The Temporary Skilled Migration Income Threshold (TSMIT) will rise from $53,900 to $70,000 as of July 1, 2023, according to the Australian government. As a result of this change, employers who wish to sponsor foreign workers will have to provide a minimum salary of $70,000 in addition to superannuation. While the goal of this action is to guarantee fair wages for temporary skilled migrants, it has alarmed Australian business owners. This pay increase could present significant challenges for the industry given the current labor shortage, especially since many companies rely on skilled migration to offer a genuine dining experience. 


The government’s determination to safeguard temporary skilled migrants by ensuring they receive adequate compensation is reflected in the decision to raise the TSMIT. However, this sudden rise places a heavy financial burden on company owners, especially smaller businesses that may already be having trouble as a result of the pandemic. Their ability to retain skilled migrant workers may be hampered by the additional expenses associated with meeting the new salary threshold.


For instance, the COVID-19 pandemic and border restrictions have made the severe labor shortage in the Australian hospitality sector even worse. For many businesses, skilled migration has historically been a lifeline, enabling them to fill critical positions with employees who have the knowledge and cultural awareness needed to deliver an authentic dining experience. The increased salary requirement may make it difficult for some businesses to recruit and keep skilled migrant workers, which would worsen the labor shortage.


The knowledge and experience of employees is crucial to the success of many businesses, especially those that specialize in foods from particular places or cultures. Professional migrant workers frequently bring not only specialized knowledge but also a deep understanding of the subtleties of their native culture. Businesses that find it difficult to meet the higher salary threshold may have to make staffing compromises, which could have an impact on the standard and authenticity of the dining experience they offer.


Business owners are looking for alternatives and solutions as a result of the current labor shortage and the financial ramifications of the increased salary requirement. Some people may investigate automation or technological developments to optimize processes and lower labor costs. To meet the demand for skilled positions, they must reevaluate their business models and put more emphasis on educating and upskilling local talent. The government might also think about putting in place specific policies or incentives to help the hospitality sector adjust to these changes, like funding or easier access to educational opportunities.


While the purpose of the TSMIT increase is to ensure that temporary skilled migrants receive fair wages, it presents significant difficulties for Australian business owners, especially in light of the current labor shortage. The increased salary threshold may put a strain on budgets and limit a company’s ability to recruit and keep skilled migrant workers. As a result, there is a chance that the industry will compromise the genuine dining experiences that many restaurants aim to offer. In order to address these concerns, government and industry stakeholders must have a conversation, consider alternatives, and put supportive policies in place that strike a balance between fair wages and the long-term viability of the business sector.

Source: Indian business owners in Australia worried by temporary skilled migrants’ pay rise after migration review