A Quick Look on Australia Startups post-457 Visa Disruption

Australian-Startup-vs-457-visa-Tss

A Quick Look on Australia Startups post-457 Visa Disruption

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It is safe to say that Turnbull has disrupted Australia’s startup scenes with his abolishing the 457 Visa program. The so-called TSS Visa will replace the 457 Visa and it will start to roll in March 2018. It seems that, for better or worse, the “disruptors” industry have been disrupted.

The 457 Visa has been the most common way for foreign workers to work in Australia. Startups are no exception. Under this Visa (valid for 4 years period), a startup company can sponsor talents from overseas as employees. That way, they solve the problem of talents shortage that they might have. The Subclass 457–otherwise known as Temporary Skilled visa–is not without its own appeal to the candidates. For them, it’s like the gateway toward the highly coveted Permanent Residency (PR).

 

Australia-Startup-457-visa

Yea, mate. We feel ya.

 

This development took a hit, however, when the government made a change of policy on the 457 Visa.

Many IT-related occupations are slashed from the occupations list available for the 457 Visa. Positions that are crucial to startups, such as marketing research analyst–under which category some growth hackers fall into–are no exception.  It’s not just that. Even C-suite positions like CEO and CIO are affected by that Visa policy changes.

Update: CEO and CIO have since been “restored” back to MLTSSL in July 2017, following backlash from startup community.

Immediate Effects on Australia Startup Scenes

  • Take OccurX, for example. This healthtech startup was hit last April because one of its main scientists, Xian Lau, a Singaporean citizen, had his occupation (pharmacologist) on the list of the dying Visa.
  • Atlassian reportedly has 25% of its 1000+ workforce on 457. And its co-founder, Mike Cannon-Brookes has since been vocal on the changes. He even incited a Tweet war (rather one-sided though)–which is a joy to behold in itself–with the Immigration Minister, Peter Dutton, back in April.
  • Annie Parker is perhaps the best poster woman for the dichotomy of foreign workers vis–à–vis Turnbull’s Trump-esque ‘Australians first’ at the moment.

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Annie Parker Fishburner

Annie Parker, Fishburner CEO

 

The British born woman was on 457 herself when she came to Australia to set up muru-D. She moved on in 2016 to start other companies, among which is the Lighthouse startup accelerator in Sydney. Currently, she’s the interim CEO at Fishburner

Among her concerns is the pathway to permanent residency that’s no longer available in the replacement Visa (aka the Short-Term Stream in the Temporary Skills Shortage Visa). The Australian permanent residency made possible by the 457 has been a trump card in attracting top talents. It’s always offered as one of the job perks, without which she thinks no offer can be good enough to attract them, which was the case with her.

A quick look on the 457 Visa Performance.

 

What Annie Parker said in the following sums it all up for startuppers who find their occupations in the Short Term Skilled Occupation List (STSOL).

“I’m worried about the message that it sends … that anyone who has the growth skills to help early-stage companies be the next Atlassian or Campaign Monitor or Canva will think ‘maybe Australia doesn’t really want me and I’ll look at Canada or New Zealand instead’. What’s more, in order to nominate a candidate for the new TSS Visa, businesses will be required to show they have at least $1 million AUD in revenue and a minimum of five employees. This just isn’t realistic for many start-ups in the early stages.

Annie Parker, Interim CEO at Fishburners

Temporary Shortage Visa (TSS Visa) Impact: November, 8 Months Later

Until October 2017, it’s nothing short of all quiet on the Western Front. We couldn’t find any single blog post that talks about it in regards of startups that didn’t date in the immediate following weeks after the announcement. The latest article we found on the subject was from July. There were absolutely no recent updates as we wrote the draft of this post (October 2017). So, we thought that it’s safe to say that, except the initial reaction, the Visa changes barely make a dent in how things work for startups.

It changes, however, when The Financial Review dropped this bomb.

That article brings to light some things that’s not being said when the initial proposals hit the news (and the migrants’ peace of mind for sure).

Atlassian founders Scott Farquhar and Mike Cannon-Brookes

Atlassian founders Scott Farquhar and Mike Cannon-Brookes (with hat)

 

The article features some interviews with prominent names in Australian tech scene such as Scott Farquhar of Atlassian (Cannon-Brookes’ co-founder) and MYOB’s helmsman, Tim Reed. They point out that the problems many have warned in response to the proposal are already here.

Tim Reed said that his company is currently 100 people short because he simply couldn’t find the people that he needs, due to the policy change.

Farquhar also points out that the government needs to take different approach on job classifications:

It is said that 46% of jobs in the future don’t exist today. ANZSCO does not adequately reflect current occupations, let alone future occupations.

He said in his officially recommendation letter to the Department as a proposal to simplify Australia Visa system.

It’s worth to note that the Department is going to update the proposals anytime this month, after a period of accepting suggestions from the public, including the one from Atlassian above. It’s interesting  to see whether or not the opinion of leading names in startup industries affected by the change has any impact on the outcome.

Meanwhile, for those CEOs, one thing is clear.

“We need to continue to attract the best skilled people from around the world in what is a highly competitive global marketplace for talent … We should not take decisions that make Australia less attractive to such talent. If it is made too difficult the talent will go elsewhere to our cost.”

Scott Farquhar

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