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Migration (Visa Evidence) Charge (Consequential Amendments) Bill 2012

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2010 - 2011 - 2012

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

MIGRATION (VISA EVIDENCE) CHARGE (CONSEQUENTIAL AMENDMENTS) BILL 2012

 

 

 

ADDITIONAL EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Immigration and Citizenship,

the Hon. Chris Bowen MP)



Migration (Visa Evidence) Charge (Consequential Amendments) Bill 2012

 

OUTLINE

 

The Migration (Visa Evidence) Charge (Consequential Amendments) Bill 2012 (“the Bill”) was introduced into the House of Representatives on 9 May 2012.  The Bill was referred to the Joint Standing Committee on Migration (“the Committee”) on 10 May 2012 for consideration. 

 

The Committee tabled its report on the Bill in the House of Representatives on 18 June 2012.    

 

The purpose of this additional explanatory memorandum is to more clearly explain the policy rationale and costing methodology underpinning the measures contained in the Bill, as recommended by the Committee in its report.

 

Implementing the visa evidence charge and ensuring the shift to online visa verification

 

This Bill makes consequential amendments to the Migration Act 1958 (“the Act”) to implement the visa evidence charge and provide a framework within which the visa evidence charge will operate.  Further, this Bill amends the Act to insert regulation making powers for the Migration Regulations 1994 (“the Regulations”) to prescribe the actual amount of the visa evidence charge that will be payable for each request for evidence of a visa, as well as regulations about matters relating to the visa evidence charge.  

 

The new visa pricing model introduces new charges for visas and associated services in line with international benchmarks.  The new model adopts a user-pays approach.  It will be a fair and flexible system where visitors wishing to visit Australia pay for the costs of application processing and the services they receive. 

 

The Department of Immigration and Citizenship’s (DIAC) label-free strategy aims to minimise the use of visa labels, while recognising that certain client groups still require a visa label.  This approach:

 

•         facilitates a greater use of online systems (e.g. Visa Evidence Verification Online (VEVO));

•         delivers streamlined processes for low-risk clients, while maintaining effective border security arrangements for higher risk caseloads;

•                     reduces the volume of clients presenting at a DIAC office;

•                     reduces costs associated with visa label printing, distribution and storage; and

•                     reduces the number of staff required for provision of evidencing services.

Potential impact on visa holders in Australia and overseas

The majority of non-citizens travelling to Australia do so without having a visa label affixed in their passport.  Since 2005, the provision of visa evidence has not been mandatory for nearly all visa subclasses. 

 

Currently, a visa holder may request evidence of their visa or a departmental officer may provide evidence of a visa to a visa holder without them making a request.  When a visa holder requests evidence, it is generally done by the visa holder presenting at a DIAC office to make the request where the evidence is issued immediately.

There are also some circumstances where an officer may elect to provide a visa holder with evidence of their visa.  This includes circumstances where a visa holder requires hardcopy visa evidence to exit or transit another country because of local customs in that country, or where it is a special requirement for that visa type (for example, visa evidence forms part of the identification documents for humanitarian visas).

 

The main drivers of label demand are visa holders’ perceived need for evidence of entitlement to work, for Medicare or Centrelink benefits, or to prove to other third parties such as foreign embassies their right to return to Australia.

 

VEVO is available for visa holders to check their current visa details and the conditions applicable to their visa.  VEVO is a free online system introduced in July 2004 that allows quick and easy verification of the visa status and entitlements of a visa holder.  The service operates 24 hours a day, 7 days a week and provides results in seconds.

 

VEVO is also available for Australian registered organisations such as employers, labour suppliers, education institutions, licensing authorities, Medicare Australia and Centrelink staff, financial institutions, peak bodies and other government agencies who have a legitimate need for information on visa status and entitlements.  As at 30 April 2012, there were 33 445 organisations registered for VEVO.

 

In the overseas context, a visa holder may require a label in their passport for exit or transit purposes. Australia does not, however, require a person holding a valid Australian visa to have a visa label in their passport to travel to, enter or remain in Australia. 

 

The Australian Government is continuing to engage with foreign governments to make them aware that Australia does not require a visa label.  This engagement has resulted in a growing number of countries now allowing some or all of their nationals to exit or transit their country without a visa label.

 

Much of the DIAC visaed caseload has been label free for a number of years and currently only one third of all applications result in a label. There are no barriers to participation for the two thirds of the caseload that are currently label free, and with concerted effort working with overseas governments, more caseloads have transitioned to label-free arrangements.  

 

In relation to the education sector, most clients apply for their visa electronically and travel to Australia label-free.

 

 



Migration (VISA EVIDENCE) CHARGE (CONSEQUENTIAL AMENDMENTS) BILL 2012

 

ADDITIONAL notes on individual clauses

 

SCHEDULE 1 - Amendments

Migration Act 1958

 

Item 3             Sections 70 and 71

 

1.               This item repeals existing sections 70 and 71 of Subdivision AE of Part 2 of the Migration Act and substitutes new sections 70, 71, 71A and 71B.

2.               New section 71 provides for the liability to pay visa evidence charge.  New subsection 71(2) allows the regulations to prescribe the amount of the visa evidence charge payable by a person who requests visa evidence under new section 70 and states that the amount must not exceed the visa evidence charge limit for the request. 

3.               It is proposed that the Migration Regulations 1994 (“the Regulations”) will be amended to initially set the visa evidence charge at $70 for the provision of evidence in the form of labels.  This charge will apply to all visa categories unless there is a nil charge. 

4.               Broadly, new subsection 71(3) allows the Regulations to specify a different amount of the visa evidence charge for different circumstances and classes of visa, and for a method of calculation to be developed to allow this.  The upper charge limit of $250 and new   subsection 71(3) provides the flexibility to increase the $70 in some circumstances if it does not succeed in reducing reliance on visa labels.  These provisions also enable the charge to be set at a higher rate, if required, to process a label quickly outside of normal processing times.  

5.               In general, it is proposed that there will be a nil visa evidence charge for humanitarian, emergency, diplomatic or bilateral interest circumstances.  In addition, there may be other compelling circumstances where there will not be charge.  It is proposed that the visa evidence charge will be nil only the first time a person requests evidence of a visa in a circumstance where the charge is nil.  It is proposed that where a person has previously received evidence of a visa where the circumstances provided for a nil charge, any additional requests for evidence of that same visa will incur a charge.

Costing methodology underpinning the measures

6.               DIAC’s label usage in 2011 was 1.365 million labels, reflecting a declining trend over time.  As host governments continue to embrace label-free travel and individuals increasingly use                 e-lodgement and electronic evidence, demand will continue to decline. As more applications are lodged online, fewer visa labels are being issued.

7.               In estimating visa label volume projections an upper demand limit was established, taking historical and future demand forecasts into account.  The upper limits identified were set at 900 000 in 2012-13, dropping to 450 000 in 2015-16.  It is reasonable to assume that the demand will be below these upper limits; how far below depends on how successful the visa evidence charge is in changing client behaviour.

8.               If the visa evidence change had absolutely no effect in changing client behaviour and no further host governments accept the label-free arrangements, label demand would be towards these upper limits.

9.               It was however, assumed that the visa evidence charge would change individual client behaviour, and that, over time more governments overseas would accept electronic evidencing.  So for the visa evidence charge revenue forecasting, an initial decline of 40 per cent was modelled, increasing to a 55 per cent drop over four years.  This would see revenue from around 530 000 applicants in 2012-13, dropping to just over 400 000 in 2015-16.  Modelling did not change the demand curve when the price for visa evidence was increased in the Budget from $60 to $70.  

10.           It is not possible to determine exactly how individual clients, and other governments will react - significant changes in large visitor and student markets is anticipated but the timing and nature of these and other changes will determine the actual revenue flow.

11.           If the visa evidence charge should prove to be successful and demand declines faster than projected, this will see a faster than projected tapering off in revenue.