Andreas Rost, owner of the Organic Bread Bar in the Sydney suburb of Paddington, is nervous and with good reason. As an employer of four 457 visa workers, he is unsure if he will be able to keep operating thanks to the government’s abolition of the skilled visas.
Mr Rost told The Australian Financial Review he had been forced to employ four out of his 11 staff on 457 visas because he found it difficult to find Australians who were willing to start work at two or three in the morning.
“I’m originally from Germany and it’s similar there, if a country is wealthy physical work becomes unattractive,” he said.
“In large bakeries people can start work at 7am… but in a small bakery you have to start in the night, so I think it’s more difficult for a small business to find people.”
Mr Rost said he had also had problems in the past with local workers who he would train in artisan baking for three or four months and then leave the small business after six months, while foreign workers who would usually stay for two years.
“I also tried for more than a year to get an apprentice. If there aren’t any 457 visas I’m not sure how I will run my business.”
As of March 31 last year, there were 97,766 primary 457 visa holders in Australia. Many of these workers (15,260) were from accommodation and food services businesses like Mr Rost’s bakery, but information, media and telecommunications workers also made up a large portion (10,030)
Chief executive of operational health and safety mobile app startup SafetyCulture, Luke Anear, is one of numerous tech entrepreneurs on edge waiting for more information about the government’s new temporary skills visas.
He said workers with the skills he needs for his company, which makes a workplace checklist app and has more than 50,000 paid subscriber and has almost doubled the number of staff from 60 to 104 in the last six months, are not captured by any Department of Immigration list of approved occupations.
“We need people who can think at scale, who’ve already worked for a business growing as fast and as big as ours is today,” Mr Anear said.
With Sydney-founded, Nasdaq-listed software company Atlassian arguably the only local source of such people today, Mr Anear said the 457 skilled visa program had been crucial to SafetyCulture. He sponsors 12 employees through the program and another handful have recently been granted permanent residency.
Noting the Prime Minister’s promise that the new ‘Temporary Skills Shortage’ visa regime would consider skills needed in regional Australia, Mr Anear said SafetyCulture’s Townsville head office “would not exist” had it not been for the importation of skills to give it momentum.
Some of the main reforms the government is proposing with the new temporary visas are more targeted occupation lists: 200 occupations have been axed, including the entry-level tech sector mainstays of ‘ICT support and test engineers’, ‘ICT support technicians’ and ‘web developers’.
All applicants must have two years’ work experience in their skill, an extension of the permanent residency eligibility period to three years and mandatory local labour market testing.
Schedugram founder and Dialogue Consulting director Hugh Stephens said the uncertainty of the changes would affect business confidence, decision-making and result in additional costs for startups.
“Given that one of the conditions of the 457 class is that businesses need to show that the existing local talent pool isn’t sufficient to fill their skills shortage, does this mean that the government knows of a secret pool of technology talent nobody else has found?”
Code Club Australia general manager Kelly Tagalan is from the US and is in Australia thanks to a 457 visa. Without the visa, Ms Tagalan said 65,000 Australian kids might not have had the chance to learn to code.
“Our program addresses the national skills gap… we over-index in areas that are economically depressed: regional, remote and in urban-impacted schools,” she said. “If skilled migrants are now being limited… how can innovation of education, the business sector and of our way of life here continue?”
Like Ms Tagalan, the chief executive of one of the country’s largest co-working spaces Tank Stream Labs Bradley Delamare, also came to Australia on a 457 visa.
Mr Delamare arrived in the country in 2011 from the UK on a 457 visa sponsored by EY. He said the process was made a lot easier because a large corporation was behind it and had the resources to manage the process for him.
“There are a huge number of creative and savvy migrants who are not just working for large companies on their visas, but have eventually gone on to launch their own small businesses and startups,” he said.
“I just hope the Temporary Skills Shortage visa is as attractive to foreign talent so they won’t be deterred from working in Australia.”
StartupAUS chief executive Alex McCauley said any replacement skilled visa program should be streamlined to reduce its cost to early-stage companies.
“A startup spends an average of $15,000 on all the legals and search costs behind one 457 visa sponsorship, and they are not going to that expense simply to hire someone they could have hired within Australia,” he said.
With US President Donald Trump simultaneously announcing a review of the US’s skilled visa program, Mr McCauley said Australia should not be adopting a “closed” stance but pressing its advantage.
“There is definitely an outflow of talent from California’s tech scene, including people who have been there and done that in the growth of some huge and successful companies. We need to be making it as easy as possible for them to be sponsored into Australia.”
This article originally appeared in the Financial Review. Read the original here, or follow the AFR on Facebook.