Banks will suffer in the long run if they cannot access the best talent available because of tighter Australian immigration rules, recruiters say.

An organisation representing Australian recruiters warns that the country's banking and wealth management sector will be harmed over the long run by proposed government measures to tighten visa requirements.

As reported here last week, the Association of Executive Search and Leadership Consultants sounded the alarm following the 18 April announcement by the Australian Prime Minister, Malcolm Turnbull MP, and his Minister for Immigration and Border Protection, Hon Peter Dutton MP, that the Temporary Work (Skilled) visa (subclass 457 visa) be abolished and replaced with the new Temporary Skill Shortage (TSS) visa. Changes to the subclass 186 visa were also announced-including the extension of age limits. Amended rules would set a new maximum age limit of 45 years old for executive-level professionals to obtain 186 visas, significantly restricting Australia's access to senior executive talent aged 45 or over, AESC said.

Asked about how banking will be affected in particular, Graham Willis, AESC chair for Australia, told WealthBriefingAsia: "All in all there is the potential for a significant impact over time. Senior executives at a number of levels are attracted to Australia for a number of reasons and often choose to stay, take up residency and become citizens. The proposed legislation makes Australia much less appealing and that cannot be good for our economy."

In the very short-term the restrictions will not have much effect because only three executives out of 47 in banks have come from overseas in recent years, Willis said. "In the medium to long term there is a bigger impact. If we look at the same group of 47 senior bank executives then at least 11 of them came from overseas at one point of their career, have taken up residency (a path now closed off under the changes to the 457 Visa) and have made, and continue to make, a significant contribution not just to their current employers but the economy as a whole. This does not count those from New Zealand, who operate under a much more generous immigration regime, because there are currently seven from NZ...and two of those are CEO’s."

"Senior executives often have families that have to move as well. It is disruptive for both social life, schooling (if they have children) and it is expensive.  One of the aspects the  Australian government is worried about is that by bringing in people from overseas they will force down the local salary rates. I would suggest at the senior executive level in the finance industry that is certainly not the case," he continued.

"The proposed changes in legislation are currently a bit of a ‘catch all’. I am not sure they are intended to disadvantage companies trying to bring in global talent at the executive level but, potentially inadvertently, that is what it does," he said.

As reported in April, Australia intends to tighten visa requirements for skilled workers from overseas. The existing 457 visa programme is used mainly to hire foreign workers in the restaurant, IT and medical industries - the majority came from India, the UK and China. But the current administration said the system would be abolished to give priority to hiring Australian nationals. According to government statistics, 95,758 people were living in Australia on 457 visas last year, with the highest proportion coming from India (24.6 per cent), the UK (19.5 per cent) and China (5.8 per cent) (source: BBC).