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Is this the fix to Skills Shortage? The TSS VISA: A Year in Review

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Is this the fix to Skills Shortage? The TSS Visa: A Year in Review

One year into the TSS (Temporary Skill Shortage) Visa program, we take a look at how the substitute system has been performing and how the industry has reacted to the changes for attracting overseas skilled workers.

The TSS sub-class 482 was introduced in March 2018 after the Turnbull Government abolished the 457 Temporary Work Visa program because as said at the time by Prime Minister Turnbull ‘it's lost its credibility’. The program was immediately replaced by the TSS system which puts ‘Australians and Australian jobs first’.

The more rigorous TSS scheme consists of two streams; a two-year visa stream and a four-year stream requiring two-years work experience. The skilled occupations list was also reduced to focus on the areas where there is a genuine need. More stringent assessments were also introduced including a complete police record and criminal check and mandatory labour market testing.

According to data from the Department of Home Affairs, in the last financial year, there were 33,949 TSS visa grants compared to 31,851 grants of the 457 visa in 2017/2018. New South Wales (15,744), Victoria (9,491) led the charge with the twin economies of Queensland (3618) and Western Australia (3227) trailing significantly.

PwC Senior Immigration Manager, Rachel Williamson said, ‘we have seen employers with a genuine need have contributed to use the program despite the introduction of the SAF Levy. Smaller employers, on the other hand, appear to be less willing to pay the upfront levy as it is costly’.

Since the introduction of the TSS scheme, the government introduced the Skilling Australians Fund levy (SAF), a training fund that supports the skills development of Australians. The levy, which can cost as much as $1800 per year of stay, took effective 12 August 2018 and is payable in full at the time the worker is nominated.

The levy is in addition to the application fee and could be seen as an obstacle for some businesses as it can quickly add up especially for the longer-term, four-year stream.

In addition to the SAF levy, Ms Williamson also outlined that ‘employers need not only be mindful of occupations available for visa sponsorship but also be aware that overseas workers nominated under the short-term stream do not have a pathway to apply for permanent residency later on through their employers’.

Queensland and Western Australia the twin economies

Breaking down Titan Recruitment’s core business areas, sponsored visa grants came from the industries: Professional, Technical & Scientific (5150), Information Media and Telecommunications (4880) and Mining (812), with Queensland securing 816 and Western Australia 1,018.

In Western Australian and Queensland demand for work visas has slowed over the last two years, however, Ms Williamson says ‘there are already signs that the labour market may not be able to meet future demand for skills, in particular, the need for engineers across the Mining and Resources sector’.

Titan Recruitment’s Founder and Director, Craig Van Heurck agrees “we have seen an increase for engineering professionals for projects within the Mining and Rail sectors, and also Design Engineers to meet the needs of key infrastructure projects.”

“At the same time, we are seeing employers looking for explicit skills and experience such as iron ore or roads experience,” he said, “and this is when the skills demand becomes a problem.”

Van Heurck believes a fundamental change is needed as the TSS scheme is prohibitive to most businesses. “We are hearing from employers that the TSS visa system is costly,” he said. “It’s simply not sustainable to draw on a limited pool of talent with a niche skillset, neither is it sustainable, cost-wise.

Building local capability and drawing from the diverse candidate pool in Australia could be the solution, according to Van Heurck.

“We have the high-quality technical and engineering professionals to do the job right here,” he believes. “Organisations need to think outside the box and look at individuals who have the key competencies, business smarts and values, and build a framework to transfer their skills into their operations.”

“You never know, you may find an employee who is able to do an even better job, without the exorbitant outlay,” he said.

Key Points

  • The worker must be nominated for a skilled position by an approved sponsor

  • The worker must have the right skills to do the job and meet the relevant English language proficiency requirements

  • Skilled occupation list has been restructured and is subject to stringent labour market testing

  • SAF levy took effect 12 August 2018 is payable in full at the time the worker is nominated

Source: Department of Home Affairs

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