During the past year, Australian business has been affected by changes to immigration policy, tax legislation and economic flux. These factors have had a significant impact on employee mobility in Australia.
New immigration policies have increased the cost and duration of visa application. Tim Denney, Managing Director at Berry Appleman & Leiden asserts that there has been a significant increase in the cost of recruiting foreign employees. “Government processing fees have more than doubled since July 2013 for some visa categories.”
“The government has changed how sponsorships are assessed including tightening of English language criteria, increased training requirements and, escalated powers of inspection,” according to Denney.
Changes to tax legislation have also greatly affected employee mobility into Australia, with the exclusion of living-away-from-home allowance tax concessions from the vast majority of expatriate employees working in Australia. Since the tax restrictions came into effect on 1 October 2012, the impact has been felt throughout Australia. Kumar Krishnasamy, Partner at BDO Expatriate Services & Employment Taxes says the changes “increased the talent shortage in the country, making it more difficult for employers to secure the right skill set for their business – or have to pay higher taxes to do so”
Krishnasamy also attributes Australia’s interpretation of the double taxation agreement between Australia and other countries as a factor in discouraging short term business visitors, who are often required to pay tax when working in Australia for less than 183 days. This is often at odds with other countries which may exempt short term business visitors working in their country for less than 183 days, subject to other requirements.
The impact has been felt in other industries too such as furniture hire and temporary accommodation. Mary Tsaganas, Group General Manager at Corporate Housing says: “Companies have reduced their relocation budgets, at times selecting the most affordable option at the detriment of customer experience.”
This year, the mining and resources industry experienced a cyclical downturn. A leader in the industry has used this challenge as an opportunity to review the ability of its resources and to send skilled technical sources on short term assignments to Asia and the Middle East to deliver projects. From a global mobility perspective, outbound assignments have tripled for this company in the last 12 months and given them the opportunity to capitalise on emerging markets.
Even in the face of increasing obstacles to global mobility, Australia continues to be a fantastic place to live with outstanding opportunities, a high quality lifestyle and a good economy. Local salaries are rewarding and opportunities are available for those who offer specialist skills in the market. The recent establishment of a new government provides a positive opportunity for continued growth and expansion in Australian business.
The Employee Mobility Institute