A “game changer” for Aussie startups: Government unveils new trial visas aimed at startup scene

The federal government has today unveiled a new trial visa scheme aimed at fixing Australia’s tech talent shortage, which is being hailed as a “game changer” for local, fast-growing startups.

Starting July 1, the government will trial the new ‘Global Talent Scheme’ visa for one year, born from the ashes of the 457 visa which was scrapped and replaced with a new short-term working visa system this month.

Startups and industry bodies have been long-time critics of the government’s tightening of the 457 visa requirements – believing these would stifle innovation and industry growth – and have been calling for changes for over 12 months.

It appears those calls have been answered as the new visa trial includes a startup-specific ‘stream’, allowing companies who operate in STEM-related fields hire up to five positions per year via the visa, with applicants being given a pathway to permanent residency after three years.

Those applicants must have three years work experience that is “directly relevant” to the role they are taking, however the new visa trial does not have a set list of occupations, allowing startups to hire for emerging roles in the tech industry.

There are a number of concessions attached to the visa, however, with startups needing to be endorsed by a “startup authority” to be eligible for the stream. They must also prove that they have given preference to Australian workers when recruiting for the role before turning to those requiring a visa. StartupSmart understands this assessment with involve the percentage of the startup’s workforce that is Australian, as well as its training of Australians.

Further consultation between now and July will determine who or what will be considered a “startup authority”.

Employees on the global talent scheme visa must also be able to pass on their skills to train and develop local workers, and must have minimum annual earnings at the market salary rate. However, in what StartupAus chief executive Alex McCauley says is a first, the employee’s annual earnings can include company equity.

McCauley tells StartupSmart the industry advocacy body had been in discussion with the government about the new visa changes for some time, and was initially concerned the trial visa would only be made available to traditional, “trusted” companies.

The visa does include a stream for “established” businesses, requiring them to have annual revenue of $4 million and to be paying the applicant over $180,000 per year, but gives the business the option of hiring up to 20 positions each year.

“We find when Australian policymakers talk about ‘trusted companies’, they’re talking about established businesses with a track record of profitability and stability,” McCauley says.

“Obviously startups can’t satisfy those criteria, so we wanted other criteria for them to look at for special visa treatments.”

He’s also a fan of the government’s choice to let startup industry bodies and other “authorities” decide what is and isn’t a startup, saying it’s a smart way to tap into the industry’s experience and let it “self-regulate”.

Changes praised by industry

The trial visa format is a change of pace for the federal government, whose changes to the 457 visa program saw it reduce the number of eligible occupations, reduce access to residency pathways, and introduce stricter English language tests.

McCauley says the government usually takes a “risk management approach” around things like visas, and can be conservative about the types of companies it gives special treatment to.

But the approach taken in this instance, especially for allowances around equity, shows a change of heart for the government, one which McCauley and other vocal opponents of the 457 visa changes are welcoming. In a tweet, Atlassian co-founder Mike Cannon-Brookes gave “kudos” to the government for the changes.

I should say here – kudos to the govt for responding to feedback, being build-measure-learn focussed (1 year trial is a great idea!) and to @AlanTudgeMP for getting “fair dinkum” into his quote 🇦🇺 https://t.co/KMUOUlzkoO

— Mike Cannon-Brookes 👨🏼‍💻🧢🇦🇺 (@mcannonbrookes) March 18, 2018

Wes Sonnenreich, co-founder and chief executive of experiential learning software company Intersective, tells StartupSmart his business is currently eligible for the visa trial within the startup stream, but is predicting it will move to the established visa stream over the next two years.

He says the visa trial is well researched and likely to be effective, and helps startups like his hire international talent at all points of a company’s life-cycle.

“Once we cross that threshold to the established stream it’s going to be a lot easier to go to markets like the US where there’s key machine learning talent and find the best of the best for our startup,” Sonnenreich says.

“I think the trial is well researched and shows the government spoke to a lot of people in consultation.”

However, the co-founder is hoping to have a bit more consultation before the visa is put into action. He also hopes the government will reassess its requirement for three years of relevant work experience for international graduates from Australian universities working with startups on a two year post-study visa.

Under the current proposal, a startup wanting to hire a graduate under the new visa wouldn’t be able to because it’s unlikely they would have enough prior work experience to qualify. Sonnenreich is hoping to change this via consultation with the government.

A game changer for startups

McCauley calls the new visa trial a “game changer” for startups and scale-ups. He notes the rule about candidates having three years of relevant work experience isn’t likely to pose an issue as many companies are looking to hire already skilled and experienced experts or executives.

Tim Bos’ blockchain company ShareRing is one of them. He tells StartupSmart the new visa trial is a great opportunity for his company to hire skilled staff who can then pass those skills onto his more junior workers. The newly-launched company is also operating in the rapidly emerging blockchain space, meaning knowledgeable blockchain developers can be in scarce local supply.

“An issue we face is in finding people with a lot of experience in the areas of blockchain, telematics and sensors, but if we are given the option to hire this talent from overseas, it would be hugely beneficial to our knowledge growth and overall business prosperity,” he said.

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