Australia: Federal Budget Introduces New Skilling Australians Fund Tax
The Australian Treasurer has announced the establishment of the Skilling Australians Fund levy to support the new Temporary Skill Shortage Visa and the training and development of Australian workers. A new Temporary Parent Visa is expected to be introduced in November 2017, with a maximum validity period of 10 years. Effective July 1, 2017, there will be an annual increase to the visa application charges in accordance with the forecast Consumer Price Index. Stricter requirements for foreign investors and access to pensions are expected to be introduced in 2018.
As part of the 2017-2018 budget, the Australian Treasurer has announced the establishment of the Skilling Australians Fund levy to support the new Temporary Skill Shortage Visa , which is replacing the Subclass 457 Visa Program in March 2018. This tax will replace the training benchmarks that currently apply to the Subclass 457 and the Permanent Employer Sponsored Skilled Migration Visa programs.
Skilling Australians Fund
Effective March 2018, employers that sponsor foreign nationals for the new Temporary Skill Shortage (TSS) Visa and permanent employer sponsored visas will be required to pay a levy to generate revenue for the Skilling Australians Fund, as follows:
- Businesses with profits of less than AU 10 million per year will be required to make an upfront payment of AU 1,200 per visa per year (or part thereof) for each employee on a TSS Visa and a one-time payment of AU 3,000 for each employee sponsored for a permanent Employer Nomination Scheme (ENS) Visa (Subclass 186) or a permanent Regional Sponsored Migration Scheme (RSMS) Visa (Subclass 187);
- Businesses with profits of AU 10 million or more per year will be required to make an upfront payment of AU 1,800 per visa per year (or part thereof) for each employee on a TSS Visa and a one-time payment of AU 5,000 for each employee sponsored for an ENS Visa or a RSMS Visa.
Revenues collected from this levy will support the training and development of Australian workers through apprenticeships and training programs for occupations in high demand, occupations relying on skilled migration pathways, industries and sectors of future growth, trade apprenticeships and training programs in regional and rural areas.
New Temporary Parent Visa
In November 2017, the Australian government plans to introduce a new Temporary Parent Visa for parents of Australian nationals and permanent residents and eligible New Zealand nationals, with a maximum validity period of 10 years. Existing Contributory and Non-Contributory Parent Visas will remain open to new applicants.
It is expected that a total of 15,000 Temporary Parent Visas will be available annually. Applicants will be able to choose between two options:
- Three-year visa for AU 5,000; or
- Five-year visa for AU 10,000, with an opportunity to renew for another five years.
The sponsoring individual will be legally liable for public health expenditures incurred by the Temporary Parent Visa holder.
Visa Application Charges
Effective July 1, 2017, there will be an annual increase to the visa application charges in accordance with the forecast Consumer Price Index.
Permanent Migration Program Levels
The Permanent Migration Program level for 2017-2018 will remain at a ceiling of 190,000 positions, including 16,250 positions for the Humanitarian Program, an increase of 2,500 positions.
Starting September 11, 2017, foreign nationals who buy residential property, but leave it vacant or lease it for at least six months per year, will be required to pay an annual AU 5,000 Foreign Investors Tax. Limits on foreign ownership in new developments and stricter rules on capital gains tax on Australian property are expected to be introduced on or after July 1, 2017.
Access to Pensions
Starting July 1, 2018, foreign nationals seeking access to Australian pensions will be required to have 15 years of continuous Australian residence before being eligible to receive the Age Pension or the Disability Support Pension. This is an increase from the current continuous residence requirement of 10 years.
What This Means for Employers and Foreign Nationals
Current visa regulations for employment in Australia will continue to apply until the proposed changes are officially implemented in Australian legislation. Employers can expect higher costs when employing foreign nationals associated with the new Skilling Australians Fund levy.
Fragomen will continue to monitor the developments and will provide further updates as new information is released.
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