Last week, the Minister for Immigration and Border Protection, Mr Peter Dutton, announced the commencement of a review of the TSMIT. This review has the capacity to affect many Temporary Work (Skilled) (subclass 457) visa applicants and their business sponsors.

The TSMIT is a benchmark minimum salary a sponsor can nominate an overseas worker to receive under the 457 visa programme. In almost all cases, the nominated earnings, in addition to another very important criterion, the “market salary rate”, must both be above the TSMIT. This is to ensure two things. Firstly, that the nominating business cannot undercut the local labour market by paying overseas nationals less than the market salary rate, and, secondly and conversely, a business cannot inflate a nominated worker’s salary if the market rate is lower than the TSMIT.

Mr Dutton, in his media release, states that: “The TSMIT defines the salary threshold for jobs that can be filled by a 457 visa holder and is designed to protect Australian workers and ensure that visa holders are undertaking skilled employment.”

Mr Dutton, however, may be adding political spin. The Explanatory Statement to the original legislation explains that the purpose of the TSMIT was so that “visa holders can independently provide for themselves in Australia” and was intended to limit the extent that a 457 visa holder “may impose a burden on the broader Australian community or come under pressure to breach their visa conditions.” It should be noted that as temporary visa holders, they are not eligible for government entitlements, such as Medicare.

Just how burdensome a 457 holder could place on the Australian community would depend on a number of factors such as their family composition and where in Australia they worked. For example, a sole breadwinner with a partner and four children living and working in Sydney would conceivably require a higher salary compared to a single sponsored 457 visa holder working in regional Australia. Yet, the TSMIT does not provide for these differences, and has an air of arbitrariness despite this figure being determined in consultation with a number of stakeholders. Consider the steady increases that occurred since the TSMIT began:

Date: 14 September 2009 - TSMIT: $45,220

Date: 1 July 2010 - TSMIT: $47,480

Date: 1 July 2011 - TSMIT: $49,330

Date: 1 July 2012 - TSMIT: $51,400

Date: 1 July 2013 - TSMIT: $53,900

Transparency as to how the TSMIT is decided would be of assistance to employers and migration agents everywhere. Gladly, this call has been heeded as the review will “consider a range of issues including the factors that should determine the settings, the appropriate base level, and the roles of indexation and regional concessions for the TSMIT.”

In the meantime, the current TSMIT of $53,900 will remain until the review is finalised and considered.