Consultation
Fringe Benefits Tax (FBT) Reform living-away-from-home benefits
Name
Mr Matthew Watkins
Organisation
Ernst & Young
Email
mwatkins1973@gmail.com
Are you submitting on behalf of your Company
No
Do you want your submission to be confidential
No
Accessibility Statement
Yes
Submission files
Support files
Submission text
I work in Canberra on a 457 Visa. As a temporary resident I am going to be affected by the change to LAFHA. While on principle I don't disagree that the system needs to be better targetted the changes fail in two respects: 

1. They don't factor in a transition period for temporary residents on 457 visas who maintain a home abroad. 7 months is in-sufficient and the time table should have been set at 12-18 months to allow for people such as myself to complete unbreakable contracts on rentals. 

2. They don't provide temporary residents with any relief on costs such as child care or schooling as compensation. 

The result is less income for the same high cost of living, higher than for permanent residents or citizens who continue to benefit from LAFHA. The changes provide a strong disincentive for foreign skilled labour (which Australia needs) to come and work over here. Combine this with a strong Aussie dollar and it is another dis-incentive for migration. 

Companies such as mine are telling employees this is issue is between the ATO/Treasury and individuals. They are not re-negotiating contracts as it would cost too much (ironically if they did renegotiate the cost of labour would go up and tax revenue would decline). 

It's a blatently political and short sighted move. As a labour government putting forward reforms for the people this is not a people friendly nor fair measure. The majority of those impacted are now left with unbreakable financial commitments and no where to turn. 

I would urge you to extend the transitonal arrangements to all recipients including temporary residents on 457 visas who maintain a home abroad. That would be the fair and right thing to do. 

Regards 

Matthew