The Australian Government continues its powerful blueprint for economic growth.
In response to the COVID-19-induced recession, the Australian Federal Budget 2021-22 is focussed on an extraordinary fiscal stimulus to support the economy, provide tax cuts, increase employment, skills and training opportunities and keep Australia safe.
The assumptions of a post-pandemic Australia include:
- Population–wide vaccination by year’s end,
- No extended state border restrictions,
- The return of international students in late-2021,
- Gradual return of migrants from mid-2022, and
- Little international travel until mid-2022.
Impact of international travel restrictions on population growth
Historically, Australia’s population grew because of the Migration Program. With the closure of the borders, there has been an unprecedented fall in net overseas migration, which in turn has impacted the economy. Net overseas migration is forecast to fall by 97,000 in 2020-21, and 77,000 in 2021-22. This is well below the -1.5% annual growth rate in population pre-COVID.
However, there are still some 1.74 million temporary visa holders in Australia (at 31 March 2021), including students, visitors, working holiday makers and temporary residents (Skilled Employment).
Migration Program by the numbers
The Government will maintain the 2021-22 Migration Program planning level at 160,000 places.
Skilled visas contribute to about 50% of the program and are focussed on highly skilled migrants in the employer sponsored, Business Innovation and Investor Program, and Global Talent cohorts. Given the allocation of places in the priority skilled visas, there is an overall decrease in other skilled migration places. Highly skilled individuals will also have access to streamlined processing of their visas to permanent residence.
The Global Business and Talent Attraction Taskforce initiative is seen as a key tool to help turbocharge our economy. The focus is on attracting high–value businesses, new technologies and highly skilled individuals in future–facing industries to generate jobs, strengthen Australia’s supply chain resilience and support Australia's capacity in priority growth sectors.
With over $550 million over the next four years allocated to attract talent and business overseas, the Australian Taxation Office (ATO) will provide fast-tracked tax advice to foreign investors, and individual tax residency rules will be simplified.
Family and skilled stream places remain at their 2020-21 planning levels, with a continued focus on onshore applicants, including reducing the onshore Partner visa pipeline. Family visa places are set at 77,300 for 2021-22.
Temporary visa holders can now apply for a subclass 408 Temporary Activity visa within 90 days prior to the expiry of their current visa.
Student visa holders - concessional work rights
A number of temporary measures have been implemented for student visa holders, due to the exceptional circumstances during the COVID-19 pandemic and the need to ensure supply of critical services. Student visa holders can now work beyond their usual limitation of 40 hours per fortnight if they work in specified industries or organisations, including:
- Approved aged care providers,
- Registered National Disability Insurance Scheme providers,
- If they are enrolled in a health-related course and are supporting health efforts during COVID-19 as directed by health officials,
- The agriculture sector, and
- The tourism and hospitality sectors.
These concessions mean that there is now a discretion not to cancel the visas of students who work in excess of 40 hours per fortnight for employers in specified industries. Employers, including related third-party labour hire companies, will not be investigated for a potential offence in allowing a student visa holder to work in breach of their visa conditions while the concession applies.
Sponsored Parent (Temporary) Visas
The Government will extend the validity period for Sponsored Parent (Temporary) visas by 18 months for individuals who are unable to use their visas due to COVID-19 travel restrictions.
International student sector
There is some respite for the international student sector, with a small phased program for the return of international students to commence in late 2021, which will gradually increase from 2022.
Focus on Adult Migrant English Program – a new delivery model
The Government will introduce a new delivery model for the Adult Migrant English Program from 1 July 2023, consistent with measures announced in October 2020 which introduced changes to the English language requirements and support for partner visa applicants and their permanent resident sponsors. This program is designed to improve English language, employment and social cohesion outcomes for migrants by linking provider payments to student outcomes.
Support for new migrants
New migrants to Australia will be forced to wait four years before they can access government benefits, providing a budget benefit of $671m. The waiting period will apply to all those granted residency from 1 January 2022.
Refugees, humanitarian and onshore detention
The Humanitarian Program will be maintained with a ceiling of 13,750 places in 2021-22.
The Government will provide $464.7 million over two years from 2020-21 to increase the capacity of the onshore Immigration Detention Network (IDN) and to extend use of the North West Point Immigration Detention Centre on Christmas Island. This increased capacity is designed to address ongoing capacity pressures across the IDN as a result of the inability to remove unlawful non-citizens from Australia due to the COVID-19 pandemic.
The Government will also provide $54.8 million over four years, starting from 2021-22, to address the backlog of cases within the Migration and Refugee Division (MRD) of the Administrative Appeals Tribunal.
Bolstered defence initiatives
The Government’s investment of $270 billion in Australia’s defence is reinforced by investment in the Department of Home Affairs. This includes additional capacity for the Australian Criminal Intelligence Commission with the Government providing $51.8 million in funding in 2021-22. This investment is designed to sustain operational activities and enhance core capabilities to disrupt trans-national, serious and organised crime.
Consistent with the whole-of-Government approach, this measure also includes funding to support enhanced collaboration and information sharing through the ongoing integration of Australian law enforcement agencies into the National Criminal Intelligence System.
Designed to significantly enhance the Australian Security Intelligence Organisation’s (ASIO's) capability to identify and respond to threats in a more complex security environment, the Government will also provide $1.3 billion over ten years from 2021-22 (including $413.8 million over four years from 2021-22) to ASIO to further boost our ability to protect Australia and Australians from threats to our security.
Strengthening Australia’s national identity settings
In 2021-22, there will be a strengthening of Australia’s national identity settings, the costs which will be met from the existing resources of the Department of Home Affairs.
Meanwhile, the Department of Home Affairs revenue decreased from $3,015.8 million in 2020-21 to $2,945.5 million in 2021-22 as a result of reductions in visa applications while the border remains closed.
You’ll find more analysis and insights from BDO’s team of sector experts on our dedicated Federal Budget page.