A measure forcing new permanent residents to wait four years before they can access most government welfare payments and family tax benefit risks exacerbating inequality for people who are starting out and already contributing tax to the Australian economy, according to Settlement Services International (SSI).
Announced in Tuesday's Federal budget, the four-year Newly Arrived Resident's Waiting Period will apply to all those granted residency from January 1, 2022, affecting 13,200 future migrants and 45,000 families, with carers and parents to be hit the hardest.
SSI CEO Violet Roumeliotis said that while SSI welcomed many of the budget measures supporting the CALD community, this increase to wait times would have harmful effects on migrant families and their children, and would undermine efforts for new arrivals to find suitable long-term employment.
"The family tax benefit supports young parents, most of whom are working but on lower incomes, to provide adequate care and support for their children. It's an investment in our children's future," she said.
"Withholding family tax benefit from migrant families will mean that they pay a higher rate of taxation on their income than other Australians."
Currently, migrants are eligible to receive family tax benefit B immediately; carers allowance and family tax benefit A after one year; and paid parental leave and carers payments after two years.
Far from encouraging self-sufficiency for newly arrived residents, extending the waiting period was likely to result in underemployment and exacerbate levels of skills mismatch, said Ms Roumeliotis.
"We should not be drawing these arbitrary distinctions between new permanent residents and other Australians. If you are working and paying tax, you should be eligible for the same benefits as everybody else," she said.
A report published earlier this year by the Committee for Economic Development of Australia (CEDA) that explored ways to improve Australia's skilled migration program recommended the Newly Arrived Resident's Waiting Period be reduced to six months in order to give skilled migrants a better chance of finding employment.
It found even the current policy settings did not give migrants with skills the best chance of making it in the Australian labour market. It forced migrants to accept the first job they could get, rather than wait for one that was more in line with their skilled occupation and invest the necessary time and effort in a successful job search to address Australia's chronic skill shortages.
"Along with rectifying an issue of equity, this shows that there is also an economic imperative for reducing wait times to access tax concessions and welfare support so that we harness the full benefits of skilled migration," said Ms Roumeliotis.
About SSI:
Settlement Services International is a community organisation and social business that supports newcomers and other Australians to achieve their full potential. We work with all people who have experienced vulnerability, including refugees, people seeking asylum and culturally and linguistically diverse (CALD) communities, to build capacity and enable them to overcome inequality.
