The 2021/22 Federal Budget and Immigration

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The 2021/22 Federal Budget and Immigration

The 2021/22 Federal Budget and Immigration

Last week, Josh Frydenberg delivered his second pandemic budget. While the federal budget covers the priorities of the Australian Government for the next financial year, of particular interest is how immigration will be affected.

How is immigration affected by the budget?
Generally, the federal budget will have positive and negative outcomes for each of the outlined items and immigration is no different. 

The migration program planning level will remain unchanged from the 2020/21 budget at 160,000 places. Net overseas migration is expected to fall to around -97,000 persons by the end of 2020/21 and then -77,000 in 2021/22 before increasing to 235,000 in 2024/25. This is compared to 194,000 in the 2019/20 period. 

While there may be impacts on immigration overall, there are three areas that are of particular interest. These are:
-          Changes to waiting periods
-          The introduction of the ‘simple bright line’ test
-          Focus on attracting business talent 

Waiting periods
A change to the waiting periods of newly arrived residents will see a blanket 4-year waiting period applied to most government benefits. Previously the waiting period was determined by the migrant’s situation and visa type. 

This change will apply to those who achieve residency from 1st January 2022 and not those already resident in Australia. 

The ‘simple bright line‘ test
A common concern among temporary visa holders is usually regarding tax obligations when they are in Australia. Under proposed changes announced in the budget, this test would use the number of days someone is physically present in Australia over an income year to determine whether they are an Australian tax resident. 

This is a simplified, yet similar test used by some other countries including the United States. Put simply, an individual is considered an Australian tax resident if they are physically present in Australia for 183 days or more during the income year. 

Attracting business talent
The Government is committing $550 million over the next four years to attract talent and business from overseas. The ATO will provide fast track tax advice to foreign investors and individual tax residency rules will be simplified to support this initiative. 

Other notable immigration announcements:
-          International students who are in Australia and working in hospitality and tourism will be able to increase their work hours to 40 hours a week.
-          The validity period for Sponsored Parent (Temporary) visas will be extended by 18 months for individuals who are unable to use their visas dur to Covid-19 travel restrictions.
-          The requirement for Temporary Activity (subclass 408) visa applicants to demonstrate attempts to depart Australia if they intend to undertake agricultural work has been removed. The period in which a temporary visa holder can apply for the subclass 408 visa has been extended from 28 days prior to visa expiry to 90 days prior to visa expiry.

The announcements in the budget relating to immigration are based heavily on international borders being closed. While this is a safe measure at this time, one cannot help but wonder if certain issues were addressed in this budget would Australia be in a position to possibly open its borders sooner and in turn enable Australia’s migration program to re-commence. Factors such as an effective and reliable quarantine system and a coordinated national vaccine program could all have an impact on the timeline in place for opening borders.

If you would like to discuss any aspects of migration, contact the team at Visa Solutions Australia on 1800 828 008.

Travel Exemptions

While Australian borders are currently closed due to the COVID-19 pandemic, travel exemptions may apply under the following circumstances:
- A traveller has a compassionate or compelling reason to visit Australia
- Overseas workers holding a Subclass 482 or 400 visa are required to undertake a job in Australia that cannot be filled by a local employee

Visa Solutions Australia has been successful in acquiring a broad range of exemptions, from critical workers to those needing to travel on compassionate grounds.


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