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How the 2019-20 Federal Budget impact on Australian Migration program?

Federal budget

The Commonwealth Treasurer, Josh Frydenberg has handed down Australia’s 2019–2020 Federal Budget (the “2019/20 Budget”). FortuneChance has identified five key areas of changes in migration portfolio and summarised in this article. 

Reduction in migration intake level

As previously announced by Prime Minister Scott Morrison in late March, the 2019/20 Budget formally confirmed that the reduction of Australia’s permanent migration intake by 30,000 places to 160,000 each year for the next four years.

For the 2019/20 Migration Program year, the 160,000 places can be further categorised into the following streams:

Skilled stream – there will be 108,682 places in this stream. It represents 69.5% of the program places. The breakdown of this stream is as follows:

Family stream – there will be 47,732 quotas for family stream including partner and parent visas. 

3,586 places will be allocated to Child and Special eligibility streams. 

The reduction in intake number of 30,000 seems a bit shocking. However, when you compare this to figures in prior years you will reckon that the budgeted figure is merely reflect the current intake level.  You may have a better idea after looking at the table below:

As seen in the table above, the migration program has not met the original planning level since 2016-17. The reduction in planning level is therefore just an adjustment to make the planning level match with the outcome. 

In fact, it is worth noting that the 2019/20 quotas for the skilled independent visa (Subclass 189) will be reduced significantly from 39,137 to 18,652. The 20,485 places cut will be reallocated to the new regional visas. Under the 2019/20 Budget, there will be 23,000 spots reserved for the newly launched regional visas. 

Introduction of new regional visas to replace the existing ones

Three new regional visas will also be introduced on 16 November 2019 and will replace the existing Regional Sponsored Migration Scheme (“RSMS”, subclass 187) visa and the Skilled -Regional (Provisional) visa (subclass 489). These new regional visas make up of two provisional visas and one permanent visa, namely:

  • Skilled Employer Sponsored Regional (subclass 494)
  • Skilled Work Regional (Provisional) visa (Subclass 491)
  • Permanent Residence (Skilled Regional) visa (subclass 191)
 
These new visas form the new PR pathway for regional skilled migration. The definition of “regional” will also be simplified and allow more desirable places on offer. Under the new definition, the regional area refers all of Australia, except for Sydney, Melbourne, Perth, Brisbane and the Gold Coast.
 

More information will be uploaded to our blog or facebook. Please stay tuned!

 

Changes to Skilled Migration Points Test

From 16 November 2019, the Skilled Migration Points Test will be adjusted to award additional points to applicants where their partner has competent English but cannot meet the other requirements for skilled partner points. Additional points will also be awarded to single applicants to ensure that they will not be disadvantaged. The changes are summarised as follows:

  • 15 points for nominated by a State or Territory government or sponsored by a family member residing in regional Australia, to live and work in regional Australia;
  • 10 points for having a skilled spouse or de facto partner;
  • 10 points for certain Science, Technology, Engineering and Mathematics (“STEM”) qualifications;
  • 5 points for applicants with a spouse or de facto partner who has competent English; and
  • 10 points for applicants who do not have a spouse or de facto partner.
Extension of Graduate Visas for students study and work in Regional area

From 16 November 2021 onwards, international graduates will be able to extend for an extra year by applying a second post-study work visa if they complete a higher education or postgraduate qualification in a regional area and live in a regional area while holding a Temporary Graduate (subclass 485) visa. 

Increase in visa application charges (VAC)

There will be a 5.4% increase in VAC starting from 1 July 2019. Almost all of the visas will be affected, except for subclass 600 Visitor Visa and the second instalment VACs, such as the second instalment charge for certain skilled visas where the dependent cannot demonstrate the required level of English proficiency.

Take subclass 189 as an example, the current VAC for the main applicant is $3755, If you submitted your visa application after 1 July 2019, you will need to pay around $200 more for the new VAC.

Our recommendations

For those who are planning to apply for a visa, you may wish to lodge it by 30 June 2019 to avoid the increase in VAC.

For those who are considering the RSMS (subclass 187) and subclass 489 visa/s, please ensure to lodge your visa application by the end of October 2019 so that you are not subject to the new rules, such as the three-year requirement of living and working in regional area.

For international students who intend to study in Australia, you may consider universities in regional areas as this may capture the benefit of extended stay of the graduate visa and new PR pathway available.

If you would like to know more about how the changes may affect you please contact us for a consultation. 

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