Analysis: 491, 494 and 191 visas, the new kids on the block

As Australia is in the midst of a federal election, there will no doubt be little or no major change to immigration regulations for some time, perhaps until well into the new parliamentary term.

So far immigration has been relegated in the election, perhaps due to a general consensus by the two biggest parties. Exceptions include the Labour Party seeking an increase to the Temporary Skilled Migration Income Threshold (TSMIT) from $53,900 to $65,000, which would likely devastate businesses in regional areas that rely on sponsoring overseas workers and where wages and the cost of living are generally less than in cities and where skill shortages are more prevalent. The Coalition meanwhile has pledged to leave humanitarian visas capped at 18,750 places a year.

Many people are however still trying to digest the recent announcements, especially the new regional skilled visas: the provisional Subclass 494 – Skilled Employer Sponsored Regional (Provisional) visa, the Subclass 491 – Skilled Work Regional (Provisional) visa, and the permanent Subclass 191 – Permanent Residence (Skilled Regional) visa given the swift rollout of these visas just days before the election was called. This article analyses why they were introduced and what they aim to achieve. Based on previous articles it may come as no surprise…

Note: A lot of this analysis is based on conjecture. Some important legislative instruments relating to these visa subclasses have not been released and may not be known for some time, which could confirm or negate some of the suggestions in this article.

Immigration, and congestion-busting

While immigration is governed by federal laws and policies, it is without doubt that Australia’s three largest cities, Sydney, Melbourne, and Brisbane have received a disproportionate number of migrants between 2007 and 2017. During this period, these three cities alone received 68.1 per cent of all migrants according to the Australian Bureau of Statistics. Without foresight, which many politicians either do not possess or require beyond the next election, spending towards infrastructure tends to play catch-up.

While these three cities have received an influx, other cities, such as Darwin are facing population decline, which is not helpful if that city or region desires economic growth and prosperity.

The migration figures quoted above, however, include temporary visas, such as students and visitors, which is important to note as Australia’s third and fifth biggest exports are education (student visas) and personal travel (visitor visas). Both these exports require temporary visas which do not provide the holder the right to remain in Australia. This right is only reserved for permanent visa holders, and of course Australian citizens.

Furthermore, it has been previously reported that the Northern Territory, a region that is actively seeking migrants to settle in its vast jurisdiction, confirmed that the longer a person lives there, they more likely they will settle there. Five years is the apparent sweet spot.

Given the above, and without harming Australia’s economy by attempting to dissuade international students and tourists (why or how could they regulate this is another topic), immigration laws can only do so much. Australia, a signatory to the International Covenant on Civil and Political Rights (ICCPR) cannot restrict a person’s freedom of movement if they are lawfully in Australia. How can they, therefore, encourage migration to areas where it is needed, and keep them there for enough time to dissuade them from moving to a major city after they are granted a permanent visa?

The carrot (permanent residency) versus the stick (visa cancellation)

While it may be difficult if not impossible to regulate where temporary visa holders visit, study or work, it does not prevent tinkering with permanent migration numbers, which may in turn change the behaviour and preferences of current and prospective temporary visa holders who have aspirations to becoming permanent visa holders. By changing the requirements for permanent visas, these changes will trickle down to affect temporary visas as well, particularly student visa holders.

Those that have navigated the path to an Australian permanent visa (and the migration agents who assist them) know that there is one very important difference between temporary and permanent visas besides being able to remain in Australia permanently.

Temporary visas usually impose multiple visa conditions depending on the nature of the visa and its purpose. Permanent visas do not impose visa conditions, meaning that once a person is granted a permanent visa, they can live where they want in Australia, with two notable exceptions. While there are general powers to cancel permanent visas under certain situations, such as because of fraudulent information and documents, the Migration Act 1958 (Cth) prescribes provisions to enable cancelling two types of permanent visas under specific grounds: business skills visas under section 134 and regional sponsored employment visas under section 137Q, which is currently embodied in the Subclass 187 – Regional Sponsored Migration Scheme visa.

But statistics have showed that the number of 187 visas cancelled using this power has been miniscule. This leads to two possible conclusions: either the majority of 187 visa holders are commencing and completing the two years of employment required of their 187 visa or the Department of Home Affairs do not have the resources to ensure proper compliance.

If it is the latter, the cost-effective step is to transfer the onus of compliance from Home Affairs to the visa holder. Enter the Subclass 494 – Skilled Employer Sponsored Regional (Provisional) visa and Subclass 191 – Permanent Residence (Skilled Regional) visa.

494 visas: the 187 visa-lite

The 494 visa is in all intents and purposes a 187 visa under the Direct Entry stream but without the benefit of being a permanent visa. Unless a visa applicant is a transitional 482 worker, which is defined as a person who on 20 March 2019 held a Subclass 482 (Temporary Skill Shortage) visa in the Medium-term stream; or was an applicant for a Subclass 482 (Temporary Skill Shortage) visa in the Medium-term stream that was subsequently granted, a 187 visa will be all but abolished from 16 November 2019.

The possibility of a permanent 191 visa is now up to the 494 visa holder to substantially comply with their visa conditions, including:

  • Condition 8579 - live and work in a designated regional area; and

  • Condition 8608 – not cease employment with their sponsor for more than 90 days, among other things.

They will also need to meet minimum taxable income thresholds for at least the last 3 years, among other things.

By adding an extra step to obtain a permanent visa, 494 visas, while obviously still unable to forcibly quarantine migrants to certain areas, this visa provides a significant incentive in the form of a permanent visa for 494 visa holders to live and work in a given regional area for a minimum amount of time while still retaining the ability to cancel this visa for breaches of visa conditions. A 494 visa holder who has breached their visa conditions would not contemplate applying for a 191 visa as they will likely be refused. Furthermore, that 494 visas come under the standard business sponsor compliance framework, mandatory reporting for certain events, such as ceasing work, is required by the employer under pain of administrative sanctions.

These two things solve the issue of gathering adverse information when they occur because businesses are obliged to provide it. It also cuts the costs to investigate potential visa breaches, which they may or may not be able to do currently with 187 visas.

General Skilled Migration, permanent migration and 491 visas: the easy target

If employer sponsored 187 visas will be effectively abolished and “replaced”, what can be said of General Skilled Migration (GSM) visas?

When it was announced that permanent migration numbers would be reduced by 30,000 to 160,000 places in the next program year, it did not come as a shock that this would be taken from the GSM visa program. The reason is simply that independent skilled visas are not demand-driven like employer sponsored temporary and permanent visas. As above, once a permanent Subclass 189 – Independent Skilled visa, Subclass 190 – Nominated visa, or a Subclass 887 – Skilled – Regional visa has been granted, there is nothing preventing these visa holders, who can be granted a permanent visa before even setting foot in Australia, from settling in a major city.

Family visas, the other major component of the permanent visa program will remain unchanged. Considering these visas predominantly consist of partner visas, if would be unpalatable, and politically suicidal to expect partners of Australian citizens, Australian permanent residents, and eligible New Zealand citizens to not live with their sponsor wherever they may be!

What was surprising with GSM visas was the necessity to replace the Subclass 489 – Skilled - Regional (Provisional) visa with the Subclass 491 – Skilled Work Regional (Provisional) visa from 16 November 2019 when there are many, many similarities with the two subclasses.

There are, however, two major differences between these subclasses that should be highlighted. The first is that eligible relative sponsors of 491 visa applicants (who must be an Australian citizen, an Australian permanent resident, or an eligible New Zealand citizen) must be usually resident in a designated regional area. Comparatively, what is a designated area for eligible relatives for 489 visas include Melbourne and Perth, cities that will not be possible under the 491 visa.

The second big difference is that visa condition 8579, which requires 491 visa holders to live work and study only in a designated regional area listed at the time the visa was granted will apply to all visa holders, not just the primary visa holder. This prevents partners and to a lesser extent children of the primary visa holder working in a non-designated regional area, which would increasing the likelihood of the primary visa holder leaving for the city as soon as their 887 visas have been granted.

These two important changes are in addition to the extra year necessary for 491 visa holders to comply with visa conditions to meet criteria for a 191 visa in comparison to the minimum two years for a 489 visa holder to be eligible for an 887 visa, not to mention tougher income requirements too.

The lingering question on GSM visas is precisely how will the numbers change in the next program year? The paltry number of eligible relative sponsored 489 visa invitations compared to 189 visa invitations is a cause for concern: only 110 invitations for 489 visa have been issued this program year compared to 22,720 invitations for 189 visas. These 489 invitations, of course, do not account for invitations to State or Territory nominated applicants. If wanting to have capable skilled migrants live and work in a regional area is the goal, one would expect these numbers to be reversed. To answer this question, we must wait until probably July.