482 visa “perfect storm”: Budget cuts, strong demand and visa delays

A mainstream media article over the weekend highlights growing discontent with Australia’s visa processing of skilled visas reporting major budget cuts of one-third, around $875 million to migration-related processing for the next financial year, which is less than 3 weeks away.

It is unfortunate as visa processing times for skilled visas remain stagnant after emerging from pandemic-induced lockdowns and just when businesses need them most. The two major factors involved are the aforementioned budget cuts and a historically low unemployment rate that invariably drives up demand for skilled visas and particularly temporary work visas: the subclass 482 – Temporary Skill Shortage visa and to a lesser extent the subclass 494 – Skilled Employer Sponsored Regional (Provisional) visa. These two visas were designed to address demand-driven skill shortages whose holders would fill some of the now 423,000 job vacancies around Australia.

Other issues reported within the Department are low staff morale, and a culture set on hampering applications rather than facilitating efficiencies such that case officers are “trained to look for reasons to refuse.”

Sponsoring businesses are frustrated not only with processing times but also with excessive costs and mandatory labour market testing.

Visa processing times are updated regularly and published online. These vary by visa stream. The median processing time for 482 visas is 46 days for the Medium-term stream and 83 days for the Short-term stream. The 90th percentile processing times are grim: 9 months for the Medium-term stream and 15 months for the Short-term stream.

Back in September 2018, the Department of Home Affairs, stated that processing times for 482 visas were much faster than those for the visa subclass it replaced, the subclass – 457 Temporary Work (Skilled) visa. This claim has not aged well.

In that same newsletter, they announced the end of priority processing requests.

How applications are processed is according to a binding direction from the Minister for Immigration. This is made under section 499 of the Migration Act 1958 (Cth) for which a summary can be found on Home Affairs’ website. Those at the front of the queue are applicants nominated in occupations on the Priority Migration Skilled Occupation List (PMSOL) and applications lodged in relation to a Global Talent Employer Sponsored Agreement and the agricultural sector. This is then followed by applicants: nominated in a critical sector, whose location of employment is in a regional area, nominated by accredited business sponsors, and nominated by parties to a labour agreement. The rest are processed in order of lodgement.

These priorities are the reason why processing times for the various 482 visa streams are different.

One gripe reported are those languishing on bridging visas, whose numbers have more than doubled from 180,000 in June 2019 to 367,000. These are total numbers and therefore accounts for all types of visa applications.

Bridging visas are, however, not the biggest problem. As previously written, it is expected that the number of bridging visa holders would naturally increase. Setting aside the anxiety of waiting for a decision, provided they have suitable work rights, employers should have no complaints. Those who hold Bridging visa As or Bs can also apply for rights to travel, by being approved a Bridging visa B.

The biggest concern with long processing times is visa applicants waiting offshore as unless they can work remotely, they simply cannot be employed otherwise. Should the new Minister want to address the problem of high job vacancy numbers, processing priorities should be amended to reflect the importance of offshore visa applicants.

The solution to budget cuts within the migration program without appropriating money elsewhere is to either raise revenue, which would involve increasing the already material financial penalties to employers and applicants by upping visa application and related charges or reallocating internal resources to areas where needed. Neither solution is immediately palatable.

Lastly, there may be a conflict of ideology with the current government. Historically, the Labor Party has railed against skilled migration, including 457 visas, which was eventually stigmatised enough to be abolished. Furthermore, and even in the weeks since forming government, they envisage the solution to the current increase in inflation and cost of living pressures is raising wages, which according to many would occur with less skilled migration, especially the temporary kind. But rising wages, like inflation, do not rise evenly.

It will be interesting to see how this plays out.