In this year’s Federal Budget, the Coalition promised to impose a levy of up to $1,800 per annum on companies for each worker they employ on a temporary skilled visa. The measure is aimed at raising some $1.2 billion over four years, with the money to be used on skills training.
Today, the Australian Chamber of Commerce and Industry (ACCI) has hit out at the “unreasonable and excessive” charge. From The AFR:
…in submissions on the legislation for the levy, the Australian Chamber of Commerce and Industry slammed the tax as “unreasonable and excessive”.
ACCI workplace relations director Jenny Lambert, author of the submission and one of the panellists of the government’s 457 visa review, said the levy was “an unwelcome budget surprise”.
She said in the submission that the levy quantum was “well in excess of the review’s recommendation of $400 per visa holder” and the government’s requirements for full payment up front, for the life of the visa term, went against the review’s recommendations.
Further, if the visa application was unsuccessful or if the visa holder returned home during their visa term, the levies would not be refundable to the employer.
“Clearly, this is unfair and an unjustifiable burden on business,” the submission said.
“Under the new system, the business would have to pay a training levy of $4,800 for a worker eligible for a four year visa regardless of whether they kept on their apprentice”…
The peak body proposed halving the levies “on the basis that they are excessive and present a strong barrier to accessing the skills the economy needs”.
If there is a problem with the Turnbull Governent’s temporary ‘skilled’ visa reforms it is that they were nowhere near stringent enough and left the pathetically low pay floor of $53,900 (non-indexed) in place. SBS News in March noted the ridiculousness of this low pay floor:
The government’s decision to ignore calls to increase the salary floor of 457 workers in its recent reforms threatens to undermine the ‘skilled’ component in the temporary skilled visa scheme, according to migration experts.
The salary floor for 457 visa holders, known as the Temporary Skilled Migration Income Threshold (TSMIT), has remained at $53,900 since 2013, despite a government review recommending it be increased.
In the nine months to March, almost 10,000 457 visas were granted to workers on salaries between $53,900 and $57,000 (an estimate of where the TSMIT would have risen to by now had it not been frozen), according to documents published under Senate Estimates.
This group represents around one-quarter of the entire 457 scheme, which will provide grants to approximately 45,000 foreign workers in 2016-17, according to latest Department of Immigration figures.
Dr Joanna Howe, Professor in Law at the University of Adelaide, said although it might not seem significant to not increase the TSMIT each year, if it is not indexed a key integrity measure of the 457 visa is undermined.
“The decision to freeze the TSMIT and to keep it frozen means that the 457 visa is shifting somewhat from being a skilled and highly-skilled work visa, to being a more general labor supply visa which can meet the alleged shortages in industries like accommodation and food,” she said.
Of the 9850 visas granted, with salaries between $53,900 and $57,000, in the past nine months, 3806 were in the accommodation and food sector – six times more than any other identified sector.
Alex Kaufman, migration manager and lawyer at FCB Group, argued the continued freeze on the TSMIT “runs counter” to measures introduced under the government’s recently announced reform package.
“Given the TSMIT has been used as a proxy indicator for ‘skills’, both in terms of signalling skills shortages, and the level of skill held by a 457 visa applicant, the decision to not increase the TSMIT for the time being is likely a political one, designed to placate sectors where the highly skilled still come at relatively low cost – notably, the hospitality sector,” he said.
The fact remains that the floor salary for ‘skilled’ temporary workers should be set above the average full-time salary of $83,642 (which includes unskilled workers), not 36% below it at $53,900.
By maintaining such a low pay floor for temporary foreign workers, the Coalition has ensured the system will continue to be overused and abused by employers, and will continue to undermine the pay and working conditions of local workers.
