$5,000 levy for Australian highly-skilled visas

After scrapping the 457 visa, the Australian Federal government continued its assault on foreign workers in the federal budget. Scott Morrison, the Australian treasurer has announced a levy on highly-skilled foreign worker visas with a view to establishing a new skill building fund.

It’s estimated that over the next four years, $1.2 billion will be generated as a result of a skilled visa levy that will directly contribute to a new Commonwealth-State ‘Skilling Australians Fund.’

Mr Morrison revealed that a yearly foreign worker levy of $1,200 or $1,800 per worker will be applied to temporary work visas. Meanwhile, employers sponsoring permanent skilled worker visas will be subject to a $3,000 or $5,000 charge.

Australia skilled worker visa levy follows UK and US example

Australia’s decision to introduce a levy for the hiring of skilled foreign workers brings them into line with the US, which charges $4,000 to $4,500 for H1B and L1 visas respectively, and the UK, which recently introduced a £1,000 immigration skills charge.

Morrison said that under an existing arrangement, employers hiring overseas workers were expected to invest 1 or 2 percent of their payroll to training. However, he claims that this is a system that’s difficult to monitor and he anticipates that the levy model will replace this arrangement by March 2018.

He said: “Skilled migration has always played a significant role in driving our economic growth. But it must be on our terms and we must skill more Australians to secure jobs.”

How the skilled visa levies will be distributed

According to the federal budget, small businesses – defined as those with a turnover of less than $10 million – will be subject to an annual charge of $1,200 if sponsoring a foreign worker’s temporary visa and a one-time payment of $3,000 if recruiting a foreign worker for a skilled visa on a permanent contract.

Meanwhile, medium and large businesses – defined as those with a turnover exceeding $10 million – will face an annual charge of $1,800 for hiring temporary workers and a $5,000 fee for hiring someone on a permanent visa.

With $1.2 billion expected to be raised from the levy over the next four years, Australian States and Territories can access finances, provided they meet a commitment to train new apprentices.

The government claims that existing training initiatives have not been successful in generating training opportunities that would enable Australian workers to fill skills gaps. In response to the changes, AIIA chief executive Rob Fitzpatrick expressed his delight that there’s a focus on high demand occupations, industries and sectors with growth potential.

Australian visa applications fees to rise

In addition to the introduction of a skilled visa levy, the federal budget alluded to an increase in Australian visa application fees. New charges are expected to be introduced on July 1, 2017 and will rise in line with inflation. Increased visa application fees will generate $410 million over the forward estimates period, according to the Federal government.

The budget also referenced a new temporary parental visa, which will allow the parents of migrants to remain in Australia for up to 10 years. This visa is expected to be launched in November 2017.