Last Friday, the Assistant Minister for Immigration and Border Protection, the Hon Senator Michaelia Cash, confirmed in a MIA WA State Conference, that the Market Salary Rate payable for foreign workers under the 457 Visa Program will not be indexed for the 2014/2015 financial year.
From 1 July 2013 , the Temporary Skilled Migration Income Threshold (TSMIT), was indexed by 4.8 per cent, in line with the Australia-wide increase in average weekly earnings. The current TSMIT is set at $53 900.
Standard business sponsors are required to pay their overseas workers the market salary rate. Where the market rate for a position is less than $53 900, the position cannot be nominated under the subclass 457 program.
The TSMIT is set at this level to ensure that all subclass 457 visa holders have sufficient income to independently provide for themselves in Australia.
The TSMIT helps ensure that subclass 457 visa holders do not impose undue costs on the Australian community or find themselves in circumstances which may put pressure on them to breach their visa conditions. This is particularly important given these workers do not have access to a range of government support available to Australian citizens and permanent residents.
There is anecdotal evidence – certainly in many of the trades- that this figure is too high and that there are many local tradesmen not earning this level of salary. The question is what factors are taken into account when formulating this figure. The main additional cost borne by 457 visa holders,would appear to health insurance because 457 visa holders cannot access Medicare, but rather are required to have health insurance in place for the terms of their visas. Many employers cover this cost, but not all so as usual, the government is left to legislate for the lowest common denominator.