On 14 March 2019, the Parliamentary Joint Committee on Corporations and Financial Services (Committee) released its 369-page report detailing its findings into the franchising sector, with regards to the franchising code of conduct .
The Committee has stated that comprehensive and broad reform is required to resolve issues within the sector which are systemic. They have also noted that the current regulatory framework is not addressing the power disparity between franchisors and franchisees. To address the issues identified and rebalance the power disparity the Committee has made 71 recommendations most of which are to be referred for further investigation by a Franchising Taskforce (Taskforce). The major recommendations are provided below:
Franchising code of conduct major recommendations
The Committee has recommended that the Taskforce be formed to further investigate potential regulatory amendments including:
1. the implementation of a public franchise register to be updated annually, with updated disclosure documents and template franchise agreements, by franchisors;
2. a requirement that the franchisor (and master franchisor) make disclosure to franchisees regarding the purchase of products below cost pricing, the margin on products and the rebates the franchisor receives for the purchase of such products;
3. investigating the conflict of interests associated with supplier rebates and third line forcing and whether the ACCC should be investigating these issues;
4. whether the Australian Consumer Law should be amended to expressly extend the unfair contract terms regime to franchises by deeming franchise agreements to be standard form documents and making breaches of this regime subject to civil penalties;
5. whether the Franchising Code of Conduct (Code) should be amended to prevent unilateral variations in documents such as manuals and policies unless the majority of franchisees (or their representatives) agree to the variation;
6. an amendment to the Code requiring rental amounts paid to the franchisor under a head lease to be held on trust solely for the purpose of paying rent to the landlord;
7. whether amendments are required to deal with franchisees’ rights in relation to goodwill when the franchise agreement ends or is transferred as part of a sale contract; and
8. whether the extent to which franchise systems involve sufficient co-investment and risk sharing such that they should be regulated similarly to financial products.
Additional recommendations to the franchising code of conduct
In addition to those matters to be referred to the Taskforce, the Committee has recommended that:
1. unilateral variations of franchise agreements be prohibited unless the majority of franchisees (or their representatives) agree to the variation;
2. mandatory quarterly reporting on marketing funds be required and civil penalties be introduced for failing to adhere to the reporting requirements. An additional recommendation is that legislation is amended to clarify how marketing funds are to be distributed in the event a franchisor is wound up;
3. extensive additional disclosure be required including:
a. provision of disclosures in both hard copy and digital copy formats;
b. for existing sites – the disclosure of financial information in the context of sales, including the previous 2 years’ Business Activity Statements;
c. for greenfield sites – the disclosure of financial information in the context of sales including the previous 2 years’ Business Activity Statements for a comparable franchise site;
d. provision of a copy of mandatory guidance on employment matters and overseas workforce issues as prepared by the Fair Work Ombudsman;
e. the disclosure of all rebates, commissions or other payments in relation to the supply of goods and services to franchisees as a percentage of the full purchase price on each transaction;
f. the disclosure of the reasonable personal workload to be undertaken in running and operating the franchise business; and
g. provision of a copy of the ACCC’s Franchisee Manual as part of disclosure.
4. existing whistle-blower protections be extended to cover franchisees reporting franchisors who are breaching the Code;
5. numerous changes to the cooling off provisions be made, including:
a. that the cooling off period commence on the later date of:
i. the franchise agreement being executed;
ii. an upfront payment being made to the franchisor;
iii. the disclosure documents being received by the franchisee;
iv. a copy of the lease being received by the franchisee.
b. clarification that the 14-day disclosure period must commence 14 days before the franchise agreement is executed; and
c. making the cooling off period applicable to transfers, renewals and extensions of the franchise agreement;
6. franchisees be able to terminate franchise agreements in circumstances where:
a. they are suffering hardship;
b. they are being exploited by the franchisor; or
c. the business has failed;
7. franchisor rights of immediate termination be limited to special circumstances such as fraud and public health and safety and require 7 days’ notice to be given to franchisees during which period the franchisee can lodge a dispute which causes suspension of the termination process until the dispute is resolved;
8. a class exemption be created to make it lawful for franchisees to collectively bargain with their franchisor;
9. arbitration be provided as an option if mediation is unsuccessful and multiple franchisees be able to take part in mediation or arbitration with Franchisors;
10. the ACCC be given power to identify and act on instances of systemic churning and burning (i.e., the repeated sale of a franchise site that is known to perform poorly or fail in order to make money from franchisees paying franchise fees).
Whilst the Committee’s recommendations are numerous and substantive, the report is part of a greater legislative process which will involve:
• the Government considering which recommendations to implement; and
• the formation of the Taskforce to provide further recommendations,
before Parliament will consider any legislative changes proposed by the Government.
Additionally given the recent joint media release by the Hon Stuart Robert, MP and the Hon Michaelia Cash which confirmed the Government is looking at strengthening the unfair contract terms regime, it is expected that the amendments proposed by the Committee will be considered as part of the Government’s review of the unfair contract terms regime.
If you would like us to prepare new franchise documents for you, review your existing franchising documents or would like to obtain further advice in respect of the Franchising Code of Conduct, please don’t hesitate to contact us.
Here’s how to prevent it.
The way you handle a security interest can determine whether you record huge loss in your books or a healthy account of your business. One company Onesteel Manufacturing Pty Limited lost $23 million because of an over-sight in their security interest! While another, Psyche Holdings Pty Limited was able to avert the situation. Anything that potentially lose your business such huge amounts of money should be taken seriously. But what is a security interest?
Definition of a security interest
A security is “Enforceable claim or lien created by a security agreement, or by the operation of law, that secures the fulfillment of a pledge. A lender or obligee has a security interest in the collateral provided by a borrower or obligor to guaranty timely payment of a debt or performance of an obligation. See also perfected security interest.” Source: Business Dictionary
Security Interests- Why you should care?
Under s 166 of the Personal Property Securities Act 2009 (Cth) (PPSA), even if a security interest is registered correctly at the time of lodgement, there is an ongoing requirement to amend the registration within 5 business days of you acquiring actual or constructive knowledge of a defect in the registration. A failure to amend the registration within this time frame will result in the registration becoming defective. A defective registration can result in substantial losses such as was the case in OneSteel Manufacturing Pty Limited (administrators appointed)  NSWSC 21, in which a registration incorrectly made reference to an ABN (where an ACN should have been used), effectively resulting in a $23 million loss.
Defects of the kind covered by s 166 of the PPSA can arise where security interests are registered in respect of:
(a) an individual who changes their name after registration of the security interest;
(b) patent, plant breeder’s right, trade mark or design applications using a reference to a serial number (e.g. a patent application number) which changes upon the registration of the patent, plant breeder’s right, trade mark, or design (e.g. a patent number);
(c) a trust where the trust does not initially have an ABN and subsequently obtains one; or
a trust which has an ABN (and the security interest is registered against that ABN) but subsequently cancels the ABN;
(d) partnerships where partners leave or have ABNs cancelled or new ABNs are issued;
(f) secured property which is transferred to another party by the Grantor subject to the security interest;
(g) body corporates which after registration obtain an ARSN or have their ARSN cancelled.
The above list is not exhaustive, and the exact details required to be recorded for a particular entity are prescribed in the Personal Property Securities Regulations 2010 (Cth) (PPS Regulations).
Issues that can rise after a security interest has been registered
A case has recently highlighted the issues that can arise where a trust obtains an ABN after a security interest has been registered. In the matter of Psyche Holdings Pty Limited  NSWSC 1254:
(a) A general security deed was entered into between Ridgeway Finance Pty Ltd (Secured Party) and Psyche Holdings Pty Ltd as trustee for the LH Equity Trust (Grantor) in June 2013 relating to a loan between the two parties.
(b) Pursuant to the general security deed, a security interest was registered; however, at the time of registration the trust did not have an ABN and accordingly the ACN of the trustee was used in accordance with the registration requirements of the PPS Regulations.
(c) It is important to note that in relation to trusts, the PPS Regulations require that security interests are registered as follows:
- If the trustee of the trust has been included on the transitional register, reference must be made to those details as recorded on the transitional register;
- If not recorded on the transitional register and the trust has an ABN, reference must be made to that ABN;
- If not recorded on the transitional register and if the trust does not have an ABN, then:
- If the trustee is a company, reference must be made to the company’s ACN; or
- If the trustee is an individual, the security interest must be registered against the individual.
(d) After registration of the security interest, the trust was assigned an ABN, the registration date of which was backdated to 20 June 2013.
(e) Over 5 years later a director of the Secured Party was advised of the ABN of the Grantor and became aware that the security interest would need to be updated to reference the Grantor using the Trust’s ABN.
(f) Unfortunately, the Secured Party did not amend the security interest to refer to the Grantor using the ABN within the 5 sdays provided for in s 166 of the PPSA resulting in the security interest becoming defective.
(g) Once the Secured Party realised their error, they registered a new security interest on 6 July 2018 using the Trust’s ABN details and then applied to the Court under section 588FM of the Corporations Act 2001 (Cth) (Act) to fix a later time for the registration of its interest. The basis for their application was that the failure to register the interest earlier was accidental or due to inadvertence.
(h) The Court action was necessitated due to s 588FL of the Act which would have the effect that should the Grantor become insolvent within 6 months of the date the second security interest was registered, the secured property would vest in the company for the benefit of creditors generally and the Secured Party would lose the benefit of the security interest unless the Court extended the date for registration under 588FM of the Act.
(i) Fortunately for the Secured Party, the Court was satisfied in this case, that such inadvertence had been established and granted the extension of time to register the security interest.
This case shows that secured parties need to be particularly diligent when dealing with trusts to ensure that their security interests are registered correctly and that, if it becomes aware of changes to the trust’s ABN status, amendments are made to correct the registration within the 5 days allowed for in s 166 of the PPSA. Doing so will avoid the costs incurred in lodging a new security interest and going to Court to obtain a similar order as granted in this case.
How to avoid a loss: security interests
One solution to above problem is for a secured party to register multiple security interests against both the trustee and the trust to attempt to ensure that there is at least one security interest which is valid at any point in time. Another benefit to this approach is that, if Parliament ever legislates the recommendation contained in the Whittaker Report (published in 2015) that security interests granted by trusts should always be registered against the trustee, the Secured Party will not have to amend any of its security interests. The main risk with registering multiple security interests, however, is that such registrations are potentially unjustified and may expose the secured party to civil penalties under section 151(1) of the PPSA. It is for this reason that we recommend that a clause is included in the relevant agreement providing that the trustee is acting in its own right and as trustee in order to justify the lodgement of the security interests.
When starting a business many people simply register a business name and domain but fail to realise that this does not grant them the exclusive use of that name in Australia or protect any design they use in their business.
To obtain such protection you must register a trade mark with IP Australia. The four steps to registering a trade mark are:
- Conduct preliminary research and choose your trade mark
- Structure ownership and use of your trade mark
- Determine which class of goods and services apply to your trade mark
- Apply to register your trade mark
1. Conduct preliminary research, choose and design your trade mark
It is vital from the outset that you ensure the name or logo is chosen with a view to trade marking it. Often we find that businesses within an industry tend to use common names, descriptive words or identifiers which by themselves can adversely affect the ability of the business to trade mark its intellectual property. In deciding on a business name and logo we recommend that you:
- engage in preliminary research and conduct Google searches on similar businesses;
- Whois domain name searches to identify available urls; and
- Australian trade mark database searches,
- avoid using where possible common names used for the products or services you sell;
- descriptive words and phrases by themselves;
- geographical names;
- words which sound similar to another business;
- logos which are similar to other businesses;
- common phrases, acronyms, single letters, and numerals;
- common surnames;
- liaise with both your logo designers (if applicable) and lawyers to ensure that the logo and name you choose is unique and capable of distinguishing itself from your competitors.
Rostron Carlyle Rojas Lawyers can assist you in this process by advising you on the likelihood of potential names and logos being registered as a trade mark and whether there are any potential conflicting trade marks or issues.
2. Structure ownership and use of your trade mark
Just as important as choosing the right name and logo is structuring the ownership and use of your trade mark. Unless the person or entity named in the trade mark application as the owner is the entity which will ultimately use the trade mark, it is important to ensure that documentation is put in place providing the user with a legal right of use.
Recent case law has resulted in a trade mark owned by a director of a company being successfully opposed on the basis that whilst the trade mark was used by the company, the director as the owner did not use the trade mark. Importantly in that case there was no written licence agreement between the director and the company by which the company had a legal right of use of the trade mark, or even evidence of an intention on behalf of the director to enter into such an arrangement.
Rostron Carlyle Rojas generally advises having a trade mark and other valuable intellectual property owned by a separate holding company which then licenses that intellectual property for use by your trading entity or third parties, and is experienced in establishing and documenting such arrangements.
3. Determine which class of goods and services apply to your trade mark
The next step is to determine which class of goods or services apply to your trade mark. IP Australia uses a classification system which categorises goods and services into 45 different classes and it is important to note:
- you must actually use or intend to use the trade mark in relation to the goods and services you specify;
- IP Australia bases its fees on the number of classes claimed and these fees increase with every class you add;
- whilst a wide description of the goods and services offers greater protection a wide description also increases the risks of the trade mark conflicting with pre-existing trade marks or being challenged on the basis of non-use;
- whilst it is possible to narrow the description of the class of goods and services after a trade mark is registered it is not possible to widen that description; and
- careful drafting of the description of the class of goods and services can avoid potential conflicts with other trade marks, costly objections by third parties and increase the likelihood of a trade mark being registered.
4. Apply to Register Your Trade Mark
Once the above steps are completed the application for the trade mark can be lodged with IP Australia. Generally, your trade mark application will be examined within 3-4 months after which IP Australia will either issue an acceptance notice or an adverse report. If accepted, the trade mark will be advertised to allow third parties to view the trade mark application and make objections. If there are no objections the trade mark will be registered at the earliest 7 ½ months after the application for the trade mark was lodged. It is possible that during the application process IP Australia may issue an adverse report or a third party may oppose the trade mark application. In both cases it is important that professional advice is obtained to determine your options and to ensure that the relevant deadlines are met in a timely fashion.
Rostron Carlyle Rojas Lawyers have successfully dealt with many issues that have arisen during the trade mark application process and can advise you of your options going forward.
If you need advice or assistance in respect of trade marking or protecting your intellectual property please contact us.
 Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd  FCAFC 83.
On 18 March 2018, the new Temporary Skill Shortage (TSS or subclass 482) Visa program commenced. This visa program replaces the old subclass 457 visa program, which has now been abolished.
The new TSS visa is designed for Australian employers who have a genuine need to employ skilled workers on temporary resident visas.
The Australia Federal Government, through the new Department of Home Affairs, has implemented this change to address public concerns about the displacement of Australian workers. This transition to the new TSS visa program is aimed at better meeting Australia’s skill shortage needs and improving the quality, economic contribution and integration of skilled migrants.
The new TSS visa, similar to the old 457 visa program, has three mandatory stages:
- Sponsorship – the employer proposing to hire one or more skilled worker(s) must lodge an application to become a Standard Business Sponsor (SBS). If approved, this SBS will last for 5 years, and will allow the employer to nominate the skilled workers they require in that time period.
- Nomination- the employer must then nominate each skilled worker they wish to employ. The worker must have an occupation on the Department of Home Affairs’ occupations lists for the TSS visa.
- Application- the overseas skilled worker must then lodge their visa application, showing they have the skills and qualifications necessary to fulfil the position.
This article aims to help existing subclass 457 visa holders, potential TSS applicants, and employers who sponsor temporary skilled workers to navigate these visa changes.
This article is not intended to be comprehensive legal or migration advice. Potential applicants and employers can contact Rostron Carlyle Lawyers to set up a consultation to receive migration advice specific to their situation.
Sponsorship under Temporary Skill Shortage Visa
Businesses who wish to employ skilled workers can apply to become TSS Standard Business Sponsors (SBS).
The business must show that they are lawfully operating in Australia, or are an overseas business looking to set up operation in Australia. If the sponsorship is approved, it will allow businesses to nominate skilled workers at any point within a 5-year period.
Sponsors must make payment to the Skilling Australians Fund for every TSS worker they nominate. This Skilling Australians Fund has not yet been created, but it is anticipated to begin in the next few weeks, pending the passing of legislation in parliament.
The Skilling Australians Fund (SAF) levy is anticipated to be:
- For small businesses (turnover under $10 million): $1200 per year or part year; and
- For other businesses: $1800 per year or part year.
Training Obligations for existing Standard Business Sponsors (SBS)
If you are an existing SBS, your sponsorship period will continue until its expiry date, and you are able to nominate TSS workers up until your SBS expiry.
Following the implementation of the Skilling Australians Fund (SAF), Sponsors will no longer be required to spend 1% of their payroll on training. The SAF will substitute this requirement.
Until the SAF legislation is passed in parliament, the training obligation remains for existing sponsors under their current sponsorship obligations.
Please also note that for existing sponsors, the training obligation will continue to apply to their previous sponsorship years.
Changes to the Sponsorship system
There have been a number of changes made from the previous Standard Business Sponsor (SBS) system.
Firstly, all sponsors will be approved for a 5-year sponsorship period. Previously, new businesses would only be granted an 18-month sponsorship period.
Secondly, there will be streamlined processes available for existing sponsors looking to renew their sponsorship. If your sponsorship period is due to expire, a renewal of sponsorship can be lodged prior to its expiry, which will be a more efficient process than the initial sponsorship application.
Thirdly, the existing accreditation criteria are anticipated to be expanded. If you are a business that nominates skilled workers and fits into one of the following categories, you may be eligible to apply to become an accredited sponsor.
- Category 1: Commonwealth and State/Territory Government or Statutory Entities
- Category 2: Australian Trusted Traders
- Category 3: Low risk sponsor with low volume usage and high percentage of Australian workers
- Category 4: Low risk sponsor with high volume usage and medium percentage of Australian workers
If you receive accreditation, any nomination and visa applications lodged will receive priority processing with the Department of Home Affairs. The Department of Home Affairs has also indicated that they are implementing auto approval of accredited sponsors’ nomination applications, which will greatly increase the efficiency of the TSS visa process.
Finally, employers are now specifically prohibited under the SBS process from recovering any costs related to the sponsorship process and visa applications. It is vital that Sponsors are aware of their sponsorship obligations to the Department of Home Affairs. If you are unsure about your obligations, Rostron Carlyle Lawyers can assist you in understanding these obligations.
Nomination under the Temporary Skill Shortage Visa
Once a business is approved as a Standard Business Sponsor, or after the application has been lodged, the business is able to nominate a skilled overseas worker for a TSS visa.
There are three streams available under the TSS visa:
- Short-Term stream: This stream is for skilled workers whose occupation is on the Short Term Skilled Occupation List (STSOL) at the time of nomination. The worker can be nominated for up to two years, unless an International Trade Obligation applies.
- Medium-Term stream: This stream is for skilled workers whose occupation is on the Medium to Long Term Strategic Skilled List (MLTSSL) or the Regional Occupation List (ROL) at the time of nomination. The worker can be nominated for up to four years.
- Labour Agreement stream: This stream is available in very limited circumstances for employers who do not fall within the usual Standard Business Sponsorship program. This stream will not be discussed in this article.
The position offered to the skilled worker must meet the following key requirements:
- The job offered must be for a fulltime position;
- The skilled worker must be offered the same employment terms and conditions that would be offered to an Australian employee;
- The skilled worker must be offered a market salary for the position. The market salary must be determined in accordance with up to date reference to the local job market;
- The salary offered must be at least the Temporary Skilled Migration Income Threshold, which is currently $53,900;
- If hired under an employment contract, the contract must comply with all Australian employment law; and
- The employer must demonstrate that they have a genuine need for the skilled worker to work in the business in the nominated occupation.
The employer must also demonstrate that they have complied with the Labour Market Testing requirement. The employer must prove that they have tested the local labour market and have been unable to find an Australian worker to fulfil the position. There are specific criteria to be met, including publishing two advertisements for the position and demonstrating that there are no suitable Australian candidates for the job.
For Skilled Workers
If you are a skilled worker who is interested in being sponsored to work for an Australian employer, you can consider your eligibility for the new TSS Visa. Applicants can apply for the TSS visa while offshore or onshore provided there are no prohibitions on their existing Australian visa.
If you are applying in Australia, you must hold a valid substantive visa, or a Bridging Visa A, B or C.
The TSS visa in the Short-Term and Medium-Term streams is only available to workers whose occupation is on one of the Department of Home Affairs’ occupation lists.
After your employer has initiated the first two stages in the process, the Sponsorship and Nomination as detailed above, you can prepare for your TSS visa application.
Short-Term Stream TSS Visa
If your occupation is on the Short-Term Skilled Occupation List (STSOL), you can be nominated for up to two years, unless an International Trade Obligation applies.
A Short-Term stream applicant must demonstrate the following:
- Proof of English language. Unless an exemption applies, applicants must show an English test score equivalent to an IELTS 5, with no band lower than IELTS 4.5. An alternative English test can also be acceptable, such as PTE (score of 36 with no band lower than 30) or TOEFL;
- Skills and qualifications to perform the position they have been nominated for;
- At least two years of work experience in the nominated occupation or a closely related occupation;
- The position offered to the applicant must meet any relevant caveats or restrictions placed by the Department of Home Affairs on the applicant’s occupation; and
- The Genuine Temporary Entrant requirement – Applicants for the Short-Term stream must demonstrate that they only intend to remain in Australia temporarily.
Certain applicants of certain trade occupations may be required to undertake a skills assessment, if they are a passport holder from a designated list of countries.
It is also important to note that if you are a Short-Term stream applicant, you can only apply for a maximum of two TSS visas onshore (two years + two years). After that, you must go offshore if you wish to apply for any further TSS visas.
There is no permanent residence pathway available to new TSS applicants in the Short-Term stream. Permanent residence pathways are only potentially available to those who had applied for or held a subclass 457 visa on 18 April 2017.
Medium-Term Stream TSS Visa
If your occupation is on the Medium to Long Term Strategic Skilled List (MLTSSL) or the Regional Occupation List (ROL), you can be nominated for up to four years.
A Medium-Term stream applicant must demonstrate the following:
- Proof of English language. Unless an exemption applies, applicants must show an English test score of IELTS average 5, with no band lower than IELTS 5. An alternative English test can also be acceptable, such as PTE (score of 36 with no band lower than 36) or TOEFL;
- Skills and qualifications to perform the position you have been nominated for;
- At least two years of work experience in the nominated occupation or a closely related occupation;
- The position offered to the applicant must meet any relevant caveats or restrictions placed by the Department of Home Affairs on the applicant’s occupation category; and
- If your occupation is on the Regional Occupation List, the position offered must be in regional Australia.
Certain applicants of certain trade occupations may be required to undertake a skills assessment, if they are a passport holder from a designated list of countries.
TSS visa holder in the Medium-Term stream may also have an option to apply for a permanent stage visa after working for their employer for a period of 3 years.
Comparisons to the subclass 457 visa
The new TSS Visa is the replacement of the old 457 Visa program. However, there have been substantial changes and restrictions introduced to the new TSS visa program which will have an impact on the employers who require temporary skilled workers, and skilled migrants looking for different visa options in Australia.
The Federal Government first announced the abolishment of the subclass 457 visa on 18 April 2017. Over the past 11 months, the Department of Home Affairs has introduced incremental changes to the subclass 457 visa, in preparation for the introduction of the TSS visa on 18 March 2018.
The changes from the old 457 visa to the new TSS visa program include the tightening of the labour market testing and market salary criteria, requiring TSS applicants to have at least two years of work experience in their nominated occupation, replacing training requirements for sponsors with the SAF levy, and reducing the visa term from four years to two years for applicants whose occupation is on the STSOL.
Perhaps the most significant change has been the reduction in occupations available for nomination for a temporary work visa. Prior to 18 April 2017, there were 651 occupations on the skilled occupation lists. This number has now been reduced to 461.
Furthermore, the ability for temporary skilled workers to transition to permanent resident visas has also been narrowed. Temporary skilled workers must be on a Medium-Term TSS visa and have an occupation on the MLTSSL or the ROL to have the ability to transition to a permanent residence employer visa. However, there are transitional arrangements in place for those who held, or had applied for, a subclass 457 visa on or before 18 April 2017.
Starting the Process
If you are an employer looking to employer overseas skilled workers, or a skilled worker looking for visa options in Australia, Rostron Carlyle Lawyers can assist you.
The article above provides a summary of the key criteria for the new Temporary Skill Shortage visa. Rostron Carlyle Lawyers can assess your eligibility to apply and assist in the preparation and lodgement of the three stages of the TSS process.
Anna Gunning-Stevenson, Rostron Carlyle Lawyers
Lawyer and Registered Migration Agent, MARN 1797244
Contact us for a consultation today:
Peter Kuek-Kong Lee, Special Counsel and Registered Migration Agent MARN 0427478
Anna Gunning-Stevenson, Lawyer and Registered Migration Agent MARN 1797244
(07) 3009 8444
There has been a formal arrangement in place since the 1920s to facilitate the free flow of people between Australia and New Zealand. In 1973 this arrangement was formalized with the Trans-Tasman Travel Arrangement.
With the reform of the Migration Act on 1 September 1994, all non-Australian citizens must apply for a visa to enter Australia. New Zealand citizens entering Australia are granted a Special Category Visa (SCV). They are granted this visa when they present a New Zealand passport and incoming passenger card at immigration clearance at the International Airport or shipping port. By so doing, New Zealand citizens are considered to have applied for a visa and are granted an SCV or subclass 444 visa.
On 26 February 2001, a new bilateral social security arrangement was made between Australia and New Zealand. As a result, New Zealand citizens arriving after this date are not able to access certain social security payments or educational benefits in Australia (eg income support payments). The only way that they can access these benefits, like New Zealand citizens who arrived prior to this date, was to apply and be granted permanent residence in their own right.
This change has caused hardship for many NZ citizens who arrived in Australia after 26 February 2001 as they are not able to access social security safety nets unless they become permanent residents.
This has resulted in the New Zealand Government lobbying for change in Australia. In response to these calls, the Australian government announced on 19 February 2016 a new pathway for NZ citizens residing in Australia on or before 19 February 2016 to apply for the new visa.
This new pathway is called the Skilled Independent 189 (New Zealand) Visa Stream. It will commence on 1 July 2017 and will only apply to NZ citizens who meet the particular requirements.
1 July 2017 Pathway – Skilled Independent 189 (New Zealand) Stream
The Department of Immigration and Border Protection has yet to release all the rules for this new visa. But it has been announced that NZ citizens who lived in Australia on or before 19 February 2016 may be eligible for this visa if they:
- Are “usually resident” in Australia;
- Have been living in Australia for at least five years on or before that date;
- Have contributed to Australia; and
- Have met the relevant health and character requirements.
What do these requirements mean?
‘Usually resident’ is generally undefined. However, the Department has suggested:
“The place that a person is ‘usually resident’ is assessed taking into account their physical residence (where the person eats, sleeps, has a home) and the person’s intention to make that place their home.”
If the applicant can prove that they are or have the intent to reside in Australia, they should be eligible.
Residence for at least 5 years
Applicant has to prove that applicant has been living in Australia for at least five years on or before 19 February 2016 when the announcement was made.
Proving contribution to Australia
Proving of contribution to Australia comes with an evidential requirement in respect of income.
Essentially, the applicant must show they have a taxable income at or above an income threshold for each income year in the five years prior to lodging an application (unless they are claiming an exemption). Applicants have to provide at least four Notices of Assessment issued by Australian Taxation Office from the relevant five income years – immediately prior to the application.
The applicant’s taxable income must be at or above the income threshold listed for that income year. In 2012-2013 this was AUD $51,400; but from 2013 to 2017 in each financial year the threshold was AUD$53,900.
There are exemptions to the income tax requirement where an Australian authority is preventing the applicant from leaving Australia, such as where:
- The Family Court of Australia assigns the primary care of a child to the applicant preventing the applicant from removing that child from Australia; or
- The applicant is prevented from leaving due to a compensation claim for an injury, resulting in the applicant being unable to continue to earn at or above the income threshold. The result of this being, if the applicant returned to New Zealand, their ongoing rehabilitation and/or compensation would be discontinued
- The applicant was on an approved parental or carer’s leave from their usual employment and prior to the leave had an annual income of no less than the threshold and when resuming their employment have an earning income of no less than the threshold.
A waiver to the income requirement will be assessed on a case-by-case basis. It will take into account whether the applicant will resume (or intends to resume) earning an income at or above the income threshold within a reasonable timeframe. Periods of maternity, paternity or carers leave during the qualifying period can be taken into consideration.
The detail of these exemptions will be available from 1 July 2017.
Health and Character requirements
All applicants for permanent residence have to meet the good health and character requirements. Applicants for the visa have to therefore undertake the requisite health checks, and obtain Penal and Security clearances. These will be arranged in due course after the application is lodged.
As many New Zealand citizens came to Australia after the rules changed on 26 February 2001, they have been prevented from obtaining many benefits available to permanent residents.
This new pathway which becomes available from 1 July 2017 offers new hope for many NZ citizens. If after reading this article you believe you may meet the stipulated requirements, please contact our Migration Lawyer, Peter Kuek-Kong Lee on (07) 3009 8444, or by email.