Unnecessary requirements: Why startups aren’t utilising the Global Talent Scheme visa

On July 1, 2018, the ‘Global Talent Scheme’ (GTS) pilot was rolled out for an expected 12 months, comprising of two streams.

1. An established businesses stream for businesses that are either publicly listed or with an annual turnover of at least $4 million in each of the past two years; and
2. A startup stream for certain startups operating in a technology or STEM field.

To access the GTS pilot, an interested business would need to first negotiate an agreement with the Australian government. Once approved, in theory, the business could then sponsor a foreign national for a TSS visa under that agreement, and avoid some of the hindrances to attracting top talent to Australia.

GTS visa approvals

After a number of delays (largely attributed to political changes) it appears that unfortunately, the program has had minimal traction. A Freedom of Information (FOI) request made by Hannan Tew indicates that as of January 31, 2019, a total of:

• eight applications (these being primary and secondary applicants, or in other words, family members) were lodged and granted under the established business stream; and
• no applications were lodged and granted under the startup stream.

The FOI document reveals the number of visa applications submitted and granted under the GTS pilot, as opposed to the number of agreements negotiated under the GTS pilot. However, media announcements indicate at least four companies (Cochlear, Salesforce, Rio Tinto and SafetyCulture) have had agreements approved under the established business stream, and one company under the startup stream (Q-CTRL).

Okay, so what is the benefit of the GTS?

The existing TSS visa program permits any eligible business to bring in foreign workers. However, it is restricted in that the worker must be nominated in an occupation listed on either the:

• Medium to Long Term Strategic Skills List (MLTSSL), which allows for visas for up to four years, can be continually renewed, and has pathways to Australian permanent residency; or
• Short Term Skilled Occupation List (STSOL), which allows for visas for up to two years, can be renewed only once onshore, and does not have pathways to employer-sponsored permanent residency.

Both lists are available in a legislative instrument here.

The primary benefit of the GTS pilot is that it allows the business to treat any position as though it correlates to an occupation listed on the MLTSSL. For example, a “Sales and Marketing Manager” (listed on the STSOL) could be eligible for a four-year visa and have pathways to permanent residency which would not have otherwise existed. A summary of the broader benefits is detailed in an article we published when the GTS pilot was first in play. This well-written article also discusses the benefits of the GTS primarily focusing on (and we agree):

• employment of talent in emerging sectors (where certain positions cannot be cleanly categorised into the existing list occupations); and
• the ability to fill hybrid roles (also not clearly on list occupations).

So, why aren’t startups jumping on board?

Let’s talk about hybrid roles and emerging-sector talent.

Practically, most emerging-sector positions are highly technical and skilled roles that can still ‘loosely’ be matched to an occupation on the MLTSSL. While obviously the ‘fitting a square peg into a round hole’ option is less than desirable, the department appears to accept this. It’s a common practice that already occurs due to the limitations of the ANZSCO occupations and the practical reality is that most savvy companies and immigration lawyers continue to take this approach (successfully).

Alternatively, the GTS pilot provides the option of undertaking the additional bureaucratic process of negotiating an agreement with the Department for a specific role before then lodging a TSS visa. However, as the data seems to indicate, this longer process has understandably not yet been utilised.

The point seems to be, why would any business want to take on an additional bureaucratic process without any real significant benefit?

Apart from an expedited visa processing time (which might actually be countered by the additional GTS agreement preparation time) it appears the GTS pilot needs to implement further benefits to the startup stream to attract any actual use. Most importantly, the GTS pilot doesn’t remove what we’ve seen as the biggest impediment to startups (and any business) bringing in foreign workers: the high cost of the visa (including the compulsory Skilling Australia Fund levy).

A potential solution

How about we remove the requirement for payment of the Skilling Australia Fund (SAF) levy for companies under the startup stream (and/or subsidise the lodgement fee)?

One of the biggest issues, since the 457 visa was replaced by the TSS visa, was the significant increase in cost, both in terms of the government lodgement fees and due to the introduction of the Skilling Australia Fund (SAF) levy.

The SAF levy is payable for each TSS visa lodged by a business, the purpose of which is to raise funds to train Australians, and is payable upfront at a cost of:

• $1,200 per year of visa for businesses with a turnover of less than $10 million; or
• $1,800 per year of visa for business with a turnover of $10 million or more.

In the case of a four-year visa, this represents an additional cost of $4,800 for small businesses or $7,200 for other businesses. Not including professional fees, a business is looking at the following expenditure in fees to the government alone.

The SAF levy is there to apparently pay for training of Australians. But in order to access the GTS pilot:

• The business must demonstrate access to the GTS pilot will support job opportunities and skills transfer for Australians; and
• The applicant must demonstrate they have “capacity to pass on skills/develop Australians”.

So, do startups really need to be hit twice with the training requirement?

The mandatory payment of the SAF levy, in addition to the very high government lodgement fees, can be crippling for a bootstrapped startup counting every dollar. The savings from excluding startups from paying the SAF fee would represent a huge benefit and provide that little bit extra to really push through on what matters most: the idea.

As the startup stream only allows access to five positions per year, there is already a built-in mechanism to prevent larger startups from abusing the SAF levy exclusion. The economic cost of a handful of waived levy fees per startup will also be outweighed by the significant economic stimulation that the new talent brings in (even say, just from the expenditure they will now contribute to the Australian economy).

It’s by providing tangible cost-saving benefits like this that startups are more likely to be incentivised to pursue the GTS pilot (and really have the capacity to bring talent to Australia).

Note: In the FOI request previously referenced, a total of eight visas (primary and secondary) had been granted under the entrepreneur stream of the 188 visa, a pathway designed to attract entrepreneurs to Australia and rolled out nearly two-and-a-half years ago.

This article was first published on the Hannan Tew Lawyers website and was republished with permission. Read the original article.

NOW READ: “The potential to move the needle”: South Australian budget introduces new visa for startup founders

NOW READ: “Insider threats”: Mozilla and FastMail sound alarm about Aussie staff as AA Bill incentivises moving elsewhere