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2010 - 2011 - 2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MIGRATION (VISA EVIDENCE) CHARGE BILL 2012
ADDITIONAL EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Immigration and Citizenship,
the Hon. Chris Bowen MP)
Migration (Visa Evidence) Charge Bill 2012
OUTLINE
The Migration (Visa Evidence) Charge 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.
Reforming Australia's immigration visa system and ensuring the shift to online validation
The amendments will comprise one part of a major reform of Australia's immigration visa system.
This reform transforms the pricing framework for Australia's visa program. The visa evidence
charge is designed to encourage clients to reconsider their need to have visa evidence.
The visa evidence charge also allows for greater cost-recovery in respect of immigration processing
and generates additional revenue.
The broader transformation agenda is designed to improve efficiency, integrity and client service.
This includes driving efficiencies in the service delivery costs by moving paper application
lodgement, non-electronic payments and general enquiries to the online environment and extending
the role of Service Delivery Partners both onshore and offshore.
Service Delivery Partner arrangements provide clients with local access points to Department of
Immigration and Citizenship (DIAC) services through strategically placed offices. Service Delivery
Partners have been established in many overseas countries to collect visa applications and charges,
and handle basic enquiries and supporting documentation on behalf of the department.
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.
DIAC's 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.
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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.
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MIGRATION (VISA EVIDENCE) CHARGE BILL 2012
ADDITIONAL NOTES ON INDIVIDUAL CLAUSES
Clauses 6 and 7
1. Clause 6 provides for the imposition of a visa evidence charge payable under section 71, as
amended, of the Migration Act. Clause 7 provides for a visa evidence charge limit of $250
for the financial year ending on 30 June 2013 and an annual indexation mechanism to
increase the visa evidence charge limit for later financial years.
Proposed initial charge
2. 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.
3. In general, it is proposed that the Regulations will provide 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 a 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.
4. The upper charge limit of $250 provides flexibility to increase the $70 charge if it does not
succeed in reducing reliance on visa labels. The upper limit also enables the charge to be set
at a higher rate, if required, to process a label quickly outside of normal processing times.
Costing methodology underpinning the measures
5. 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.
6. 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.
7. 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.
8. 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.
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9. 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.
10. 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.
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