Australia Federal Budget 2020 - global workforce & talent commentary



Globility Group View

The release of the federal budget by the Australian Government was eagerly anticipated. This is one of the first budgets to be released on the cusp of a gradual opening of borders as governments adjust to driving economic recovery in an evolving COVID environment.

What insights can we take from the Australian Government on the role global talent will play in driving economic recovery?

Predictably, the budget contains a raft of measures to stimulate the local economy around personal and business tax cuts and infrastructure spending measures.

Importantly however, the budget contains some significant announcements around attracting global talent which will be so vital to driving economic growth. 

Whilst these talent initiatives are welcome, our view is that the announced measures lack some detail around how the measures will be implemented and their focus.

With talent expected to play a pivotal role in helping to drive growth and create employment opportunities, we believe that there is an opportunity for developed economies such as Australia’s to make a bold statement around the role immigration and talent attraction and retention play in driving growth.

Investors & entrepreneurs

The Australian Government has made a bold announcement that investors and entrepreneurs will be pivotal to economic recovery.

The Australian Government has a long and successful history of attracting wealthy investors and business entrepreneurs to leverage their successful business history to build their future in Australia.

Australia ranks highly as the preferred location for foreign business investors and business owners. The United States has long been the favoured destination for foreign wealthy investors via its investor immigration program.

However, Australia has historically ranked #2 as the preferred location for wealthy foreign investors. Canada and the United Kingdom also rank highly.  

The Australian Government have reinforced its commitment to attracting foreign investors and entrepreneurs and will introduce changes to improve the quality of investments and applicants.

The Australian Government Business Innovation and Investment Program (“BIIP”) will focus on higher value investors, business owners and entrepreneurs and improve the economic outcomes of the BIIP.

Additionally, places in this program will be increased to 13,500 per annum. This is a further testament to the future role the Investor Immigration program will play to help drive economic recovery in Australia.

Having stated this, it is anticipated that the skills and attributes of investors and entrepreneurs will be very targeted. Recent announcements by the Australian Government indicate that preference will be given to occupations and skills which will help deliver economic recovery and supplement health related skills in short supply locally.

Visa application charges for BIIP visas will also be increased by an additional 11.3%, which is above regular Consumer Price Indexation on 1 July 2021.

Strategies to attract global talent

Australia’s net overseas migration is set to fall into negative levels for the first time since World War II with a loss of 72,000 people forecast for the 2020-21 financial year.

A new whole-of-government Global Business and Talent Attraction Taskforce will be established to attract international businesses and exceptional talent to Australia, to support the post- COVID recovery and boost local jobs.

This budget initiative follows an earlier announcement in September 2020, when the Australian Government established a taskforce combining government and private sector experts as part of efforts to drive investment and job creation in the post-COVID-19 economy. The new "strike team" is charged with luring international businesses to Australia and will target exceptional talent in advanced manufacturing, financial services, FinTech and health.

The group was being established as talented workers and business leaders overseas looked to Australia and would target talent in countries including the United States, United Kingdom, Hong Kong and Singapore.

The team would leverage existing Australian networks abroad, including the Australian diaspora, to help identify opportunities. The Australian Government hopes to also leverage from Australia’s relative success economically, as well as from Australia’s successes in dealing with COVID both in terms of a health perspective and socially.

For over 20 years, the Australian Government has been widely regarded as innovative and forward thinking in its development and deployment of immigration policy. Many of the initiatives introduced by the Australian Government have been adopted by other developed economies including Singapore, United Kingdom, United States of America and Canada.

Some of the immigration initiatives pioneered by the Australian Government which have been adopted elsewhere include the use of people movement concessions in free trade agreements, data matching legislation, online visa lodgements, points based skilled migration and investor and entrepreneur immigration programs.

The Global Talent Independent Program (“GTI”), is a streamlined visa pathway for highly skilled professionals to work and live permanently in Australia. 

The budget included an announcement that places in the GTI program will be tripled to 15,000.

Australia is after the brightest and best global talent to work in seven future-focused sectors. The GTI program is designed to help grow our innovation and tech economies. This will create opportunities for Australians by transferring skills, promoting innovation, and creating jobs.

Australia is also a lifestyle destination, and one of the most prosperous, safe and culturally diverse countries in the world. Australia offers opportunities for innovation, with strong trading links and a business-friendly regulatory approach. Through the program, talented individuals will be given permanent residency to make their new lives in Australia.

I predict that we will see more multi-faceted regulatory immigration policy development which incorporates economic, social and wellbeing elements in multiple locations worldwide as we gradually open our borders to the movement of talent.

This in turn will require an adjustment to workforce planning and management strategies by businesses as they balance the need to drive growth in key foreign markets, whilst balancing their duty of care responsibilities to their global workforce. 

Importantly, it will also require business to adopt a collaborative approach with government to co-design cross-border talent policy which support business growth, without the burden of over-regulation.

A glimpse into the future

The initiatives announced by the Australian Government in the period immediately leading into the federal budget and the measures announced in the budget are an interesting barometer of future government cross-border talent policy initiatives.

In the absence of a formal population policy, my view is that we will see immigration used increasingly as a de facto population policy.

This will be particularly relevant for the Asia Pacific region. The impact in Asian markets is roughly aligned with other regions, but a significant issue weighing in favour of the Asian recovery is the likelihood of travel channels likely to open before other parts of the world.

The economic impacts of COVID-19 will see a massive transformation to the future – cross-border strategies will need to be revised, business and cashflow plans stress tested, supply chains revisited, policy co-design with government, as well as many other challenges.

A call to action for business

The Australian Government has clearly flagged its intention to attract global talent to Australia, and has constructed a policy framework to help drive that outcome.

However, the business community have a clear role to play in ensuring that these government initiatives deliver the outcomes they were designed to achieve.

The first step in positioning your business for success in attracting the best a brightest is to have a deep understanding of your existing and future workforce needs.

Increasingly we are seeing governments build their policy framework around an assumption of detailed workforce knowledge and requirements by employers seeking to access skilled foreign labour.

Embedding immigration into the wider global workforce policy of business will provide both greater visibility and greater control for employers in developing their future workforce requirements.