Businesses that use temporary visa workers will have to fork out up to $1800 a worker per year as part of a new visa tax expected to raise more than a billion dollars towards training local workers.

The 2017 budget revealed the government will impose an annual foreign worker levy on employers from March 2018 to fund its new Skilling Australians Fund, which aims to support 300,000 apprenticeships and traineeships in high-demand occupations that rely on skilled migration.

However, the fund could struggle to raise money as figures in the budget reveal the government is expecting a massive drop in new skilled visa applications due to its new restrictions on 457 visas and permanent residency.

Under the new levy, small businesses will have to pay $1200 for every year they employ a temporary visa worker and a one-off payment of $3000 for each employee they sponsor for a permanent skilled visa.

Businesses with turnover of more than $10 million will be charged $1800 per worker a year and a $5000 one-off levy for permanent skilled visas.

The levy is expected to raise more money than the current system where visa sponsors contributed 1 to 2 per cent of their payroll to training. This, however, was difficult to police said Treasurer Scott Morrison.

While immigration officials were able to verify whether employers had paid the money, they had no visibility on what the money was used for and whether rorting was occurring.

Residency restrictions

Under the new system, states and territories can draw from the fund but only after they sign up to new requirements for training apprentices, including by matching funding contributions, achieving outcomes and providing up to date data on performance.

The fund will replace the National Partnership Agreement on Skills Reform, which was set to expire on June 30, and is expected to raise more than $360 million per year totalling $1.5 billion over four years.

The government will fund $261.2 million of the initial $350 million set for 2017-18.

But from 2018-19 funding for this measure will be determined by the training fund contribution levy, totalling $1.2 billion in the four years up to 2020-21.

However, the government could struggle to rely on a steady stream of temporary and permanent visa workers to fund the program following its moves to heavily restrict visa eligibility criteria.

Fees for 457 visa applications are set to more than double from $1060 to $2400 and about 200 occupations have been removed from 457 visa eligibility.

Further restrictions on permanent residency are expected to come into effect by March 2018.

The budget reveals the government is expecting these new restrictions to lead a dramatic downturn in revenue from the skilled visa system.

 

Courtesy of  David Marin-Guzman

 

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