When the Australian government’s new budget takes effect on July 1, 2012, fewer foreign workers will qualify for fringe benefit tax exemptions, the number of employer-sponsored permanent migration visas will increase to 129,250 (up from 125,850), and two key permanent residence programs will be revamped to address skills shortages in regional Australia.
The Australian government announced several initiatives in its Fiscal Year (FY) 2013 budget that will affect employers of foreign workers. Fewer foreign workers will qualify for fringe benefit tax exemptions. The budget also responds to the shortage of skilled local workers in regional Australia by increasing the number of permanent employment-based visas available in Fiscal Year 2013, revamping two key permanent residence programs and creating a streamlined path to permanent residence for temporary workers.
Strict New Limits on Tax Exemption for Living-Away-From-Home Allowances and Benefits
Effective July 1, 2012, foreign workers will no longer be able to claim tax exemptions for housing and food benefits unless they have established a residence in Australia for their own use and their employer transfers them to another location in the country. This is similar to the rules on taxable housing and food benefits that apply to Australian workers.
Currently, foreign workers’ housing and food benefits are generally exempt from both income and fringe benefit taxes. This concession delivers significant tax savings to foreign workers and their employers and has played an integral role in many Australian employers’ recruitment and retention strategies. The practical effect of the change, which was proposed late last year, will be to increase foreign workers’ tax liabilities and reduce their take-home pay unless their employer increases their gross pay to offset the higher tax liabilities.
Increase in Overall Migration Quota; New Initiatives to Remedy Skills Shortage
For FY 2013, Australia will increase the overall number of permanent migration visas by 5,000, to 190,000. The total number of employer-sponsored migration visas will be 129,250, an increase of 3,400. The new allocation will be in effect from July 1, 2012 to June 30, 2013.
The Australia government will continue to focus on attracting skilled workers to regional and low population growth areas. In FY 2013, there will be 16,000 RSMS visas available, the same as this Fiscal Year. As we have reported previously, on July 1, the government is reorganizing the Employer Nomination Scheme (ENS) and the Regional Sponsored Migration Scheme (RSMS) to create a simplified path to permanent residence for foreign workers holding a subclass 457 visa, the principal temporary work visa category. The ENS is Australia’s standard form of employer-sponsored permanent residence. The RSMS is a special program that allows employers in regional and low population growth areas to fill vacancies they have been unable to fill with local workers.
RSMS applications will continue to receive top processing priority in FY 2013. The budget also allocates AUD 1.3 million over the next two years to improve the application process for the Employer Sponsored Permanent Residence Program, and AUD 5 million over the next three years to pilot distance English language learning programs through the National Broadcast Network to reach foreign nationals living and working in regional areas.
Restructured Penalties for Employer Compliance Violations
Other measures announced in the budget will restructure Australia’s employer compliance penalty system, introducing graduated tiers of sanctions for employers that undertake actions that would cause a person to breach their visa conditions or refer for work or hire a foreign national who does not have work rights. Sanctions will range from warnings and infringement notices with financial penalties to civil penalties and criminal prosecution for the most serious breaches. The government will run an education campaign to ensure employers are aware of the new arrangements.
Other Immigration Initiatives
The budget will also implement proposed new fees on July 1, 2012. There will be a charge of AUD 60 to place a visa label in a foreign national’s passport where a label is not required by Australian authorities, and an AUD 60 fee to submit a paper application where an online option is available. Each fee will increase to AUD 70 in 2013. There will also be a new surcharge for visas of longer duration and visa extensions sought from within Australia.
Also beginning July 1, 2012, the government will increase the medical cost limits known as Significant Cost Thresholds, for visa applicants to AUD 35,000, up from AUD 21,000. Regardless of a visa applicant’s financial status, if the estimated cost of treating the applicant’s health condition exceeds the Significant Cost Threshold, the visa application will be denied unless a health waiver is available for that particular visa. The threshold will not apply to humanitarian visa applicants.
As the Department of Immigration and Citizenship announces additional details of the changes in the FY 2013 budget, Fragomen will update clients.
This alert is for informational purposes only. If you have any questions, please do not hesitate to contact the global immigration professional with whom you work at Fragomen in Australia or send an email to fragomenclientcorrespondence@fragomen.com.
Source: Fragomen
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Tags: 2013, aud, Australia, Employer, Foreign, Permanent, Visa, Workers
This entry was posted on Thursday, June 7th, 2012 at 9:46 am and is filed under Australia. You can follow any responses to this entry through the RSS 2.0 feed.
![<em>Illustration: Simon Letch</em>” /></p>
<p><em>Illustration: Simon Letch</em></p>
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<p>Problem? Far from it.</p>
<p>”[The] positive role of migration in maintaining the size of the labour force in many countries is expected to become more important as more baby boomers retire,” the report states. ”By 2015, immigration – at the current level – will not be sufficient to maintain the working-age population in many OECD countries, especially in the European Union.”</p>
<p>One of the defining global narratives of the coming decades will be the struggle of ageing nations to rejuvenate their populations and provide for the needs of their elderly. But here in Australia we force young, willing hands in nearby countries to board leaky boats to take their chances in a cruel sea. That is not only morally shameful, it’s economically stupid.</p>
<p>Figures from the same OECD report prove decisively that job gains for migrants do not come at the expense of existing Australians.</p>
<p>Across the first half of the noughties, the employment-to-population ratio for foreign-born Australian men averaged 73.2 per cent. The average for native-born Australian men was substantially higher, at 78.8 per cent.</p>
<p>In the second half, this gap shrank. The average employment-to-population ratio for foreign-born men advanced to 76.3 per cent. But this did not come at the expense of the native-born, who saw their ratio also increase, to 80 per cent.</p>
<p>Because, for all the focus on asylum seekers, Australia’s overall migration program is heavily focused on filling existing skills shortages and, hence, is skewed towards younger working people. Australia’s total migration and humanitarian intake was 182,500 people last financial year. Of these, most – 92 per cent – came from the migration program.</p>
<p>Just 8 per cent, or 13,799 visas, were granted under the humanitarian program. Of these, most – 8971 – were granted to people seeking asylum from an offshore location. The number granted to people who had made their way to Australia first, by boat or plane, was 4828.</p>
<p>Australia’s refugee intake is not only small compared to its total migration intake, but also compared to the number of people who would like to seek asylum here. Australia received 54,396 offshore applications for humanitarian visas last year, meaning for every successful one, five others went unanswered.</p>
<p>Is it any surprise people get on boats? With such an undersupply of places relative to demand, a black market in people smuggling is the only natural result.</p>
<p>It seems distasteful, somehow, to apply an economic framework to a such a morally charged policy issue as asylum seekers. It is governments, after all, not markets, that decide the supply of migration places.</p>
<p>But people smugglers are a good example of the economic phenomenon of black markets. Black markets for products and services spring up where supply in legitimate markets is overly restricted. Just as alcohol prohibition in the US forced up the price of booze and fuelled criminal activity in the 1920s and ’30s, a shortage of humanitarian visas to Australia has encouraged people smuggling. People smugglers are today’s bootleggers, with tragic consequences.</p>
<p>The evidence shows, after all, that most people who arrive unlawfully by boat are eventually settled in Australia on protection visas – 83.3 per cent of the ”irregular maritime arrivals” in 2009-10, according to the latest figures from the Department of Immigration.</p>
<p>By far the best way to smash the people smugglers’ business model would be to expand the legal market for seeking asylum. It’s time to accept there is a constant, and even increasing, demand by people to seek asylum in Australia.</p>
<p>If we want to stop the boats, the best way might be to fire up the 747 turbo engines and simply fly people here, legally and safely, in the first place. If we want to deter desperate people from making a treacherous journey, let’s make it known in international refugee processing centres around the world: there is an easier path to Australia and an open door on arrival for those who follow it.</p>
<p>Sound radical? Perhaps the most bizarre aspect of this week’s debate on asylum seekers is that there is, in fact, tri-partisan agreement on just this point.</p>
<p>The Opposition Leader, Tony Abbott, promised this week to increase the humanitarian intake to 20,000 within three years of forming a government. The Greens issued a press release yesterday titled ”We Can Save Lives From Today” proposing much the same thing.</p>
<p>Just last month, the Minister for Immigration, Chris Bowen, told the International Association of Refugee Law Judges of his desire to progressively increase the humanitarian program to 20,000. As for why he had not already done this, Bowen cited budget constraints. Every additional 1000 humanitarian places would cost the budget $216 million. Increasing it to 20,000 would cost about $1.35 billion over the first four years.</p>
<p>And so it comes to this: what price asylum seekers’ lives?</p>
<p>It’s time for politicians to bite the bullet and agree to increase Australia’s humanitarian intake. As a rich nation with low public debt and so much to gain from migration we cannot afford not to do so. That politicians can agree on this central point and continue to squabble among themselves is not only deeply shameful, but the ultimate sign of the deep dysfunction that prevails in our nation’s Parliament.</p>
<p><strong><img decoding=](http://images.smh.com.au/2012/06/28/3412542/art-353-letch-200x0.jpg)
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