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Federal Budget 2022-23: International

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A key platform of the Budget is attracting migrant labour to cover skill shortages arising from the COVID-19 pandemic.  The Budget seeks to achieve this by relaxing certain work restrictions for a range of visas and increasing country caps for work and holiday visas.  The Government has also announced measures to promote inbound investment by reducing regulatory burdens for investors under Australia’s foreign investment framework.  Much needed support to the tourism sector has also been announced.

Australia’s foreign investment framework

The Government will amend Australia’s foreign investment framework to reduce the regulatory burden faced by investors. The amendments will streamline the requirement for some investors to notify the Government before acquiring an interest, while still maintaining the Government’s ability to address national interest concerns as they arise. These amendments are due to commence on 1 April 2022.

Changes to visa rules

The Government will relax certain work restrictions for a range of visas including eligible Student and Working Holiday Maker (WHM) visa holders, and will extend visas for certain engineering graduates negatively affected by COVID-19 travel restrictions.  This will provide much needed support to businesses and will aid Australia’s economic recovery.

The Government has also announced incentives for international students and WHM visa holders to bring forward their arrival in Australia by refunding the Visa Application Charge for Student visa holders who arrive in Australia between 19 January 2022 and 19 March 2022, and for WHM visa holders who arrive in Australia between 19 January 2022 and 19 April 2022 (inclusive).

As part of the Budget, the Government has promised to increase country caps for Work and Holiday visas by 30% in 2022-23. The Government is also redistributing 10,000 places in the 2021-22 Migration Program from the Partner visa category within the Family stream to the Skill stream. This redistribution recognises the sharp fall in the number of on-hand Partner visa applications and will further support the economic recovery by increasing the places available for skilled visa holders.

The Government will also clarify the tax treatment for income earned by workers under the Australian Agriculture Visa scheme established in MYEFO 2021-22 to respond to workforce shortages in the agriculture and primary industry sectors.

Resident return visa

The Government has mandated online lodgement of Resident Return visa applications (except where special circumstances apply), improving processing efficiencies and enabling applicants to better track their application. Currently, Resident Return visa applications can be lodged online or on a paper application form, with paper applications attracting a Non-Internet Application Charge. Over 99% of applications lodged in 2020-21 were lodged online.

Migration program

The Government will maintain the 2022-23 permanent Migration Program planning level at 160,000. Skill stream places will increase from the 2021-22 planning levels to 109,900, and account for around 70% of the permanent Migration Program. Partner visa granting arrangements will move to a demand-driven basis going forward. These changes will help maximise the economic benefits of the permanent Migration Program.

Australia – United Kingdom free trade agreement

The Budget reaffirms the commitment made by both the Australian and United Kingdom governments on 17 December 2021 when they signed the Australia-United Kingdom Free Trade Agreement. This Agreement eliminates tariffs on over 99% of Australian goods exports to the UK.

Tourism support

The Government will provide additional funding over 3 years to support the recovery of the Australian tourism sector as part of the Government’s response to the COVID-19 pandemic. Funding includes:

  • $76.7 million over 2 years from 2021-22 to extend the COVID-19 Consumer Travel Support Program to support travel agents and tour arrangement service providers.
  • $63.0 million over 3 years from 2021-22 to accelerate international tourist and backpacker arrivals through targeted marketing initiatives.
  • $6.8 million over 3 years from 2021-22 for increased data availability and analysis to improve planning in the tourism sector and to establish an employment platform to promote career opportunities in the sector.

Modernising Australia’s export system

The Government will provide $267.1 million over 4 years from 2022-23 (and $4.4 million per year ongoing from 2026-27) to modernise and improve Australia’s trade system and support Australian exporters. Funding includes:

  • $127.4 million to continue and expand the Digital Services to Take Farmers to Market initiative to transform the delivery of Government agricultural export systems.
  • $80.0 million to provide additional support for small and medium export businesses to re-establish their presence in overseas markets through the Export Market Development Grants program.
  • $48.0 million to modernise Australia’s trade system, reduce the regulatory burden on exporters and to identify opportunities for further reforms.
  • $11.7 million to expand the Trade Information Service to provide exporters with a single source of online information to facilitate access to international markets. Partial funding for this measure has already been provided for by the Government.

Diplomatic and consular concessions

The Government has granted or extended access to refunds of indirect tax under the Indirect Tax Concession Scheme (ITCS) to the diplomatic and consular representations of certain specified countries. Under the ITCS, diplomatic and consular representations receive refunds for indirect taxes including GST, fuel and alcohol taxes.

The Government has also extended ITCS access for Papua New Guinea and the Taipei Economic and Cultural Office to include construction and renovation relating to their current and future diplomatic missions and consular posts.

Infrastructure financing facility for pacific projects

In line with the Pacific Step-up, the Government will increase the Australian Infrastructure Financing Facility for the Pacific to $3.5 billion, supporting additional infrastructure investment in the Pacific. The Government will provide financing packages through the Facility to the Government of Papua New Guinea:

  • to improve Papua New Guinea’s road network, including the Wau and Sepik Highways; and
  • to expand the electricity distribution grid in Lae and East New Britain as part of the PNG Power Sector Development Project.

Strategic partnership with India

The Government will provide $245.5 million over 5 years from 2021-22 (and $16.8 million per year ongoing from 2026-27) for initiatives to support the Comprehensive Strategic Partnership with India, including:

  • an Australian High Commission in Malé, Maldives, to support economic and security priorities in the Indian Ocean region.
  • a Centre for Australia-India Relations in Australia to provide Australia-India Maitri education and cultural programs.
  • a range of initiatives to build economic, trade and investment and regulatory links between Australia and India, advance regional cooperation on maritime shipping, disaster resilience and information sharing, and support resources and critical minerals supply chain links.

Humanitarian program

The Government will maintain the Humanitarian Program at 13,750 places in 2022-23 and over the forward estimates, and the size of the program will remain as a ceiling. The Government will also provide:

  • $665.9 million over 4 years from 2022-23 for an additional 16,500 humanitarian places for Afghan nationals across the 4 years from 2022-23, to address the anticipated need for places.
  • $9.2 million in 2022-23 to extend existing Youth Transition Support services for 12 months to 30 June 2023, to continue the provision of services to young humanitarian entrants and vulnerable migrants to increase engagement in education and community sport and assist in transition to employment.
  • $1.0 million over 5 years from 2022-23 to establish a Human Rights Advocacy Program to provide grants of up to $100,000 to human-rights focused organisations to advance Australia’s human rights priorities. This funding will be met from within the existing resources of the Department of Foreign Affairs and Trade.
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