicability and effectiveness of key visa components which have been used as an integrity mechanism and to ensure labour market compatibility.

3.1 Views of business As above, EY sought the views of business on this issue, see page 4. We asked survey respondents to rank some of the visa components considered to generate the greatest contribution to the economy, see Table 1.

3.2 Visa components ► Age threshold As the Discussion Paper states, with an aging population globally people are living and working longer and older migrants will make a sustained economic contribution over a longer career span. A simple “cut-off’ age is not an effective mechanism to ensure labour market or economic outcomes. Age is not currently considered in relation to family and temporary work or other activity visas and this should remain the case. Age should be a minor consideration for permanent migrants in the proposed economic category under the new model as it does impact the net contribution an individual migrant will make to Australia. However, should this component be considered in the context of a net contribution test, it will be one of many factors to take into account. Employers surveyed did not rank age as a significant issue impacting a migrant’s contribution to the economy, see Table 1. We also asked business whether they agreed that the economic contribution of skilled migrants over 50 years of age outweighs the social and economic costs of supporting these migrants after retirement. Eighty percent of respondents do not agree that this is the case. ► English language proficiency EY supports a number of proposals in the Discussion Paper. A minimum standard of proficiency is important to ensure work safety and comprehension of work rights. Setting English proficiency levels by reference to occupational and industry standards and intended activity is a sensible approach. Current requirements for the subclass 457 visa programme are inflexible and can become administratively onerous, as pointed out by one survey respondent:

The English Language requirements for Indian citizens can cause problems with delays in either collating documents to meet the exemption requirements or waiting, in some cases, 2 months for a test date to be available.

We strongly support removing formal English language testing from the temporary visa programmes, unless required by occupational and industry standards. ► Skills and skills assessments EY also supports the proposal in the Discussion Paper that where industry standards exist, these standards determine skill requirements and agrees that there is a role for peak industry bodies in this process. Maintaining confidence that the skill migration programmes are utilised by employers with genuine skill needs and skilled workers is essential.


► Occupation lists We have commented in our submission to the Independent Review into integrity in the subclass 457 programme on the limitations of ANZCO. Businesses we have surveyed agree that ANZSCO is not always relevant and it is not adaptable:

Current Immigration Laws are too prohibitive to the natural flow of Australian Business, in majority of occasions, our roles do not fit neatly into the strictly defined roles of ANZCO or the process to sponsor talent is too lengthy/too complex to meet the requirements of a fast moving business.

We have also commented how a preoccupation with ANSZCSO can obscure the intention of skilled visa programmes. A focus on ANZSCO codes, instead of skill level, can have significant implications for highly skilled and experienced potential migrants in the transition from a subclass 457 visa to permanent residence under the employer nomination scheme, in particular. The concept of a list of occupations excluded from skilled migration programmes has merit as it will assist all parties focus on the skill level of occupations and individuals. ► Points test See our proposals regarding the net contribution test above. ► SkillSelect The SkillSelect framework with the expression of interest and invitation stages delivers an effective mechanism for government to manage applications with minimal risk. The proposed Direct entry visa under the new VisaArena model could utilise the SkillSelect framework. ► Sponsorship and nomination

EY considers that sponsorship (in many visa categories) has economic and social benefits. Nomination requirements could be rolled into visa application criteria. It is imperative to reduce the number of temporary visa sponsorships for businesses. We strongly recommend that a new Human Capital Sponsorship would be adequate for both temporary and permanent residence. ► Training investment In the report of the independent review into integrity in the subclass 457 programme, the independent panel proposed a training levy per visa holder per year. Ninety-one per cent of survey respondents agreed with the following statement: An out of pocket training contribution to the immigration department of between $400 and $800 for each sponsored subclass 457 visa holder per annum (as recommended in the report of the subclass 457 visa integrity review) would be an unfair impost on Australian employers who already invest in training Australian workers. For smaller employers, the training contribution may be a viable option if their business operations do not already include training expenditure. For those employers already demonstrating a training commitment to their Australian employees, this new requirement would be an additional burden and impost.


► Labour market testing We also take the opportunity to comment on labour market testing. It has not been demonstrated that the introduction of labour market testing in November 2013 has prevented abuses of the subclass 457 visa programme. Instead it is irritation to legitimate employers filling genuine shortages. Labour market testing should be removed.


4. Visa categories proposed in Discussion Paper In conclusion we provide brief responses to the visa categories proposed in the Discussion Paper.

4.1 Short-term migration We understand that it is proposed that this visa accommodate individuals intending to: i. Undertake paid work for an Australian organisation or business ii. Perform an activity which is not remunerated, iii. Enter under an international government arrangement EY agrees that providing one visa for short-term stay, removes confusion and the need to choose between different visas. For instance the following subclasses may be appropriate all options for a person intending to undertake training as part of their overseas employment subclasses 400, 600, 402, and 457. We also applaud the proposal to provide a streamlined route for intra-company transfers through exemptions to requirements to demonstrate English proficiency and skills. Replacing the subclass 400 visa with a new short-stay visa should resolve the issues currently experienced with the subclass 400 visa. However, consideration also needs to be given to individuals who will be employed and paid by an overseas organisation, including self-employment, while working in Australia. We also comment that people intending a short-term stay, should not be precluded from making another visa applications while in Australia.

4.2 Skilled work We understand that it is proposed that this sponsored visa could be for individuals intending work in the medium to long term. Under the proposal, this visa would provide two pathways:

i. temporary /provisional: up to 4 years ii. permanent: held the temporary/provisional visa for a minimum period or have skills in high

demand and on an occupation list. We consider that it is difficult to discuss temporary/provisional and permanent migration requirements together. For instance, licensing and registration is mentioned as a requirement. However, it can be very difficult for a person not already in Australia to obtain licensing or registration. Similarly skills assessments are an onerous requirement for a temporary visa. A cap should not be imposed on temporary migrant visa grants. We look forward to seeing a flexible model for the transition to permanent residence being implemented and would not like to see skilled temporary migrants being locked into their positions for a minimum period in Australia before being able to apply for permanent residence. High salary exemptions are also important to maintain as salary is reflection of the value placed by employer on individual and therefore contribution will make to economy.

4.3 Business and investment The current Business Investment and Innovation and Business Talent visa categories are better characterised as part of the economic visa program as opposed to sitting under a broader skilled migration banner. As such, EY supports the creation of the new Business and Investment visa category as proposed.


4.4 Integrity EY recommends the following measures to ensure integrity: ► retain public interest criteria

► introduce enhanced sanctions and meaningful penalties, and dedicate resources for targeted

monitoring. These measures are also recommended in our submission to the independent review into integrity in the subclass 457 programme

► reward sponsors with a strong history of compliance

► link the validity of temporary visas to the duration of intended activity

► greater use of visa conditions to control activity to enable a temporary skilled migrant to remain in Australia and change activities

► remove the distinction between onshore and offshore applications and design visas so there is no prohibition on a further application onshore

► rigorous assessment of visitor visa applications, no further stay conditions, and substantial compliance and genuineness tests

► Schedule 1 criteria be structured to avoid a stockpile of high risk applications requiring assessment and providing an incentive for vexatious applications through a likely short-term stay on a Bridging visa (as was the case when onshore subclass 456 visa extensions were available)

► engagement and collaboration with Trusted Partners [Migration advisors and reputable employers with a strong track record of immigration compliance] to promote compliance

► extend notification periods to 28 days.


Appendix A Copy of EY comments on the proposed changes to the temporary work (short stay activity) visa (subclass 400)

A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation

Ernst & Young680 George StreetSydney NSW 2000 AustraliaGPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555Fax: +61 2 9248 5959ey.com/au

Ms Sophie MontgomeryAssistant SecretaryTemporary Visa Policy BranchDepartment of Immigration and Border Protection

By email: [email protected]

10 October 2014

Comments on the proposed changes to the temporary work (short stay activity) visa(subclass 400)

Dear Ms Montgomery

Thank you for the invitation to comment on the proposed changes to the temporary work (short stayactivity) subclass 400 visa.

We understand the immigration department is considering extending the current three month visasettings of all streams (Invited Participant, Highly Specialised Work and Australia’s Interest) to allow:

1. the visa holder to travel to and enter Australia within six months after the date of the grant of thevisa; and

2. a maximum stay period of six months, during which the visa holder may remain in Australiaafter their first entry.

The proposed changes would provide more flexibility for those attending major sporting events andbusinesses requiring workers for highly specialised, non-ongoing or intermittent activities.

We represent some of Australia’s largest employers as well as hundreds of medium-sized and smallerbusinesses. As Australia’s second largest immigration service provider, we are well placed to commenton this topic.

Since the temporary work (short stay activity) subclass 400 visa was introduced in March 2013, we havereceived constant feedback from our clients on the utility and effectiveness of this aspect of the visaframework. We have surveyed our clients and consolidated their feedback and summarised it in thissubmission.

The majority of clients who use the subclass 400 visa can be described as “big businesses” with globaloperations. They utilise this visa as part of broader business operations to offer highly specialisedtechnology or technical services for immediate short-term projects. Many of them have a significantpresence in Australia, creating employment opportunities for Australians and contributing to the localeconomy and community development.

EY supports the proposed changes to the subclass 400 visa framework and the flexibility it intends toafford to businesses requiring workers for highly specialised, non-ongoing or intermittent activities.

We understand the department is considering implementing the proposed changes to the subclass 400visa in November 2014. In this context, we welcome this opportunity to provide the following commentsand recommendations.


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1. Challenges of existing criteria and policy of subclass 400 visa

From our client feedback, common challenges of the existing subclass 400 visa criteria and policy are:• Inconsistency across overseas missions in documentation requests, fluctuating processing times

and decision-making• Inflexible assessment of non-ongoing work• Limitation of visa framework to recognise short-term, informal training needs, and• Limited recognition of global organisations with a global workforce that undertake intra-company

transfers.

1.1 Inconsistency of lodgment procedures, inconsistency in documentation requests acrossvarious overseas missions, fluctuating processing times and decision-making

Currently, subclass 400 visa applications are processed by overseas missions. Visa applicants holdingspecified eligible passports are able to lodge the visa application online, while others must lodge apaper-based application by mail at their nearest overseas mission.

Applicants in certain countries are required to lodge a paper-based application through the AustralianVisa Application Centre. This additional process adds another layer of confusion as each specificcountry’s visa application centre imposes different documentation requirements.

The immigration department's website, also confirms this at:http://www.immi.gov.au/Visas/Pages/checklists/400.aspx

Applying outside Australia: Visa application requirements differ from country to country. Your nearestimmigration office outside Australia will tell you exactly how to submit your application and whatdocuments to provide.

The extent of the varying documentation requirements from country to country not only causes confusionand frustration, it also causes delays in application preparation for many situations where highlyspecialised workers are required urgently and when time is of the essence.

For example, the Australian High Commission, India and the Australian Embassy, Vietnam requirenotarised copies of all passport pages including blank pages; or otherwise copies certified by VFS,whereas other overseas missions, such as the Australian High Commission, South Africa requires onlycertified/notarised copies of biographical pages of the current passports of all visa applicants. TheAustralian High Commission, Singapore sets a higher threshold for applicants visiting Australia for thefirst time, to show evidence of accommodation and evidence of travel history. Some overseas missionsrequire passport photos, some require full birth certificates, while other missions require less supportingdocuments. Applications processed by the Australian High Commission, London require only a copy ofthe passport biodata page of each visa applicant. A number of overseas missions do not provide adocument checklist or guidance on required documents, which creates a gap of uncertainty andinconsistent requests for documents by the processing case officer.

Currently, the published service standard for processing of subclass 400 visas is 5 working days to 1month. However, with applications processed by different overseas missions we often experience veryshort processing times from the Australian High Commission, Singapore and Australian Embassy,Washington, within 1 or 2 working days, whereas processing times by the Australian High Commission,India or Australian Embassy, Madrid can be as long as 4 weeks. The extreme variation of processingtimes by overseas missions creates difficulty for our clients to mobilise highly specialised workers inurgent situations. Often our clients are required to mobilise technical specialists at the demand of itsclients in order to meet a contractual obligation or emergency need. Companies choose the requiredforeign worker for the short-term assignment based on their technical specialisation, not nationality orcountry of residence. As such companies are at the mercy of the visa applicants’ local overseas missionto process applications in the shortest possible timeframe.


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We believe companies would benefit from an option of paying an additional application charge to accesspriority processing within 2 working days. This would not only generate additional revenue for theimmigration department (and in turn overseas mission to allocate required resources to process priorityapplications), but also meets the programme intention of facilitating short-term assignments, which areoften urgent.

Furthermore, our clients have experienced inconsistent visa grant decisions, despite providing the samedocumentation with applications processed by different overseas missions. It appears certain overseasmissions apply policy strictly and limit visa grants to 6 weeks with single entry, while other overseasmissions apply policy more flexibly granting visas allowing the maximum 3 month stay period withmultiple entry during the stay period. Discrepancy of visa grants raises questions as to the integrity of thevisa framework in meeting business needs and underlines the fact that inconsistent outcomes frequentlyarise in this part of the migration programme.

EY recommends

Establish one onshore centre of excellence for specialist temporary entry dedicated to processingsubclass 400 visa applications. Allow all applicants to lodge the visa application online. Standardisedocument requests and accept copies of supporting documents, as opposed to certified or notarizeddocuments. Additional application fees for urgent applications to be processed within 2 working days.

1.2 Inflexible assessment of non-ongoing work

Subclause 400.111 of Part 400 of Schedule 2 to the Migration Regulations 1994 defines non-ongoingwork to mean:

"... participation or engagement in... the event, activity or work is likely to be completed within acontinuous period of 3 months or less, the person has not been given an expectation of staying inAustralia... after the end of that period; and has not made arrangements to stay in Australia... after theend of that period."

However, the immigration department's policy as specified in the relevant PAM under "HighlySpecialised Work Stream" severely truncates the timeframe of non-ongoing work to "normally up to sixweeks":

8 Non-ongoing positionClause 400.222 requires that the position the applicant is seeking to fill in Australia be non-ongoing...A "non-ongoing" position would reasonably involve finalisation of a set of duties within a time periodthat does not exceed the period of stay granted, normally up to six weeks but may be up to threemonths if an officer determines a longer period of stay is warranted.

Above policy wording is confusing and unhelpful to processing case officers, as we have experiencedinconsistent decision-making by overseas missions. As mentioned above, our clients have experiencedinconsistent visa grant decisions, despite providing ostensibly the same documentation with applicationsprocessed by different overseas missions. It appears that certain overseas missions apply policy strictlyand limit visa grants to 6 weeks single entry, while other overseas missions apply policy more flexiblygranting visas allowing the maximum 3 month stay period with multiple entry during the stay period.Discrepancy of visa grants raises questions as to the integrity and efficacy of the visa framework inmeeting business needs.

Further, the policy examples of "Intermittent work/activities and the ‘non-ongoing’ requirements" do notrecognise individuals who have spent time in Australia previously for activities unrelated to the work tobe undertaken on the subclass 400 visa. This is a challenge for independent contractors who work formore than one organisation in Australia for short periods of time over the year. For example, businessesin highly specialised industries, such as maritime, and oil & gas, commonly engage specialisedindependent contractors or rely on specialist labour agencies to provide experts for short-term projects.


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Often an individual is engaged on different short-term projects through different labour agencies andorganisations in Australia, without being directly employed by an Australian organisation. In thesecircumstances, the individual's travel records into Australia may suggest the visa holder is undertakingongoing work, although the nature of each piece of work undertaken would be non-ongoing, usually afew weeks for each piece of work.

Many industry sectors heavily rely on the government and immigration department to provideimmigration laws and policy that facilitate access to specialised knowledge and services not readilyavailable in the Australian labour market. With the ability to engage highly specialised foreign workers,organisations in Australia are able to create employment opportunities for Australians and enhance theirskills and technical knowledge through exposure to international technology and services.

EY recommends

Reference of "normally up to six weeks" in policy at paragraph 8 should be removed to avoid confusionand allow flexibility to apply the definition of "non-ongoing" as stated at subclause 400.111 of Part 400 ofSchedule 2 of Migration Regulations 1994. Policy recognition that it is common practice for certainindustry specialists to be engaged by organisations as independent contractors who may undertakemultiple short-term highly specialised work assignments in Australia for different contracting companies.As such, subsequent subclass 400 visa grants should be available to specialists of this nature.

1.3 Limitation of visa framework to recognise short-term, informal training needs

According to the relevant PAM, the policy at paragraph 5 “Workplace-based training” specifies that thesubclass 400 visa:

“…is not appropriate for persons intending to undertake training in Australia as their main activity…Training may be acceptable where it is incidental to the main purpose of stay and does not lead to aformal educational qualification, such as where the applicant is a highly specialised worker and will bedoing some training run internally by their employer while in Australia.”

“Persons intending to undertake a short-term training course (that does not involve work) whilevisiting Australia may apply instead for a visitor visa.”

“For persons (including professional sportspersons) seeking to participate in a formal structuredtraining program, the GC-402 Training and Research visa may be appropriate.”

The challenge with the above policy is that it does not recognise short-term, informal workplace-basedtraining. Global companies often arrange intra-company transfers to allow their global workforce toundertake short-term workplace-based training in different countries to gain location specific experience.Assignees may be a recent graduate or a new hire identified to participate in informal training to meettheir colleagues in Australia, observe and learn hands-on technical skills or procedures that they couldshare with their home country colleagues. These short-term training initiatives do not meet the higherthreshold requirements of regulation 2.72I for nomination of a subclass 402 training and research visaunder the enhanced skills or capacity building streams.

We will provide further comments and recommendations on the subclass 402 visa in a separatesubmission on the subclass 400 series visa review. For the purpose of this submission, we wish tohighlight the gaps in the existing visa framework in recognising various forms of workplace-basedtraining.


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EY recommends

Collective review of existing visa framework and policy in the effectiveness of providing appropriate visaoptions for foreign employees undertaking training in Australia. Amend paragraph 5 of the relevant PAMon “Workplace-based training” by removing policy that "GA-400 is not appropriate for persons intendingto undertake training in Australia as their main activity”. Recognise training initiatives by globalcompanies through short-term intra-company transfers.

1.4 Limited recognition of global organisations with a global workforce that undertake intra-company transfers

Paragraph 8 of the department’s policy on “Non-ongoing position” attempts to recognise “Intra-companytransfers”. However, further clarification should be considered to cover intra-company transfers forshort-term training initiatives.

Policy states:

“GA-400 may be appropriate for short-term intra-company transfers in Australia, which could includesituations such as, but not limited to

· A project manager with proprietary knowledge/skills undertaking a short-term secondment toenable the incumbent manager to go on leave.

· Acting Chief Executive Officer seeking short-term intermittent visits to attend business meetingsin relation to operational management issues while the business in Australia finds a localincumbent.

Specialist Entry Section supports officers taking a flexible and facilitative approach in consideringcases such as the above where the intra-company transferee’s proposed engagement in an activityor work is considered to be short-term and non-ongoing, even where the position being filled may beongoing.”

Further, departmental policy does not appear to recognise short-term intra-company visits where foreignemployees are required to visit the Australian business to attend internal meetings, deliver ad hoctraining on new products or technology, or review processes against the global organisation’s standards.Nor does the policy recognise the need for non-executive directors to visit Australia to attend boardmeetings throughout the year.

The nature and frequency of the work visits undertaken by these foreign employees and non-executivedirectors requires the subclass 400 visa to be more flexible to allow up to 12 months validity. To protectthe integrity of the short stay activity framework, the government could limit the number of days spent inAustralia, to no more than 6 months aggregated over a 12 month period.

EY recommends

Recognise training initiatives by global companies through short-term intra-company transfers. Short-term training initiatives do not pose a threat to the Australian labour market as they do not compromiselabour market access or opportunities. The Australian government and immigration department shouldsupport Australian organisations through showcasing Australia’s high standards and unique workenvironment or projects which are fertile training grounds for an international workforce.

Extended 12 month visa validity should be available for intra-company transfers and non-executivedirectors to recognise the nature of their visits to Australia may involve intermittent work that does notextend to ongoing employment based in Australia and therefore does not impact the Australian labourmarket. To protect the integrity of the short stay activity framework, the government could limit thenumber of days spent in Australia, to no more than 6 months aggregated over a 12 month period.


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2. Interaction of visa framework and tax compliance

As part of the review of subclass 400 visa and other subclass 400 series visas, we recommend a reviewof the interaction of the visa framework with the income tax compliance system. In particular,consideration should be given to mechanisms to facilitate the obtaining of Tax File Numbers (TFNs) forindividuals working in Australia on such a visa. The current process for applying for TFNs makes itdifficult for employees and employers to comply with income tax obligations, potentially undermining theoverall effectiveness of the subclass 400 visa.

We appreciate the need to manage the risk of identity theft and similar issues. However, the currentsystem places significant practical barriers to visa holders and their employers when meeting their taxcompliance obligations.

In particular we recommend linkages of subclass 400 visa and other subclass 400 series visas with theAustralian Taxation Office online TFN application process in order to allow visa holders to obtain a TFNthrough that online system.

Consideration should be given to removing the requirement for a visa holder to be in Australia prior toobtaining a TFN through the current online application process. Practically, for offshore resources sectorworkers, where offshore employees arrive in Australia on a vessel, it is not apparent how this can bedemonstrated when these employees do not pass through an immigration post upon arrival. Further, asvisa holders will most likely spend their entire time in Australia working on a vessel or platform, therequirement to go through the TFN application process with potentially limited access to online facilitiescreates a distraction from their primary purpose of providing services to their employer.

Where a foreign employee is unable to obtain a TFN using the online system, the nature of their workpatterns can make the use of a paper-based application very difficult. This is particularly the case whereoffshore resources workers do not come ashore in Australia during the work rotations (or only for transitpurposes). The requirement of a paper-based application to have documents certified at a consulate orhigh commission overseas can be extremely onerous for such mobile employees and considerationshould be given to accepting documents certified by a person of suitable standing (a magistrate orjustice of the peace for example).

The administrative overheads associated with a paper TFN application are significantly more onerousand time-consuming, but failure to obtain a valid TFN for employees with a personal income taxobligation in Australia is likely to mean Pay As You Go withholding by the employer will be required at thetop marginal tax rate (currently 47% including the deficit reduction levy but excluding Medicare levy onthe basis the individuals are not tax residents of Australia).

In practice, the inability for employees on subclass 400 visas to obtain TFNs online has created themisconception that there is an automatic exemption from Australian income tax for those employees.While in certain circumstances tax exemptions may apply (e.g. under a relevant double tax treaty), this isnot an automatic consequence of the class of visa. From a tax policy perspective, the starting positionshould be that there is potential for Australian income tax to be required. It would be preferred for theimmigration and taxation systems to align to promote compliance with tax obligations and maximiserevenue collections. There is a significant risk of non-compliance due to the difficulty in obtaining TFNsunder the current approach.

An inflexible and complex visa framework in relation to tax compliance not only creates challenges toAustralian organisations that require foreign workers to fill a skills shortage, it hinders many businessesin bringing expertise to Australia which might otherwise create jobs for Australians.


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3. Conclusion

Our clients recognise and respect the need for compliance with the Australian visa framework. In ourexperience, clients make every reasonable effort to take into account visa requirements, processingtimeframes and any visa limitations as part of their workforce planning, project scheduling and costing.Many client companies incur additional costs in the interest of meeting higher threshold criteria set bythe visa framework. This ultimately impacts on the project bottom line, commercial viability and acompany’s ability to be price competitive.

The short stay activity subclass 400 visa has created challenges for business since it was introduced inMarch 2014. EY and our clients welcome the proposed changes in offering flexibility of first entry within 6months from visa grant and extending the stay period to a maximum of 6 months.

We submit that further review and clarification of department’s policy on subclass 400 visa should beconsidered as part of the November PAM series updates.

Any policy clarification should remove or minimise the discretionary nature of assessing “non-ongoing”work. A specialised visa processing centre should be established to deliver consistent processing timesand decision making of applications with consistent documentary requirements. There should be broaderpolicy recognition of global organisations that have a global workforce that undertake short-term intra-company transfers. Further recognition of specialised industry needs through engaging independentcontractors to undertake short-term project work through various companies or labour agencies shouldalso be recognised in policy. Flexibility in granting subsequent subclass 400 visas is required to meet theunique nature of certain technical specialists.

Business would also benefit from the option of paying an additional application charge or premium toaccess priority processing within 2 working days to genuinely facilitate mobility of foreign workersrequired to undertake short-term work that is often urgent or immediate.

Please contact me directly on (02) 9248 5163 or by email [email protected] if you requirefurther information. EY is agreeable to publication of our submission on the department’s website.

Yours sincerely

Wayne Parcell PSM(MARN 9790656)PartnerOceania Leader, Global Immigration


Appendix B Copy of EY submission to independent review of integrity in the subclass 457 visa programme

Integrity + Mobility + Talent = Productivity Submissions to the independent review of Integrity in the subclass 457 visa programme


Ernst & Young 680 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

9 May 2014 Mr John Azarias Independent Panel Review of integrity in the subclass 457 programme Via email: [email protected] Dear Mr Azarias Thank you for the opportunity to contribute to the independent review of integrity in the subclass 457 visa programme. EY is Australia’s second largest immigration service provider. We represent some of the world’s largest businesses as well as hundreds of medium and small businesses from industry sectors including engineering, telecommunications, finance, property development, insurance, shipping, banking, professional services, retail and recruitment. In this submission, we will respond to the panel’s issues for consideration. EY has also taken the opportunity to propose transformational change to employment related immigration pathways and to the way the immigration department engages with trusted immigration advisors to conduct business. It is our view that these proposals offer the government and Australian business with substantial cost savings and less red tape. EY supports the Australia Government’s efforts and focus on strengthening the integrity of the subclass 457 visa programme. It is also our view that the current framework for employment related visas is unnecessarily complex. There a many opportunities to streamline the current framework to remove some of the obstacles employers experience when recruiting skilled and experienced staff from overseas, The subclass 457 visa programme is weighed down by an accumulation of ad hoc integrity measures. These measures were implemented in an increasingly politicised atmosphere and were not justified by any evidence based research. Views of Australian and global business In developing our submission EY sought the views of business. We consulted with more than 1500 Australian and global businesses in face to face forums and through an on-line survey to assist the Panel. The views contained in our submission reflect those of a cross section of the business community from large global corporations to smaller local businesses.

How many Australian permanent residents or citizens work in your business?

Answer Options Responses More than 1,000 40.80%

501-1,000 16.30%

101-500 20.40%

51-100 8.20%

Less than 50 14.30%

mailto:[email protected]


How many subclass 457 visa holders does your business currently sponsor:

Answer Options Responses More than 100 30%

51-100 14%

11-50 32%

Less than 10 24% Businesses that have assisted EY and the Panel by providing their input include; • household names Jetstar Airways, BHP Billiton Olympic Dam, Commonwealth Bank of Australia,

QBE Insurance Group • ASX listed companies Monadelphous Group Limited, Nufarm Limited, Aristocrat Technologies

Australia Pty Ltd, Cochlear Limited and • Global firms ATKearney, CSL (Canadian Shipping Lines), Gold Fields. The subclass 457 visa programme provides significant benefits to the Australian economy which far outweigh the risks posed by instances of fraud and non-compliance. However, through an accumulation of ad hoc integrity measures, the programme has lost its flexibility and ability to meet the needs of business. Our recommendations seek to assist the panel and the government reduce red tape and restore balance to the programme. Key recommendations are: • one streamlined sponsorship facility for all sponsors in the economic demand driven (skilled

temporary and permanent entry) categories • creation of a new Global Mobility visa to facilitate intra-company transfers • simplifying and aligning requirements to business operations • a simple and transparent sanctions regime for breaches of sponsorship obligations • transformational change of the application process and decision-making framework We welcome the government’s reform agenda and look forward to the opportunity participate further. Yours sincerely

WAYNE PARCELL PSM Partner Global Immigration Human Capital, Tax MARN: 9790656 Attachment

Submissions to the independent review of Integrity in the subclass 457 visa programme EY i

Table of contents

1. Terms of Reference One - Compliance .............................................................................. 1 1.1 Level of non-compliance .......................................................................................... 1

1.1.1 Recommendation 1 .............................................................................................. 1 1.2 Risk of non-compliance ............................................................................................ 1

2. Terms of Reference Two and Three .................................................................................. 2 2.1 Intention of the programme ..................................................................................... 2

2.1.1 Recommendation 2 .............................................................................................. 2 2.2 Sponsorship and access to programme ..................................................................... 3

2.2.1 Recommendation 3 .............................................................................................. 3 2.3 Sponsorship framework improvements ..................................................................... 4

2.3.1 Recommendation 4 .............................................................................................. 4 2.4 Obligations ............................................................................................................. 4

2.4.1 Recommendation 5 .............................................................................................. 5 2.5 Costs and fees ........................................................................................................ 6

2.5.1 Recommendation 6 .............................................................................................. 6 2.6 Labour Market Testing ............................................................................................. 6

2.6.1 Recommendation 7 .............................................................................................. 7 2.7 Training Benchmarks ............................................................................................... 8

2.7.1 Recommendation 8 .............................................................................................. 8 2.8 Market Salary rates and Temporary Skilled Migration Income Threshold ..................... 9

2.8.1 Recommendation 9 ............................................................................................ 10 2.9 Skills assessment .................................................................................................. 10

2.9.1 Recommendation 10 .......................................................................................... 10 2.10 English language testing ........................................................................................ 11

2.10.1 Recommendation 11 .......................................................................................... 12 2.11 Consolidated Occupations List and ANZSCO ............................................................. 12

2.11.1 Recommendation 12 .......................................................................................... 13 2.12 Integrity and migration agents ............................................................................... 13

2.12.1 Recommendation 13 .......................................................................................... 13 2.13 Integrity and education ......................................................................................... 13

2.13.1 Recommendation 14 .......................................................................................... 14 2.14 Integrity and Labour Agreements ........................................................................... 14

2.14.1 Recommendation 15 .......................................................................................... 14 2.15 Integrity and transparency ..................................................................................... 14

2.15.1 Recommendation 16 .......................................................................................... 14 3. Terms of Reference Four – Compliance and sanctions ...................................................... 15

3.1 Non-compliance and fraud ..................................................................................... 15 3.1.1 Recommendation 17 .......................................................................................... 15

3.2 Incentives ............................................................................................................. 15 3.2.1 Recommendation 18 .......................................................................................... 15

3.3 Sanctions ............................................................................................................. 15 3.3.1 Recommendation 19 .......................................................................................... 16

3.4 Monitoring and inter-agency cooperation ................................................................ 16 3.4.1 Recommendation 20 .......................................................................................... 16

3.5 Monitoring and Fair Work Ombudsman .................................................................... 16 3.6 Investigation ......................................................................................................... 17 3.7 Workers’ rights ...................................................................................................... 17

3.7.1 Recommendation 21 .......................................................................................... 17 3.8 Risks and benefits ................................................................................................. 17 3.9 Monitoring – immigration department resources ..................................................... 18

3.9.1 Recommendation 22 .......................................................................................... 18 4. Transformational change – Sanctions and penalties ......................................................... 19

4.1 Issue ..................................................................................................................... 19 4.2 Recommendation 23 .............................................................................................. 19

5. Transformational change –Human Capital Immigration Framework .................................... 20

Submissions to the independent review of Integrity in the subclass 457 visa programme EY ii

5.1 Recommendation 24 .............................................................................................. 21 6. A new visa for the new economy - Global Mobility Visa .................................................... 24

6.1 Recommendation 25 .............................................................................................. 24 6.2 Impact .................................................................................................................. 25

7. Transformational change - decision-making alliance ........................................................ 26 7.1 Issue ..................................................................................................................... 26 7.2 Recommendation 26 .............................................................................................. 27 7.3 Impact .................................................................................................................. 27

Appendix A Making the most of the talent around us: Discussing change for employer sponsored permanent migration: maintaining the integrity of the legal and policy framework whilst securing economic benefits for Australia. ............................................................................................. 28 Appendix B Labour market testing – issues to be clarified by the department .......................... 29 Appendix C Proposal for Accredited Agent Alliance (AAA) between the Department of Immigration and Border Protection and Accredited Migration Agents ......................................... 30 Appendix D EY’s Human Capital Immigration Framework poster ............................................. 31

Submissions to the independent review of Integrity in the subclass 457 visa programme EY 1

1. Terms of Reference One - Compliance

Determine the level of non-compliance by sponsors in the subclass 457 programme, both historically and under the current regulatory framework.

1.1 Level of non-compliance What was the level of non-compliance or fraud by sponsors in terms of both regulatory requirements specifically, and the intent of the programme, before and after the 1 July 2013 reforms including the subsequent implementation of the labour market testing requirement? Publically available information does not demonstrate that the level of fraud or non-compliance in this programme should cause alarm or that it is any greater than that in other Australian visa programmes. There is also no evidence that there has been an increase in fraud or non-compliance by users of the subclass 457 visa programme. According to the Department of Immigration and Citizenship Annual Report for 2012-13, the percentage of sponsors formally sanctioned in 2010-11 was 0.75% and this reduced to 0.72% in 2012-13. In other words, 99.3% of sponsors are doing the right thing. Under EY’s proposed Human Capital Immigration Framework, Australian business sponsors will submit an Annual Return to maintain their business sponsorship status. This will release immigration department and other agency resources to monitor overseas business sponsors, high risk sponsors and high risk industry sectors and respond to allegations. This is preferred to adding to the administrative burden and complexities of the programme, such as labour market testing, for the 99.3% of sponsors who are doing the right thing.

1.1.1 Recommendation 1 • EY’s proposed Human Capital Immigration Framework be implemented - see Section 6

Transformational change – making the most of our human capital.

1.2 Risk of non-compliance Are there circumstances or situations that are more likely to lead to greater non-compliance in the programme? While non-compliant or fraudulent behavior cannot be accepted or condoned, it is our view that some degree of non-compliance is inevitable – as it is in nearly all sectors. EY survey respondents expressed overwhelming support (91%) for the sponsorship obligations and the sanctions regime. Ninety-three percent of survey respondents also reported that their business has a good understanding of the obligations and were confident the business was not in breach of the obligations. At the same time, just over half (51%) of survey respondents also reported they experienced challenges complying with the obligation in relation to notifying the department when certain events within the required ten working day notification period. To improve compliance, the period within which sponsors must notify the immigration department of certain events needs to be amended to take account of the practicalities of business operations. This is addressed in greater detail in response to Terms of reference 2 Question 4 below.


2. Terms of Reference Two and Three

Evaluate the regulatory framework of the subclass 457 visa programme and determine whether the existing requirements appropriately balance a need to ensure the integrity of the programme with potential costs to employers in accessing the programme. Report on the scope for deregulation while maintaining integrity in the programme

2.1 Intention of the programme How do the existing requirements fit with the intention of the subclass 457 visa programme? The intention of the subclass 457 visa programme is to provide streamlined entry arrangements for businesses needing to recruit skilled staff from overseas as stated in the Procedures Advice Manual:

The [subclass] 457 visa is primarily intended to provide streamlined entry arrangements for businesses needing to recruit skilled staff from overseas on a temporary basis. The [subclass] 457 visa programme is designed to fill skill shortages that cannot be met from the local labour market.

A majority of survey respondents told us that they did not consider that the current regulatory framework supports this intention. Business identified the following issues as significant obstacles in the programme: Table 1

Indicate one or more issues that are significant obstacles in the subclass 457 programme?

Answer Options Responses Frequent changes in immigration law 71.40%

Removal of living away from home allowance 40.80%

English language requirements 32.70%

Formal skills assessment 26.50%

Recruitment and relocation costs 26.50%

Australian income tax rates 26.50%

Differing state and territory licensing and registration requirements 18.40%

Immigration department processing time 6.10%

2.1.1 Recommendation 2 • EY’s proposed Human Capital Immigration Framework be implemented to remove these

obstacles.


2.2 Sponsorship and access to programme What types of organisations should be allowed to become sponsors? How effective are the current restrictions on newly established business and overseas business sponsors? Access to the programme for a wide range of businesses should be maintained, including for newly established business and overseas businesses. Newly established business sponsors Current restrictions on newly established business sponsors are articulated in the Procedures Advice Manual which guides immigration department officers to limit sponsorship and subclass 457 visa approvals to 12 months. EY’s proposed Human Capital Immigration Framework includes a recommendation that Australian businesses be approved as sponsors on a rolling 12 month basis providing the business submits an Annual Return demonstrating that the criteria for approval and the sponsorship obligations continue to be met. With regard to the visa period, EY appreciates that there will be some circumstances where a 12 month subclass 457 visa is warranted. However, a four year visa would be appropriate in many other circumstances such as where the newly established business is a branch office of a well-established global business, or has been established by a principal with a sound record of involvement in business in Australia. Overseas business sponsors EY recommends that overseas businesses applying for sponsorship approval continue to be assessed on a case by case basis. Overseas businesses are not covered in our proposed Human Capital Immigration Framework. A major issue of concern is that the current restrictions on overseas business sponsors are not articulated in the Procedures Advice Manual. This results in inconsistent and unpredictable decision making by immigration department officers in overseas posts which frustrates business’ ability to plan for expansion into Australia. EY recommends that policy guidelines be developed to guide officers in the exercise of their discretion to grant sponsorship approval for up to three years and subclass 457 visas for up to four years. A three year sponsorship and a four year visa would be appropriate where the overseas business is highly reputable and seeking to establish a branch in Australia. EY’s proposed Human Capital Immigration Framework requires Australian business sponsors to submit an Annual Return to maintain their business sponsorship status. This will release immigration department resources to monitor overseas business sponsors and industries of interest to the immigration department.

2.2.1 Recommendation 3 • Policy guidelines to be amended to guide officers to exercise discretion and grant visas for up to

four years where the sponsor is a newly established Australian business and is a branch office of a newly established global business.

• Policy guidelines to be developed to guide officers to exercise discretion to grant overseas business sponsorship approval for up to three years and associated subclass 457 visas for up to four years.


2.3 Sponsorship framework improvements Are there any aspects of the sponsorship framework or nomination process that could be made to work more efficiently or effectively? This review provides a valuable opportunity to transform the subclass 457 visa programme and achieve significant improvements in both its efficiency and effectiveness. Key improvements to the programme that our proposed Human Capital Immigration Framework will achieve are: • Reducing administration and costs for business and government through a single Human

Capital Sponsorship facility • enhanced integrity through an Annual Return obligation for sponsors • increased competitiveness of Australian businesses by creation of a new Global Mobility Visa These proposals are detailed in section 5 below and in EY’s Human Capital Immigration Framework poster at Appendix 4.

2.3.1 Recommendation 4 EY’s proposed Human Capital Immigration Framework be implemented, as outlined above.

2.4 Obligations Are the current sponsorship obligations satisfactory? EY survey respondents reported overwhelming support for the current obligations regime, with one significant exception - the time period for notification of events. Table 2

Do you agree or disagree with the following statements?

Answer Options Agree Disagree Legally enforceable sponsorship obligations and a transparent sanctions regime are necessary to ensure employers do the right thing 91% 9%

Our business has a good understanding of the ten sponsorship obligations and we are comfortable we are not breaching any of the obligations 93% 7%

Our business has a good understanding of the penalties and sanctions that could be imposed for breaches of the sponsorship obligations 93% 7%

Sponsors should have an obligation to inform visa holders about workers’ rights and responsibilities under Australian law 88% 12%

The obligation to notify the immigration department of a visa holder’s termination of sponsored employment within 10 working days should be the responsibility of the subclass 457 visa holder

42% 58%

The sponsoring employer should have 30 days to notify the immigration department of the termination of a visa holder’s sponsored employment 95% 5%

Employers with a history of strong compliance should be rewarded with greater immigration facilitation 93% 7%

Sanctions and penalties for an employer’s breach of sponsorship obligations should be transparent and predictable with a sliding scale of applicable sanctions and penalties commensurate with frequency and severity of breaches

100% 0%

A simulated compliance monitoring and written report by EY should be able to substitute for a formal monitoring by the immigration department 77% 23%


Just over half (51%) of sponsors also reported they experienced challenges complying with the obligation in relation to notifying the department when certain events occur – termination, and change of duties in particular – within the ten working day notification period. Survey respondents commented:

10 days is also too short to notify - being a large organisation we can only rely on our payroll reports to determine terminations and role changes.

The vast majority (95.5%) of sponsors agreed that the time period for notification of events should be extended to at least 28 days. Notice of termination There is no integrity value in requiring sponsors to notify of termination within ten working days. Subclass 457 visa holders are permitted to remain in Australia for 90 days after termination without breaching their visa condition. The department of immigration rarely takes action to contact visa holders or to cancel subclass 457 visas until 90 days has elapsed. Subclass 457 visa holders who depart Australia and request cancellation of their subclass 457 visa in order to retrieve their superannuation are continually frustrated as the immigration department can take over three months to cancel a subclass 457 visa. Penalising sponsors for failing to notify of termination within ten working days in this context cannot be justified. Notice of change of duties The obligation to notify a change of duties, where there is no change of ANZSCO occupation, creates an administrative burden to business and the immigration department without improving integrity. These notifications are merely filed. In rare cases the immigration department responds that the department considers that a change of duties results in a change of occupation. However, this is merely communicated to the sponsor and no further action is taken. An unintended consequence of this sponsorship obligation is that many sponsors avoid making changes to subclass 457 visa holders’ positions including promotions and lateral moves. The value that these skilled individuals can deliver to Australian economy is lost.

To certain degree the rules make it difficult to promote the [subclass] 457 visa holders. We have commented further on the benefits of revising the use of ANZSCO occupational classifications below in paragraph 2.11 as well as in Appendix 1 Making the most of the talent around use – Discussing change for employer sponsored permanent migration submitted to Assistant Minister Cash in December 2013.

2.4.1 Recommendation 5 • all obligations relating to notification of events be amended to allow sponsors to notify within

28 working days • the obligation to notify change of duties within an ANZSCO occupation be removed.


2.5 Costs and fees Are fees and associated costs appropriate for this programme and who should be responsible for paying fees? The costs involved in the subclass 457 visa programme have increased significantly in the past 18 months with the dramatic increase in visa application charges, the introduction of labour market testing and the extension of English language testing to a greater number of visa applicants. Businesses that we surveyed agree that the costs associated with access to the programme are too high and that high costs serve no function in discouraging abuse or improving integrity. Table 3

Current limitations on transfer of costs to visa applicants or visa holders should be maintained to prevent unscrupulous employers and recruiters exploiting vulnerable persons. While the level of such abuse is inconsiderable in the context of the programme, any instance of exploitation has a serious impact on individuals and their families.

2.5.1 Recommendation 6 • removal of labour market testing • reinstatement of occupation based exemptions to English language testing • re-examine the visa application charge cost structure, with charges on a per-person basis,

which imposes a considerable cost burden on employers

2.6 Labour Market Testing Are the requirements of labour market testing suitable, including the current scope for exemptions and protected occupations? Policy guidelines for labour market testing require significant refinement. We have identified a number of areas for improvement in Appendix 2 Labour Market Testing – issues to be clarified Nearly 90% of sponsors surveyed agreed with the following statements:

• A suitably qualified Australian who is readily available to fill a skilled vacancy is preferred to hiring an overseas skilled worker unless there are proprietary business skills and knowledge that a local candidate would not possess

Select ONE statement which best describes the overall costs associated with accessing the subclass 457 visa programme:

Excessive and restricts accessto the programme

Too high but unavoidable in thecontext of recruiting skilled staff

Set at an appropriate level tomaintain integrity in theprogramme

Not high enough to discourageattempts to abuse the program


• Labour market testing is not necessary to ensure Australians are considered for employment when suitably qualified Australians are readily available without the significant costs involved in importing an overseas skilled worker

Labour market testing is not an appropriate mechanism in a modern global economy. Sixty percent of our survey respondents identified labour market testing as a significant obstacle which prevents the subclass 457 visa programme meeting the programme’s intention, refer to Table 1 above. As a blunt instrument of the old economy, the concept of labour market testing disregards the fact that businesses make a large investment in relocating skilled staff from overseas, rather than look overseas for lower cost workers. Survey respondents commented:

It is always commercially prudent and easier to recruit locally. We know where skill shortages exist and advertising slows down the process when there may be a pressing commercial need to move quickly.

It's cheaper and easier to recruit locals where they have the required skills and experience. However, many of our roles have an international dimension, which may not be available in the local workforce.

Local hires are always the preferred option other than where proprietary business skills and knowledge is required.

Table 4

2.6.1 Recommendation 7 • Remove labour marketing testing • In the event labour market testing is retained, additional policy guidance on a number of issues

which have arisen during implementation should be provided – see Appendix 2

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

What is the average cost per subclass 457 visa holder (including family) of recruitment and relocation costs?

Less than $5,000

$5,001 - $10,000

More than $10,000


2.7 Training Benchmarks Are the current training benchmarks appropriate or adequate for ensuring that employers provide training opportunities to Australians? Sixty percent of survey respondents agreed that training benchmarks are an appropriate measure to test whether or not employers provide adequate training opportunities to Australians. Many also commented that capturing the information presents challenges:

For large businesses, training is simply part of the organisation. Accounting for this is extremely difficult.

In addition, the current regulations require businesses to report on training investment over various periods of 12 months, including the most recent 12 months and the 12 months commencing on the date of most recent sponsorship approval. The complexity and duplication in the current regulations across the various employment related visa categories, is set out in Table 8 Towards a simpler sponsorship framework at page 22. It would relive the administrative burden to business considerably, if the financial information required to address training benchmarks could be reported according to financial year. One key change required is amending policy guidelines in recognition of realities of business:

Companies should be able to report training expenses as a whole organisation (i.e. all associated entities that are operating in Australia under the parent group), rather than individualising the cost per each entity. Currently, this doesn't give a true reflection of our investment in training to Immigration

Some entities face challenges meeting the training benchmarks not because they are not committed to investing in training their Australian workforce but due to legitimate business arrangements. A corporate group with multiple associated entities may assign certain activities and expenses to specific entities. For example, a group’s learning and development function may be managed by one entity within a group, even though that training is delivered to employees of all entities within the group. Another example is where the payroll function of the entire group is managed by one entity, even though the payment of remuneration is to all employees of all entities within the group. Where an entity cannot show payroll or training expenditure in their financial accounts, their business and employees are disadvantaged. Some entities face challenges meeting the benchmarks due to the small size of their business, as recognised by one of our survey respondents:

we meet these requirements annually, but smaller businesses may have more ebb and flow in their training spend.

Sixty percent of survey respondents agreed that enabling employers to meet training benchmarks by averaging expenditure over a number of years or would improve training outcomes for Australians.

2.7.1 Recommendation 8 • Amend legislation and policy to enable businesses to report on training expenditure and payroll

by financial year • Amend policy guidance to enable corporate groups to report on group wide training investment • Amend legislative instrument to provide flexibility for business to average training expenditure

over three years


2.8 Market Salary rates and Temporary Skilled Migration Income Threshold

How effective is the market rates framework for ensuring that 457 visa holders are provided with Australian terms and conditions of employment and how should the market rate be determined and assessed? Is the application of a Temporary Skilled Migration Income Threshold (TSMIT) appropriate and is it set at the appropriate level? If so, how should it be indexed? A large majority (82%) of survey respondents agreed that the concept of a market salary requirement is an effective mechanism to maintain parity in wages between subclass 457 visa holders and Australian employees and reduces the chance of exploitation of overseas workers. Others reported that the mechanism is inadequate for positions in regional and remote locations and for highly specialised roles. Further, the following comment highlights the fact that integrity measures are applied across the programme where they are not required, adding to the costs of processing:

I believe that the issue of exploitation is limited to a select few industries and not an issue for professional services industries (finance, consulting etc.). To deter exploitation for the select few industries, MSR [market salary rate] is relevant. I would consider the need for MSR to be reviewed on industry basis, not required for all applications in all industries.

Most business consider that a flexible market salary rate, determined by location as well as occupation, with no TSMIT, is the preferred mechanism to ensure subclass 457 visa holders are provided with at least market rates and Australian terms and conditions of employment. Table 5

The situation of regional employers requires special consideration. Businesses in low population growth areas should be supported to fill short to medium term skill shortages that cannot be filled from the local labour market.

Select the most appropriate method of ensuring subclass 457 visa holders are remunerated

appropriately and provided Australian terms and conditions of employment:

A single temporary skilledmigration incomethreshold (TSMIT) for alloccupations

Flexible market salary ratereferenced by occupationand location with nominimum threshold

Return to a minimumsalary level for alloccupations regardless ofmarket rate


Regional subclass 457 visa arrangements were previously in place to provide fast and flexible entry to regional Australia for suitably skilled workers offered temporary roles in Australian businesses operating in regional and low-population growth areas of Australia. The regional subclass 457 visa program was abolished in 2009. Concessions were in place in the regulations to provide greater flexibility regarding: • Minimum salary level (now market salary rate); • English language requirements, and • Skill level of occupations and visa applicants.

Employers in regional areas struggle to locally source skilled labour to fill vacancies. The reintroduction of a regional subclass 457 visa program will encourage employers in regional Australia to expand and increase employment levels, and act as a key feeder program for the permanent Regional Skilled Migration Scheme.

2.8.1 Recommendation 9 • Remove TSMIT and retain a rigorous assessment of market salary rates • Re-introduce a regional stream into the subclass 457 visa program, in consultation with the

regional certifying bodies, with concessions in the position nomination application to recognize the fundamental labour market differences and recruitment challenges in regional Australia and thereby provide greater flexibility regarding:

• Market salary rates and the Temporary Skilled Migration Income Threshold; • English language requirements, and • Skill level of occupations and visa applicants.

2.9 Skills assessment How effective are skills assessments in ensuring subclass 457 visa holders have the skill for the nominated position? Is there something that could be done to improve and or streamline the requirement for the business? Formal skills assessments are required for a small number of occupations. Nevertheless over a quarter of survey respondents identified skills assessment as a significant obstacle in the programme (Table 1).

Skills assessment – remove this requirement as obstacle for those who are genuinely specialist managers and programme and project admins – goes against intention for streamlined entry If they aren't skilled, we don't hire them. The business can assess that. We have our own tests and induction so have our own due diligence process including appropriate supervision and performance management processes. These external skills assessments generally take so long that they are worthless to an employer from a risk management perspective unless they are completed prior to the visa being granted. They may well be appropriate for some high risk professions.

The introduction of skills assessment for Project and Program Administrators and Specialist Managers (neck) in July 2013, with extremely limited flexibility for existing subclass 457 visa holders legitimately working in those occupations, has created significant issues for those wishing to extend their employment in Australia. The department should make use of other regulatory mechanisms to manage problematic cases rather than add to the administration costs and processing times for the majority of genuine cases.

2.9.1 Recommendation 10 • Remove the policy to require skills assessments for Project and Program Administrators and

Specialist Managers (neck).


2.10 English language testing What circumstances should subclass 457 visa applicants is required to undertake an English language test? Are the current English language requirements appropriate? Vocational English, or a higher proficiency if required for licensing or registration, is an appropriate standard. However, the extension of formal English language testing to a greater number of visa applicants in July 2013 by removing the occupational exemptions to formal English testing has slowed the visa application process considerably. Survey respondents commented:

There are difficulties with long delays to get a testing date, costs and overall long process. There has to be a more efficient way to test this without the lengthy process.

Review English language testing for countries where the primary education language is English. This is adding unnecessary processing time and delays in fulfilling short term business needs.

Applicants in northern Europe regularly report wait times for IETLS tests of over four weeks. Some fly to the United Kingdom to sit an earlier test. This is not acceptable. As with skills assessments, the majority of employers find that they are best placed to assess a candidate’s English language ability in relation to the position: Table 6

The current exemption to formal testing available to applicants who have studied for five consecutive years in institutions where English is the language of instruction requires applicants to locate evidence of their education that goes back many years or to contact schools and universities to provide documents. This can be onerous and should not be necessary for applicants from countries where it is well accepted that English is the primary language of education and the workplace, including India, South Africa and The Philippines. The requirement to have studied for five consecutive years is not consistent with other English language requirements, such as the exemption under the employer nomination scheme for permanent residence of the Functional English requirements. It does not take account of the realities of modern life such as the growing practice of the gap year.

At what point in the recruitment process does your business test a candidate’s English language skills? Please choose the

best option:

Job application

Initial candidate screening

Interview

Post interview selection

After a conditional offerhas been made


2.10.1 Recommendation 11 Amend the relevant legislative instrument to: • Reinstate the exemption to formal English testing for ANZSCO occupations 1,2, and 4 -6 • Introduce exemptions to IELTS testing where it is well accepted that English is the primary

language of education and in the workplace, including India, South Africa and The Philippines. • Amend the exemption based on study in English to require the study be five years cumulatively

2.11 Consolidated Occupations List and ANZSCO Is the Consolidated Sponsored Occupations List (CSOL) an appropriate source for occupations relevant to the subclass 457 visa? How should the composition of the CSOL be determined? Is there a more effective way to define nominated positions than ANZSCO, to capture emerging occupations and to provide clarity of positions between skill levels? The CSOL is derived from the ANZSCO. We will address the ANZSCO first. Less than half (47%) of our survey respondents agreed that ANZSCO classification system continues to be relevant to all positions in which business nominates subclass 457 visa holders.

There are not enough occupations and the classifications are open to interpretation - for very niche and specialist roles it is often very hard to know which classification is suitable. Given the nature of business in Australia where multiskilling is key, the ANZCO positions are too rigid and inflexible where a position falls between codes.

ANZSCO classifications can become an unnecessary preoccupation during application processing and assessing notifications of change of duties, despite the fact that roles are clearly skilled. This is in part due to the decreasing ability of ANZSCO to capture emerging occupations and accommodate roles which require multiskilling. As a result business finds it difficult and costly to negotiate with the immigration department which occupation is the most appropriate. Further business find managers tend to avoid promoting or changing the roles of subclass 457 visa holders for fear of immigration consequences. Requiring a new nomination for a role change is also seen by business as onerous and unnecessary when the subclass 457 visa holder continues to perform in a skilled position. We have already referred to the adverse impact the preoccupation with ANZSCO occupations has for business in restricting the ability of business to make the most of skilled visa holders in different roles. The adverse impact this has on the ability of individuals to obtain permanent residence is explained in Appendix A Making the most of the talent around us: Discussing change for employer sponsored permanent migration: maintaining the integrity of the legal and policy framework whilst securing economic benefits for Australia. Businesses we consulted have made several suggestions to save them and the department time and costs: • an exclusive list rather than an inclusive list be develop – excluding lower skilled ANZSCO

occupations from the program • “industry occupations” in a group of ANZSCO occupations within which individuals can transfer • “enterprise occupations” commonly used in individual businesses.


2.11.1 Recommendation 12 • Reliance on duties and specific ANZSCO occupations be replaced by a focus on skill level of

occupations

2.12 Integrity and migration agents What role can registered migration agents play in improving the integrity of the subclass 457 visa programme? Registered migration agents play a critical role in advising clients of the requirements for sponsorship nomination and visa approval and the need to comply with sponsorship obligations. Concepts such as market salary rates and TSMIT are difficult for many employers to navigate. Reputable agents continually assist their clients identify and address any risks of non-compliance through client education – including formal training – and risk audits. Agents of integrity will work with employers to remedy any breaches and disclose them voluntarily as appropriate. Most survey respondents (77%) agreed that a simulated compliance monitoring report by EY should be able to substitute for a formal monitoring by the immigration department. This is consistent with EY’s proposed transformation to decision making with agents entering into a partnership with the department - see Section 6 Transformational change to decision-making. This proposal aligns with the National Commission of Audit’s recent report which recommends:

Recommendation 43: Visa processing The Department of Immigration and Border Protection grants around 4.7 million visas every year. Many visa processing tasks are high volume and low complexity and would be well suited to outsourcing.

We also reiterate that EY’s proposed Human Capital Immigration Framework requires Australian business sponsors to submit an Annual Return to maintain their business sponsorship status which will improve the integrity of the programme, and the public perception of the integrity of the programme immeasurably.

2.12.1 Recommendation 13 • A simulated compliance monitoring report by accredited agents be an accepted substitute for a

formal monitoring by the immigration department.

2.13 Integrity and education

Would providing improved support and information to employers and visa holders on their rights and obligations help to improve the integrity of the subclass 457 visa programme? If yes, how might this be implemented? Are Department of Immigration and Border Protection outreach officers utilised effectively by stakeholders in providing information on the subclass 457 visa programme? EY is one of the largest immigration service providers in Australia. Our clients have little exposure to and understanding of the role that immigration department outreach officers can play. Under the proposed collaborative partnership between accredited agents and the immigration department, agents and the department could effectively educate a large number of sponsors and visa holders. We have made further recommendations under Terms of Reference 4 below.


2.13.1 Recommendation 14 • Immigration department outreach officers and immigration service providers work

collaboratively to enhance employer awareness campaigns.

2.14 Integrity and Labour Agreements

What impact do labour agreements have in terms of managing non-compliance or fraud in the subclass 457visa programme? Labour agreements have been used as a tool to closely regulate sectors of concern in the past decade. These agreements can be an effective tool to enhance integrity through a more robust monitoring programme, the annual negotiation of ceilings and the flexibility the model provides to include specific requirements such as higher training benchmarks. Labour agreements have limited reach to address individual cases of fraud and non-compliance.

2.14.1 Recommendation 15 • Labour agreements are used judiciously to address sectors where genuine integrity concerns

exist. • Labour agreements be processed efficiently and transparently

2.15 Integrity and transparency Would increasing transparency improve the integrity of the subclass 457 visa programme, and if so how might this be implemented? EY’s proposed Human Capital Immigration Framework provides a transparent and robust model that will improve integrity by requiring Australian business sponsors to submit an Annual Return to maintain their business sponsorship status. This will release immigration department resources to monitor overseas business sponsors and high risk sponsors and industries. The current penalties and sanctions framework needs to be more transparent to reduce the uncertainty of consequences for non-compliance with the sponsorship obligations. We recommend, in section four below, a framework of transparent penalties to clarify the objective criteria to promote transparency and ensure measurability of the penalties and sanctions imposed.

2.15.1 Recommendation 16 • EY’s proposed Human Capital Immigration Framework be implemented, as above. • EY’s proposed Transparent Penalties Framework be implemented, as below.


3. Terms of Reference Four – Compliance and sanctions

Review and advise on the appropriateness of the current compliance and sanctions.

3.1 Non-compliance and fraud

In what way can the potential for non-compliance or fraud in the subclass 457 visa programme be more effectively managed? We reiterate that sponsors overwhelming support efforts to maintain integrity in the programme – see Table 2 above. EY’s proposed Human Capital Immigration Framework requires Australian business sponsors to submit an Annual Return to maintain their business sponsorship status. This will release the immigration department resources to monitor overseas business sponsors and high risk sponsors and industries. We recommend the following additional measures to encourage compliance: • Rewarding employers with a history of compliance – see below • A transparent framework of predictable sanctions and penalties – see Section Four Transparent

Penalties

3.1.1 Recommendation 17 • Immigration legislation and policy changes amended to provide a greater level of transparency

and predictable penalties be imposed commensurate with frequency and severity of breaches - see section four below.

3.2 Incentives Could employers be provided with greater incentives to comply with the requirements of the subclass 457 visa programme? If so, how might this be implemented? Could the system be improved to reward employers with a history of strong compliance? If so, how might this be implemented? Ninety three percent of EY survey respondents agreed that employers with a history of strong compliance should be rewarded with greater immigration facilitation.

3.2.1 Recommendation 18 EY recommends all of the following (including in combination): • Streamlined application requirements • Priority application processing • Reduced visa application charges • Extended period of sponsorship approval (in the event the sponsorship renewal by Annual

Return proposed in our Human Capital Immigration Framework is not implemented)

3.3 Sanctions Are the existing range of sanctions and administrative actions (such as cancelling a sponsorship or barring a sponsor) satisfactory, and how effectively are they being applied? Are the range of civil penalty provisions (infringement notices and civil action) and criminal sanctions satisfactory, and how effectively are they being applied? Are there any further actions that could be considered to enhance integrity?


The vast majority (91%) of EY survey respondents indicated that legally enforceable sponsorship obligations and a transparent sanctions regime are necessary to ensure employers do the right thing. In addition, most survey respondents (93%) reported a good understanding of the ten sponsorship obligations and the penalties and sanctions which could be imposed for breaches of the sponsorship obligations. An area of concern is the inconsistency in the application of sanctions and administrative actions by the immigration department. All businesses surveyed requested that sanctions and penalties for an employer’s breach of sponsorship obligations should be transparent and predictable with a sliding scale of applicable sanctions and penalties commensurate with frequency and severity of breaches. A greater level of transparency and predictable penalties should be imposed commensurate with frequency and severity of breaches. The framework should also take into consideration the size of the organization, revenue and the number of visa holders.

3.3.1 Recommendation 19 • Immigration legislation and policy be amended to provide a greater level of transparency and

that predictable penalties be imposed on sponsors commensurate with frequency and severity of breaches, as outlined above.

3.4 Monitoring and inter-agency cooperation

Could cooperation between the Department of Immigration and Border Protection and other agencies during monitoring be improved? EY is one of the largest immigration service providers in Australia. While our clients have little exposure to the role that other agencies take during monitoring, they overwhelming support all efforts by government agencies to ensure integrity in the programme. EY’s proposed Human Capital Immigration Framework requires Australian business sponsors to submit an Annual Return to maintain their business sponsorship status. This will release the immigration department resources to monitor overseas business sponsors and high risk sponsors and industries. The proposed transformed decision making framework, see section 6, should be extended to collaboration between the immigration department, other agencies and significant immigration service providers to enhance employer awareness campaigns and streamline the monitoring procedures.

3.4.1 Recommendation 20 • Immigration department officers and other agencies work collaboratively with significant

immigration service providers to enhance employer awareness campaigns and streamline the monitoring process.

3.5 Monitoring and Fair Work Ombudsman

Has the inclusion of powers to the Fair Work Ombudsman been useful in improving compliance? Of the EY survey respondents, 87% have not been monitored by the Fair Work Ombudsman. We are yet to see the impact of the Fair Work Ombudsman’s increased powers in improving compliance in the subclass 457 visa programme. Based on our recent discussions with the Fair Work Ombudsman, we understand that the inspectors investigate only issues associated with occupation and payment of salary. The inspectors are not investigating guaranteed annual earnings and refer this back to the immigration department or Australian Tax Office for further investigation.


Clearer lines of reporting and investigation should be provided when there are other agencies involved in monitoring activities and improving compliance.

3.6 Investigation Could the way the Department of Immigration and Border Protection responds to allegations of non-compliance, fraud and exploitation be improved, and if so how? Within our client group, we have had no exposure to how the Department of Immigration and Border Protection responds to allegations of non-compliance, fraud and exploitation. If the immigration department moves towards a collaborative partnership with accredited agents, these agents will assist with the further education of clients in respect of their sponsorship obligations, seek to remedy any breaches and implement system changes to improve non-compliance, fraud and exploitation in the program.

3.7 Workers’ rights Is information about workers’ rights and responsibilities under Australian law readily accessible to subclass 457 visa holders in appropriate formats? Should the provision of such information by the employer form part of the sponsorship obligations under the subclass 457 visa programme? There are multiple information sources in respect of workers’ rights and responsibilities available to clients via the immigration department website, visa approval notifications, and other agency websites. Regulation of workers’ rights is both at a Federal and State or Territory level which can add additional requirements for our clients depending on location. A significant number (89%) of EY survey respondents advised that employers should have an obligation to inform visa holders about workers’ rights and responsibilities under Australian law. The Fair Work Act obliges employers to provide employees with information about their rights. Duplicating this obligation under the Migration Act will not benefit visa holders and will only duplicate record keeping and reporting requirements for employers. The immigration department is better placed to include information in nomination and visa approval notifications which are sent to both the employer and employee.

3.7.1 Recommendation 21 • No additional obligation be created for sponsors to provide subclass 457 visa holders with

information on workers’ rights and responsibilities

3.8 Risks and benefits

Is there an appropriate balance between regulatory requirements and compliance with the overall benefits and risks of the programme? In our view the benefits of the programme to the Australian economy far outweigh the risks posed by isolated instances of non-compliance. Proportionally, the number of subclass 457 visa holders in the workforce is very small. Concerns that subclass 457 visa holders will drive down wages and dilute working conditions do not seem well founded or supported by evidence. Through an accumulation of ad hoc integrity measures, the programme has lost its flexibility and ability to meet the needs of business. The focus needs to be shifted to provide the immigration department and other agencies with the resources to investigate and penalise demonstrated cases of fraud and non-compliance.


3.9 Monitoring – immigration department resources

Are the Department of Immigration and Border Protection's compliance activities adequately resourced and its systems appropriate to monitor compliance and ensure integrity in the subclass 457 visa programme? How might these be improved? Immigration department resources available to monitor compliance and ensure integrity appear not to have changed significantly since the introduction of the subclass 457 visa programme in 1996. EY’s proposed Human Capital Immigration Framework requires Australian business sponsors to submit an Annual Return to maintain their business sponsorship status. This will release immigration department resources to monitor overseas business sponsors and high risk sponsors and industries. If the immigration department moves towards a collaborative decision making partnership with accredited agents, under the proposed decision making framework, additional resources will be available to conduct monitoring where required.

3.9.1 Recommendation 22 • Implement EY’s proposed Human Capital Immigration Framework which requires Australian

business sponsors to submit an Annual Return, as above • Implement EY’s proposed collaborative decision making partnership with accredited agents to

enable immigration department resources to be directed towards investigating and penalising cases of fraud and non-compliance, as above


4. Transformational change – Sanctions and penalties

4.1 Issue To be effective, the penalties and sanctions framework must be transparent, predictable and consistently applied. The effectiveness of the current penalties and sanctions framework is limited due to the lack of certainty surrounding the consequences of non-compliance with the sponsorship obligations. A range of penalties and sanctions for a breach of obligations may be imposed, including: • barring the sponsorship • serving an infringement notice • obtaining an enforceable undertaking • pursing civil penalty We have seen inconsistency in the application of penalties and sanctions by the immigration department and further clarity and transparency will assist business. The tiered table of penalties for the employment of illegal workers determined by the severity of the offence provides a useful model. At the same time the discretion available to immigration department officers when considering whether or not to impose a sanction or penalty must be maintained. A “mandatory sentencing” framework, such as that recently reversed in the student visa programme, is not. The subjective criteria currently specified in the regulations should be maintained, these include: • number of occasions on which the person has failed to satisfy the sponsorship obligation in a

given time frame – for example, annually to enable sponsors to improve performance and not continue to be penalized cumulatively for an excessive period of time

• nature and severity of the circumstances relating to a failure to satisfy a sponsorship obligation • whether, and the extent to which, the failure to satisfy the sponsorship obligation was

intentional, reckless or inadvertent In addition, the new framework should also take into account factors such as organisation size, revenue and number of subclass 457 visa holders sponsored. For instance, a sponsor who employs two visa holders and fails to notify of a termination should be treated differently to a sponsor who employs 300 visa holders.

4.2 Recommendation 23 Amend the current penalties and sanctions framework to clarify objective criteria, promote transparency and ensure measurability of the penalties and sanctions imposed. This is a suggested indicative framework.

Obligation Warning Infringement notice Sanction

Failure to meet sponsorship obligations under regulation 2.78 – 2.87B) of the Migration Regulations 1994 (Cth)

Imposed after 2 late notifications

Imposed after 4 late notifications, with consideration given to subjective criteria specified in regulations 2.89 to 2.94B of the Migration Regulations 1994 (Cth)

Imposed after 5 late notifications, with consideration given to subjective criteria specified in regulations 2.89 to 2.94B of the Migration Regulations 1994 (Cth)


5. Transformational change –Human Capital Immigration Framework

The proposed Human Capital Immigration Framework, detailed in EY’s poster, offers a solution to the following structural obstacles in the subclass 457 visa program and other employment related visas. Under the current regulatory framework there are multiple categories of employer sponsorship for temporary employment related visas and several categories of nominations for permanent residence. The criteria for approval of each of these employer lodged applications are duplicated as demonstrated in Table 8 Towards a simpler sponsorship framework at page 22. Current unnecessary duplication and administration can be reduced by enabling Australian business sponsors to nominate individuals in any of the employment related visa categories without obtaining separate sponsorship approval and duplicating information and documents with each nomination for permanent residence. Table 6 demonstrates that the current criteria for standard business sponsorship approval are the most rigorous. The training criteria, in particular, are most rigorous for standard business sponsors as demonstrated in Table 9 Inconsistencies in training criteria. Hence a move to a single sponsorship framework will strengthen integrity as well as remove red tape. The burden on employers and the department addressing and assessing the same requirements many times over is particularly evident at the permanent visa stage. Navigating the inconsistent training criteria by businesses that sponsor both temporary and permanent visa applicants is also overly complex. It is well documented that the employer nomination scheme is principally accessed by those using the subclass 457 visa programme. The savings to business and the department by streamlining procedures under one simple sponsorship framework will be significant. Should an organisation not seek approval as a standard business sponsor they can continue to access the other visa programmes under the existing sponsorship framework. Learning from the Past The proposed Human Capital Immigration Framework has a sound precedent. EY was a party to a Labour Agreement for many years under the previous Labour Agreement model – prior to the conversion of Labour Agreements to a tool to more closely regulate sectors of concern. The Big Three Professional Services Firms agreement provided for streamlined temporary and permanent entry in Australia with a view to “maintain efficient and competitive operations in the international financial and professional services sector”. The agreement was an over-arching sponsorship which provided the party Firms streamlined access to temporary visas for occupational trainees and professional consultants and to employer nominated permanent residence. Parties to the agreement were required to report annually on compliance and monitoring requirements. Placing the onus of reporting on the sponsor meant that the immigration department resources could be directed at improving overall compliance within the programme.


5.1 Recommendation 24 A single Human Capital Sponsorship for Australian businesses under which sponsorships and nominations can be lodged for the following visas: • Subclass 401 exchange stream • Subclass 401 exchange stream • Subclass 402 occupational training, professional development and research streams • Subclass 457 temporary work (skilled) • NEW - Subclass 455 Global Mobility visa, see below • Subclass 186 employer nomination scheme (permanent residence) • Subclass 187 regional sponsored migration scheme (permanent residence) Human Capital Sponsorship has a rolling validity secured by a satisfactory annual return. An additional pathway to employer nominated permanent residence be created for holders of a subclass 309 visa or subclass 820 visa with at least 2 out of the last three years employment in nominated occupation or closely related occupation in Australia including 12 months with the nominating employer while holding a valid visa with appropriate work rights. Eighty five percent of sponsors surveyed reported that a single sponsorship facility for temporary and permanent visa applications would reduce costs for their business. Table 7

Which of the following options would be most effective for your business?

A single sponsorship facility for temporary andpermanent visa applications for an extendednumber of years with the requirement to submitan annual return to demonstrate compliancewith the obligations

A single sponsorship facility for temporary andpermanent visa applications for a three yearperiod during which time the immigrationdepartment could conduct a monitoring audit toinvestigate compliance with the obligations.

The current arrangement with subclass 457 visasponsorship approval for three years duringwhich time the immigration department couldconduct a monitoring audit and a separatenomination for each applicant for permanentresidence.


Table 8

Towards a simpler sponsorship framework Current state – Criteria for approval relating to business

Requirement of business

Long stay activity sponsor Subclass 401 visa exchange stream

Training and research sponsor Subclass 402 visa Professional development stream

Training and research sponsor Subclass 402 visa occupational trainee and research streams

Standard business sponsor Subclass 457 visa standard business sponsorship stream

Employer nomination scheme Subclass 186 and subclass 187 visas transition stream

Employer nomination scheme Subclass 186 and subclass 187 visas direct entry stream

Active and lawful operations

Sponsorship

Sponsorship

Sponsorship

Sponsorship

Nomination

Nomination

Training local workforce – see Table 9 for range of criteria relating to training

Sponsorship

Nomination

Nomination

Employment with sponsor or associated entity

Sponsorship

Nomination

Nomination

No adverse information

Nomination

Sponsorship

Nomination

Sponsorship

Nomination

Nomination

Commitment to occupational opportunities for local workforce

Nomination

Visa

Visa

Sponsorship


Table 9

Current state – Inconsistencies in training criteria

Long stay activity sponsor Subclass 401 visa exchange stream

Training and research sponsor Subclass 402 visa Professional development stream

Training and research sponsor Subclass 402 visa occupational trainee and research streams

Standard business sponsor Subclass 457 visa standard business sponsorship stream

Employer nomination scheme Subclass 186 and subclass 187 visas transition stream

Employer nomination scheme Subclass 186 visa direct entry stream

Requirement to train Australian citizen and permanent residents at time of employer application

A reciprocal exchange opportunity for Australian citizen or permanent resident employees

None None Meets training benchmarks at time of sponsorship application – i.e. expenditure in 12 month period prior to date of application AND When applying for a further sponsorship, show met obligation to meet training benchmarks for each 12 month period of previous sponsorship approval, based on the anniversary date of sponsorship approval.

Subclass 457 visa sponsoring entity met training benchmarks for each 12 month period of previous sponsorship approval, based on the anniversary date of sponsorship approval. (NOT required to meet benchmarks at time of nomination application.)

Employing or proposed employing entity meets training benchmarks at time of nomination application– i.e. expenditure in 12 month period prior to date of application


6. A new visa for the new economy - Global Mobility Visa

One consistent message that business gave us during our consultations is that the subclass 457 visa programme fails to meet the needs of global business as there is no flexibility. The subclass 457 visa programme is burdened by an accumulation of ad hoc integrity measures. The subclass 457 visa programme does not meet the needs of global businesses where short term projects are the norm.

457 is a "migration to live here" visa, that is not aligned to short term project work e.g. offshore oil and gas, resources, technology transfer etc. Not aligned to the needs of short to medium term projects where foreign workers are FIFO [fly-in-fly-out] or here for a short term with highly specialised skills that are usually very rare, industry specific or company specific (proprietary systems). Puts us in a situation where we are looking at how we can work offshore rather than Australia, which is wrong. Nothing fits for a person who is a world class specialist and needs to pop in and out of Australia for work. Similar for a project with unknown timeframes which becomes a notification issue.

Global businesses need to relocate human resources quickly and strategically. They also have strategies to develop employees across borders. Providing for the streamlined entry of intra-company transferees will improve productivity and competitiveness.

6.1 Recommendation 25 The proposed subclass 455 Global Mobility Visa offers a solution to these problems. Details of the proposal are provided in the Framework poster. In summary: Streamlined nomination criteria:

• Nomination by human capital sponsor • Nomination by human capital sponsor • Sponsor is part of a group of companies with “substantial international operations”:

• operations in at least three countries • operating in at least 2 countries for at least 12 months

• Occupation on the CSOL excluding ANZSCO group 3 occupations Technicians and Trades • Guaranteed annual earnings or base salary at least the temporary skilled migration income

threshold • Other terms and conditions of employment equivalent at Australian standards • In the last 2 years, the nominated individual has at least 12 months employment with one

or more associated entities of the sponsor • Genuine position

Streamlined visa criteria:

• Suitable skills and qualifications • Suitable skills and qualifications • Meet health and character • Valid health insurance


Visa conditions:

• Only work in the nomination role and occupation • Maintain health insurance • Notify of cessation of employment with sponsor in 28 days • Up to 12 months absence overseas to allow for streamlined transfer of personnel within group

with substantial international operations

6.2 Impact • Improved capacity for Australian business to complete in the global economy • Reducing administration costs for business • Reducing administration costs for the Department of Immigration and Border Protection • Allowing the Department of Immigration and Border Protection to target assessment

resources at cases requiring scrutiny


7. Transformational change - decision-making alliance

7.1 Issue To ensure the programme is effective, it must be responsive to the needs of business. A significant challenge faced by business sponsors is the time-lag between recruitment and onboarding. We have seen a reduction of the immigration department’s processing timeframes for subclass 457 visa applications recently. Nonetheless, processing times remains sensitive to fluctuations in application rates and staffing levels. The current assessment process for subclass 457 visa applications also has notable inefficiencies, in particular, the duplication of the assessment of applications. Prior to application lodgement, migration agents undertake a thorough assessment and applications are decision ready. After lodgement, the same administrative tasks and assessments are undertaken by the immigration department assessing case officer. The approval rate for subclass 457 visas has always been very high with a high proportion of applications falling into the low risk profile. This is partly the result of the higher rate of migration agent assisted applications compared with other visa programmes. We recommend a collaborative processing alliance between the immigration department and accredited migration agents to effectively manage low-risk applications in the subclass 457 visa programme including sponsorship, nomination and visa applications. Such applications should be fast-tracked for finalisation by immigration department offers without the need for a detailed reassessment of all criteria. The immigration department’s role will be to conduct security checks such as Movement Alert List. Other cases, identified by accredited agents as more contentious will be submitted for careful and subjective assessment by immigration department case officers. In the May 2014 report, Towards Responsible Government. the National Commission of Audit has identified the same problem and made the same recommendation:

Recommendation 43: Visa processing The Department of Immigration and Border Protection grants around 4.7 million visas every year. Many visa processing tasks are high volume and low complexity and would be well suited to outsourcing.

Businesses we consulted overwhelmingly agreed that this is an appropriate model and will improve application processing times.

Would EY be an appropriate organization to be a specially accredited trusted migration advisor to enter into a partnership with the immigration department and take on certain responsibilities such as approving low risk applications to improve application processing times?

Answer Options Responses Yes 94.3%

No 5.7% A robust set of indicators should be developed for accreditation of migration agents. Minimum criteria for agent accreditation are detailed in our Accredited Agent Alliance (AAA) Proposal, at Appendix 3. We also recommend that the privilege provided to accredited agents be balanced with increased


penalties where the agent acts unethically or misuse the process. A number of integrity measure are proposed in our Accredited Agent Alliance (AAA) Proposal, at Appendix 3. Our proposal is not dissimilar to the process adopted by the Building Professionals Board, which is an independent NSW Government authority established to oversee building certification. The Building Professional Board has delegated the process of certifying buildings to accredited certifiers. We suggest a similar approach to processing subclass 457 visa applications. The collaboration model between accredited agents and the department should also be extended to employer education programmes as discussed above.

7.2 Recommendation 26 An Accredited Agent Alliance (AAA) scheme as detailed in Appendix 3 AAA Proposal, be developed and trialed

7.3 Impact • Significant reduction in costs for the immigration department • Fast-tracked processing will reduce the cost of facilitating requests for priority processing • Release of departmental resources to focus on integrity measures • Better meet the needs of business sponsors • Certainty in processing timeframes for business • Accredited migration agents will have an incentive to lodge applications of a higher standard

to ensure they can maintain their accreditation


Appendix A Making the most of the talent around us: Discussing change for employer sponsored permanent migration: maintaining the integrity of the legal and policy framework whilst securing economic benefits for Australia.

This paper has been prepared by Ernst & Young in consultation with the Migration Institute of Australia for consideration by the Minister and Assistant Minister for Immigration and Border Protection. Ernst & Young requests that the paper not be disclosed or disseminated into the public domain without prior consent.

Making the most of the talent around us Discussing change for employer sponsored

permanent migration: maintaining the integrity

of the legal and policy framework whilst

securing economic benefits for Australia

December 2013

1

Making the most of the talent around us – December 2013

Table of contents

1. Background ................................................................................................................... 2 2. Summary of recommendations ....................................................................................... 3 3. Introduction .................................................................................................................. 6 4. Detailed analysis and commentary .................................................................................. 7 5. Part 1 - Employer Nomination Scheme – transition stream ................................................. 8

Change in role during employment in Australia ....................................................................... 8 6. Part 1 - Employer Nomination Scheme – transition stream ............................................... 10

Change in ANZSCO classification during employment in Australia ........................................... 10 7. Part 1 – Employer Nomination Scheme – transition stream ............................................... 11

Change to business structure .............................................................................................. 11 8. Part 1 – Employer Nomination Scheme – transition stream ............................................... 13

Secondary subclass 457 visa holders ................................................................................... 13 9. Part 2 – Employer Nomination Scheme – direct entry ...................................................... 14

Aligning the direct entry and transition streams - improved consistency and integrity ............... 14 10. Part 2 – Employer Nomination Scheme – direct entry ...................................................... 17

Change to business structure .............................................................................................. 17 11. Part 3 – Regional Sponsored Migration Scheme .............................................................. 18

Remove inconsistency between legislation and policy on required skills ................................... 18 12. Part 3 – Regional Sponsored Migration Scheme .............................................................. 19

Improve the way “regional” is defined .................................................................................. 19 13. Part 4 – Employer Nomination and Regional Sponsored Migration Schemes generally ......... 20

Empower delegates with discretion in exceptional circumstances ............................................ 20 14. Part 5 - Subclass 457 visa program ............................................................................... 22

English language requirements ............................................................................................ 22 15. Part 5 – Subclass 457 visa program ............................................................................... 24

Reinstate regional subclass 457 visas .................................................................................. 24 16. Part 5 – Subclass 457 visa program ............................................................................... 25

Introduce a temporary skilled migration income threshold with occupational and regional classifications .................................................................................................................... 25

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1. Background

1.1 This discussion paper has been prepared by Ernst & Young (EY) at the request of the Hon Senator Michaelia Cash, Assistant Minister for Immigration and Border Protection, for consideration by Minister Cash and the Hon Scott Morrison MP, Minister for Immigration and Border Protection.

1.2 In 2011, a comprehensive review of the employer-sponsored permanent visa program was carried out by the immigration department. This resulted in significant reforms that were introduced on 1 July 2012.

1.3 The key reforms that resulted from the review were intended to:

► collapse the number of visa subclasses from six to two;

► introduce a streamlined and simplified pathway to employer sponsored permanent

residence for eligible subclass 457 visa holders;

► raise the upper age limit to 50 years; and

► replace exceptional circumstances provisions with objective exemptions.

1.4 In a number of areas the legislative changes may not be fully achieving the intended outcomes of the 2011 review.

1.5 We welcome the opportunity to discuss a range of recommended changes to the current scheme, to improve the effectiveness and responsiveness of the program to a dynamic economy and labour market.

1.6 As a key pathway program for employer-sponsored permanent residence, several recommendations for adjustments to the subclass 457 visa program have been included in this paper.

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2. Summary of recommendations

Part 1 - Employer Nomination Scheme - transition stream

Recommendation 1

Amend the regulations so that the nominee must have been employed by the same employer in positions in respect of which they hold and have held subclass 444, 461 or 457 visas for a total period of at least two of the three years immediately before applying so that promotions and work in closely related skilled positions or occupations consistent with normal career progression do not preclude nominees from the transition stream.

Recommendation 2

Amend procedures advice manual to ensure where it can be demonstrated that an applicant has worked in the same skilled position for at least two years the administrative reclassification of a position in a different ANZSCO occupation four-digit unit does not either preclude applicants from the transition stream or require them to work an additional two years under the new ANZSCO classification.

Recommendation 3

Amend the procedures advice manual to remove the additional requirement that there is an associated entity relationship between the current and original sponsor where there has been a change of sponsor within the previous two years.

Recommendation 4

Amend the regulations or issue a new legislative instrument to allow secondary subclass 457 visa holders who have been employed by their employer for two out of the last three years in the nominated occupation (listed on the Consolidated Skilled Occupation List) and meet all other eligibility requirements to be nominated for a transition stream permanent visa. Alternatively apply an exemption for secondary subclass 457 visa holders under the ‘direct entry’ stream via a legislative instrument similar to what is in place for New Zealand citizens who hold a subclass 444 or subclass 461 visa.

Part 2 - Employer Nomination Scheme - direct entry stream

Recommendation 5

Where the nominating entity is an approved business sponsor or an associated entity of an approved standard business sponsor, align the direct entry stream nomination requirements with those for the transition stream:

► the nominating entity must be the sponsor, and

► the nominating entity must demonstrate that they have continued to meet training

benchmarks in accordance with their obligations as a subclass 457 visa sponsor.

https://legend.immi.gov.au/Migration/2013/28-10-2013/legend_current_mr/Pages/_document00000/_level%20100001/_level%20200001/level%20200002.aspx#JD_103-Subclass45740TemporaryWork40Skilled4141visa

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Recommendation 6

Implement the concept of one sponsorship facility to support both employer nominated permanent residence and sponsored temporary residence nomination applications. Restructure the ENS using the same framework as the subclass 457 visa program:

► Business sponsorship facility for employer for a period of time or a capped number of

nominations;

► Nomination of position;

► Visa application by nominee.

Recommendation 7

Amend the procedure advice manual to allow for change in the employer’s business structure which results in a new employing entity so that eligibility is not impacted where the intent of the exemption is met – that is, where two years of service have been performed in Australia in the same position as the holder of a subclass 444 or 461 visa.

Part 3 - Regional Sponsored Migration Scheme

Recommendation 8

Amend the procedures advice manual to accurately reflect the legislative requirement that the qualifications listed in ANZSCO as being necessary to perform the tasks of Skill Level three occupations, that is, an AQF Certificate III with two years post qualification experience, or an AQF Certificate IV, meet the requirements.

Recommendation 9

In consultation with the States amend legislative instrument IMMI 13/049 to broaden the scope of the definition of “regional Australia” taking into account specific areas of low population growth which require additional skill support, even where those areas fall within a larger region considered metropolitan.

Part 4 - Permanent employer-sponsored visas (generally)

Recommendation 10

Reinstate assessing delegates’ “exceptional circumstances” discretion to waive age, skill and English based upon “exceptional circumstances”. This may also involve including additional policy guidelines for case assessors to guide the use of their discretion whilst at the same time not restricting the circumstances in which an exception can be made.

Part 5 - Subclass 457 visa program

Recommendation 11

Expand the list of authorised English language tests to include the International Second Language Proficiency Rating (“ISLPR”).

https://legend.immi.gov.au/Migration/2013/28-10-2013/legend_current_mr/Pages/_document00000/_level%20100001/level%20200001.aspx#JD_103-ANZSCO

5


Recommendation 12

Amend the legislative instrument IMMI 13/099 to expand the list of countries whose passport holders are automatically deemed to have Vocational English to include South Africa, Singapore, The Philippines and India with exemptions to providing English language test results to apply to applicants who:

► are offered overall guaranteed annual earnings of $96,400;

► are nominated in an occupation classified as ANZSCO skill level 1 or 2;

► have already worked in Australia as the holder of a subclass 457 visa for a prescribed

period of time (for example, at least two years);

► have obtained a Bachelors or Masters degree from an English language institution;

► have completed secondary and/or tertiary studies in English for a period of five years in

total (not consecutive).

Recommendation 13 Re-introduce a regional stream into the subclass 457 visa program, in consultation with the regional certifying bodies, with concessions in the position nomination application to recognize the fundamental labour market differences and recruitment challenges in regional Australia and thereby provide greater flexibility regarding:

► Market salary rates and the Temporary Skilled Migration Income Threshold;

► English language requirements, and

► Skill level of occupations and visa applicants.

Recommendation 14

In consultation with regional certifying bodies, amend the legislative instrument and Consolidated Skilled Occupations List so as to re-introduce occupational and regional classifications for the TSMIT to allow for differences in market rates according to skill level and locations by designated post code.

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3. Introduction

3.1 Australia’s employer-sponsored permanent migration program is intended to be highly responsive to labour market pressures. The permanent visa program is designed to address the short-to-medium term demand for specific skills in the Australian labour market, and ensure that limited program places go to those who will make the greatest contribution to Australia.

3.2 In the 2012-13 program year, skilled migrants were offered nearly 68 per cent of all available places. Employer-sponsored migrants accounted for one-quarter of all program places.1 These figures reflect a change in emphasis from family and reunion migration to skilled and economic migration, supporting the expansion of Australia’s economy with a broader pool of skilled labour.2

3.3 The employer-sponsored permanent migration program has two key tenets:

i. The Employer Nomination Scheme (ENS), which allows employers to sponsor highly

skilled foreign workers for permanent residence to fill genuine vacancies in their

business; and

ii. The Regional Sponsored Migration Scheme (RSMS), which encourages highly skilled

migrants to settle in designated regional areas.

3.4 The ENS and RSMS programs each have a single visa subclass (subclass 186 and subclass 187 respectively) with three streams:

1. Temporary residence transition;

2. Direct entry; and

3. Agreement.

3.5 The temporary residence transition stream is for eligible primary subclass 457 visa holders who have worked in Australia for their nominating employer for at least two years.

3.6 The direct entry stream is designed for applicants who do not meet the transition stream requirements and who are either outside Australia or who are in Australian but “have an untested relationship with their sponsor and limited familiarity with Australian working conditions”3.

3.7 The agreement stream is for applicants sponsored under a labour agreement and is beyond the scope of this paper.

1 Department of Immigration and Citizenship. 2012-2013 Migration Program Report.

2 Australian Bureau of Statistics. Perspective on Migrants: Permanent Migration to Australia – An overview by

Eligibility Category. April 2009. 3 Department of Immigration and Citizenship, Reforms to the Permanent Employer Sponsored Visa Program, May 2012.

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4. Detailed analysis and commentary

Part 1 - Employer Nomination Scheme – transition stream

Temporary residence transition stream

Creating a consistent streamlined pathway

Background

4.1 The temporary residence transition stream is intended to provide a fast-tracked simplified pathway to permanent residence for subclass 457 visa holders who have been tested in the Australian labour market by completing at least two years employment with their Australian employer.

4.2 However, many temporary residents with more than two years experience in skilled roles with Australian employers are not eligible for permanent residence under the transition stream due to several aspects of the current legislative framework and an inflexible policy approach.

4.3 As stated in the immigration department’s May 2012 publication Reforms to the Permanent Employer Sponsored Visa Program, this pathway is streamlined “in recognition of the important economic and social contribution these skilled workers make to Australia.”

4.4 Subclass 457 visa holders with proven skills in the following situations are currently not eligible under the transition stream:

► career promotion and change of role;

► change of ANZSCO occupation classification during employment in the same position;

► business restructure results in a change of ABN or ACN; and

► secondary subclass 457 visa holders.

4.5 In these circumstances, an overly bureaucratic approach effectively restarts the two year clock for applicants who have proven skills in the Australian labour market. The current legislation and policy discourages and penalises promotion and flexible business practices - tying up business in unnecessary red tape to meet immigration requirements.

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5. Part 1 - Employer Nomination Scheme – transition stream

Change in role during employment in Australia

Legislation and policy summary

► The nominee must have been employed in the position in respect of which they hold the subclass 457 visa for a total period of at least two of the three years immediately before applying: regulation 5.19(3)(c)(i)(A)(II).

► The nominator must identify an occupation that has the same four-digit occupation unit group code as the occupation carried out by the holder of the subclass 457 visa: regulation 5.19(3)(a)(iii)(B).

► Policy instructs decision makers that changes in position such as promotion are acceptable so long as the new role continues to fall within the same ANZSCO occupation four-digit unit group.

5.1 In practice when assessing applications, the immigration department requires nominees to have been working in the same position and the same ANZSCO occupation four-digit unit group for at least two out of the last three years immediately before applying.

5.2 Nominees who have diverse skill sets and worked in different roles, or have performed well and consequently been promoted do not meet the requirements of the transition stream.

5.3 This issue also arises with holders of subclass 444 and subclass 461 visas applying under the direct entry stream. A change in position may restart the two year clock.




https://legend.immi.gov.au/Migration/2013/28-10-2013/legend_current_mr/Pages/_document00000/_level%20100008/level%20200214.aspx#JD_444-SPECIALCATEGORY

https://legend.immi.gov.au/Migration/2013/28-10-2013/legend_current_mr/Pages/_document00000/_level%20100008/level%20200228.aspx#JD_461-NZCITIZENFAMILYR39SHIP40TEMP41

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5.4 As an example:

A senior engineering manager has been employed for three years with her Australian employer on a subclass 457 visa in the occupation of Engineering Manager (ANZSCO 133211). As a result of promotion to the role of General Manager, her occupation changes to Corporate General Manager (ANZSCO 111311). A new subclass 457 nomination application is lodged and approved under the new occupation.

5.5 Under the current regulations and procedures advice manual, the two years of qualifying service is considered to have restarted from the day the new nomination was approved. As a General Manager, the nominee cannot lodge an ENS application relying upon the previous three years of engineering work for the purpose of meeting the two year qualifying period in the transition stream. The visa holder will only qualify in the transition stream after two years as a General Manager.

Recommendation 1

5.6 Amend the regulations so that the nominee must have been employed by the same employer in positions in respect of which they hold and have held subclass 444, 461 or 457 visas for a total period of at least two of the three years immediately before applying so that promotions and work in closely related skilled positions or occupations consistent with normal career progression do not preclude nominees from the transition stream.

Impact

5.7 This amendment would acknowledge flexibility in the modern work place where nominees who have worked for two years or more in different skilled roles with one employer are eligible to continue to make an economic contribution particularly as they have a proven track record with the employer.


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6. Part 1 - Employer Nomination Scheme – transition stream

Change in ANZSCO classification during employment in Australia


► The nominee must have been employed in the position in respect of which they hold the subclass 457 visa for a total period of at least two of the three years immediately before applying: regulation 5.19(3)(c)(i)(A)(II).

► In practice, the immigration department also requires that a nominee’s position has been classified under the same four-digit ANZSCO occupation unit group for at least two years.

6.1 This presents a problem where the tasks of a particular single position legitimately correspond to more than one ANZSCO occupation. It is widely acknowledged that ANZSCO classifications are indicative only and can be generic.

6.2 As an example:

A qualified Accountant providing advisory services to clients has legitimately been approved by the immigration department as an Accountant (ANZSCO 221111) for one subclass 457 visa and as a Management Consultant (ANZSCO 224711) for the next visa while working in the same position.

If the nominee worked in their position for at least two years, the legislative requirement above will be met. However, because the ANZSCO occupation is not in the same four-digit unit group, the nominee would need to work for at least two years on their second visa before becoming eligible under the transition stream.

Recommendation 2

6.3 Amend procedures advice manual to ensure where it can be demonstrated that an applicant has worked in the same skilled position for at least two years the administrative reclassification of a position in a different ANZSCO occupation four-digit unit does not either preclude applicants from the transition stream or require them to work an additional two years under the new ANZSCO classification.

Impact

6.4 This amendment will bring the policy in line with the intent of the temporary residence transition stream and ensure procedural fairness for those temporary visa holders who have been tested and proven in the Australian labour market.



11


7. Part 1 – Employer Nomination Scheme – transition stream

Change to business structure


► Subclass 457 visa holders are authorised to work for either their sponsor, or an associated entity (within the meaning of section 50AAA of the Corporations Act 2001) of the sponsor. Hence, many subclass 457 visa holders are employed by one entity and sponsored by an associated entity within the group.

► If a business restructure occurs, the associated entity relationship between the sponsoring and employing entities may no longer exist. A new subclass 457 nomination will then be required to transfer the visa holders’ sponsorship to a new sponsoring entity.

► Legislation for an ENS nomination requires that the nominator is or was the most recent business sponsor for purposes of the subclass 457 visa: regulation 5.19(3)(b)(i).

► Policy for ENS transition stream nominations provides detailed instructions to decision makers where there has been a business restructure:

► If ... at the time the nomination is made, a relationship under s50AAA between the nominator and the previous sponsor can be established, the time spent working for the former employer may be counted towards the 2 year requirement for the purposes of regulation 5.19(3)(c)(i)(A).

► If a relationship under s50AAA cannot be established in circumstances involving a sale, takeover or substantial restructure of the nominator's business, any period of employment with the former employer does not count towards the 2 year employment requirement. This applies even if the:

• nominee is still working in the same position, performs the same duties, and has the

same working conditions

• nominee reports to the same management structures or

• nominator retains the same business name and operations, but is considered to be

a new legal entity.

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Issue

7.1 In effect, the procedures advice manual creates an additional requirement not reflected in the regulations.

7.2 Where there is a business restructure (and section 50AAA of the Corporations Act 2001 does not maintain an association between the entities) many nominees cannot apply under the transition stream despite at least two years employment in the same position. This runs counter to the purpose of the transition stream which is to provide a streamlined pathway for subclass 457 visa holders whose skills and experience have been demonstrated in the Australian labour market.

Recommendation 3

7.3 Amend the procedures advice manual to remove the additional requirement that there is an associated entity relationship between the current and original sponsor where there has been a change of sponsor within the previous two years.

Impact

7.4 The intent of the temporary residence transition stream will continue to be met. This will enable the program to be responsive to the realities of the changing dynamics of business structures and ownership.

13


8. Part 1 – Employer Nomination Scheme – transition stream

Secondary subclass 457 visa holders


► Under current legislation, the nominee must have been granted the subclass 457 visa as a primary applicant in order to apply under the ‘transition stream’: regulation 5.19(3)(a)(ii) and 5.19(3)(b)(i).

Issue

8.1 Many secondary subclass 457 visa holders are skilled professionals who take up full time work in Australia. Many employers wish to nominate these employees for permanent residence under the transition stream but are unable to do so based on the current criteria, despite the employee and employer meeting all other eligibility requirements.

Recommendation 4

8.2 Amend the regulations or issue a new legislative instrument to allow secondary subclass 457 visa holders who have been employed by their employer for two out of the last three years in the nominated occupation (listed on the Consolidated Skilled Occupation List) and meet all other eligibility requirements to be nominated for a temporary residence transition stream subclass 186 permanent visa. Alternatively apply an exemption for secondary subclass 457 visa holders under the ‘direct entry’ stream via a legislative instrument similar to that which is in place for New Zealand citizens who hold a subclass 444 or subclass 461 visa.

Impact

8.3 Bring legislation and the procedures advice manual in line with the intent of the temporary residence transition stream, ensuring procedural fairness for those temporary visa holders (secondary subclass 457 visa holders) who have demonstrated skills and experience in the Australian labour market. The intent of the temporary residence transition stream will continue to be met.

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9. Part 2 – Employer Nomination Scheme – direct entry

Aligning the direct entry and transition streams - improved consistency and integrity

Background

9.1 The direct entry stream is available to applicants who are not eligible under the transition stream. This stream has additional requirements based on the assumptions that:

► nominees are untested in the Australian labour market, and

► employers do not have a tested relationship with the immigration department.

9.2 Nominees in this stream must prove their skills and qualifications by undergoing a formal skills assessment and demonstrating at least three years relevant post-qualification work experience in their nominated occupation, unless exempt.

9.3 Direct entry nominators must be the direct employer of the nominee in contrast to applicants applying via the transition stream where the nominee must be nominated by the entity that sponsored them for their subclass 457 visa, while the employer may be an associated entity of the sponsor.

9.4 This element of the transition stream operates as an integrity measure for the subclass 457 visa program; at the time of nominating each individual for permanent residence, the sponsor or nominator must demonstrate that they have continued to meet training benchmarks in accordance with their obligations as subclass 457 visa sponsors.

9.5 Under the direct entry stream, the direct employer, and therefore the nominator, must show that they meet the training benchmarks only at the time of each nomination for permanent residence. This reflects the assumption that these employers do not have an ongoing and tested relationship with the immigration department.

15


Issue

9.6 Some employers nominating employees via the direct entry stream face challenges meeting the training benchmarks not because they are not committed to investing in training their Australian workforce but due to legitimate business arrangements.

9.7 Entities operating under a group structure approach corporate management as well as operational and administration issues differently from a smaller single entity. A corporate group with multiple associated entities may assign certain activities and expenses to specific entities. For example, a group’s learning and development function may be managed by one entity within a group, even though that training is delivered to employees of all entities within the group. Another example is where the payroll function of the entire group is managed by one entity, even though the payment of remuneration is to all employees of all entities within the group. Where an entity cannot show payroll or training expenditure in their financial accounts, their business and employees are disadvantaged as they do not meet the training benchmark requirements to apply via the direct entry stream.

9.8 EY understands that the requirements of the direct entry stream have been designed for and are suitable for situations where an untested employer wishes to nominate a nominee from overseas.

9.9 In EY’s experience, employers rarely nominate employees for permanent residence where they have not been tested within their workforce. In almost all cases, direct entry stream nominees are already in Australia working for the nominating employer. They apply under the direct entry stream because they have either worked in Australia for less than two years or have faced one of the issues with the transition stream described above. In other cases, the nominee may be working for the nominating employer in an overseas operation.

9.10 As an example:

Since 1 July 2012, EY has assisted with the preparation and lodgement of approximately 500 applications via the direct entry stream. Of these applications, less than a handful have been nominees who were not already working in Australia for the nominating employer; this represents less than one per cent of the number of applications. In all but one of this handful of cases, the nominating employer was either an approved business sponsor, or the associated entity of an approved sponsor. In the one exceptional case, the employer was a former business sponsor.

9.11 In this handful of cases, nominees have primarily sought to apply for permanent residence via the direct entry stream before commencing employment in Australia for immigration-driven reasons, such as an impending fiftieth birthday which will take them over the age threshold. They have simultaneously obtained a subclass 457 visa in order to commence work in Australia without delay while the permanent visa application is processed.

16


Recommendation 5

9.12 Align the streams

Where the nominating entity is an approved business sponsor or an associated entity of an approved standard business sponsor, align the direct entry stream nomination requirements with those for the transition stream:

► the nominating entity must be the sponsor, and

► the nominating entity must demonstrate that they have continued to meet training benchmarks in accordance with their obligations as a subclass 457 visa sponsor.

Recommendation 6

9.13 Single sponsorship approval for temporary and permanent residence and restructure ENS along the lines of a temporary sponsorship

Implement the concept of one sponsorship facility to support both employer nominated permanent residence and sponsored temporary residence nomination applications. Restructure the ENS using the same framework as the subclass 457 visa program:

1. Business sponsorship facility for employer for a period of time or a capped number of

nominations;

2. Nomination of position;

3. Visa application by nominee.

17


10. Part 2 – Employer Nomination Scheme – direct entry

Change to business structure


► Holders of subclass 444 and 461 visas, New Zealand citizens and their family members, must apply under the direct entry stream as the transition stream is only available to subclass 457 visa holders.

► Holders of subclass 444 and 461 visas are exempt (by way of legislative instrument) from the standard direct entry requirements of having a formal skills assessment and demonstrating at least three years employment experience.

► This effectively creates a transition stream pathway for holders of subclass 444 and 461 visas who have been working for their nominating employer in the nominated occupations for at least two years.

Issue

10.1 A change in the employer’s business structure which results in a new employing entity will restart the two year clock for holders of subclass 444 and subclass 461 visas who would otherwise meet the requirements of working in the same skilled position for at least two years.

10.2 Despite at least two years employment in the same position many nominees cannot apply under the direct stream exemptions where there has been a business restructure resulting in a change of employer. This runs counter to the purpose of the exemption which is to provide a streamlined pathway for holders of subclass 444 and subclass 461 visas who have been tested and proven in the Australian labour market.

Recommendation 7

10.3 Amend the procedure advice manual to allow for change in the employer’s business structure which results in a new employing entity so that eligibility is not impacted where the intent of the exemption is met – that is, where two years of service have been performed in Australia in the same position as the holder of a subclass 444 or 461 visa.

Impact

10.4 The intent of the direct stream exemption for subclass 444 or 461 visa holders will be met. This will ensure procedural fairness for those temporary visa holders who have demonstrated skills and experience in the Australian labour market.





18


11. Part 3 – Regional Sponsored Migration Scheme

Remove inconsistency between legislation and policy on required skills

Background

11.1 The RSMS regulations require the nominee to demonstrate they have “the qualifications listed in ANZSCO as being necessary to perform the tasks of the occupation”. The immigration department recently revised the procedures advice manual so nominees in most non-trade occupations who hold a Certificate IV are required to demonstrate two years of professional experience in addition to the qualification.

Issue

11.2 Skill Level three occupations are listed in ANZSCO as having an indicative skill level of an AQF Certificate III with two years post qualification experience, or an AQF Certificate IV. In this situation, policy now goes beyond the legislative requirement by requiring professional experience in addition to the qualification.

Recommendation 8

11.3 Amend the procedures advice manual to accurately reflect the legislative requirement that the qualifications listed in ANZSCO as being necessary to perform the tasks of Skill Level three occupations, that is, an AQF Certificate III with two years post qualification experience, or an AQF Certificate IV, meet the requirements.

Impact

11.4 Achieve consistency between legislation and policy, avoiding confusion and future review of decisions made based on the policy inconsistency.


https://legend.immi.gov.au/Migration/2013/28-10-2013/legend_current_mr/Pages/_document00000/_level%20100008/level%20200145.aspx#JD_187111-occupation


19


12. Part 3 – Regional Sponsored Migration Scheme

Improve the way “regional” is defined

Background

12.1 Visas with special designation for regional Australia are intended to help businesses in regional, remote or low population growth areas, outside the major metropolitan areas of Brisbane, Gold Coast, Sydney, Newcastle, Wollongong and Melbourne, to recruit skilled workers to fill positions that are unable to be filled from the local labour market.

12.2 Certain geographical areas are designated part of “regional Australia” under regulation 5.19(7). Those areas are specified according to post code by legislative instrument IMMI 13/049.

Issue

12.3 Some areas which should be considered part of “regional Australia” from a population growth perspective are not captured by the legislative definition as the post codes in the broader metropolitan areas absorb these areas as well.

12.4 As an example:

The Hunter Valley of New South Wales is not considered to be a part of regional Australia for the purposes of the migration legislation because it falls under the Newcastle/Hunter local government area. However, from a population growth perspective, the Hunter Valley could and should be considered a regional area which would benefit from this designation.

Recommendation 9

12.5 In consultation with the States amend legislative instrument IMMI 13/049 to broaden the scope of the definition of “regional Australia” taking into account specific areas of low population growth which require additional skill support, even where those areas fall within a larger region considered metropolitan.

Impact

12.6 Businesses in low population growth areas within broader areas considered metropolitan are also supported to fill short to medium term skill shortages that cannot be filled from the local labour market.

20


13. Part 4 – Employer Nomination and Regional Sponsored Migration Schemes generally

Empower delegates with discretion in exceptional circumstances

Background

13.1 Prior to 1 July 2012, delegates of the Minister were empowered to use their discretion in exceptional circumstances to waive criterion for age, English language and skills requirements for employer-sponsored permanent visas. This discretion facilitated the entry of permanent migrants to Australia where that entry was in line with the broader intent of the program. The discretionary power was removed on 1 July 2012 and replaced by exemptions from the age,

English language and skills requirements specified in legislative instruments.

Issue

13.2 Failure to allow for discretion on age, skills and English language requirements in exceptional circumstances restricts the employer-sponsored program from providing a highly-responsive framework for employers to fill genuine shortages. This is particularly relevant in those cases where the permanent visa applicant is already living and working in Australia, the position is based in a regional area, or the skill of the applicant is highly specialised. This is also inhibits the

eligibility of very senior professionals applying for permanent residence.

13.3 As an example:

A 51 year old primary school teacher is located in a remote regional area as a subclass 457 visa holder for two years, with a spouse also gainfully employed and two children at school. The teacher is currently ineligible to apply for employer-sponsored permanent residence (or General Skilled Migration) as she does not meet the age requirement of less than 50 years. Her salary level and occupation do not render her eligible to meet any of the narrow exemptions for age which currently exist for employer sponsored visas until she has completed four years of employment with her sponsor on her subclass 457 visa and has earnings equivalent to the Fair Work High Income Threshold for each of those four years.

21


Recommendation 10

13.4 Reinstate discretion of assessing delegates to waive age, skill and English based upon “exceptional circumstances”. This may also involve including additional policy guidelines for case assessors to guide the use of their discretion whilst at the same time not restricting the circumstances in which an exception can be made.

Impact

13.5 Australian businesses will be better empowered to fill short-to-medium term labour gaps in circumstances where an existing or prospective employee

22


14. Part 5 - Subclass 457 visa program

English language requirements

Background

14.1 Applicants are required to have Vocational English for grant of a subclass 457 visa. Vocational English is currently defined as being an IELTS score of 5.0 on each of the four components (reading, writing, listening, speaking) of the test conducted not more than three years prior to the application. Prior to 1 July 2013, applicants nominated for occupations in ANZSCO skill levels one and two were exempt from this requirement. On 1 July 2013, English language requirements for subclass 457 visas were changed to remove occupation exemptions. Exemptions to formal English language testing to demonstrate vocational English are currently in place where:

► a base salary of $96,400 will be paid;

► applicants hold passports from New Zealand, United Kingdom, United States of America,

Ireland or Canada; or

► the applicant can demonstrate five consecutive years of full time secondary or tertiary

education where the language of instruction was English.

Issues

14.2 The changes have led to a higher number of subclass 457 visa applicants required to undertake an English language test in circumstances where it may not be necessary or reasonable.

14.3 Delays in the availability of places for the IELTS examination are significantly slowing visa processing times and impacting Australian businesses with urgent skills shortages.

14.4 Many existing subclass 457 visa holders who were exempt for purposes of their initial subclass 457 application and have worked in Australia for up to four years, and then apply for a second 457 visa, must undertake an English language examination.

23


14.5 The study exemption is unnecessarily onerous. The requirement that the five years of study be consecutive means that many applicants who had a break in their education, such as for work and travel or other personal reasons, do not meet the exemption. The five year requirement means that applicants who have completed full-time tertiary study in Australia or other native English language countries at either Bachelor or Master level may still be required to undertake an English language examination.

14.6 Consideration must be given to the fact that subclass 457 visas are employer demand-driven, and employers will also assess whether or not an applicant has suitable English language skills.

Consideration must also be given to the skill and employment experience of applicants who may have studied or even worked in English speaking countries for a significant period of time.

14.7 As an example:

A Mining Engineer (excluding petroleum) – ANZSCO 233611 – who holds a passport from France has applied for a subclass 457 visa. The engineer has completed a Bachelor Degree in Science of four years duration at an English-language university in the United Kingdom. The engineer is offered a base salary of $80,000, and overall guaranteed annual earnings of $160,000, by his prospective Australian employer. Under the current rules, the engineer would not meet the study or salary exemptions, and would be required to sit an English language examination to prove his English language skills.

14.8 Consider the same engineer in the above example, and that he has already worked successfully in Australia for four years on a subclass 457 visa. He is now applying for a second subclass 457 visa. Under the current rules, the engineer would be required to sit an examination to prove his English language skills.

Recommendation 11

14.9 Expand the list of authorized English language tests to include the International Second Language Proficiency Rating (“ISLPR”) test.

Recommendation 12

14.10 Amend the legislative instrument IMMI 13/099 to expand the list of countries whose passport holders are automatically deemed to have Vocational English to include South Africa, Singapore, The Philippines and India with exemptions to providing English language test results to apply to applicants who:

► are offered overall guaranteed annual earnings of $96,400;

► are nominated in an occupation classified as ANZSCO skill level 1 or 2;

► have already worked in Australia as the holder of a subclass 457 visa for a prescribed

period of time (for example, at least two years);

► have obtained a Bachelors or Masters degree from an English language institution;

► have completed secondary and/or tertiary studies in English for a period of five years in

total (not consecutive).

Impact

14.11 Improvement in the efficiency of subclass 457 visa processing and reduction in the administrative burden on the department.

24


15. Part 5 – Subclass 457 visa program

Reinstate regional subclass 457 visas

Background

15.1 Regional subclass 457 visa arrangements were previously in place to provide fast and flexible entry to regional Australia for suitably skilled workers offered temporary roles in Australian businesses operating in regional and low-population growth areas of Australia. The regional subclass 457 visa program was abolished in 2009.

15.2 Concessions were in place in the regulations to provide greater flexibility regarding:

► Minimum salary level (now market salary rate);



Issue

15.3 Employers in regional areas struggle to locally source skilled labour to fill vacancies. The reintroduction of a regional subclass 457 visa program will encourage employers in regional Australia to expand and increase employment levels, and act as a key feeder program for the permanent Regional Skilled Migration Scheme program.

Recommendation 13

15.4 Re-introduce a regional stream into the subclass 457 visa program, in consultation with the regional certifying bodies, with concessions in the position nomination application to recognize the fundamental labour market differences and recruitment challenges in regional Australia and thereby provide greater flexibility regarding:

► Market salary rates and the Temporary Skilled Migration Income Threshold;



Impact

15.5 Businesses in low population growth areas are supported to fill short to medium term skill shortages that cannot be filled from the local labour market.

25


16. Part 5 – Subclass 457 visa program

Introduce a temporary skilled migration income threshold with occupational and regional classifications

Background

16.1 The current Temporary Skilled Migration Income Threshold (TSMIT) applies the same minimum base salary across all occupations on the Consolidated Sponsored Occupation List. The TSMIT is currently set at $53,900 per annum.

16.2 Policy states that the TSMIT “provides a benchmark against which the ‘market salary rate’ is measured. This ensures that subclass 457 visa holders, who must be paid terms and conditions of employment that are no less favourable than the ‘market salary rate’, can be self reliant and maintain a reasonable standard of living in Australia and not find themselves in circumstances that may put pressure on them to breach their visa conditions, given their ineligibility to access government income support payments and some other government-funded services.”

Issue

16.3 Whilst the market salary rate requirement is reflective of locality, the TSMIT is set at a rate which does not take into consideration regional locations. A generic base rate which applies equally across all occupations and locations limits the intent of the subclass 457 visa program and prevents some employers, particularly those in regional areas, from being able to fill short and medium term skill shortages. The market rate of pay for an occupation classified as ANZSCO skill level one is highly unlikely to be the same as an occupation classified as skill level three or four. The current TSMIT rate of $53,900 is much higher than the national minimum wage of approximately $32,355 per annum ($622.20 per week).

16.4 As an example:

A business in a small country town (“designated as regional Australia”) employs an Australian in the position of Fitter (ANZSCO 323311). The Australian employee’s salary of $51,000 is considered the market rate of pay for the occupation in that particular area. The business has won a new contract and urgently requires a second Fitter. Unable to recruit locally, the business seeks to utilise the subclass 457 visa program, but is unable to do so as the nominated salary, the same as that offered to the equivalent Australian worker at the same location, is below the current TSMIT and thereby cannot be nominated.

Recommendation 14

16.5 In consultation with regional certifying bodies, amend the legislative instrument and Consolidated Skilled Occupations List so as to re-introduce occupational and regional classifications for the TSMIT to allow for differences in market rates according to skill level and locations by designated post code.

Impact

16.6 Australian regional businesses are better empowered to fill short-to-medium term labour gaps while paying market rates.

26


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insights and quality services we deliver help build trust and confidence in the

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Appendix B Labour market testing – issues to be clarified by the department

Labour market testing – issues to be clarified

by the department

Labour market testing – issues to be clarified by the department e EY i

Table of contents

1. Exemption based on Australia’s international trade obligations .......................................... 1 1.1 Immigration department policy .................................................................................. 1 1.2 Issue for clarification ................................................................................................ 1 1.3 Recommendation ..................................................................................................... 1 1.4 Issue for clarification ................................................................................................ 1 1.5 Recommendation ..................................................................................................... 2 1.6 Issue for clarification ................................................................................................ 2 1.7 Recommendation ..................................................................................................... 2 1.8 Issue for clarification ................................................................................................ 2 1.9 Recommendation ..................................................................................................... 2

2. Labour market testing by way of advertisements .............................................................. 3 2.1 Immigration department policies ............................................................................... 3 2.2 Issue for clarification: ............................................................................................... 3 2.3 Recommendation ..................................................................................................... 3 2.4 Issue for clarification ................................................................................................ 4 2.5 Recommendation ..................................................................................................... 4 2.6 Issue for clarification ................................................................................................ 4 2.7 Recommendation ..................................................................................................... 4

3. Nomination only application by same sponsoring company ................................................ 5 3.1 Legislation .............................................................................................................. 5 3.2 Issue for clarification ................................................................................................ 5 3.3 Recommendation ..................................................................................................... 5 3.4 Issue for clarification ................................................................................................ 5 3.5 Recommendation ..................................................................................................... 6

Labour market testing – issues to be clarified by the department e EY 1

1. Exemption based on Australia’s international trade obligations

1.1 Immigration department policy Specialists with 2 years employment in Australia1

Specialists are persons who have trade, technical or professional skills who have been nominated by either an Australian or overseas business following two years full-time employment in Australia with the same nominating employer. Labour market testing is not required if the nominee is:

• a citizen of a WTO member country (see section 62.2 WTO member countries) and • is nominated by an employer who they have worked for in Australia on a full-time basis for 2

years.

1.2 Issue for clarification A nominee (who is a citizen of a World Trade Organisation country) has been working for the sponsoring employer (the end user) in Australia through approved on-hire arrangements for the past two years. Policy does not clarify whether the employment period with the sponsoring employer, being the end user, can be counted for the purpose of meeting the two year full-time employment requirement that would enable an exemption from the labour market testing requirement.

1.3 Recommendation EY recommends additional policy guidance to be provided so that full-time employment is understood to include approved on-hire and subcontract arrangements because the end user benefit from the nominee’s work through the indirect employment no less than through a direct employment relationship between the nominee and the sponsoring employer.

1.4 Issue for clarification A nominee (who is a citizen of a World Trade Organisation country) has been working for the sponsoring employer in Australia through for the past two years as the holder of a secondary subclass 457 visa or some other visa with permission to work. Policy does not clarify whether this period of employment will be able to be counted for the purposes of the exemption counted for the purpose of meeting the two year full-time employment requirement that would enable an exemption from the labour market testing requirement even though the nominee has not held a subclass 457 visa as the primary sponsored person with the sponsoring employer.

1

PAM3 - MIGRATION REGULATIONS - SCHEDULES - Sch2 Visa 457 - Temporary Work (Skilled) - Nominations and visa applications – 62.6

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_mp/Pages/_document00003/_level%20100176/level-200754-1.aspx#622

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_mp/Pages/document00003.aspx

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_mp/Pages/_document00003/level%20100176.aspx


1.5 Recommendation EY recommends additional policy guidance to be provided to confirm that the two year full-time employment period is not contingent upon the nominee holding a primary subclass 457 visa with the sponsoring employer for that two year period; the nominee should be able to have held any visa with appropriate work rights.

1.6 Issue for clarification Policy does not clarify whether the calculation in determining the two year full-time employment period is based on consecutive or cumulative time; and how periods of leave (including paid or unpaid parental leave) are dealt with.

1.7 Recommendation EY recommends that the two year full-time period should be cumulative over a three year period immediately prior to the nomination application and excludes any period of unpaid leave. This would be consistent with the assessment of two year full-time employment under the Temporary Residence Transition nomination stream of the employer nominated permanent subclass 186 or subclass 187 visa pathways (subparagraph 5.19(3)(c)(i)). Exclusion of unpaid leave, should not apply, if the nominee is a person that holds a subclass 457 visa and is approved for a nominated occupation that permits the visa holder to work in positions other than in the business of the nominator. This is also consistent with the assessment of two year full-time employment under the Temporary Residence Transition nomination stream of the employer nominated permanent subclass 186 or subclass 187 visa pathways (subparagraph 5.19(3)(c)(ii)).

1.8 Issue for clarification A nominee is a person holding a subclass 457 visa and is approved for a nominated occupation that permits the nominee to work in positions other than in the business of the nominator. Policy does not clarify whether time spent working for different businesses can count towards the two year full-time employment.

1.9 Recommendation EY recommends that the nominee is a person that holds a subclass 457 (Temporary Work (Skilled)) visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B), who are visa holders permitted to work in positions other than in the business of the nominator, the two year full-time employment should include cumulative time spent working with the sponsoring company and other businesses recognised by the visa condition 8107 per subclause 8107(3A), which is consistent with the above mentioned sub-subparagraphs.


2. Labour market testing by way of advertisements

2.1 Immigration department policies Satisfying the labour market testing condition2

The labour market testing condition is satisfied if the decision maker is satisfied that:

• The sponsor has undertaken labour market testing and • On the basis of the information and evidence provided in relation to the testing, there is no

suitably qualified and experienced Australian citizen, Australian permanent resident or eligible temporary visa holder (see section 59.6 Eligible temporary visa holders) readily available to fill the nominated position.

Advertising3

The information relating to the sponsor’s attempts to recruit an Australian worker must include evidence of any advertising (paid or unpaid) of the position, and any similar positions. The advertising may have been undertaken by a third party, provided the third party was commissioned or authorised by the applicant to advertise the position. There is no requirement that the applicant must have placed the advertisement themselves. If an applicant provides a document containing details of any advertising undertaken relating to the nominated position or similar positions, decision makers may consider this requirement met with no further enquiry unless there are indications that the claims have been falsely given or there are other integrity concerns. Advertising fees4

If the applicant has included evidence relating to advertising the nominated position, they must also provide details of the fees and any other expenses paid (or payable) for that advertising.

2.2 Issue for clarification: Policy does not clarify where the nominator wishes to rely on evidence of paid advertisement whether the sponsor has to keep a record of individual invoices or itemised invoices showing payment made for the corresponding advertisement for the nominated occupation.

2.3 Recommendation EY recommends that a letter of explanation from the company detailing the payment arrangement they have with the recruitment agency should be sufficient to meet the mandatory disclosure of fees or other expenses paid for the advertisement. EY’s clients have advised that they actively engage recruitment agencies as part of their recruitment drive. However, due to the nature and size of their businesses, they receive monthly invoices from the recruitment agency. The invoice would not necessarily itemise each advertisement placed on behalf of the company, nor specify cost of each advertisement placed. As such these companies would not be able to keep a record of actual fees paid for the advertisement associated with the nominated position.

2

PAM3 - MIGRATION REGULATIONS - SCHEDULES - Sch2 Visa 457 - Temporary Work (Skilled) - Nominations and visa applications – 59.5 3

PAM3 - MIGRATION REGULATIONS - SCHEDULES - Sch2 Visa 457 - Temporary Work (Skilled) - Nominations and visa applications – 60.2 4

PAM3 - MIGRATION REGULATIONS - SCHEDULES - Sch2 Visa 457 - Temporary Work (Skilled) - Nominations and visa applications – 60.3








2.4 Issue for clarification Policy does not clarify whether the advertisement have to be in the same geographical location as the nominated position.

2.5 Recommendation EY recommends that an advertisement placed in the 12 months prior to nomination application should be accepted, regardless of the specific geographical target audience, provided the target audience covers the geographical location of the nominated position. Section 140GBA and subsections (5) and (6) of the Migration Act 1958, specifies the sponsoring company at minimum must provide two particular information to show attempts to recruit suitably qualified and experienced Australian citizens or permanent residents. Information on the geographical target audience is not mandatory information specified by the legislation.

2.6 Issue for clarification Policy does not clarify whether sponsoring companies are required to keep evidence of labour market testing for a particular period of time, and if so, for how long. Further, policy does not clarify whether monitoring inspectors will request evidence of labour market testing at time of monitoring.

2.7 Recommendation EY recommends that record keeping of labour market testing evidence is a decision for each sponsoring business to the extent that they comply with all Australian legislated record keeping requirements. Section 140GBA of the Migration Act 1958 details the labour market testing condition to be met for a nomination by a standard business sponsor. The legislation does not specify a record keeping requirement for evidence of labour market testing. Subregulation 2.82(3) regarding sponsorship obligation to keep records, does not list evidence of labour market testing being of a kind the sponsor must keep records.


3. Nomination only application by same sponsoring company

3.1 Legislation Labour market testing — condition5

Scope

(1) This section applies to a nomination by an approved sponsor, under section 140GB, if:

a) the approved sponsor is in a class of sponsors prescribed by the regulations; and b) the sponsor nominates:

i. a proposed occupation for the purposes of paragraph 140GB(1)(b); and ii. a particular position, associated with the nominated occupation, that is to be

filled by a visa holder, or applicant or proposed applicant for a visa, identified in the nomination; and

c) it would not be inconsistent with any international trade obligation of Australia determined under subsection (2) to require the sponsor to satisfy the labour market testing condition in this section, in relation to the nominated position.

(2) For the purposes of paragraph (1)(c), the Minister may, by legislative instrument, determine (as an international trade obligation of Australia) an obligation of Australia under international law that relates to international trade, including such an obligation that arises under any agreement between Australia and another country, or other countries.

3.2 Issue for clarification Policy does not clarify whether a nomination only application would be exempt from the labour market test where an existing subclass 457 visa holder is promoted as part of its natural career progression and the duties of the new role warrants classification by a different occupation.

3.3 Recommendation EY recommends that the nomination application should be exempt from labour market testing if it is a nomination only application by the same sponsoring company but it is nominating a different nominated occupation, due to a career progression or promotion in the natural course of the nominee’s career development within the sponsoring company. A letter of support confirming the promotion or career progression should be sufficient to warrant the exemption from labour market testing. This is to recognise that organisations have structured career progression or promotion processes and the immigration department should not impose labour market testing on such circumstances.

3.4 Issue for clarification Policy does not clarify whether a nomination only application would be exempt from labour market testing where the new nomination application propose to amend the salary for an existing subclass 457 visa holder, but no change in the nominated occupation.

5

MIGRATION ACT – PART 2 – CONTROL OF ARRIVAL AND PRESENCE OF NON-CITIZENS – Division 3A – Sponsorship – Section 140GBA

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_ma/Pages/_document00000/_level%20100005/level%20200009.aspx#JD_140GB

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_mr/Pages/_document00000/_level%20100003/level%20200038.aspx#272AA

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_ma/Pages/_document00000/_level%20100005/level%20200009.aspx#JD_140GB4014140b41

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_ma/Pages/_document00000/_level%20100005/level%20200009.aspx#labourmarkettesting

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_ma/Pages/_document00000/_level%20100005/level%20200009.aspx#labourmarkettesting

https://legend.immi.gov.au/Migration/2014/01-01-2014/legend_current_ma/Pages/_document00008/_level%20100038/level%20200132-2.aspx


3.5 Recommendation EY recommends that the nomination application should be exempt from labour market testing if it is a nomination only application by the same sponsoring company and it is nominating the same nominated occupation, but proposed to amend the salary. This is to recognise change of salary would be assessed under the market salary requirement. Labour market testing should not be required, as the nomination only application does not propose to nominate a different occupation.

EY | Assurance | Tax | Transactions | Advisory

About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2014 Ernst & Young, Australia All Rights Reserved. ED None ey.com


Appendix C Proposal for Accredited Agent Alliance (AAA) between the Department of Immigration and Border Protection and Accredited Migration Agents

EY 1

Recommendation – Introduction of collaborative processing between Department of Immigration and Border Protection and accredited migration agents for the assessment of subclass 457 visas with the objective of leading to process efficiency within the 457 visa programme

Background

The purpose of the subclass 457 visa programme is to allow approved business sponsors hire foreigners to fill skilled positions where there is a shortage in the Australian labour market in occupying the position within a reasonable timeframe. To ensure the programme works effectively, the programme must be responsive to the challenges and needs of business sponsors. In our experience, a significant challenge faced by business sponsors is the time-lag between recruiting a suitable foreign worker for the skilled position, and the commencement of the foreign worker in that position. Issue

We have seen a positive trend in the reduction of the immigration department’s processing timeframes for subclass 457 visa applications. Nonetheless, the current processes with assessing subclass 457 visa applications remain to have notable inefficiencies, in particular, the duplication of administrative activity involved in assessing applications. Prior to lodgement, registered migration agents undertake a thorough assessment of the proposed nominated position to be filled by the visa applicant. An assessment is also undertaken by registered migration agents to ensure the proposed applicant is eligible to fill the position, and meets the requirements for a subclass 457 visa. The purpose of these assessments is to ensure the application is compliant with immigration law and policy, and to ensure all the supporting documentation meets the prescribed requirements. Upon lodging the application, the same administrative tasks are undertaken by the assessing case officer, resulting in a duplication of administrative activities. Recommendation

We recommend the introduction of collaborative processing of applications between the immigration department and registered migration agents who are accredited to lodge low-risk non-contentious applications for fast-tracked approval without the need of a case officer re-assessing the application to re-confirm compliance with immigration law and policy. Essentially, the collaboration will result in the delegation of the duty of assessing a subclass 457 visa application onto the accredited registered migration agent. We suggest the fast-tracked facility be available to accredited registered migration agents where applications are lodged on a decision-ready basis. To ensure the integrity of the subclass 457 visa programme, it is imperative that the accredited status is only available to providers who take responsibility for, and successfully ensure that, satisfactory compliance with immigration law and policy is maintained. Further, a robust set of indicators should be developed to assess the credibility of the registered migration agent to award them the status of an accredited registered migration agent. The minimum criteria could include history of recorded compliance with immigration law and policy; years of experience as a registered migration agent; or, proven track record of lodging applications for a set period of time that are decision-ready.

Appendix C

EY 2

Our proposal is not dissimilar to the process adopted by the Building Professionals Board, which is an independent NSW Government authority established to oversee building certification. The Building Professional Board has delegated the process of certifying buildings to accredited certifiers. We suggest a similar approach to processing subclass 457 visa applications. The standard processing arrangements should be maintained in tandem with the new collaborative processing arrangements to allow sponsors and visa applicants who are not using an accredited registered migration agent to continue to lodge applications and deal directly with the department. Impact

The primary benefit of the collaborative model will be to share the tasks and risks between the immigration department and accredited registered migration agents, with migration agents taking more responsibility for certain risks. Other benefits include the following: • Collaboration will allow case officers to make a determination without undertaking a separate

assessment to that undertaken by the accredited migration agent. • Fast-tracked processing will enable faster, lower intervention decisions, resulting in a

significant reduction in the time and cost spent by the immigration department to finalise applications.

• Fast-tracked processing will reduce the administrative time in facilitating requests for priority processing where the sponsor has a business case requiring expedited processing.

• The efficient timeframe will ensure the process is more relevant to the business needs of sponsors.

• Limiting the tasks to be completed by case officers will allow for the management of expectations and provide certainty of processing timeframes. Once again, this will ensure the process is more relevant to the business needs of sponsors.

• Reduction of costs to the Australian government due to the delegation of tasks to accredited migration agents. We estimate that it will reduce the spent by case officers by up to 80% for low-risk non-contentious applications.

• Collaboration will allow for increased consultation between migration agents and immigration department.

• Accredited migration agents will have an incentive to lodge applications of a higher standard to ensure they can maintain their accreditation.

To assist with the implementation of the collaborative processing, we recommend the development of a framework, which: • allocates the liability of decisions between the accredited registered migration agent and the

immigration department • details the monitoring process; and • details the requirements to becoming an accredited registered migration agent.

We also recommend that the collaborative process balances the privilege provided to accredited registered migration agents with significant penalties where they act unethically or misuse the process.


Appendix D EY’s Human Capital Immigration Framework poster

Human capital immigration framework

Table 2 — Visa options for Human Capital Sponsor

Table 1 — Human Capital Sponsor

2 May 2014

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Subclass 400 Temporary work

(short stay activity) visaHighly specialised work stream

Subclass 401 Temporary work

(long stay activity) visaExchange stream

Subclass 402 Training and research visa

Occupational trainee, professional development and research streams

Subclass 455 Global Mobility visa

Subclass 457 Temporary work (skilled) visa

Subclass 186 Employer Nomination Scheme (Permanent)

Subclass 187 Employer Nomination Scheme (Permanent)

About this visa Allows individuals to visit Australia to undertake highly specialised and non-ongoing work that can assist Australian business where the skills cannot reasonably be found in the Australian labour market

Allows individuals to come to Australia on a temporary basis to work in a skilled position under a staff exchange arrangementThe individual will work in the skilled position under a reciprocal staff exchange arrangement to:• Give participants an opportunity to experience

another culture• Enhance international relations• Broaden participants’ experience and knowledge

Allows individuals to come to Australia on a temporary basis to participate in workplace based training, professional development or an Australian research projectThe occupational trainee stream is for individuals who require structured workplace-based training to enhance skills in their current occupation or area of tertiary studyThe professional development stream is for individuals sponsored by an organisation with a professional development agreement.The research stream is for individuals to participate in an Australian research project with a tertiary or research institution

Allows streamlined temporary entry of individuals on an intra-company transfer between entities of a global group of companies with substantial international operations

This visa subclass captures activities catered for by the following visa subclasses:• subclass 401: exchange stream• subclass 402: occupational training, professional

development and research streams• subclass 457 for work

Allows skilled individuals to work in Australia in a nominated occupation

Allows skilled individuals to apply for permanent residence in AustraliaThe Temporary Residence Transition stream is intended to provide a more streamlined pathway to permanent residence for subclass 457 visa holders who have worked in their skilled occupation for their Australian employer for at least 2 yearsThe Direct Entry stream is available to individuals who do not meet the transition stream requirements. Individuals must have a favourable skills assessment and three years experience in their nominated skilled occupation

Allows skilled individuals to apply for permanent residence to work in regional AustraliaThe Temporary Residence Transition stream is intended to provide a more streamlined pathway to permanent residence for subclass 457 visa holders who have worked in their skilled occupation for their Australian employer for at least 2 years

Visa period of stay Stay of up to 3 monthsMultiple or single entryValidity up to 3 months

Stay for duration of exchange (up to 2 years)Multiple entryValidity up to 2 years

Stay for duration of training or research program (up to 12 months)Multiple entryValidity of up to 12 months

Stay of 1 day up to 4 yearsMultiple entryValidity of up to 4 years

Stay of 1 day up to 4 yearsMultiple entryValidity up to 4 years

Permanent residenceMultiple entry facility valid for five years from grant

Permanent residenceMultiple entry facility valid for five years from grant

Nomination criteria No nomination Nomination by human capital sponsor or long stay activity sponsor Must nominate the position and the person to participate in reciprocal staff exchange arrangement with an overseas organisationThe position must be a skilled position — occupation listed in ANZSCO major groups 1–3:• managers, professionals, and technicians and

trade workersFormal agreement must be lodged specifying the period of the exchange and identify the Australian and overseas participants in the exchangeExchange must broaden participants’ experience and knowledge

Nomination by human capital sponsor or long stay activity sponsor Occupational trainee stream:Occupation on the CSOL Conditions comply with Australian industrial relations lawsStructured workplace training program for either:• individuals who must completed occupational

training for mandatory licensing or registration in their occupation;

OR• individuals with at least 12 months full time

experience in the occupation within the last 2 years prior to application

Workplace training program including:• objectives• tasks• location• skills audit of participant, including English• names and qualifications and/or experience

of trainers, and• planned learning outcomes and assessment

criteriaResearch stream:No specific nomination criteria Professional development stream:No specific nomination criteria

Nomination by human capital sponsor Sponsor is part of a group of companies with “substantial international operations”:• operations in at least three countries• operating in at least 2 countries for at least

12 monthsOccupation on the CSOL excluding ANZSCO Group 3 occupations Technicians and TradesGuaranteed annual earnings or base salary at least the temporary skilled migration income threshold Other terms and conditions of employment equivalent to Australian standardsIn the last 2 years, the nominated individual has at least 12 months employment with the sponsor or one or more associated entities of the sponsorGenuine possitionLabour market testing exemptEmployment or assignment with sponsor or an associated entity of the sponsor

Occupation on the CSOL Equivalent terms and conditions of employmentSalary is market rate for earnings <AUD250,000No labour market testing Employment or assignment with sponsor or an associated entity of the sponsorGenuine possition

Criteria in relation to business:If nominator is an approved human capital sponsor no criteria in relation to the businessThe current nomination criteria in relation to the business are the same as those for human capital sponsorship approvalThe business has demonstrated the criteria are met through the sponsors’ annual return — unless there is evidence to the contraryIf the nominator is not a an approved human capital sponsor, the following criteria to be common to both temporary residence transition and direct entry streams:• Actively and lawfully operating in Australia• Training benchmarks — at time of nomination

application one standard test• No adverse informationCriteria in relation to position:Common to both streams: • equivalent terms and conditions of employment• market salary rates• position available for at least 2 yearsTemporary residence transition stream:Nominated individual holds a subclass 457 visa and has for at least 2 out of the last three years been employed in nominated occupation or closely related occupation in Australia including 12 months with the nominating employer and was the holder of held one or more subclass 457 visas for at least 2 out of the last three yearsDirect entry stream:Nominated occupation on CSOL

Criteria in relation to business:If nominator is an approved human capital sponsor no criteria in relation to the businessThe current nomination criteria in relation to the business are the same as those for human capital sponsorship approvalThe business has demonstrated the criteria are met through the sponsors’ annual return unless there is evidence to the contraryIf the nominator is not a an approved human capital sponsor, the following criteria to be common to both temporary residence transition and direct entry streams:• Actively and lawfully operating in Australia• Training benchmarks — at time of nomination

application one standard test• No adverse informationIf the nominator is not a an approved human capital sponsor, the following criteria to be common to both temporary residence transition and direct entry streams:• Actively and lawfully operating in Australia• No adverse informationCriteria in relation to position:Common to both streams: • supported by regional certifying body• equivalent terms and conditions of employment• market salary rates• position available for at least 2 yearsTemporary residence transition stream:Nominated individual holds a subclass 457 visa and has for at least 2 out of the last three years been employed in nominated occupation or closely related occupation in Australia including 12 months with the nominating employer and was the holder of held one or more subclass 457 visas for at least 2 out of the last three yearsDirect entry stream:ANZSCO skill level 1-3

Visa criteria Intend to undertake short term, non-ongoing work intention (up to 6 weeks but in limited circumstances up to 3 months)Work must be highly specialised — occupation listed in ANZSCO major groups 1–3:• managers, professionals, and technicians

and trade workersStreamlined processing where Australian inviting organisation is a human capital sponsor Letter of invitation from Australian entity Meet health and characterValid health insurance

Has the skills and experience to undertake the duties of the nominated positionAdequate means of supportMeet health and characterValid health insuranceStreamlined processing where sponsor is a human capital sponsor

Adequate means of supportMeet health and characterValid health insuranceStreamlined processing where sponsor is a human capital sponsorOccupational trainee stream:Appropriate skills for the trainingResearch stream:Intends to participate in an Australian research project with a tertiary or research institution

English language testing exemptSkills assessment exemptHas suitable skills and qualifications Meet health and characterValid health insuranceSecondary criteria to replicate subclass 457 visa criteriaStreamlined processing

Has suitable skills and qualifications Skills assessment for some trade occupationsRegistration and/or licensing where required for the occupationEvidence of English proficiency (unless exemption applies)Meet health and characterValid health insuranceReinstate occupation based exemptions to English language testingRemove skills assessments for project and program administrator and specialist manager NEC

Common criteria:Under 50 years of age, unless exceptional circumstances existRegistration and/or licensing where required for the occupationEvidence of English proficiency — unless exemption appliesMeet health and characterTransition stream:No stream specific requirements at visa stageDirect entry stream:Skills assessment in nominated occupation and at least three years employment in nominated occupation — unless exemptExemptions to skills assessment and three experience:High earnings >AUD180,000Exempt occupations (Minister, Academic, scientist)Holders of subclass 444 and subclass 461 visas with at least 2 out of the last three years employment in nominated occupation or closely related occupation in Australia including 12 months with the nominating employer Holders of a subclass 309 visa or subclass 820 visa with at least 2 out of the last three years employment in nominated occupation or closely related occupation in Australia including 12 months with the nominating employer while holding a valid visa with appropriate work rights.Holders of a subclass 309 visa or subclass 820 visa to be deemed to have applied for a subclass 186 visa with no additional visa application charge, similar to the deemed application mechanism that was in place for applicants in the general skilled migration queue

Common criteria:Under 50 years of age, unless exceptional circumstances existRegistration and/or licensing where required for the occupationEvidence of English proficiency — unless exemption appliesMeet health and characterTransition stream:No stream specific requirements at visa stageDirect entry stream:Skills assessment in nominated occupation if individual has overseas trade qualificationOther: has qualifications specified in ANSZCOExemptions to skills assessment or qualification:High earnings >AUD180,000Holders of subclass 444 and subclass 461 visas with at least 2 out of the last three years employment in nominated occupation or closely related occupation in Australia including 12 months with the nominating employerHolders of a subclass 309 visa or subclass 820 visa with at least 2 out of the last three years employment in nominated occupation or closely related occupation in Australia including 12 months with the nominating employer while holding a valid visa with appropriate work rights.Holders of a subclass 309 visa or subclass 820 visa to be deemed to have applied for a subclass 186 visa with no additional visa application charge, similar to the deemed application mechanism that was in place for applicants in the general skilled migration queue

Visa conditions Only work in the activity and occupation listed in the applicationNo study permittedArrive in Australia within 3 months of visa grant or specified period if earlier

Must participate in the approved program in AustraliaNotify of cessation of participation with sponsor in 28 daysMaintain health insurance

Must participate in the approved program in AustraliaCannot leave, work for another employer or be self employedNotify of cessation of participation with sponsor in 28 daysMaintain health insuranceComply with visa conditions and Australian laws

Only work in the nomination role and occupation Maintain health insuranceNotify of cessation of employment with sponsor in 28 daysUp to 12 months absence overseas to allow for streamlined transfer of personnel within group with substantial international operationsFull work rights for secondary visa holders

Only work in the nomination role and occupation Maintain health insuranceComply with visa conditions and Australian lawsNotify of cessation of employment with sponsor in 28 days

Nil Nil

Benefits of proposed model

Improved capacity for Australian business to complete in global economyReducing administration costs for Department of Immigration and Border ProtectionAllowing Department of Immigration and Border Protection to target resources at cases requiring scrutiny

Improved integrity as the requirements for approval of human capital sponsorship will applyImproved integrity as the more stringent obligations of human capital sponsorship are more rigorousReducing administration costs for Department of Immigration and Border Protection

Improved integrity as the requirements for approval of human capital sponsorship will applyImproved integrity as the more stringent obligations of human capital sponsorship are more rigorousReducing administration costs for Department of Immigration and Border Protection

Improved capacity for Australian business to complete in global economy with streamlined visa categoryReducing administration costs for businessReducing administration costs for Department of Immigration and Border ProtectionAllowing Department of Immigration and Border Protection to target assessment resources at cases requiring scrutiny

Significantly reducing administration costs for business by removal of labour market testing and reinstatement of occupation based exemptions to English language testingImproved capacity for Australian business to complete in global economy by streamlining application processImproved integrity by requiring individuals to notify of the cessation of their employment and to engage with the Department regarding their visa status earlier than 90 days after cessation

Significantly reducing administration costs for business with sponsorship approval by removing need to repeatedly demonstrate meet criteria in relation to business with each nominationSignificantly reducing administration costs for Department of Immigration and Border Protection by removing need to repeatedly assess criteria in relation to business with each nominationSignificantly reducing administration costs in addressing and assessing complex and inconsistent training requirementsRemoving administrative blockages in the pipeline by reverting to flexibilities in the pre July 2012 employer nomination schemeSignificantly reducing administration costs for Department of Immigration and Border Protection by removing applicants from long second stage partner visa queueNo impact on integrity

Significantly reducing administration costs for business with sponsorship approval by removing need to repeatedly demonstrate meet criteria in relation to business with each nominationSignificantly reducing administration costs for Department of Immigration and Border Protection by removing need to repeatedly assess criteria in relation to business with each nominationSignificantly reducing administration costs in addressing and assessing complex and inconsistent training requirementsRemoving administrative blockages in the pipeline by reverting to flexibilities in the pre July 2o12 employer nomination schemeSignificantly reducing administration costs for Department of Immigration and Border Protection by removing applicants from long second stage partner visa queueNo impact on integrity

Investment Procedure Advice Manual updateRe-structuring of online application form to identify applications associated with human capital sponsors

Legislative change criteria for approval of nomination — various visasProcedure Advice Manual updateRe-structuring of online application form to identify applications associated with human capital sponsors

Legislative change criteria for approval of nomination — various visasProcedure Advice Manual updateRe-structuring of online application form to identify applications associated with human capital sponsors

Legislative changeDevelopment of new online application form and Procedure Advice Manual guidelines

Legislative changeReissue legislative instrument specifying exemptions to English language criteriaReissue legislative instrument specifying exemptions to labour market testingProcedure Advice Manual update

Legislative changeReissue legislative instrument specifying exemptions to direct entry criteriaProcedure Advice Manual updateRe-structuring of online application form to identify applications associated with human capital sponsors

Legislative changeReissue legislative instrument specifying exemptions to direct entry criteriaProcedure Advice Manual updateRe-structuring of online application form to identify applications associated with human capital sponsors

About this sponsorship Allows companies to apply for ONE sponsorship to access visa programs including:• Subclass 401 exchange stream• Subclass 402 occupational training, professional development and research streams

• Subclass 457• Subclass 455 Global Mobility visa, see below

• Subclass 186 and subclass 187

Period of Validity Rolling validity for 12 months with the requirement to provide an Annual Return to maintain sponsorship approval. An annual fee would also be appropriate.

Requirements Actively and lawfully operating in Australia Training benchmarks

Commitment to employment opportunities for local labourNo adverse information

Continue to meet obligations, regarding training and recovery or transfer of costs in particular

ObligationsAs they apply to visa subclasses and streams considered in this proposal* Obligation to lodge an annual return applies to all

human capital sponsors in respect of each sponsored person regardless of visa subclasses. This obligation will not apply to an organisation that is approved as another type of sponsor only.

Provide annual return showing continues to meet criteria for approval and complies with obligations — all subclasses *Cooperate with inspectors — all subclassesEnsure equivalent terms and conditions of employment: pay market rates and not reduce earnings — subclass 457Pay return travel costs — subclass 402 professional development and subclass 457Pay location and removal costs — all subclasses

Not transfer, recover from or charge certain costs to another person — all subclasses Keep records — subclass 402 professional development and subclass 457Provide records and information no earlier than 14 days in response to a request — all subclassesNotify when certain events occur within 28 days — all subclassesSecure reasonable accommodation — subclass 402 professional development

Ensure sponsored person works or participates in nominated occupation or activity — all subclassesContinue to meet training benchmarks — subclass 457Make same or equivalent position available to Australian exchange participant — subclass 401 exchange stream

Benefits Deregulation of current program which requires multiple sponsorships to access various temporary visa subclasses and a separate nomination each time an employee of nominated for permanent residenceSignificant reduction of administration and costs for both business and the Department of Immigration and Border ProtectionImproved integrity in the exchange, occupational trainee, professional development and research visa streams as the requirements for approval of human capital sponsorship will apply

Improved integrity in the exchange, occupational trainee, professional development and research visa streams as the more stringent obligations of human capital sponsorship are more rigorousOnus on sponsors to report on continuing compliance on an annual basisAllowing Department of Immigration and Border Protection to target monitoring resources at sectors and individual cases of concern

Improved integrity by requiring individuals to notify of the cessation of their employment and take responsibility for their visa statusProvide business with a realistic time frame to respond to a monitoring request, policy should allow for 28 days in most circumstancesProvide business with a realistic time frame to notify of events such as cessation of employment, appointment of a new Director and change of duties

Investment Legislative changes and Procedure Advice Manual updates Re-structuring of online system for applications and annual returns Training of Department of Immigration and Border Protection staff on assessment under the proposed program

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