China-Australia Free Trade Agreement: Implications, Licensing and TSMIT Review
November 27, 2015
By: Neil Maybanks
The China-Australia Free Trade Agreement (ChAFTA) signed on 17 June 2015 marks an historic step towards greater business and investment opportunities across a wide variety of economic sectors in Australia and China.
The ChAFTA commitments on movement of natural persons are intended to support three key elements of the Agreement:
- Increased trade and investment between the two countries;
- A reduction in barriers to labor mobility; and
- Improvements to temporary entry access within the context of each country’s immigration and employment frameworks.
Before ChAFTA can be brought into force, Australia must complete its necessary domestic processes, and the Government has now confirmed the support of the Opposition to ensure the safe passage through Parliament of the implementing bills and accompanying legislation.
As part of ChAFTA, the government has agreed to a number of measures designed to provide further clarity and comfort in regard to key issues raised by the Opposition. These include 457 visa registration and licensing requirements and the bringing forward of the Temporary Skilled Migration Income Threshold (TSMIT) review.
Registration and licensing
With the exception of medical practitioners, who are required to meet these requirements prior to visa grant, current regulations allow a person outside Australia to be granted a 457 visa prior to meeting the mandatory registration, licensing or professional membership requirements to work in the country. The individual is, however, required to take reasonable steps to meet any mandatory requirements as soon as possible after entering Australia and before commencing work in that occupation.
In regard to subclass 457 visa holders, the government has announced that it will amend the visa condition to make it clear that licenses, registrations or memberships required under commonwealth, state or territory law must be obtained within 90 days of arrival in Australia. The visa holder will be required to notify the Immigration Department if their license or registration is refused, revoked, has ceased or been cancelled.
The Immigration Department has also reaffirmed that it will continue to investigate evidence-based allegations of non-compliance with visa conditions, including those concerning licensing and registration and that it will report annually on visa compliance monitoring.
TSMIT review
As recommended by the recent Independent Review of the integrity of the Subclass 457 Visa Program, the government committed to undertake an evidence-based review of the TSMIT. This review, which was scheduled to commence by the end of 2015, has now been brought forward as part of the government’s agreement with the Opposition.
The review will consider the current income threshold level of AUD 53,900 to assess whether it should be indexed and, if so, advise on an appropriate methodology to implement any changes.
Important considerations for businesses
Australia’s existing visa arrangements, including the 457 Visa Program, will continue to be the basis for implementing Australia’s commitment to labor mobility. Under ChAFTA, the increased focus on compliance with the licensing conditions of 457 visas has wider implications for businesses beyond those relating to employing Chinese nationals in Australia.
With the government poised to introduce licensing amendments, now is an opportune time for businesses to review their existing 457 visa population for compliance with license, registration and membership regulations.
It will also be important to ensure any new 457 visa holders will be able, where required, to obtain licenses or registration and commence work within 90 days of their arrival in Australia. The proposed amendment for the visa holder to notify the Immigration Department if their license or registration is refused, revoked, has ceased or been cancelled, will mean business owners must be confident that the individual will be able to meet these requirements after arriving in the country.
Fragomen will be making submissions to the Immigration Department on behalf of its clients in response to the TSMIT review scheduled to commence before the end of 2015, and will continue to report developments throughout the consultation process. It is important to note that the current rate will not be increased prior to the conclusion of this review.
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