Foreign worker levy could discourage employers from seeking visas

Angus Kidman 11 May 2017 NEWS

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$1,800 a year fee for each overseas worker.

It became a lot harder for Australian companies to employ overseas workers last month after hundreds of jobs were taken off the skilled migration list and the regulations for others to receive visas were tightened. But it isn't just the restrictions on which occupations can potentially be filled with overseas applicants that will discourage employers from examining that path.

This week's budget also reminded us of another disincentive: there will be a levy for each worker a business chooses to employ from overseas.

"Until now, employers have had to contribute 1% or 2% of their payroll to training if they employ foreign workers. These requirements have proven difficult to police," treasurer Scott Morrison announced during his budget speech. "Accordingly, we are replacing these requirements with an annual foreign worker levy of $1,200 or $1,800 per worker per year on temporary work visas and a $3,000 or $5,000 one-off levy for those on a permanent skilled visa."

The government estimates that it will raise $1.2 billion over four years from this levy, which will be used for training schemes for Australians. That's a reminder that while the rules may have been tightened, Australia is going to continue to need to bring in skilled workers from overseas. All those sinks aren't going to plumb themselves.

Any business committed to keeping its staff happy and productive should be spending at least 2% of its payroll on training anyway, regardless of its employee mix. And any business which genuinely needs to fill a role and can't find someone locally is unlikely to be put off by a $1,800 levy, as that's a very small part of the overall employment cost.

So if this scheme works, it should only discourage companies seeking to score labour from overseas more cheaply than they could in Australia. As usual, the devil will be in the details, and we'll be watching with interest as full information about the scheme emerges.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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