Review of the Temporary Skilled Migration Income Threshold (TSMIT)
The Temporary Skilled Migration Income Threshold (TSMIT) is a major component of the 457 programme. It has been used as an entry level salary threshold to protect lower paid Australian jobs, and to ensure that 457 visa holders have reasonable means of support
while in Australia. Since it was introduced, TSMIT has been increased annually to reflect prevailing conditions.
An independent review of the 457 programme conducted in 2014 Robust New Foundations: a Streamlined, Transparent and Responsive System for the 457 Programme, (henceforth referred to as Robust New Foundations) established a detailed framework for
a new approach to the whole 457 visa programme. Two of its major recommendations referred to TSMIT. They were that a separate review of TSMIT be carried out within two years, and that, in the meantime, it should remain at its then current level of $53,900. It
was expected that, within the two years, the new framework for the 457 programme would be fully operational.
The principal recommendation of Robust New Foundations, however, was that a tripartite Ministerial Advisory Council (MAC) be established, to consist of representatives from
business, unions and government, both federal, state and territory. The aim was that these representatives would proactively identify significant issues in their sector and raise them in the Council. The Council would be supported by a resource, one of whose tasks
would be to collect the evidence relevant to the issues raised in the MAC. That evidence, and the evidence-based discussion that would ensue, would then form the basis for the Council's advice to Government.
There have been many positive developments since Robust New Foundations, including the Government's decision to revitalise the previous Ministerial Advisory Council for Skilled Migration (MACSM), in a more active role than that of its predecessor. However,
the earlier expectation that the new MACSM framework would be completely bedded down and operational within two years has proved to be premature. For this new framework to be fully effective, stakeholders should be encouraged to bring issues to
MACSM on their own initiative, that is, proactively.
In the meantime, this report makes a set of more immediate recommendations relating to TSMIT:
- it should be retained as a single figure
- it should continue to be set at $53,900
- since it has not been adjusted after July 2013, it should be annually indexed as of July 2016
- it should be indexed according to the seasonally adjusted Wage Price Index
- any concessions to TSMIT should continue to be negotiated through Labour Agreements
- Labour Agreements should be included in the simplified sponsorship model
- the current legislative framework should continue to be used for TSMIT
- the current discrepancy between the 457 programme, which requires sponsors to meet TSMIT, and the ENS/RSMS programmes, which do not have such a requirement, should be addressed by Government.