The New Subclass 491/191 Skilled Visas and 494 Employer Sponsored visa – the Big Experiment

From 16 November 2016, the new 491 provisional 5-year regional skilled migration visa came into effect, giving migrants five years (up from four under the old 489 visa system) to apply for permanent residence under the 191 visa category. The new visa subclass is points tested, like the old one, but the requirements for admission have gone up. 

People who hold a 491 provisional visa and who live and work in Australia will be able to apply for a permanent resident visa after three years. Current controversy exists around the requirements to obtain this permanent residence given the government has stipulated that it will be necessary to demonstrate a salary of $53,900 minimum for at least 3 years of these five years.  Whether or not this might be leading migrants down a merry garden path remains to be seen and no one can really foresee what will be the results five years hence. Will all those who have committed and settled with their families in regional areas actually be able to obtain permanent residence after all? 

That said, given some of the states, such as Tasmania, are indicating that they will only issue invitations to those that they believe will be able to earn this minimum salary, it also implies that only those who have many years of work experience and are seen as highly skilled in the occupation will be eligible to apply.  This limits international students who have only graduated in Australia and gained some work experience here.  Those however who have work experience in their own country linked to qualifications overseas, stand a higher chance of being offered an invitation.  This makes sense too, because to apply for this visa you must obtain a skills assessment, and to do so you usually need a high level of work experience. 

The states are ultimately responsible for those migrants who settle in their regions therefore it stands to reason that they would choose those most likely to fulfil the criteria to migrate permanently during the five years of the 491 visa. 

The 494 visa is an employer-sponsored visa that has the same duration as the 491, is provisional and also offers a path to permanent residence after three years.  It requires a minimum threshold or market salary of at least $53,900 to be paid as well as payment of the Skilling Australians Fund by the sponsoring employer.  It now includes a sponsorship component as well as a skills assessment requirement for the visa applicant.    

Skilling Australians Fund (SAF)

The Skilling Australians Fund is a tool that the Australian government uses to fund things like free apprenticeship places, new industry collaborations, and traineeships in particular sectors, like digital and disability care. Again, the SAF has been the subject of much controversy amongst industry bodies and employers who argue that in having to pay such a large amount of money for the privilege of sponsoring a very necessary overseas skilled worker, they actually have less to invest in actually training Australians within their own company. On the job training is vital to today’s workforce growth. And is the funding really going to the areas it is supposed to assist? 

New South Wales is the primary beneficiary of the program, receiving $93.8 million of the total $145 million budget. Western Australia received $18.2 million, and South Australia $20.1 million. All other states received less than $6 million in 2018-2019 financial year.

The Skilling Australians Fund, therefore, coincides with states that have a higher international student population than others. That’s no coincidence.

Being an international student as we discussed, is not sufficient to get on the path to permanent residence. Aside from the need for a skills assessment for instance, in South Australia, students must study in a relevant nominated occupation; otherwise, they cannot migrate at all. 

If you’re a student and want to live and work in Australia after graduation, the advantage of studying in a regional area is the amount of years you will obtain for a post graduate visa – three or four dependent upon the regional area. The good news is that any work you do all adds up.  Three years’ work experience in the nominated occupation or related field is what is required for the 494 visa therefore this is where we may see some of Australia’s international students headed in the future. 

Perth and Gold Coast are now considered regional too, thus providing a way to potentially gain three years of work experience for the new 494 regional employer-sponsored visas.

Some small business pathways can help your application. For instance, in Tasmania, if you have a small business plan that will benefit the state, you can obtain state nomination and ultimately a permanent visa through this pathway. 

Migrating to Australia is becoming very competitive. There are only 25,000 regional places available through the Skilled Migration Program each year, with many more people vying for these places than are available. Thus to be successful, you need both high points and a good command of English too. The only occupations where you require fewer points are in the trades: auto mechanics, electricians, carpenters, and so on.

DAMA – Designated Area Migration Agreement – are these really effective?

The DAMA system is a formal agreement between the federal Australian government and the territories for the supply of overseas workers. The idea is to enable regions to up their intake of migrant workers when demand for labour is high, and reduce it when demand is low. 

DAMA agreements between the Australian government and regional employers usually last five years. In theory it is the best way for people who want to migrate to Australia to do so if their particular job isn’t on an approved list. In practice, it is a complex, time-consuming and expensive process for the employer including payment of the Skilling Australians Fund.  One suggestion for government would be to reduce this fund payable to encourage regional employers to sponsor skilled workers and thereby assist to populate the state with willing and able migrants going into immediate work and paying their taxes. 

The Reality Of Australia’s Regional Migration Needs

The truth is that Australia is in dire need of migration. Net migration is the most significant driver of economic growth with international students making up more than half of the total migrant population. 

Melbourne University Demographer Peter Macdonald, for instance, argued at the AFR National Infrastructure Summit in Melbourne in June 2019 that if Australia pushes down migration too much, then it will harm the country’s economic growth. The fact that the country entered a recession after the May 2019 elections is probably the clearest signal yet. 

The reality is that Australia relies on international migration to remain competitive. Both Melbourne and Sydney need a steady supply of workers if they want to compete with major global cities like New York and London. Australians might fear the increased congestion and pressure on public services, but the added benefit to the economy is likely to more than pay for this. 

Conclusions

Migration is a chicken and egg scenario. On the one hand, you need free movement of people to create a vibrant economy, and on the other, you need a vibrant economy to attract people from overseas. Neither comes first: both feed off each other. 

Despite the current issues with the Australian immigration system, including indeed a call to privatise, the future holds the potential to remain bright and optimistic. The extended 485 graduate visa will attract students to Australia who will, in turn, find work, pay taxes and add demand to the local economy, notwithstanding the much needed infrastructure development within the regional areas. 

The new immigration rules will hopefully return Australia to a more even pattern of regional development and away from the big-city-bias of recent years. 

In the past, people emigrated to places like Darwin and Broome in search of a better life. Perhaps we’re now seeing a return to the old ways and the possibility that Australia’s hinterland will be repopulated. For those willing, able, and brave enough, there are opportunities abound in Western Australia, Northern Territory, South Australia and even Tasmania.  Let us live in hope that one way or another, the big experiment will ultimately lead us to positive results for all. 

Start the conversation