Budget 2017: Visa-using employers to contribute to skills fund to support apprenticeships

Businesses that use the federal government’s new temporary skill shortage visa will be required to contribute to a national skills fund to support local apprenticeships, under a plan unveiled in the 2017 federal budget.

In place of the now scrapped 457 visa for foreign workers, the federal government plans to create a new temporary skill shortage visa with stricter conditions.

The government said on Tuesday evening that employers hiring foreign workers using the new visa will be required to make contributions to the government’s new Skilling Australians Fund.

This fund would then be used to support up to 300,000 apprentices, trainees, pre-apprentices and other categories of local workers, if matched with funding from the states and territories.

The government estimates the fund could raise $1.5 billion, which would be through a levy imposed on the employer.

For businesses with less than $10 million in annual turnover, the levy would be an upfront payment of $1200 per visa per year for each employee on a Temporary Skill Shortage visa.

If an employee is being sponsored for a permanent Employer Nomination Scheme visa or a permanent Regional Sponsored Migration visa, the employer would need to pay a once-off payment of $3000 for each employee.

For businesses with more than $10 million in annual turnover, the levy would increase to $1800 and $5000, respectively.

The levy would replace existing employer requirements, for workers on 457 visas and Employer Nomination Scheme Direct Entry visas.

“We will give Australians the best opportunity to fill Australian jobs, rather than relying on overseas qualified workers,” said Education Minister Simon Birmingham and Assistant Vocational Education and Skills Minister Karen Andrews in a statement.

Training and support for apprentices will also be the focus of a new mentoring service announced in the budget.

The government will spend $60 million over two years to establish the specialised industry mentoring service, which it said will complement existing services under the Australian Apprenticeship Support Network.

The government expects the funding will be used to support up to 45,000 apprentices and trainees.

Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on Twitter, Facebook, LinkedIn and Instagram.