Migration Newsflash: Budget 2017-18 new training levy

New training levy to underpin Temporary Skill Shortage

The Budget 2017-18 handed down by the Government has provided further insight to the operation of the new Temporary Skill Shortage (TSS) visa which will replace the Temporary Work (Skilled) Subclass 457 visa from March 2018.

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The budget measures announced included the introduction of a new training levy framework which will underpin the TSS visa and replace the existing training benchmarks that currently have to be met by employers accessing the 457 visa program.

Employers who nominate foreign employees for the TSS visa and certain permanent skilled visas will have to pay the new training levy which will be contributed into a new 'Skilling Australians Fund'.

The revenue generated from this fund which is estimated at AUD 1.2 billion in the Budget's forward estimates, will be used to support Australian skills development and the take-up of apprenticeships and traineeships.

What does this mean for business?

From March 2018, businesses with annual turnover of AUD 10 million or more will be required to make an upfront payment of AUD 1,800 per visa year for each foreign employee sponsored on a TSS visa. In addition, they will also pay a one-off levy of AUD 5,000 for each foreign employee sponsored for Australian permanent residence.

The levies apply at a lower rate of AUD 1,200 per visa year and AUD 3,000 respectively, for businesses with annual turnover below AUD 10 million.

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