Migration Newsflash. Revised 457 occupation lists and legislative changes from 1 July July 2017

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1 Migration Newsflash 4 July 2017 Revised 457 occupation lists and legislative changes from 1 July 2017 Revisions have been made by the Government to the Short Term Skilled Occupation List (STSOL) and Medium and Long Term Strategic Skills List (MLTSSL) which take effect from 1 July 2017 alongside important legislative changes that impact temporary and permanent skilled migration. The revisions to the lists of occupations eligible for either 2 year or 4 year sponsorship on a Subclass 457 visa (and Temporary Skill Shortage (TSS) visa once introduced in March next year) have been made following stakeholder consultations held by the Department of Immigration and Border Protection, and industry feedback and representation to the Government. These changes will result in previously removed specialist occupations such as Petroleum Engineer, Geophysicist, Hydrogeologist, Biotechnologist and Metallurgists added to the MLTSSL, and engineering occupations such as Chemical Engineer, Materials Engineer, Industrial Engineer, Civil Engineering Technician and Electronic Engineer which were previously restricted, to be eligible for 4 year visa sponsorship. Importantly, senior management occupations notably Managing Director and Corporate General Manager have been transferred from the STSOL to the MLTSSL with specific caveats affording multinational corporations with the ability to appoint high salaried foreign executives entering as intra-corporate transferees to fill these executive level roles for up to 4 years KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name and logo and are registered trademarks or trademarks of KPMG

2 A summary of the revisions made to the STSOL and MLTSSL is provided below (The full lists of eligible occupations are available here): ANZSCO Removed occupations added to MLTSSL ANZSCO Removed occupations added to STSOL Petroleum Engineer Research and Development Manager Food Technologist Production Manager (Manufacturing) Geophysicist Music Director Hydrogeologist Music Professionals nec Life Scientist (General) Artistic Director Biochemist Aeroplane Pilot Biotechnologist Flying instructor Microbiologist Helicopter pilot Life Scientists (nec) Nurse Researcher Metallurgist Web Developer Natural and Physical Science Professionals (nec) ICT Support and Test Engineers nec Horse trainer ICT Support Technicians (nec) ANZSCO Occupations on MLTSSL where restrictions for 457 visa sponsorship have been removed Aircraft Maintenance Engineer (Avionics) Chemical Engineer Butcher or Smallgoods Maker Materials Engineer Dressmaker or Tailor Industrial Engineer Retail Buyer Production or Plant Engineer ANZSCO Occupations moved from MLTSSL to STSOL Civil Engineering Technician Production Manager (Mining) Production Manager (Mining) Moved to STSOL Anaesthetist Electronics Engineer ANZSCO Occupations removed from STSOL Stonemason Psychotherapist ANZSCO Occupations moved from STSOL to MLTSSL Fleet Manager Chief Executive or Managing Director Equipment Hire Manager Corporate General Manager University Tutor Faculty Head Picture Framer Chief Information Officer Property Manager Environmental Manager Real Estate Agent Principal Musician (Instrumental) Real Estate Agent Statistician Real Estate Agent Representative Economist Mining Engineer (excluding Petroleum) Engineering Professionals (nec) Chemist Environmental Consultant Environmental Research Scientist Environmental Scientists (nec) Botanist Marine Biologist Zoologist Conservator Meteorologist University Lecturer (Suitable for the position of Research Associate or Research Fellow in a University) Multimedia Specialist Software & Applications Programmers (nec) ICT Security Specialist

3 Legislative changes from 1 July 2017 Apart from the revisions made to the eligible occupation lists (as effected by legislative instrument IMMI 17/060), a raft of other legislative changes have also come into effect as part of progressive changes in the lead up to introduction of the TSS visa in March 2018 (as flagged in our Migration Newsflash releases of 20 April and 10 May 2017). The changes impacting the skilled migration program from 1 July 2017 are detailed as follows: Temporary Work (Skilled) (Subclass 457) visas Removal of language salary exemption where the base rate of pay (expressed as annual salary) is at least AUD 96,400 for all applications lodged on or after 1 July 2017 unless the applicant is an employee of an overseas business who is transferring to Australia to work for that company or an associated entity of the company. Mandatory provision of penal clearances for all applications lodged on or after 1 July This requirement applies to all applicants aged 16 years and older and is for all countries lived in for 12 months or longer in the last 10 years. Broadening of categories and specification of a range of criteria to enable low-risk type organisations including low volume users of the program to qualify to apply for accredited sponsorship status. Employer Sponsored Permanent Migration (Subclass 186/187) visas The age limit of applicants applying under the Direct Entry (DE) stream of Employer Nomination Scheme (ENS) (Subclass 186 visa) and the Regional Sponsored Migration Scheme (RSMS) (Subclass 187 visa) is reduced to under 45 years from 1 July The age limit of applicants applying under the Temporary Residence Transition (TRT) stream of the ENS (Subclass 186 visa) and the RSMS (Subclass 187 visa) remains at under 50 years until 1 March 2018 when it will fall to under 45 years in alignment with the DE stream. The current age exemptions will still be available under ENS and RSMS. The minimum language requirement for applicants applying under the TRT stream of the ENS (Subclass 186 visa) and the RSMS (Subclass 187 visa) is competent (i.e. an International Language Testing System (IELTS) (or equivalent test) score of 6 in each component) in alignment with the DE stream. The language and skill exemption for visa applicants with nominated earnings at least equivalent to the current Australian Taxation Office top individual income tax rate (AUD 180,001) has been removed for all applications including applications lodged before 1 July 2017 and have yet to be finally determined. This is significant change that has not been previously flagged in any of the Government s announcements on proposed changes and hence clarification is being sought from the Department on the removal of these exemptions with no consideration for transitional arrangements. A second nomination cannot be made for the same position that is linked to a visa application that has not been finally determined thereby meaning that the visa application can either be withdrawn or make be subject to refusal if the first nomination has been refused. All DE stream nominations must include the identity of the nominee similar to the provisions under the TRT stream. In addition, genuine need provisions are introduced for all streams of the ENS and RSMS

4 which compel employers to provide evidence of a genuine need to have nominees work in the nominated position Specification of types of training funds that are eligible for Training Benchmark A and the types of expenditure on training that are acceptable to Training Benchmark B which employers must choose to either satisfy. General Skilled Migration (Subclass 189/190/489/485) visas Specification of occupations and assessing authorities for purpose of General Skilled Migration. The age limit of applicants applying under the points tested General Skilled Migration (subclass 189/190/489/485) visas is reduced to under 45 years from 1 July Introduction of a new stream under Skilled Independent (subclass 189) visa which provides New Zealand Citizens who are Special Category (Subclass 444) visa holders in Australia with an additional pathway to permanent residence. A summary of the changes and anticipated changes from 1 July 2017 and 1 March 2018 respectively is provided below: Visa Subclass Effective 1 July 2017 Effective 1 March 2018 Age Skill Occupation List STSOL or MLTSSL 186 DE Under 45 Skills + 3 years 187 DE Under 45 Skill Levels 1, 2, TRT Under 50 2 years on 457 visa 187 TRT Under 50 2 years on 457 visa 189 Under 45 Skills Schedule 1 IMMI17/058 Approved 457 Occupation Approved 457 Occupation Age Skill Occupation List Under 45 Skills MLTSSL + 3 years Under 45 Skill Levels Schedule 1 1, 2, 3 IMMI17/058 Under 45 Under 45 3 years on eligible visa (TBC*) 3 years on eligible visa (TBC*) MLTSSL Under 45 Skills TBC* TBC* MLTSSL 189 NZ Exempt Exempt Exempt Exempt Exempt Exempt Exempt Meet income threshold unless exempt 190/489/485 Under 45 Skills *To be confirmed STSOL + MLTSSL Under 45 Skills STSOL + MLTSSL

5 What does this mean for business? The expanded list of occupations will provide businesses with greater access to key skills from overseas to help bridge the gaps in skills which cannot be reasonably filled locally. Employers however will need to be aware of the specific caveats placed on eligible occupations when nominating these occupations for either temporary work visas or employer sponsored permanent migration. These will be critical in determining whether an occupation is eligible for sponsorship on nomination. Also, the ability for high salaried employees to seek exemptions for skill and language is no longer available under the employer sponsored permanent migration program from 1 July 2017 including applications that were lodged pre-1 July 2017 but have yet to be determined. To re-iterate, in relation to applications that have been lodged but yet to be decided (and which relied on preexisting exemptions available prior to 1 July 2017 and duly addressed at the time of application), clarification is being sought from the Department on how these applications would be treated. The Government s attempt to apply the aforementioned changes retrospectively will adversely impact on the cohort of prospective skilled migrants who contribute substantially to their employers businesses and the broader economy; and who have already entered into permanent full time contracts of at least 2 years upon the grant of permanent residence in Australia. Key considerations for business It is imperative that businesses carefully consider how the aforementioned changes will affect prospective employees both from a temporary work visa perspective and for of their eligibility for permanent residence prior to offering an assignment or contract of employment for them to relocate to Australia for work. With protracted timeframes for the processing of 457 visas arising from the implementation of progressive changes to the program, the broadened framework allowing low risk sponsors to gain accredited sponsorship status is a welcomed change that would benefit business through access to priority processing arrangements.

6 Contact us KPMG will issue further updates on the changes as they arise and we will work with you to help minimise the impact of these changes, therefore do not hesitate to contact us with any queries. National Practice Michael Wall National Leader Immigration mwall2@kpmg.com.au New South Wales and ACT Belinda Wright bwright3@kpmg.com.au Victoria and Tasmania Patrick Forwood pforwood@kpmg.com.au Queensland Stephen Abbott sabbott@kpmg.com.au Western Australia, Northern Territory and South Australia Ivan Hoe ihoe@kpmg.com.au KPMG has Immigration Advisory capabilities across our 148 member firms globally. Please contact your Australian representative who will assist in providing the appropriate contact in the country you require. The information contained in this document is of a general nature and is not intended to address the objectives, financial situation or needs of any particular individual or entity. It is provided for information purposes only and does not constitute, nor should it be regarded in any manner whatsoever, as advice and is not intended to influence a person in making a decision, including, if applicable, in relation to any financial product or an interest in a financial product. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. To the extent permissible by law, KPMG and its associated entities shall not be liable for any errors, omissions, defects or misrepresentations in the information or for any loss or damage suffered by persons who use or rely on such information (including for reasons of negligence, negligent misstatement or otherwise) KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name and logo and are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.