Australias 457 Visa Policy and Indian IT Sector

October 08, 2013
Australias 457 Visa Policy and Indian IT Sector
Indian IT companies have set aside their fears about the new regulatory mechanism put in place by Australia for the issuance of 457 temporary skilled work visas and have  promised to work within its framework. Australian High Commissioner to India, Patrick Suckling said this in Bangalore recently, while speaking to reporters on the sidelines of an event organised by the Bangalore Chamber of Industry and Commerce.

Measures not a reduction  

Claiming that the new measures in place for the 457 visa policy was not a real diminution or reduction of 457 visas, Mr Suckling termed the system as a successful one. "Over 200,000 skilled people have come to Australia through that visa system on an average per year, many from India," he said.
Elaborating on his discussions with Indian IT firms, Mr Suckling said: "IT companies that I have talked to say that they are prepared to work with us, and they are still getting skilled people if they need to, if they are not found in Australia they can still take them from somewhere else." 

Following US and Canada

Following on the lines of the US and Canada, Australia too had tightened its visa regime for operating the 457 temporary skilled work visa category. Under the new provisions, firms wanting to sponsor workers from outside Australia were required to prove that they had considered local hires and adequately advertised job opening in local newspapers. 

Modifications in the 457 visa category was brought into effect following a crackdown by authorities who found that visas were being issued for jobs that did not seem to experience skill shortages in Australia. Amid protectionist out-crys, the Australian media too, have been alleging misuse of the visa provision by Indian IT firms. The tough local employment scenario in Australia too has augmented the demand for imposing structural restrictions in the 457 visa process.

What will be the effect on bottom-line of Indian IT firms?

According to a report in the Times of India, 8- 9 per cent of the revenue of Indian IT companies comes from the region. The report says that TCS, which is India's largest software exporter, services over 40 clients in Australia and New Zealand. Its clientele include telecom major Telstra, Australian Gas Light Company, Qantas, Foxtel and Lloyds. 

Another Indian IT leader, Infosys, has over 2000 employees delivering ITES to clients in Australian and New Zealand includes Telstra and another telecom company. Recently, Telstra is said to have moved 170 jobs to Infosys. The company had earlier, in 2009, awarded a $450-million maintenance contract jointly to Infosys and EDS. With several other Indian IT majors having a presence in the region, the move is widely expected to hurt the bottom-line of Indian firms as it will increase recruitment and employee costs for them.

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