LAFHA chaos as overseas staff excluded from transition period
Clarification on when workers will lose their entitlement to the Living Away From Home Allowance will be issued “relatively soon”, the Treasury has told Mumbrella. However it now appears certain that most overseas agency staff will lose out.
The move follows two days of confusion on the questions of whether overseas staff already receiving LAFHA will be entitled to a two year transition period.
The issue is a key one for the media and marketing industry, which employs a disproportionately large number of staff from overseas, particularly from the UK. LAFHA offers a tax perk towards living costs.
Tuesday’s budget announcement confirmed that LAFHA will end for most people. Guidance published on Tuesday appeared to suggest that anyone with LAFHA arrangements in place would be allowed a two year transition period.
Meh – go home. The vast majority of you choose to come here. I can’t fathom why the country would pay you to do so, on top of your wages. It’s not like there’s that many jobs going in the UK at the moment.
The only “chaos” and “confusion” seems to be from Mumbrella. Reading through the release from treasury it seems pretty clear to me.
The only person the poms should be disappointed with right now is Mumbles for getting their hopes up!
But then you have to drive traffic somehow I guess.
Whilst its a concern for those involved.. it was particularly stinging that overseas workers paid less tax than me.
Finally rectified.
Schwing.
Back to blighty then!
Am I sensing some animosity towards people that actually got to choose whether to come here or not..?
this will only damage the australian economy.
will it generate more money for the gov’t ? not really – as many might choose to go elsewhere.
will it amplify the skills shortage in australia? yes
hence will it slow productivity in the marketing industry? yes.
one of the less commented elements of LAFTA is that they have to pay a lot more for healthcare and they have to pay for their kids to attend public schools, so often they are no better off at all. is the gov’t scrapping these extras too or are we just going to slug jonny foreigner to pay for the rest of us?
if the gov’t wants to generate some serious new income, start taxing sole traders properly and get rid of the cash culture in the trades. when a builder turns up to give you a quote in a luxury 4wd and lives in a McMansion – and then asks for payment in cash – you get the idea….
the only reason they are focusing on LAFHA is because recipients can’t vote (yet)….
poor form julia.
The different rule set applying to people who have homes overseas indirectly discriminates against a community of people based on their nationality. This is potentially illegal under human rights laws. If you are concerned about this or some of the other discrimatory and offensive comments that are appearing on comments boards such as the one above I encourage you to raise them at complaintsinfo@humanrights.gov.au.
The United Kingdom has a Tax Treaty with Australia which contains a non-discrimination clause.
Non-discrimination
Article 25 (Non-discrimination) is included to protect nationals of one country from tax discrimination in the other country. This is the first non-discrimination article to be included in an Australian tax treaty that gives taxpayers private rights of appeal4. The Article does not preclude either country from applying its anti-avoidance rules (including thin capitalisation measures), research and development concessions, consolidation rules or capital gains deferral rules.
If you are a British Citizen and are concerned that you are being discriminated against under Australian Tax rules you should consider raising such concerns with your local British Consular. Contact details for these are available at http://ukinaustralia.fco.gov.u.....-nationals.
Another Gillard Clusterfudge. Morbidly curious to see when this government finally goes supernova in a ball of incandescent ineptitude. @RW&B – well said.
There are concerns that the negative impact to Australias image as a financial center in Asia(http://au.legalbusinessonline......ers/108363).
There are also concerns that discrimination against foreigners via the budget reforms around LAFHA are not equitable under Human Rights laws.
Raising the awareness of such concerns may be of interest to opposition political parties who may aspire to build a truly fair Australia.
Please consider contacting Joe Hockey about any of the above concerns http://www.joehockey.com/contact/default.aspx
Please consider contacting any of the following UK Media entities on any of the concerns mentioned above:
letters@guardian.co.uk
letters@observer.co.uk
talkback@the-sun.co.uk
news@sky.com
newsonline@bskyb.com
lucy.ellison@bskyb.com
Not that I’m an expert, but I don’t think the Article 25 (Non-Discrimination) subject is worth pursuing. Overseas citizens on a 457 visa are not being discriminated against on their tax, however there is an argument that they are being discriminated against on the basis of the benefits they receive.
While I accept that their is a logical link between tax and benefits (one pays for the other), there is no legal link, and therefore I can’t see how that agreement would be relevant.
PS “Taxpayer”. A thoroughly well thought out argument. You are an inspiration to anyone who has ever wanted to put forward a balanced discussion on any subject.
To submit a story idea on the subject of LAFHA discrimination to the BBC and have a voice please visit http://www.bbc.co.uk/news/10725415
If this change in legislation does mean that we see a mass exodus on 1 July then at least it will force the government, as well as the industry, to fairly address the skills shortage. I don’t think throwing buckets of money at foreign workers who come here for a working holiday, only to go back home after a couple of years, is actually adding to the long term prosperity of the industry or the country. I would prefer to see that money being spent on increased investment in education and training, as well as a general increase in salaries to attract and retain talent, particularly at entry level roles.
@RW&B
Seriously, its not an insult to us. We like our history. And look where we got to grow up as a result?! Talk about a lucky break!
If you don’t get that you can’t have been here for very long.
I’m sensing some animosity to overseas workers. Remember – Australia need’s us! If all the workers here were to back to the UK and elsewhere in the world, the Australian economy would have a severe shortage of skill and most likely collapse. Just saying.
Deloittes, KPMG, Grant Thornton etc have been made aware that providing transitional arrangements to Australian workers but not 457 workers breaches all of Australia’s tax treay obligations. Some have come back and advised that if the existing LAFHA arrangement for a 457 visa holder was not honoured during the transitional period, the temporary resident in Australia would be having to meet a higher tax burden. Not legal. If you are affected you need to contract the relevant foreign office. Expect more to come from this…
Don’t bet on it Al….Article 25 contains the following:
UK/Australia Double Taxation Convention 2003, Article 25 states: “Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected”.
I dont think most Aussies realise that a foreign worker gets shafted by having to pay more for private health, schooling etc. LAFHA helps out there and without it, things are difficult – Sydney is not the cheapest place to live. I cant understand they want to claw back some money or not have tax payers paying for LAFHA but at least phase it out. I have come here with my family, pay for schooling and like me people would have tied themselves into rental agreements, so to just remove without grandfathering is a little unfair
I cannot see many Pom’s deciding to leave Australia because they lose their LAFHA.
Plus, (LAFHA aside) wages in Oz are very good:
Senior Account Director in Sydney AUS$140k, which in pounds is 87k British pounds. Not too bad at all, plus free sunshine and sandy beaches… I know where I would rather be.
@SallyD
Be careful, the transitional arrangements DO apply to 457 visa holders – if they are required to work away from a home that they maintain IN AUSTRALIA.
The discrimination side of things relating to the tax treaty only really applies to the fact that temp residents will now pay the same tax as everyone else – despite still having to pay for schools/healthcare etc.
Same taxation, different burdens.
Where will all the extra tax go???
@If you don’t like it
Wages are good but living expenses are really high, rent, food, schools, cars – its not cheap !! and no Pom said they didnt like it but most would have come as LAFHA makes a difference.
http://www.totaljobs.com/salar.....ary-london
Citizen Smith – Yeah, you may be right.
If you don’t like it – 87K GBP in London is a far better salary than $140k in Sydney. You can’t just use exchange rates, as it doesn’t reflect the goods and services you consume in that country. I would hazard a guess that the historical average of $2.50 AUD to the GBP represents a closer approximation of the relative value of the two currencies in terms of the goods and services you can purchase in the two countries, which would put $140K on a par with 56K GBP.
@Al you wont get $87k in London for that role, which is my point. You are right about costs. Housing, food, stuff in Oz is very expensive, however that is sured up by the wages.
The mining boom puts pressure on prices (upwards), just like it did back in the gold rushes of the 1850’s. Back then a servant in Melbourne earning next to nothing could go to the goldfields and become rich. This is happening today with what used to be seasoned Macca’s employees for life, driving trucks in WA and earning $120k… v $40k in Macca’s.
I guess we just have to live with it. Greedy LAFHA abusers are nearly as annoying as the negative gearing mob who are doing nothing to help society, by dodging tax…
I think the polarised comments say it all… half of them are celebrating 2 more years of LAFHA, the other lamenting its imminent demise… basically, nobody has a bloody clue what’s going on which, with apparently only 2 months to go until (nobody really knows what), is a ridiculous situation to be in. How difficult is it to state, in clear and concise terms, what exactly will be happening after July? Cut it or don’t cut it- just give people a clear idea of your intentions and enough warning to be able to do something about it!
@ RW&B
No they don’t. Because as a 457 holder, you couldn’t own a residence in Australia from which you were required to work away (which is the immediate requirement), and claim LAFHA. If you own a residence, it’ll be overseas. Accordingly, between July 2012 and July 2014, the requirements in connected with income tax/FBT will be more burdensome on UK nationals than Australians with respect to residence. Therefore, is in breach of Australian legal obligations. The tax experts agree with my interpretation and this is one of the points they’ll be raising when they comment on the draft legislation. Further, the Fanning woman told me that was the intention. You need to argue that before you start talking about what happens after it’s gone.
@SallyD
You can own a house in Australia on a 457, you just can’t let it out.
You could rent a house in Sydney on a 457, and get sent to Perth for a year and still claim LAFHA on the basis you would otherwise be in Sydney were it not for your duties.
Plenty of people claim LAFHA without owning a home elsewhere – you don’t need to own anything – you just need to ‘intend’ to return ‘home’.
Buying a house here, or selling your house oversees would not individually disqualify you from receiving LAFHA. Both together might.
The transitional rules do not discriminate against foreign workers. Some foreign workers will STILL qualify for LAFHA after 1st July, it’s unlikely but not impossible.
Also, the ATO isn’t discriminating against us for making us pay full tax – it is the people denying us services (or making us pay for services) that are discriminating.
The more I think about this, the more I think the government/treasury could come away from this squeaky clean.
Email the BBC correspondents below, they all cover Australia/Sydney for the BBC.
Nick Bryant – Sydney (nick.bryant@bbc.co.uk)
Phil Mercer – Sydney (phil.mercer@bbc.co.uk)
Duncan Kennedy – Sydney (duncan.kennedy@bbc.co.uk)
well foreigners do get thé right to buy a property in Oz but the major downside is that once your Visa expires, you’ve 28 days to sell your property. knowing how ridiculously high the real estate prices are in Sydney, i sure would not see the point of such move. how about we – 457 holders – all pool together to buy a property to live away from? sick of this endless wait for Godot. hopefully treasury Will come with a clear paper on this!
@RW&B the rule you refer to is discriminatory. The requirement to have a usual place of residence in Australia that you are working away from is very unlikely to apply to a foreign person but almost guaranteed to be the case for an Australian LAFHA claimant. The other house that they maintain is not in Australia because……………………they are foreign. This is indirect discrimintation.
you can actually own a place in australia be on a 457 And let it out providing very stringent conditions. the property has to be brand new (not refurbished). if you buy an existing home, it has to be completely demolished to be eligible. impots.gouv.fr obviously fail the screening… if you lose your job, And have 28 days to leave Oz, this is the time frame you get to use to wave goodbye to your tenant and sell your property (in thé bush… must be thé only place affordable in here!)
oopsie typo. second hand properties fail the screening
This is a complete screw up. Not good enough to have some twentysomething lacky political researcher telling people over the phone that despite what was published, the government forgot or couldn’t be bothered to add the key detail of who the transitional applies to! Sorry, can only believe it when a legal/tax EXPERT confirms.
So yes, Australia does have a serious problem with talent – in the legal system and Government quite clearly if they can’t even get their own policies correct for budget day.
Anyone who can read basic English comes to the conclusion that the transition arrangements do not differentiate workers on residency – you can’t just tell people excuses without publishing a clarification statement. Oh wait, apparently that’s coming in a couple of weeks!
Sorry, but just can’t imagine this in the UK. Can you really see the legal, banking, corporate, sports – well any sector putting up with this from the UK Government.. The lawyers and media would just laugh the politicians out and then remind them that we live in a global competitive world companies let alone people can vote with their feet (e.g. attempts at raising corporation tax, 50pm tax etc).
I’m not sure if I want to hang around and pay Australian taxes if this is the level of competency in the Treasury…..given that I still won’t see a cent of some of the benefits I contribute towards…
The art of forward-wise planning and hypothesizing outcomes from budget changes each year, seems to have been lost in both OZ and the UK.! Sometimes these oversights have to be corrected with exceptions or temporary run-in periods. Nobody looses face when ministers admit it in either country when they come to the realisation that tinkering affects lives as well the statistics and popularity with voters. I am pretty sure Mr & Mrs AverageOZ would want their government to have a more kindly face.
It would be such a shame that Sydney’s special multicultural bonhomie (It’s main attraction) may be eroded because of this ill-thought through and incompetently clarified ruling. Six months notice would be the minimum period needed to make proper arrangements to leave. Do Oz’s in UK get subjected to this same sort of thing? I think not.
Sheer cuntery.
LAFHA has been a rort for years… You poms should stop whinging and pay
Well said Chivvy! My sentiments exactly … http://jsnrss.wordpress.com/20.....afha-joke/
For us the LAFHA merely compensates for nsw state school fees we have to pay (about 10k)
I agree it is a bit of an unnecessary benefit for singles or couples but dropping it in NSW in particular is hugely discriminatory against families.
They have further managed to compound this by being proven utterly incompetent when communicating v important info which affects people’s lives.At this point in time I no longer know if I can still afford to live here, nor will I until the idiots at the ago tell me. I would note that I work in a sector which has an enormous skill shortage in Aust. Effectively kicking my hard working family out of Aust will damage the Aust economy and makes it look like a a nation which wears a frizzy orange wig and a comedy red nose on the world stage. It’s only importance being by having the ‘blind luck’ of being both of low population and resource rich.
I await to hear my families fate over the next few days…or not as the case may be.
I lived in the UK for 2 years , I never got any tax breaks?
The fact that Australia is the only country that offers this is a clue that they shouldn’t. Its a bit extreme.
So N,
Pay much for schooling and healthcare in the UK?
Set up a limited company to avoid top tax rate?
Serve enough pints at The Walkabout, etc. to actually pay the top tax rate?
Bondi….you’re a tool…
N..I think you should know your facts before posting “facts” because you are wrong about Aus being the only country.
Why are the Poms, Indians, Dutch, Germans, French and the yanks etc..etc.. getting these jobs instead of the Aussie’s?
I’ve been here since January interviewed about 25 people for 5 positions….we’re looking for the best person for the benefit of the company and share holders. We (the other 8 people around the global offices in the interview loop) did not close on a single Aussie candidate of which there were 35% ‘ish.
http://www.expatistan.com/cost-of-living
Where do you think we are spending the money….dumb arse
That must be some view you have Citizen Smith! Human Rights violations ,financial catastrophe!!??
Please just go quietly.You are really embarrassing yourself…
For me it’s simple, if LAFHA goes and company does not recompense, then I go. Good bye Australia.
Good luck in managing your skills crisis.
So many idiots here seem to think that 457 holders are somehow supported by locals. Wrong.
We’re here to support the Australian economy and we already pay huge taxes as a result. Regardless of LAFHA.
Funniest debate I’ve found online.
Losing a few overseas ad-types over a tax perk is not important. At all. In any way.
Carry on.
Agree with @JW – Mumbrella you got this wrong on the day of the announcement sorry. It was on the government website that only people maintaining a home in Australia would receive LAFHA after July.
Lots of info to digest in a short space of time so mistakes happen. Nothing harmed but a brief burst of hope from all those on LAFHA! But you shouldn’t blame the government for this, the info was on their site. There was just a lot of it!
“Good bye Australia”
God knows its going to be tough to manage without you Les. There is no questioning how tough it ‘s going to be but I reckon we might manage
Perspective, you are spot on
My biggest problem is that I have a 3 year lease on my rented out house in the UK and 2 year lease on the house that I rent here. If Lafha is gone (which still nobody can tell me) then I’ll need to break both of them. I think it will cost me $15-$20K. No new Lafha deals or a phasing out would have been the smart way to do this.
Class action against the government to cover lease break costs anyone?
Blimey Les, please, please, pllllleeeeeeeeaaaaaassseeee don’t go!!!!! – the fallout will be of biblical proportions and the country might grind to a halt…
Ha ha; I cannot believe how “ad exec’s” think that they have a God given right to skip tax. If there was a shortage of doctor’s, or teachers etc I would empathise. “Ad exec’s” – ha ha!!!!!!
“Ad exec’s” = 20% positive for society and 80% negative v doctor, teacher, nurse etc 100%. Wake up and if you do not like it then thanks for giving it a go and merry travels.
Dear Poms, please go to the US, where you won’t have to worry about paying for school because US temporary work visas don’t let you bring in your dependents.
Given all the excitement resulting from stopping LAFHA, it must be quite the rort.
I’d like to hear what communication has been issued from everyone’s different business sector and whether they have offered any special compensation arrangements.
Can anyone tell me what happens to Kiwis in all this? We aren’t on 457s as don’t need visas. We have lots of reciprocal rights eg Medicare. Do we lose it or are we grouped with Aussies?
Blimey, shocking level of ignorance shown on here… still what do you expect of convicts (note to readers.. The previous statement was meant as a joke in v bad taste…god save your gracious queen etc).
On a more serious note, back in 2000 to 2005 Australia was in recession and the uk was full of Aussie engineers filling a big skills shortage at the time. Everybody paid the same taxes and had the same rights to services under the uk system.
Fast forward Australia 2012… Full of uk engineers filling essential skill shortage. You take lafha away and we are ‘rorted’ by the system here as we pay everything an Aussie does but get nothing back. In nsw it is particularly bad because of school fees. I worked it out today. Without lafha I will need to be paid about 16 k more after tax per year to be in the same overall position as an Aussie doing the same job.
We can’t win either way!
But I know which way this will go, bashing foreign tax dodging workers gets votes while addressing the real skill shortage issues and tax fairness does not have the same ring to it… So families like mine trying to make our way will have to renegotiate our salary packages… The government may get afew extra votes afew skilled workers may leave and the rest will ‘still get paid more anyway’ as they will insist on being at least on a level playing field with a local when you take account of all the stuff we are not entitled to…while paying (after lafha is gone) thd same tax.
Just the usual pointless politicians manipulating a situation and playing the electorate for idiots for the sake of afew votes by politicians.
On that score at least thd uk and Aust are on an equal footing.
Peace all!
Salary renegotiation here I come!
Jericoa, most Australian professionals pay school fees anyway because they send their children to private schools. Seriously, stop whinging.
And if you really are as skilled as you claim, your employer should have no trouble paying you more. Employer groups routinely claim they have to pay more for imported workers. But what you’re really asking for is preferable treatment.
@Jericoa
I seem to remember that the “convicts” were mainly English and Irish..? Elizabeth the 2nd is our Queen and we love her dearly? God save the Queen indeed!
You raise a point of interest: Where jobs are under resourced wages will pay well. Where they are adequately resourced wages will remain as they are.
Engineers / Geologists etc up in Nth Queensland and over in Perth will get looked after and be offered a great wage.
There is quite simply not a shortage of “ad execs”.
Supply and demand will prove, which occupations are worthy of receiving mega wages, which will cover the cost of LAFHA previously.
I know so many people on LAFHA who quite simply do not need to be on it and many have been on it for 5+ years – it is being abused and it is good that the government is doing something about this.
(n.b. I am not Labor supporter.)
@Kiwi LAFHA
Beached as!!!!!!!!!!
There will likely be a few interesting side effects from withdrawing LAFHA so suddenly:
1. Rents on premium properties will drop by 30%.
$700M total Lafha p.a., assume 500M is rent subsidy and 30K p.a. per lafha recipient = 17,000 rental homes effected. 7000 are likely to be in Sydney’s East and Lower North Shore. If 30-40% of the 17,000 lafha people leave Australia then rental demand decreases. Remaining Lafha people will move to cheaper houses or re-negotiate their rent. My agent told me yesterday that 30% of her rental book are lafha funded.
Summary: Bad for landlords, bad for house prices, good for non lafha renters
2. Australia’s productivity will drop
If 40% of Lafha people leave then Australian business will need to replace them with Australians pushing up wages by poaching staff from other firms. (ps. One of the reasons Labour is removing Lafha is becuase their union task masters want to remove Lafha to push up local wages. Lafha got mentioned at last years ACTU meeting.)
Recruiting overseas is difficult and expensive. Firms normally only do it if they can’t find stafff in Australia or they need specialist skills. Unlikley that these skills can be replaced in Australia.
Of the 60% of the Lafha people who choose to stay, most moved here with Lafha as part of the package. Lets say 30% renegotiate their packages pushing up wages
Summary: Business costs go up, productivity goes down. Bad for economy. Good for local workers but only in the short term.
3. Private School Fees will drop
If there are 17,000 families claiming Lafha, how many have their kids at private school? NSW will be hardest hit. Given that Lafha families need to pay school fees to state schools in NSW, you can assume that a good percentage pay a bit extra and go private. If 7000 lafha families are in NSW, each family has 2.2 kids and 50% go to private schools then that’s 7700 private school places effected by Lafha.
Summary: School fees down, bad for schools, good for non lafha parents providing schools don’t close. (Don’t laugh, it does happen, lots of schools closed in the UK in 2008/09)
In general, governments are better staying out out of markets. When they intervene for reasons like a skills shortage, they should withdraw slowly so as not to negatively impact the effected markets. Above are only some of the impacts to property, productivity and school fees. We’ll see what other effects there are over the next 6 months. Hope the economy is ready for it!
There’s no reason landlords should receive a subsidy from the government, Lease Break, so good riddance to the LAFHA.
Apart from that, your figures are grossly exaggerated. Most recipients of the LAFHA are sufficiently highly paid that withdrawal of the LAFHA, while inconvenient, will not cause much change in their financial arrangements, let alone cause them to depart.
Your claims about school fees are ridiculous, because LAFHA recipients comprise an insignificant proportion of private school parents. As well, schools with high fees have long waiting lists and would not notice the departure of a handful of Poms.
Landlords will whinge, accounting firms will whinge, migration firms will whinge. And Australia will continue to be a productive and successful society. Productivity always climbs when rorts are weeded out of the economy.
@Paddington boy:
Unless lahfa recipients put their tax breaks into bank accounts and bring it with them back home when they return, the net result will be that they either leave the country (which means less tax collected) or they stay and their purchasing power decreases. And who loses in the end? -You do. But I reckon you trust your government to collect taxes and use them wisely more than you trust a market economy.
If you had ever tried yourself what the 457 visa holders are doing – living and working in another country – you would probably be a little more understanding to what it can bring to your country. But why would you – you seem to live in the world’s most productive and successful society and don’t need the rest of the world. Wake up! It’s 2012. Do you need the skilled workers or do you want them to go somewhere else?
Hi paddington guy,
Which figures are exaggerated? The 700M p.a. is a govt figure. You can work the numbers on the average rent subsidy to get the total number of lafha renters. Lower the average rental amount and increase the number of lafha renters. It’s a zero sum game.
Sufficiently highly paid to absorb lafha removal? I think not. Lafha renters use the subsidy to rent better places than they could otherwise afford. For most, renting a cool pad was part of the relocation sales pitch they were given at hiring time. Of the 6 people I know on lafha, 1 gave notice on their north shore house last Tuesday, I will give notice in the next 8 weeks. I’ll check with the others in the next few days.
As for schools, do you really believe they are full? One of the greatest marketing myths going that one. Why do you think they advertise so much if they are so oversubscribed? I moved here 2 years ago and got offers for my kids immediately from several of the supposedly over subscribed schools.
@Sweden Who is saying Paddington Boy isn’t on a 457, or hasn’t been on one..? All the best to you though Sweden – I hope everything sorts itself out for you.
The reality is that those on LAFHA who are that good, who are that productive and amazing, will be able to renegotiate salaries with their employers because they are simply superstars. There will be many who do for sure and their life will remain the same because they are on top of the game.
Equally, there will be many that try to negotiate higher pay and employers will not be able to raise their salaries. (The employer knows that there is a queue of skilled workers keen to come to Australia and will do so without a tax break – they want to live in Oz they will work on a low base etc and put it in to stay here for the long term.)
I think that Australian society is better off currently by taking away LAFHA. I prefer workers who want to be here v workers who are only here because of the tax break… Half of Europe want to work in Australia and will do so without LAFHA.
We shall see how this pans out, overall I actually think the effect will be a positive one.
I think it is ok if you want to remove the lafha, especially if you do it for Australian permanent residents too.
What I think is crazy is that there is no transitional period (except for permanent residents, which is in itself rather strange). Your government lure skilled workers here with a tax break, and then suddenly takes it away with a few months notice.
What is the difference from you going on a holiday to Fiji, and then halfway through the hotel wants you to pay 50% more, because they have decided that it is not fair that you as a well-off Australian should get a subsidised hotel room. What? You bought the travel package which included the flight, hotel room etc two months ago.
But Paddington boy and Ethics will of course answer:
“Most tourists are sufficiently highly paid to be able to pay the increase.”
“Tourists will whinge, travel firms will whinge, but Fiji will continue to be a productive and successful society”
and
“I prepare tourists who want to be here v tourists who are here because of cheap hotels.”
I hope that is what will happen on your next holiday trip, and let me know what you think when it does.
They may say “I prepare tourists…”, but I think they will actually mean “I prefer tourists…”. 🙂
@Sweden
That is different Sweden, because when I paid for my hotel there was not an agreement in the payment terms that said the hotel could put the price up during my stay.
In your Visa / LAFHA document it states that LAFHA can be withdrawn at anytime. If it doesn’t then you have a case to out forward for sure.
I am truly feeling for you all the same, it certainly must be hard, however long term it is good for Australia. If you truly want to stay here for the long term, I am sure you will survive Sweden! You might have to move out to a cheaper suburb? You might have to cut a few costs with your spending etc? That is life and whilst it can be tough, over the long term I am sure that you are smart and resilient enough to ride this through. (I hope you do and I wish you well!!)
So the net effect of this is that there will be fewer English hipsters in Surry Hills hotels and cafes. Repalced by Australian hipsters.
The more things change the more they will stay EXACTLY the same.
Looking forward to see this mass pom “exodus”.Which we all know won’t happen.
This whole discussion reminds everyone reading it why the term “whingeing pom” remains pertinent.
@Ethics
This is more about ethics (pun intended) than legal agreements. Even if the lafha can legally be withdrawn at any time, my question is if it is fair to do so without a reasonable transition period for non-Australians.
If the hotel could show you something in the fine print which allowed for a 50% charge increase, I suppose you would think it was fine and dandy, smile all the way to the ATM and be back there on your next holiday, no?
**************************
THE FACTS
**************************
Using info and tools others have posted in this chain…
Account Director salary AU$140K in Sydney, or GBP53K in London or AU$87K, based on todays exchange rates. (1)
London is approx. 4% more expensive to live in dollar for dollar compared to Sydney. (2)
This combined with higher salaries in AU means it’s still a great deal for expats from London. I would rather have the AU$140K in Sydney than GBP53K (AU$87K) in London.
Even accounting for the slightly higher tax expats pay, you’re still way ahead without LAFHA. Basically anything you make over the $AU87K you would otherwise make in London is cream.
**************************
Sources:
(1) http://www.totaljobs.com/salar.....ary-london
(2) http://www.expatistan.com/cost.....ney/london?
@Sweden. You might be better off with a sporting metaphor.
EG. Australian Rules Football match where each team plays with a variant rulebook, but the referee uses whichever one he likes most, when making game decisions.
I am a recent faculty for a University and this will impact Australia’s ability to hire academics greatly. Due to the relatively small number of Australian Universities, recruiting faculty from outside the country is a must. The reason for this is to be able to introduce new ideas to a university, if two or three unis simply swap graduates every year it won’t be too long before everyone in a particular department was taught by the same person. There is nothing xenophobic about this comment, Australian academics are excellent teachers and researchers, but departments that only hire from one or two universities (anywhere in the world) get very stale.
The market for faculty (and the wages of faculty) is a quite competitive. Australia has a relatively high tax burden and LAHFA allowed Universities to provide more internationally competitive salary packages to potential faculty. This lasts to the tenure decision at which point the University (as allowed by the government, through public funding) could offer a pay increase to compensate for the loss of LAHFA. Without LAHFA, Austalia is no longer competitive with the United States and is in many cases equally uncompetitive with Europe. This will reduce the ability of these Universities to get better faculty.
All this being said, I understand budget shortfalls affect everyone, and differential taxes are never easy to stomach. I would have completely understood removing LAHFA and allowing a transitional period for everyone, but losing it so quickly will be a large burden for me and my family (and several of my recent colleagues families). I’m not a high priced ad exec, I’m an academic. But now not only will I pay full taxes, but I’ll still not be eligible for medicare and still be paying for my child’s public education. There is absolutely no way for me to renegotiate my salary until tenure. So the option is to move out of our small flat into a smaller flat in a worse neighborhood, or to leave.
In the end this is hurting Australians and Australian education (in addition to Australian educators). I know I’ll probably be told to “go home” or “stop whinging” but I thought I’d try to present another side of this.
Bye Bye Australia –
Going back to do my research in Europe. I really thought that no scientist could be poorer than a scientist working in France. I was wrong – A scientist working in Sydney after the removal of his LAFHA.
@Cyco
I bet you are not going to live in the 7th arrondissement in gay Paris though… You certainly (if in Paris) will not have a beach nearby, although admittedly your baked goods will be amazing. Good luck!!
@Pommie
Thx a lot Pommie.
I am going back to Perpignan where my house is and my permanent govermental reserach position is. I was entitled to 10 years of unpaid leaves, it seems that I won’t need that much. 😉
Perpignan is on the mediterarean cost and close to Spain. Not too bad, although I would have preferred visiting more beautiful Australia before going home.
@Cyco
I know Perpignan I have windsurfed down there, not too far from Argeles… I watched a game of rugby there also once… Those mistral med winds that whip up can be a lotta fun!
Good luck with everything!
Au revoir
Thx Pommie.
Difficult period but c’est la vie.
Cheers,
@ Disappointed
Good point, in a same position here. Came here a couple of months ago. Finally thought that academia and a decent lifestyle do not have to contradict.
You are absolutely right, many of us who came had offers from other (and at times better) universities from all over the world, including the US. LAFHA definitely helped making the decision in favour of Australia (and this is by no means greed, we have rejected the big money in favour of staying in research). I doubt Australia will be able to attract people in this position in the future (let alone fill positions with locals, we are even having troubles attracting PhD students from here).
Having said that, I do understand the grudge of many Australians, having to pay more taxes. However, most of us are merely asking for a transitional period. That would help a) people with families who have to leave the country and can now plan carefully without and b) independent people like who are not forced to leave but can readjust to the new circumstances accordingly.
I am fortunate to be able to continue staying here (of course without savings from now on), but I fear, that this is just the beginning of the storm, having already been stigmatised and singled out as “rorts” and “overpaid executives”.
This is beyond a joke. As are many of the childish comments above. I get LAFHA, I don’t abuse the system and a genuine fact is it partly offsets many of the increased costs I have over that of an Aussie (that is a fact, don’t even try and respond otherwise). What I have read above, the much heated debates, boils mainly down to complete Australian Xenophobia, even institutionalised Xenophobia (Government/Treasury)! It is such a shame that Aussies would publicly wish the stress and financial woes on foreigners that this abrupt and quite frankly stupid reform puts on them. More importantly, if they step back and actually think rather than Pomm bash, they will realise that nobody other than Swan wins with this. The clawbacked cash will not even remotely offset the negative impacts this will have on society and the economy. The reform is not fair as we can’t vote and that is why we are easy prey for Swan idiot Motor-mouth and his riff-raff Treasury monkeys. Many above only argue that if changed it should be done sustainably, to allow poeple and businesses to adjust fairly, rather than pulling the rug out from underneath ‘Foreigners’ and not that it shouldn’t be reformed. Less Pomm bashing, less Australian bashing. How with the severity of all this, FOR EVERYONE, has the Government got us fighting each other rather than channel this anger towards them?!?!?!?!?
My tax dollars pay for your school fees, private health insurance and rent.
Loads of your rent.
Sorry guys, but I need to pay those things as well. Piss off you whining ponces, we don’t need you or your pathetic ‘world owes me a favour’ attitude.
To all the decent hard working people from around the world, lafha or not – welcome to the country we built off he sweat of our backs. Let me buy you a beer before we get on with the job and stop whining.
@honest truth,
Uncorrect.
I have to pay school fees for my kids FULL price (=~15000$ just for a regular quarter school).
I have to pay full price any GP consultation, Vaccine,.
I need to have >10k$ in advance to pay the fees to the hospital so that my wife can give birth to a NON AUSTRALIAN kid.
I pay (now) full taxes as well.
I worked in many other countries. I never saw such a level of discrimination, hatred and lack of consideration regarding the strangers.
Sorry, but my medical researches (that was benefiting all Australians and NOT ME) will be done in and for another country as my family can not leave here anymore – not just because of the financial prejudice but also because of the racism of this society.
I cannot share your view regarding racism in Australia. Fortunately “honest truth” does not represent the Australians I have gotten to now (who have all been very open and kind). But like you cyco I have lived all over the world, and I am afraid you always find these ignorant, uninformed (and too a large extent uneducated) people who are baited by populist politicians (and it always comes down to foreigners being the culprits and they root of all evil)
But in general I have to say, that Australia has developed an exaggerated self-confidence. This is especially reflected in the attitude to bring in foreign workers with incentives like LAFHA and then drop them without a proper transition (as to say, we come from deprived countries where there is war, no water and no sun, we should be grateful living here).
I understand any Australian who does not want LAFHA to continue. I do not understand anyone who does not agree to transitional periods for foreigners though. This is plainly sadistic, because you won’t see a penny from the allegedly saved money and in return many many expats (and mostly families) are left with severe financial consequences).
@The honest truth
Are you Wayne Swan? You certainly have the same level of sophistication and well informed quotes as him. Please do your homework on the subject before running your mouth off. How naive! You are the exact democraphic Swan is hoping to win votes from with this crazy reform… The audacity, and ignorance, calling Pomms whining?!?!? All I have seen from the countless posts above are Aussies moaning (and about stuff they don’t know about). Your taxes paying for us… get real! Pomms taking our jobs… get real, if the aussie population had the skills you wouldn’t need us! You will get what you want soon enough, when we are all gone and the economy slumps you can just sit back and have a country that goes backwards and not forwards!!!
Balls. I came here looking at the budget for my wife and I and we are doing okay. You see we dont get to keep all of our hard earned SUPER. LAFHA helped cover that and the 30k it cost us to come here to get jobs without a company supporting us. Yeah it was a huge risk.
When we leave, our super will be taxed at 50%. So on top of the $650 a month medibank we pay (in case we get prgnant) we dont get all our retirement savings so we have to add that cost as well each month. In the mean time we are putting all of our money into Australian pockets. All travel! Dear Aussies, I have a family in New York and they have all come over and fly Aussie planes, spend their money here on vacation to visit. Think about it – the big picture- none of this has really been thought out. Two sets of parents, brothers, sisters, all coming here and flying around and eating and buing STUFF.
You want people to come and live here – overall theyre adding families spending money here in your economy. Then they leave! And you keep 50% for their SUPER on top if it! Its all good for Aussies, we come, we work, you get our money, then we leave and youre like thanks bro, see you later, thanks for all the money you and your friends and family dumped into our economy. Meanwhile we gave you new skills from New York To LA that you didnt have or didnt know. All the cable channels, TV shows, music, yeah we provide, you watch it all, so dont hate.
Sorry to state the obvious, but we’re talking about the advertising industry here, not doctors, nurses, teachers, hell even, plumbers.
Even if all these claims of talentless Aussies were true (which I don’t believe they are), so what? What’s the worst that can happen? McDonalds are less successful at peddling fast-food? Woolworths achieves less market penetration?
It’s not really of any consequence. Go or stay, just stop pretending it matters that much to anyone but yourself and your budget.
@We’re not discussing doctors
Oh sweet Lord man, read the industry submissions !! !! !! The industries that Australia sooooooo relies upon will be FUBAR’d by this move.
One letter saying so has been signed by nearly 50 of Australia’s largest employers.
Stop denying facts, and PUT THE STUBBY DOWN.
Click here, dude:
http://www.treasury.gov.au/Con.....ubmissions
I live in Australia. In fact I have lived here long enough now to call it ‘Stralia”. Heck, I even find myself saying ‘thanks’ instead of ‘please’, when ordering a schooner…
I came here from Eng-ger-land as a skilled migrant and was on a 457 visa. I wasn’t on LAFHA (tbh I had no idea you could apply for it, I don’t think my boss did either?), however it would of came in handy for sure and my skills were scarce at the time, so I probably would have qualified for it. Hey ho I missed out, however I am alive, well, fit, healthy and the world (hopefully) isn’t about to end…
I agree with the comments above (I am English and now also proudly an Aussie, although my sporting support is still with the Poms…) we are talking about advertising exec’s here, not doctors, teachers, nurses or engineers.
If Woolies or Cole’s has a crap campaign as a result of losing a few creative Pom’s (I doubt they will) will society in Australia be worse off?
I can empathise with families who assumed LAFHA would help them along for years and years, however in the fine print it would of stated that it could be pulled at any time, like it is being so.
I can understand the resentment from Aussies who have sky high rents and want to get along, watching colleagues who are on LAFHA who are potentially far less productive than them, living a fine life…
It’s tough to take it away so swiftly, however the are where I would want the government to consider keeping LAFHA is for the professionals who have a positive effect on society; nurses, teachers, doctors etc. Advertising professionals? I think we will be just fine and I think LAFHA can be tightened in this field.
@RW&B
3/4’s of the senior management teams at these firms are Pom’s on LAFHA – no wonder they are up in arms!!!
FIX!!!
Don’t forget Aussies get LAFHA too…I know several..pay the same tax as me but don’t have to pay school fees etc. …but get the same LAFHA
One of them has a house in the UK but becuase he is back here on a temp contract he gets LAFHA and will still get LAFHA for two years after July 1st while I won’t . He takes home more pay than the Aussie next to him for doing the same job, and post July 1st maybe me also…can anyone tell me why he should get LAFHA for another two years and I should not ????..It’s not that LAFHA is going to go that is the issue…. it’s the unfair , illegal ( becuase it breaks reciprocal tax treaties) and discriminatory way in which it is being stopped is the issue. So pull yer neck in cobber most of us Temps are not maoning that LAFHA is going just the way that it is going….and start punching out at some of your fellow countrymen who are “rorting” the system and also getting LAFHA…. if you want to say it’s unfair ..then your tax pays for their rent as well…and still will do for two years.
When an Aussie goes to the UK they get treat exactly the ame as a UK citizen for tax and benefits,….they pay the same tax and get free education upto secondary level for their kids, free health care, free day care for young kids etc etc…all we are asking is to be treat the same give us the same time to adjust to not having LAFHA (which BTW “a pom” you cannot claim for “years and years”..it’s a max of 4 years!!.).not too much to ask of a civilised society is it ???…so if your gonna take it away Mr Swann take it away for everyone at the same time…but you wont do that will ya because the Aussies that get it are voters and temporary residents are not..and that’s the only reason you’re doing it this way…..Chicken!!
Four of us are leaving (of 7 scientists) .. they are talking to close our (small) division as we were already under-staffed.
It is really sad. All this work for nothing.
@cyco. So you do not work in the advertising industry then?
@cyco
If that’s the case, that’s a completely different matter.
Please consider my rant targeted entirely at this forum’s industry. We need scientists more than doctors and teachers.
Sorry to hear about you leaving.
Good going Australia thanks for kicking the temporary workers where it really hurts ….. with NBN coming soon assuring a good bandwidth …it would rain more off shoring to countries like India, Philippines……Have you seen any Indian IT companies making a strong pitch against LAFHA. ? they have not because they get more margins by off-shoring than onsite work. They can get freshers at 500 AUD per month. The off shoring margins are as high as 80% compared to onsite work…. Time to offshore everything except the Barista and the Barbie…B&B…
Happy days….
@TheWorldIsFat
I am sensing sarcasm?
The really great thing with the NBN is the possibility that towns out in the sticks can boom and at last we might be able to live in a country town without it being full of bogan’s… (Because for high speed broadband, we must live in the city.) It could be a serious game changer.
Imagine earning Sydney wages and buying a large 4 bed country retreat for $300k v a 2 bed shoebox in Sydney for $500k…
Smart and able people who crave the country, might well be able to relocate… (Mind you, if they did, they would probably lose their LAFHA…)
My LAFHA will go too, I have a child and pay huge childcare and health insurance costs so I will really struggle when this goes.
I am looking down the PR route but I have problems as I am only on the 457 1 year so my company won’t sponsor me so if I go it alone the processing times will be 12-18 months. I know many families will struggle with these timeframes.
I really think a suitable compromise would be to keep LAFHA in place for those who apply for PR now while on their 457 while fast tracking the PR visas or just fast track PR applications?
its ok, they dont need expat skills. its says so here… oh hang on
http://www.afr.com/p/national/.....Q6MBu6oLSO
@pom, KeepLahfa and we do not need doctors.
No I do not work at all in the advertisement industry. I have a Engineer Degree + PhD in physics. I do my research in medical imaging (scanners etc..).
In the small division that i lead, 4 over 7 are leaving (including me). Today we had a meeting with all the employees of the departement impacted by the LAHFA: 17 over 42 have already given their resignation letter (that was a shock to me).
Keeplahfa: Yes – this society does not give a dam to strangers. They use us as tool/machine. You need us so you make us come to work but not to be part of the society. I must say that I always had very good experience with Australian I never experienced racism or disrespect and I am very disappointed to leave the country. But, by reading all the comments here and elsewhere, I am really disgusted. I never saw such a contrast between what people says and what people write.
@ Bob. I found this quote:
“The major driver of the decline were big drops in Australia’s performance in labour markets and international trade, reflecting the hit to overseas sales from increases in the dollar.”
I couldn’t see any statements along the lines of:
“If Australia doesn’t keep hold of it’s highly paid advertising executives, things will get a lot worse…”
@ A Pom – Wake up, please, smell the coffee! It is not just 457 holders that are claiming LAFHA, although it is fair to say that a high proportion of those on a 457 visa do. 457 holders work across the entire Australian economy on various projects including but not confined to Consulting, Finance, Marketing, Infrastructure/construction, manufacturing and so on. Australia is at a tipping point and could easily go either way, either into recession or stabilise/grow. Without many of these skills, across all industries, I know which direction I would bet on! Even advertising execs play their part. Why would you buy an overpriced Holden if they weren’t coming up with amazing campaigns to get you to buy one?!?! They often tell the mass population what to think and what to buy! When retailers are struggling due to the threat of off-shore purchasing (online shopping is a million times cheaper) the retail sector needs Advertising Jedi to help control this problem. It’s all connected…. The Government is kicking 457 holders square in the face with this, not Aussies, they get a two year grace regardless, solely because they are Aussies. DISGRACEFUL, anyone with an ounce of common sense or brains can see this is stupid and unfair. This is why people are annoyed, not that it is going, but the way in which it is stopping.
Blimey. I didn’t realise that on top of everything super was taxed at 50% if you leave, too. They really don’t like us, do they?
@Cyco and @wake-up-people
Cyco – why are you on this blog? This is a blog for the advertising and media industry?
Both – I am specifically stating that Australia can lure excellent advertising execs here without LAFHA.
I certainly feel for people who have made plans based on receiving LAFHA, it is going to be hard for them, well hey ho, life can be tough. It isn’t like you are going to be living in a tent. If you want to live in Oz, you will adapt and make do, if you don’t, you will leave.
I know where I would rather be and that is in this fine country (my personal preference), so if cr@p is thrown my way I react as positively as I am able to.
Again, I wish you all luck, however handouts should not be banked on (they can always be pulled).
I didn’t get my roof insulation sorted back when the grant was on offer and it was pulled, hey ho, I will have to save a little longer and get in done in a year or two…
I didn’t buy a pad in the Eastern Suburbs 10 years ago when prices were down, hey ho, I will have to get a house a little further south, down in the shire…
I will adapt, because I want to be here.
I didn’t live in Knightbridge when I lived in London and had to commute in on the train and tube; an hour each way per day…
Good luck with everything though, I can imagine it is tough, if you have planned to have the handout. Sincerely.
@POM
I did not know. I just end-up on this forum when I was looking for information regarding the LAHFA. I did not know it was a forum for the advertisement industry.
Sorry for being on this forum, I will not come back.
Sorry for eating your bread and sorry for being in Australia, but do not worry I am leaving very soon.