Visa Newsletters

Dear Clients and Readers,

As the Coalition continues to grapple with the effects of sweeping reforms enacted by the previous Labor government, the first few months of 2014 has seen a continued drop in permanent migration numbers, constant piecemeal changes to policies and plans to review and possibly overhaul key immigration programs.

This edition of our Visa Alert will take you through the most salient changes affecting businesses and individual visa applicants. In particular, it will explore the development and potential impact of Labour Market Testing requirements, employer sanctions legislation and the rolling out of the highly publicised Significant Investor Visas. 

The Abacus team aims to keep you up to speed with the latest movements in migration law. I hope this newsletter will serve as a useful primer on the issues most relevant to you.
Kind regards,

Linda McCreath
Managing Director
Solicitor and RMA 0104387

Briefly, LMT requires employers to provide evidence of attempts to recruit suitably qualified Australian citizens or permanent residents for the nominated position. They must also explain how it was determined that no suitably qualified Australian workers were available to fill the position. LMT is not new to Australian migration programs – it was first introduced over a decade ago, but subsequently abandoned due to widespread claims that it unnecessarily increased recruitment costs and processing times.

Thus when the Labor government rushed the controversial LMT provisions through Parliament on its last day of sitting, the heated opposition from the Coalition and various industry lobby groups came as no surprise.

Since winning the election, the Coalition has committed to cutting back the excessive ‘red tape’ resulting from the hasty reintroduction of LMT. This included exempting several highly skilled occupations from the requirements (although strangely this did not include engineers and nurses, who are still in demand. - See Abacus Visa Christmas Newsletter - 13 December 2013). However, the government has not given any indication it will repeal the provisions and we must assume that LMT is here to stay. Businesses will need to familiarise themselves with the requirements (See DIBP's FAQ on LMT), particularly as the DIBP has reiterated that they will be strictly enforced.

For instance, evidence of LMT must be provided at the time of lodging a nomination application, and companies may be asked to provide additional information once the application has commenced (See Abacus Visa News Flash). While there is no conclusive evidence yet as to whether reintroducing LMT has negatively impacted on businesses, it is certainly an issue to keep an eye on in the coming months.

Review of Significant Investor Visa Program

The Significant Investor visa (SIV) is a stream within the Business Innovation and Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa. It is distinguished by its requirement for applicants to make investments of at least five million Australian dollars into complying investments over at least a four year period.

Introduced to attract entrepreneurs and high net worth individuals to Australia, SIVs have gained significant traction as knowledge of the scheme has spread. The government’s desire to shore up Australia’s position as the premier location for Asian investors in particular is reflected by the fact that 90% of SIV applications so far have been lodged by Chinese investors. Both the New South Wales and Victoria governments have also been aggressively marketing their business visa programs (See Abacus Visa News Flash) in the hope of securing the lion’s share of overseas investment funds.

As a result, the rate of application approvals has been picking up rapidly. Since the program started in November 2012, only 28 SIVs were approved in the ten months leading to the election in September 2013. In just half the time following the election (up until the end February 2014), an additional 116 applications were approved. While this number remains low compared to the several hundred applicants still in the pipeline, a review of the SIV program announced in early March will explore ways to accelerate processing times. It will also canvass ideas to improve the program’s flexibility and possibly expand available investment options from bond and commercial property funds to include venture capital and start-ups.

There are still significant implementation issues that the review will hopefully address. For instance, an ongoing problem for Chinese investors is the current US$50,000 annual limit on outgoing foreign exchange flows for capital investment. It is uncertain how this issue will be resolved in the short-term, given that it would require a bilateral solution to be negotiated between the Australian and Chinese governments. The review is also unlikely to allow direct investment in houses and apartments because of the fear of Australian buyers being squeezed out of the market, despite various fund managers asserting that high-net worth individuals would be uninterested in the first and middle home buyer market.

It is worth noting that Australia’s ramping up of its SIV program comes at a time when other countries – in particular the US, Canada and Singapore – have either scrapped or are looking into restricting comparable ‘cash for visas’ programs. On the one hand, this means that an overflow of Chinese investors looking for pathways to overseas residency will now set their sights on Australia. On the other hand, it will be incumbent on the government to ensure that the problems which plagued similar programs (such as fraudulent money flows, unsustainable numbers of applications and negligent investment choices) do not emerge here.

Overall, the Significant Investor Visa presents a window of opportunity for keen investors to fast track permanent residency in Australia. While we remain optimistic that the SIV program will continue in the near-term, the jury is still out on the efficiency of its implementation and conduciveness to Australia’s investment climate. We would recommend those interested in applying to act soon, while there is still significant political momentum behind it.

Student visas continue to be overhauled

The start of 2014 brought good news for those looking to study in Australia. At the end of March, student visas underwent a complete makeover when the Assessment Level (AL) framework was reduced from five levels to three. The AL Framework assigns to applicants a particular level based on the immigration risk accorded to their passport and main course of study (A full list can be found on the DIBP website). This then determines the minimum evidentiary requirements for the student visa application. AL1 represents the lowest immigration risk and AL3 represents the highest immigration risk.

In general, the simplified framework means that prospective students – particularly those who previously would have been assessed as AL4, which included applicants from China – will benefit from lower levels of evidence required for English language proficiency, financial capacity and previous studies.

For example, evidence of funds for AL3 applicants will be reduced to 12 months from 18 months, with the condition they be provided by a close relative of the applicant. A number of less stringent alternatives to the IELTS test for English were also introduced. While these changes only affect applications made after 22 March 2014, we see them as a welcome move by the government to enhance the competitiveness of Australia’s international education sector by making student visas more accessible to applicants.

They also continue a trend of the overall simplification of student visas that began when streamlined visa processing (SVP) arrangements were introduced in 2012. Those eligible for SVP are not assigned an assessment level since they are assessed as though they are a lower immigration risk, irrespective of the passport they hold. This means less documentation and faster processing times. To be eligible for SVP, applicants must be enrolled in a Bachelor, Masters or Doctoral degree, or a non-award study abroad program at a participating education provider.

Taking SVP arrangements and the newly simplified AL Framework as a whole, the outlook for applicants keen on studying in Australia is quite positive, given that the hoops to jump through for student visas continue to be substantially reduced. For students on Subclass 573 (Higher Education) or Subclass 574 (Masters and Doctorate) visas, an added advantage is the ability to apply for a Subclass 485 (Temporary Graduate) visa, which allows applicants to stay in Australia temporarily to work or travel after completion of studies. 

DIBP clamping down on compliance

Finally, a note of caution to businesses and applicants using the services of migration agents – DIBP has recently sounded a warning over the prevalence of assistance given to clients by unregistered actors, including by administrative staff working for registered agents. Under Australian law, those giving migration advice must be registered with the Office of the Migration Agents Registration Authority (MARA). This is to ensure that the quality of advice being given complies with industry standards.

The Department’s recognition of this problem follows an emerging trend of visa applications lodged by agents that are often lacking essential documentation, including employment contracts, skills assessments, financial docs and language tests – or sometimes have no documents attached at all.

Over our many years of experience, the team at Abacus Visa are well aware of the importance that high quality advice and adequate submission of documents has on the overall ease of the application process for our clients. The DIBP’s warning is a timely reminder for us to be vigilant about keeping up to date with the latest migration requirements, something that our readers can do by regularly checking our website.

Conclusion

Key immigration policy changes including new labour market testing requirements, the expansion of DIBP’s powers under PIC4020 and new penalties for employers hiring unlawful workers have made visa requirements more stringent across the board. At the same time, requirements for certain categories of visas, most notably Significant Investor visas and student visas, have been simplified in line with the government’s overall goals to boost the Australian economy and make the education sector more competitive.

We make it our business at Abacus Visa to give timely and accurate advice tailored to your specific situation. Given the rapid rate at which complex immigration laws can change, our dedicated team of legal immigration professionals are committed to walking you through your visa experience to ensure it is as hassle and stress free as possible.