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Commuters cast their shadows as they arrive to the Central Business District at the morning rush hour in Sydney July 1, 2013. REUTERS/Daniel Munoz

(reuters_tickers)

By Swati Pandey

SYDNEY (Reuters) - Australia and New Zealand have tightened visa conditions for skilled migrants in a bid to woo nationalist-leaning voters, echoing the United States' "America First" policy, but critics have decried the move as mostly political posturing.

Australian Prime Minister Malcolm Turnbull on Tuesday abolished a temporary work visa popular with foreigners, replacing it with a new programme. New Zealand also tightened access to skilled work visas, taking a "Kiwis-first approach."

The changes are likely to hurt small businesses and Australian tech start-ups, industry officials said, but both countries will continue to see a surge in foreigners.

Recent population growth in Australia has been driven by student visas, which offer a path for people to study, work and eventually become permanent residents.

In the six months to December, the country granted 156,453 student visas. This compares with just 12,866 of the so-called 457 skilled work visas approved in the year to September 2016.

More than 95,000 foreigners are now employed under the 457 visa, making up a mere 0.8 percent of Australia's labour force.

"This is just a change of name, nothing else," said Shamim Ahmed, a Sydney-based migration agent at AIC Education Services. "They cannot really abolish this visa, because it is demanded by employers."

The 457 visa has been axed with immediate effect, and replaced by two new visas with a shorter skills shortage list and a tougher English language requirement, Turnbull announced on Tuesday. Additional details are still awaited.

Turnbull, who broke the news on social media site Facebook, expects fewer entrants to Australia under the new scheme, he said in a radio interview on Wednesday.

"There will be a short-term skills visa for two years and it can only be renewed once. And then the person holding it has to go back to their home country," Turnbull said, repeating the "Australian jobs for Australians" rhetoric 16 times.

Another 4-year visa will have stricter eligibility criteria.

Opposition leader Bill Shorten has labelled the announcement "cosmetic" and a "con job" that will make no real difference.

"That's just shifting deck chairs on the proverbial sinking ship," he added.

In neighbouring New Zealand, the policy changes are expected to have a limited impact on net arrivals.

Opposition members were quick to accuse the ruling National party of currying favour with voters in an election year, without making reining in immigration numbers and unemployment. 

"National's changes don't address the huge numbers of people coming here to do low-level qualifications or low-skill work," said Labour party leader Andrew Little.

A boom in new arrivals has helped the New Zealand economy achieve some of the strongest gross domestic product growth in the developed world.

But opposition parties and the central bank have called for a review of policies, citing low wage growth and soaring house prices spurred by the influx.

(To view a graphic on Australia's visa, click http://tmsnrt.rs/2oUrzig)

AFFECTED SECTORS

Australia's decision could upset India, its fifth-largest export market and the single biggest beneficiary of the 457 visa, accounting for one in four applicants.

Australia wants to boost two-way trade with India, which now stands at nearly A$20 billion, but its decision, just days after Turnbull visited the south Asian nation, could hurt ties.

India is examining the consequences of Australia's new visa policy in consultation with all stakeholders, a foreign ministry representative said in reply to a query.

"This is also a matter we will be looking at in the context of CECA negotiations," the official added, referring to talks for an economic cooperation pact between the two countries.

Leading IT lobby group NASSCOM said it expected limited fallout from the decision, though some firms among India's $150-billion tech industry could lose exemptions they had before.

"The occupations being pruned in terms of jobs do not really impact our jobs in terms of the ICT segment," said Shivendra Singh, vice president of the grouping, the National Association of Software and Services Companies.

But companies might face more paperwork, he added.

"Companies will...probably have to spend more time, effort and possibly money, also, to prepare in advance, and prepare on the ground, as well." 

For Sydney-based Shamim Ahmed, the outcome of roughly 10 applications filed last month, mostly for Asian clients under a temporary skilled visa category, hangs in the balance.

"There is no clarity on the announcement, the details have not been published," Ahmed added. "This has increased our headache."

Businesses have generally welcomed the decision but some industries fear being on the receiving end.

Early stage start-ups will be hit hardest, said David Ballerini, a co-founder of restaurant discovery and cash loyalty app Liven.

"A shortage of relevant skills from the local market was the main reason to rely on 457s," said Ballerini, who employs such visa holders, chiefly for technology and product development.

"While there is merit to saving jobs for Australian-born developers, the community is small and technical specialists are few and far between."

(Reporting by Swati Pandey; Additional reporting by Charlotte Greenfield in Wellington and Sankalp Phartiyal in Mumbai; Editing by Clarence Fernandez)

Reuters