Foxtel, MCN and Rising Sun Pictures among opponents of LAFHA changes
The treasury has received more than 100 submissions around its plans to end the Living Away From Home Allowance at the end of next month.
The axing of the LAFHA will have a major effect for the Australian marketing and agency world as it employs a disportionately large number of staff from overseas.
LAFHA is a tax perk which allows staff to claim their rent back against tax. Opponents of LAFHA claim that it is unfair to locals. However, those who are not residents point out that they face additional costs such as having to pay for their children to access public schools and often not being able to access Medicare.
The move has triggered furious debate on Mumbrella comment threads, particularly the decision to deny those claiming LAFHA because of a home overseas the two year transition period being given to locals.
Among the 100 submissions is one from accountants Ernst & Young warning the proposals “will have unintended adverse consequences on Australia’s economy” including making it much harder to attract overseas staff. It claims the plan “does not give sufficient consideration to transitional issues and the need for broad transitional provisions in order to allow affected employers and employees to amnage the change.”
As well as staff being out of pocket, employers will find themselves with larger super bills and requests to make good the difference.
Among the signatories to the Ernst & Young letter is subscription TV giant Foxtel and sales house Multi Channel Network.
Other opponents include Rising Sun Pictures, which is Adelaide’s largest post production company, having worked on projects such as Harry Potter and the deathly Hallows.
According to Rising Sun’s submission, the changes will have “a significant impact” on the business. It said: ‘We believe it will significantly decrease our ability to recruit overseas specialists. If we were to have a significant reduction in overseas staff it would make it increasingly difficult to resource the volumes of work required to maintain a profitable, world class facility.”
There would also be fewer local staff trained and mentored as a result, argues Rising Sun.
The Australian Information Industry Association, whose directors include Google, argues: “We are concerned that the proposed changes may have unintended negative consequences on Australia’s readiness for appropriately optimising our developing digital economy.”
The submissions can be viewed here.
- Declaration of interest: Staff of Mumbrella’s parent company Focal Attractions are among those affected by the change.
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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…and for all those true-blue folk saying “Australia’s economy is indestructible because we’ve got the mining boom”….. feel free to check this out:
“The proposed reform of LAFH FBT concessions will have a significant negative impact on the delivery of infrastructure and mining projects in Australia.”
– Leighton Holdings
Read it here: http://www.treasury.gov.au/~/m.....dings.ashx
Mining? Boom!
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Oh please, do Australians get these kinds of tax breaks when they move overseas? Perhaps these foreign nationals could go home where their economies have been just so strong for the past few years (with tongue firmly planted in cheek). I imagine most of these people are lucky to have well paying jobs and a great lifestyle in Australia. I fail to understand why local taxpayers should fund this good fortune.
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Oh dear……
@ LAFHA makes us laughing stock
“I fail to understand why local taxpayers should fund this good fortune.”
Because it is GOOD for Australia, long term.
Read the submissions FFS……. Written by AUSTRALIANS with much shinier CV’s than yours’. Some even predict AUSTRALIAN REDUNDANCIES if the reforms go ahead. There is more to Australian industry than media and advertising.
Oh that’s right, you know better than KPMG, Consult Australia, Google, FMG….? How about VISA..?????? Yes, VISA – the good folk that handled US$5.2 TRILLION in transactions in 2010, they don’t know what they’re talking about do they? They ask for transitional rules for ALL tax payers, at the very least, and describe the reforms as “out of step” with wider Federal Government objectives.
Other submissions talk about other overseas markets that DO offer concessional tax treatments for foreign workers. Who do they give as an example of this?? THE UNITED KINGDOM.
The list is endless, and the truth is out. The xenophobic Aussies go quiet, happy to just sleep warm in the knowledge they’ll bring home lots of gold this summer. You’re welcome to it.
Any further support fro these reforms from anonymous Aussies just serves to illustrate why you NEED foreigners here in the first place. FACT.
(occasionally I will feed the trolls)
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You see, that’s what a lot of people are going to do. I had a wonderful time here, but if promises are breached (I came here because only with LAFHA could I have a sustainable life), I will certainly reconsider going back to Germany (and I’m sure you’ll agree that Germany is a “truly strong” economy which does not rely on resources but rather on productivity and innovation, and yes, we do have sun there as well). So problem solved, one less foreign national rorting your tax system. Trouble is, that half of my department is on a 457 and will think the same (Lucky are these without families in these times). Try filling up gap then (and I doubt you will find enough local workers with the particular required skills)
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Tim,
I am not trying to stir any shit here, but you are giving the LAFHA stuff a lot of coverage. And I understand why, It IS a big issue. Bigger than a lot of Aussies realise.
But are you or Robin benefits of the LAFHA yourselves? Just genuinely curious.
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Hi AB&GRL,
It’s a fair question. I’m slightly reluctant to refer to members of my team’s own personal circumstances, but I have pinned my own flag to the mast here: https://mumbrella.com.au/there-are-12-local-jobs-right-here-that-wouldnt-exist-without-the-lafha-67047
And you may have missed the note at the end of this piece to address the very point you raise: “Declaration of interest: Staff of Mumbrella’s parent company Focal Attractions are among those affected by the change.”
You’re correct that we’ve given the issue a lot of coverage, but I’d also point out that each story has generated dozens of comments, which does suggest there is an appetite among our readers to see that coverage and to comment on it.
My own instinct is that this will become a bigger mainstream story come July 1 as the consequences begin to work through.
Cheers,
Tim – Mumbrella
My Lafha just expired after four years here and just ahead of the reform. No doubt it’s a whack in the pocket, but I am grateful for the benefit while I had it and it kept me at my job for four years when other agencies came knocking. It was a great perk and nice to be rewarded for a change, rather that slugged as per usual, for all the study, grafting and long hours I’ve put in. It’d be great to see all the explemplary Aussie’s get a kick back too but the country is not heading in that direction anytime soon.
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Also, would it not be possible to somehow tier the allowance? From I can see it is uncapped. I could be wrong there though.
What if you got the LAFHA if you earned (say) up to $100k.
After $100k no dice.
That would be socialism though. And mum and dad hate that.
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My family are here on 457 visas and claiming LAFHA. What many who criticise LAFHA don’t realise is that we receive no benefits to our tax payments here. Whereas the partner who claims the deduction pays less in tax, the other partner who works pays the full amount. We cannot claim the child care rebate or benefit. We cannot get medicare, so we pay out of pocket for private health insurance, then usually pay at least half of all medical expenses that are covered by said insurance.
Most importantly, we are a part of the local economy in the same way as Australian citizens. We pay rent, we shop, we ride public transportation, take holidays within the country, and much more.
I like to think that the agencies who employ us are gaining the benefit of our experience, while we’re learning about the Australian market. We love living and working here, but sadly, without LAFHA, we would not be able to continue to do so for long.
I hope the government really listens and takes to heart what these companies are saying. A diverse workforce is a beautiful thing.
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Bit confused by all the people saying how they cant afford to live here any more without a LAFHA tax perk. Sure, you have to pay a bit more for schools and doctors (that is double-standards so fair point), but most people I know in my company on LAFHA are not junior staff. They are typically earning $100k and above. So they will simply have to make do with less take home pay. That’s all this is about. Saying you “cant afford to live here” is crap. Many people manage to live here on lower take home salaries and have families to support. The difference is we dont all choose to live in expensive apartments close to the city or Bondi. I’ve been to the UK when I was younger and there was no such LAFHA for me, and I had to pay to see the doctor too. I couldnt afford to live in the city so I loved a bit further out. Pretty obvious I would have thought.
I know of many s.457 staff in my company who are taking this change in the right way – this was a tax perk that was good while it lasted.
The only thing which is truly crap is people ar enot being given any transition time. This is really unfair – they should at least have a 6 or 12 month transition period
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Gives us a break with the sll “poor us wont be able to get specialist overseas”…well firstly you should not be able to get someone on a 457 visa unless there is nobody in the market place to do the job….if you want to get people from overseas get them an accomodation allowance! or an expat package….secondly saying that the lafha people dont get access to medicare and thats thus alone justify the lafha, get real ! you think your 30-+ k is equivent to a couple of 100 bucks for doctors bill??? by the way australian also pay a medicare levy and pay for compulsary private health inssurance…And if the overseas lafah people were expert in their field why not applying for a skilled migration pr visa under the point system? hmmm thats probably because they wont qualify! the 457 visa is a massive scam and the lafha is a joke! Nobody forces you to come to australia to wir, so if you wAnt a nice time in this coubtry bear the cost!
What about the lafha perceived for over than one year on multiple 457 visa! what about people losing there job and getting another sponsorship and another lafha? too many abuses on the system. People who have perceived the lafha when they should not have should be subject to tax frayd and repay the ato the unlawful amount plus interest…yes they are plenty!
If you want to be in this beautiful country then do it properly apply fir a permanen residency via the skill migration scheme and point system!
Expert in marketing and sales makes me laugh!Quite simply if a company want to sponsor someone they should do it withoyt expecting tax rebates.
And tou are quite right the economical impact is a joke, because of the lafha, the rent in the lower nort shore and eastern suburbs has inflated by 40%…same impact on house price…stop this artificial inflation!
No objection for the lafha when it is genuine but because you all are anisi g the system, dodging the tax back home and here, playing with the mutual tax agreement, it is costing to the australian community!
And lastly all these agency and funcky marketers whonging not being able to compete without lafha….welcome to the real world! same for every one else!
Plus that will certainly help getting rid of the recruiting agents coming from the uk that are a disgrace for the recruiting profession. Australia has heaps of talents no need to go and look for expert to do mid management roles!!! these are not experts!!
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so angry he cant even spell check ^^^
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@The Truth – Stop droning on about Bondi/Manly/Sydney. There is more to Australia than that, and more people that will be hurt than ad execs and digital media folk.
@yeah right – beer o’clock already sir?
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get a spell check expert with the Lahfa…and have a nice trip back home
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Friday lunches are great ^^^^^^. They are what we all come over for. Genuinely everyone knows it has to be reformed/go, but for god sake put a decent timeline on it. When it finishes open medicare, schools, child care and health rebates to temporary full tax paying residents. Fair for everyone who’s here. Anyone who comes over after thatS their call to take on the costs of relocating and weigh it against the pro’s.
We love it here but feel the govt are pretty backwards. I sometimes sit here and think the EU is more sensible and god knows that can’t be right!!!
Off to crack open a beer have a good weekend
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My name is Charles but they call me prince at work.
Well I was educated in a private upper class english boarding school and went to uni at Oxford.
I am now working in Oz and lovin the lafha. Actually to tell the truth I have not really got any costs at home and put my mummy’s house on the ATO form. She found out I was rorting the tax system and sent the ATO confirmation back to oz not known at this address. I fixed this by putting one of my former boyfriends addresses on the revised form.
Now I love my lafha because it lets me live in my coogee $1200 per week furnished flat overlooking the sea. I spend my food allowance on the great food out 4 nights and home delivery for 3 nights!. Sat mornings are great sipping lattes at Paddington enjoying the view! All thanks to youse Aussie giving me a freebie tax break – THANKS A LOT!!!!
Well since the rumors started on the Wayne Black Swan giving away my dear lafha I have been in utter dispair!!! Where will I live???/ What will I eat????
The ozzie girls at work keep singing “Minto Minto Man, I want to be, a Minto Man” to the tune of the Village People? I said where the hell is Minto?
Last Saturday I had to investigate Minto, one of the few areas in Sydney that has housing for less than $350 – thats all I can afford after the Black swan takes away my lovey lafha! To my horror! I walked into Minto Mall. AHHHHHAAAA.
I tried to sit down at the coffee shop to read the local rag. ( The cappicino was made with nescafe and frof only yuk!) Housing dumps only. I could not even concentrate – the table next to me was a pregante teenage, wearing thongs, baby in pram and a screaming kid in a West Tigers jersy with a pigtale!
I this is what my life will turn into, learning how real aussies live????
HELP PLEASE WHAT DO I DO NEXT. WE ONLY HAVE 6 WEEKS TO GO !!!!!
Prince.
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It seems the biggest source of debate is from two sides A) People about to lose LAFHA who think the Government should offer a transitional period to realistically change their lifestyles over the next year or two and B) Uninformed Australians who think people receiving LAFHA are overpaid complainers who are blowing things out of proportion.
If you take away 20% of your pay overnight, you can’t just call up Vodafone, Foxtel, and your land lord and say “sorry, gotta cut you guys off”. Just as unreasonable as that is, so too is the Government not offering the SAME grandfather clause to everyone to make changes to their lives.
My wife and I have considerably cut back on spending and started trying to plan to stay here because we are not about to quit on this country yet. The reality is, we can’t change alot of FIXED expenses overnight due to contracts. We can only change our variable spending to prepare for the July 1 change. With that said, I’ll be calling up Foxtel on July 1 and saying “remember that paper you guys wrote to the Government…. I need your help now”.
The fact is, some families will be in the red with LAFHA gone. To them, that is the white flag and it’s time to box up the belongings and go home. You took a gamble on living so close to the “line” and with this reform it may not be possible for you to cover your fixed expenses and cut your variables comfortably. It’s about lifestyle really… Could you some how make it work? probably… but that’s not the reason you came here is it? You’re probably here more for personal and lifestyle reasons than anything else and why would you just scrape the barrel to just barely make it.
The people posting aren’t the execs. The people who are losing a single digit % of their take home aren’t on the message boards pouring out their life stories. The people posting about their situations are the ones truly and materially effected.
With that said, the people saying “You’ll be sorry Australia… you just wait” is a bit excessive in my book. Life will go on, with or without you here. The country isn’t going to collapse because you won’t be here. The fact is, the cost of hiring talent is now going to come at the expense of the company as opposed to the Government. Companies don’t like it, but it’s the reality now. The other reality is they have their current 457 visa holders by the balls due to contracts now and they aren’t obligated or statutorily required to increase their pay.
I hope for the best for everyone effected by this change in Legislation and I hope it doesn’t taint everyone’s life and experiences here in Australia.
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First of all, I am on Lafha myself.
I have to agree the government and the Australian people should not have to pay for this. Having said that, it is also true, the Australian economy needs foreign labor badly with current development projects and local companies (with few exceptions) just don`t have (as of today) the capability to offer and expat package to include for instance accomodation as in other countries. Therefore, in my opinion each party (government and companies) should do their share to promote skilled immigration but without making the Australian people pay for it, the companies on the other hand, need to be more competitive in the world market to be able to offer expat packages and still be in business and the government should ease the requirements for skilled expats (yes highly paid) to become permanent residents and pay full tax.
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and so it begins….. good luck with your crumbling infrastructure Oz…
=====================================
Group: Global Rail Professionals Subject: Urgent Abu Dhabi – Infrastructure Positions
The Global Edge currently require the following candidates for prestigious infrastructure projects within the Middle east
• Track Design Manager • Rail Alignment & Track Consultant • Senior Project manager • Rail Systems Requirements manager • Principal Irrigation Engineer
=====================================
Thanks for making the decision easy Swanny 🙂
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I am not anti LAFHA in the slightest. I am anti LAFHA abuse. I see so many workers in the ad industry on LAFHA and they quite simply do not need to be, especially after 6 years…
It should be a tool, used to set people up in a new role, when they have had to move and re settle etc. (Obviously…)
I am happy for LAFHA to continue, however it needs to be firmly regulated and monitored case by case.
LAFHA is good, however it IS being abused and this needs to stop.
btw; would large corporates with loads of staff be opposed to LAFHA’s removal because they fear that employees will negotiate higher payment terms..?
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So I’m lying then, ‘The Truth’ (haha!) am I? My partner earns a reasonable wage without LAFHA but, as we aren’t entitled to child care assistance I would be paying to work. So we have to rely soley on his salary. I think you’ll find that the Australians to which you refer get half of their child care costs back (or maybe have family to help). We, indeed, will be unable to afford to live here and I’m getting increasingly angry hearing that it’ll only affect rich Sydney-ites. It’s hitting families very, very hard. We are now in a position that is intolerable – we were offered the job without being told LAFHA was in any way under threat and did our sums accordingly. We’ve had effectively 6 weeks notice of a reduction of nearly a third to my partner’s salary as his firm did not do anything about the loss until the official announcement a few weeks ago. We now can’t afford to stay but have no work to return to. So thanks for your sympathy and I wish you never have the stress our family has had to endure in the last three weeks.
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The Prime Minister said a few days ago in response to the Rinehardt overseas labor deal:
“Yesterday I decided we would add to what we’re doing to make sure that Aussies are getting the jobs,” Ms Gillard said. “Companies won’t be able to bring in foreign workers if there is an Australian ready, able and willing to do the work on the jobs board.”
I love the Pom’s but the fact still remains that there are plenty of Aussie who are ready able and willing to the jobs. Australia is nice, but it’s not just another part of the UK for all who want to come here.
Australian jobs should be for Australians and employers should face penalties for lying and saying there’s no Aussies who can do the job.
Say 10 times the salary they are paying if its found they are lying and all foreign worker jobs to be advertised first and then if any foreign workers are hired, the company has to explain why with the rejected Aussies in the room to stop them from just bullshitting that no-one here has the skills because they would like to hire their UK mates.
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Yes, there may be some merit in that but, the truth remains that some jobs are next to impossible to fill with Australian workers. My partner’s job, for example. The firm he works for simply could not find local talent, which is why they paid a substantial amount of money to bring him over from the UK. I can’t see them doing that if they were able to find an Australian ten km down the road.
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Any coincidence that the transition arrangements will allow politicians and their bureaucrats in Canberra make use of it until they are voted out next year….
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Lots of words on here.
The simple position is, it needs to go, but equally it needs some form of transition arrangement that allows individuals and companies to adjust.
I don’t think you would get many lafha recipients or companies complaining about that, it simply allows them to manage their affairs in a sensible time scale.
Likewise it gets closed to new applicants immediately and the rest is simply “wound down” over a year or so.
I can’t see “annoyed Aussies” being too “annoyed” at that either…it’s just …well….dare I say it…..common sense?
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There seems to be a great deal of misunderstanding (putting it charitably) amongst some Australians about these issues.
Someone employed on a 457 visa has to take a post which their employer must be able to prove cannot be filled by an Aussie. And they must be paid at the same rate as an Aussie. So there is no way that 457s are either taking a job which should have gone to an Aussie, or undercutting Aussies as cheap labour – unless the whole system is being improperly policed, in which case the powers that be need to sort it out.
My own case as an example. It took nine months for my employers to get me out here, from start to finish, so even if employers manage it quicker than that, its a slow way to find a staff member. Second, it cost them thousands in fees to recruitment consultants and migration specialists. I have to ask, why in the name of everything that is holy would a company go through all this if perfectly good Aussie staff were there to be had? Within two months of getting here, another company got in touch, wanting to poach me. They had been trying for a year to get someone, and had actually passed me over before because they were so intent on getting a local worker, and not going through all the pain and cost of recruiting overseas. Aussie workers with the right skills are plainly not queuing up in some sectors, and for some roles, and recruiting a 457 is a costly and time consuming last resort for employers. Good job they like me…
And lets get this straight, the real annoyance with these changes is that the government has implemented them in a way which removes LAFHA immediately from foreign nationals, but leaves it in place for two years for citizens. The reason? Because they would not get away with summarily lopping 15-25% out of the pay packets of Aussie workers, and quite rightly they cushion it. But because Aussies think we should just shut up and be grateful, and the government knows we don’t vote, its OK to do it to us. Whether LAFHA is or isn’t a good use of Australian taxpayers money really isn’t the issue. But I sense that if it was, less draconian measures like caps and time limits might have been more sensible, and after that at least a level playing field on its withdrawal. But I guess the ‘fair go’ doesn’t extend to us?
And, just in case its questioned by the dragging knuckle, flag waving brigade, I do love Australia, I intend to stay, and we’ll cope just fine whatever you chuck at us. But I struggle to understand what you have done to deserve your politicians, or why a country built on the hard work of generations of migrants is so antipathetic towards the latest of us, forgets its own heritage so easily in pulling up the drawbridge, so woefully under-rates the contributions made to this country by migrants, and so completely fails to understand the 457 system whilst at the same time commenting on it here.
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Excellent post – well said
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@Fensaddler
What you are depicting here with the 457 visa is understadable…Shame you ate not working for PWC, Ernst or KPMG…they get their 457 visa under 3 weeks. The cost of doing that? they manage to get the cost offset as well, a good one for the ATO.
You are right as well saying that the 457 are badly policed…there are a number of wirking holidayer in this country that are looking and are getting sponsorship 457, which is also a breach of there visa conditions.
YES totally agree also with the fact the lack os scaling this lafha change over time is bad…but let me remind you that people lose their jobs everyday on this country with just 4 weeks notice and the representation of wirkers right fir unfair dismissal is a joke in this country…so yes thats unfair to withdraw the lafha right lime this but you should not be surprised if you knew more about the world we live in here in australia…the “no worries mate, she’ll be right” gas become arrogantly disgraceful…it is part of the reality and the Labor has worsen this situation.
I agree people should be treated fairly, but tha is not the case and the point i am making is stop brong self absorbed about the 457 and the Lafha…if people have skills, let them apply genuinely for a PR cia the skilled migration and stop abusing the 457…
But i wll grant you this, the law does not apply the same to every one, the mining fat cow got 1700 foreign workers that will tequire training in australia to do work that australian can do…abd all that with the government consent…
So yes life is not fair but hey welcome to Australia…the land of boganism and binge drinking…have a look at indigenousrights.net.au it might shed some light on voting right …so if you believe 457 deserve to vote stop the delusion right here.
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457 makes provision for application to PR by at least two routes, the most common one being the employer sponsorship of PR after two years. Skilled migration covers a very narrow range of skills, and 457 recognises that there may be other needs relating to wider range of skills and roles. I’ll be going for PR via this route in due course, and in no way is that an abuse of anything.
I wasn’t suggesting that 457’s be given the right to vote – that is a privilege that, probably rightly, comes with citizenship. My point was that 457s are an easy target because they can’t vote. Self-absorbed – I think if I’d lost my job I’d be self-absorbed with that too – we all recognise a bad deal when we see it. And just to advise I’m well aware of the considerable problems with indigenous rights and life chances in Australia…
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