Startups are complaining that a new foreign worker levy unfairly punishes them for Australia’s skills shortage

Photo: Patrick Lux/Getty Images

The federal budget on Tuesday night announced new levies for hiring foreign workers, which are expected to have an impact on the technology industry.

Treasurer Scott Morrison announced a levy of $1,200 or $1,800 per worker per year on temporary work visas and a $3,000 or $5,000 one-off tax for those on permanent skilled visas would be applied.

Mike Pritchett, CEO of video platform startup Shootsta, said that it’s not “logical” that a levy is imposed on companies struggling to fill vacancies.

“Startups are being penalised and having to pay the government money for the fact that Australia has a skills shortage,” he said.

The new levies are expected to raise $1.2 billion for a Commonwealth-State Skilling Australians Fund and replaces the 1% to 2% employers’ payroll contributions, which has been difficult to enforce.

Tony Wu, head of growth at labour exchange platform Weploy, said that the policy is “an unnecessary tax” that would just make it harder for foreign workers to land positions in Australia.

“It sends a message that Australia does not value the skills of foreign workers,” he said.

“Weploy will pay the levy either way because we need to be able to hire skilled foreign workers — alongside local Weployees — so we can provide the best talent available to our clients.”

Qwilr co-founder Mark Tanner said that the top 1% of talent in technology offer results that are 10 times better than the rest of the field.

“And the reality is that most of these candidates are from outside of our shores. Putting up barriers to attain overseas talent will be detrimental to the success of Australia in the global tech race long term.”

Xero Australia managing director Trent Innes said that the levies could stifle small business growth.

“The introduction of an annual foreign worker levy is a potentially major impost on small businesses that need to hire workers from overseas because of a lack of skills on the ground in Australia,” he said.

“This could discourage companies from looking for the skills they need to grow their business both domestically and globally.”

TechSydney CEO Dean McEvoy, sought more detail on how the Skilling Australians Fund would be spent.

“One of the biggest issues for our industry is a shortage of available trained talent within Australia. We need to be sure the money is spent training young Australians and redeployed workers in the right skills to ensure them to get the jobs of the future that our industry is creating.”

Marketing tech Mpire is still in a high growth phase, and its managing director Luke Taylor said in businesses at this point can ill afford to spend all its time training up local staff.

“Mpire needs to hire people with a niche skill set that is largely unavailable locally,” he said.

“This in turn has enabled us to hire graduates and invest the up to 2% back into their training and further growth of our business.”