Immigration and visa changes – Defence industry | KPMG | AU

Immigration and visa changes – Is the Defence Industry ready?

Immigration and visa changes – Defence industry

Mike Kalms and Michael Wall discuss the implications on the defence industry of Australia's changing visa and immigration policies.

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Defence companies often look overseas for talent.  They have to. 

The ADF’s project cycles are too long – who can hold onto talent across the years between projects?  But now the immigration and visa rules are changing. 

So what’s happened?

The Federal Government has made a strong commitment to continuous
shipbuilding in Australia, and alongside this comes a need to stimulate
workforce growth in order to meet the demands of the build program. Government initiatives such as the proposed establishment of a Naval Shipbuilding College and bi-partisan agreement to the maritime investment program outlined in the Integrated Investment Program and Naval Shipbuilding Plan are encouraging for the defence industry and provide some security on which to build their businesses and shape their workforce.

To meet the aspirations of our Government, and establish an enduring shipbuilding and maritime sustainment capability within the domestic workforce, it is going to take time.

Employers have filled skills shortages in the Australian labour market in recent years by generating a skilled workforce through avenues such as the 457 temporary visa. 

However, the latest reforms to Australia’s work visa framework will have knock-on effects on how labour demand can be satisfied into the future, where demand exceeds local supply.

  • Employer-sponsored skill migration is now subject to revised eligible occupation lists with pre-determined visa validity, and removal of pathways to obtaining Australian permanent residence for foreign workers who are in short-term occupation.
  • Certain occupations have been removed altogether and remain ineligible to be sponsored for work visa purposes.
  • The replacement of the 457 visa with a new Temporary Skilled Shortage (TSS) visa from March 2018 which will require mandatory Labour Market Testing (if no international obligations apply) and the payment of a new Training Levy.

Whilst the changes are designed to address genuine skill gaps in the domestic workforce, they will inherently impact on the Australian Defence Industry’s ability to recruit and retain a skilled workforce.

The removal of certain occupations limits the ability for the shipbuilding industry to source talent outside Australia.

Furthermore, certain occupations will only be granted a 2-year visa, compared to 4-year visas for other roles. In practice, this reduction may be a disincentive for foreign nationals who are suitably skilled in these occupations to relocate to Australia to help fill any gaps in skills that cannot be adequately sourced from within the local labour market.

Four implications for Defence Industry leaders and HR professionals

  1. For global organisations seeking to establish a presence in Australia, or resident Primes seeking to expand their current footprint, these changes restrict your ability to draw upon an experienced overseas workforce to initiate Australian operations in parallel to training local staff as part of a long-term strategy.
  2. It reinforces the need for workplace and business continuity planning for Australian Defence Industry players, in considering the short and long termimplications of these visa changes as part of their business strategy. This also includes forecasting the costs of the increased turnover of the inbound workforce, including higher visa charges, relocation costs, assignment benefits and taxes. Yes, the Government is planning to address industry-wide workforce planning as part of the Naval Shipbuilding College’s establishment, but this does not diminish industry’s role in managing that challenge.
  3. Industry participants must monitor the ongoing impact and availability of a suitably skilled workforce to support the ongoing development of Australia’s long-term capability and competiveness on a global scale.  A key challenge will be to ensure labour agreements allow for recruitment of specialist skills which cannot be identified from local markets and training arrangements embedded to ensure appropriate skills transfer to the local market.
  4. The changing landscape also serves as a timely reminder for Australian businesses to ensure your migration and visa processes are aligned to the new requirements and monitored for ongoing compliance.

KPMG can assist defence industry in managing these policy changes and the impact they may have on business operations, workforce and taxation. 

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