• Business and Investment

Skill shortages at a time of a stronger economy and lower unemployment

With the ongoing growth in demand for temporary and permanent entry to Australia, in 2018–19 the Department of Home Affairs will administer revenue from Visa Application Charges of over $2 billion, an increase of almost $400 million over the previous year. With over 30,000 visa applications being lodged with the Department each day, the focus is on protecting and managing Australia's borders.

This is reflected in the ‘Keeping Australian Safe’ announcement, which includes strengthening airport security, improving the national security architecture, and continuing Operation Sovereign Borders to combat the threat of people smugglers. The establishment of the Home Affairs Portfolio reflects a whole-of-government approach to national security, law enforcement and functions related to the border.

Yet, the average staffing levels increase of 474 for 2018–19, is a modest increase over the previous year, and at the time of significant demand for temporary and permanent employer sponsored visas and processing delays across all visa programmes.

Skilling Australians Fund

The Migration Amendment (Skilling Australians Fund) Bill 2017 and the associated Migration (Skilling Australians Fund) Charges Bill 2017 passed the Senate on 8 May 2018.

It will come into effect once the Migration Regulations are passed. It will introduce the training levy for the new Temporary Skill Shortage (TSS) subclass 482 Visa (which replaced the Temporary Work (Skilled) subclass 457 Visa) on 18 March 2018 and the permanent employer – sponsored visas.

Over the forward estimates to 2020–2021, the Skilling Fund is budgeted to raise $1.2 billion in revenue.

Religious institutions are the only organisations which will be exempt from the levy.

The Government will expand refund provisions to allow refunds of the levy in limited scenarios including where the visa application is refused on health or character grounds, the visa holder does not commence work with the employer, or the subclass 482 visa holder leaves their employer within the first 12 months of employment.

Reduction in Visas for foreign doctors

The number of General Practitioners brought to Australia on visas each year will be reduced from 2,300 to 2,100 with savings in Medicare costs of $400 million. The Government will also improve the targeting of visas for areas with doctor shortages, including regional areas.

Newstart and other welfare benefits

Migrants will not be eligible to access Newstart and other welfare benefits until they have lived in Australia for four years, providing a saving of $200 million.

Building Australia and a stronger and smarter economy

The Budget includes a range of measures for a stronger economy with government investment in essential infrastructure and to build the industries and jobs which Australia needs to compete globally.

Against this economic outlook, the Skilling Australians Fund Bill was amended to require significant administrative actions by employers. While labour market testing does not apply if it would be inconsistent with Australia's international trade obligations, there is nothing in the Budget to better enable Australian businesses to meet targeted skill shortages at a time of a stronger economy.

BDO Comment

Business will continue to carry unnecessary burdens when looking for skilled labour, due in part to the Skilling Australians Fund levy.

It is also anticipated that there will continue to be significant processing delays in regard to temporary and permanent entry employer sponsored visas given the Department’s resource constraints and focus on protecting Australian jobs.