National Innovation and Science Agenda
On the back of the announcement of the replacement of 457 visas, the Government has announced the introduction of a new levy on businesses with foreign workers on certain skilled visas, with a slightly lower levy applying to small business entities.
Levy to fund Skilling Australians Fund
The Government has proposed the introduction of a new levy for businesses with foreign workers on certain skilled visas, with application from March 2018. The revenue raised from this measure will be applied to a new ‘Skilling Australians Fund’ to support the training and development of Australian workers.
Businesses with a turnover of less than $10 million per year will be required to pay:
- Upfront payment of $1,200 per visa per year for each employee on a Temporary Skill Shortage visa
- One-off payment of $3,000 for each employee being sponsored on a permanent Employer Nomination Scheme (subclass 186) visa or a permanent Regional sponsored migration Scheme (subclass 187) visa.
Businesses with turnover of $10 million or more will be required to pay:
- An upfront payment of $1,800 per visa per year for each employee on a Temporary Skill Shortage visa
- One-off payment of $5,000 for each employee being sponsored on a permanent Employer Nomination Scheme (subclass 186) visa, or a permanent Regional sponsored migration Scheme (subclass 187) visa.
This measure is estimated to have a revenue gain of $1.2 billion over 2018 to 2021.
There is no specific detail yet regarding the administration of this new levy, but this will be a significant (and unexpected) cost to small businesses who may already be struggling with costs to employ staff. The process of hiring foreign workers is already a complicated and costly process, involving many cross border issues, including cross border taxation considerations. The levy is targeted at making hiring foreign workers less attractive in an effort to provide jobs for Australians first. The proceeds going to fund a training program for Australian workers will be a good idea to assist people getting back into the workforce.
However, for businesses with a global presence who are required to send staff between different jurisdictions across the globe for proprietary skills particular to that business (e.g. staff with access to particular intellectual property), hiring foreign workers is unavoidable in many cases. The new levy adds an unnecessary burden.