Tax break loss may force foreign professionals abroad

Woman cupping her hands around a miniature house

The career choices of international professionals working in Australia may be affected by the Government’s decision to abolish the Living Away From Home Allowance (LAFHA).

A survey, conducted by Robert Walters, questioned over 300 professionals to discover how the changes will affect their decisions.

“The reaction of the removal of their LAFHA benefits for some international professionals might be to look elsewhere for higher remuneration, or pressure current employers for a pay increase,” said Sinead Hourigan, Brisbane director of Robert Walters.

The decision to abolish the LAFHA was handed down in the federal budget, and will come into effect on 1 July this year.

Over 70 percent of professionals currently receiving the LAFHA believe that losing the benefit will make it harder for them to live in Australia, with over half of these stating they will consider moving to a country to better tax breaks. However, many employees are still keen to keep working here.

To offset the loss of the LAFHA, 75 percent of survey respondents said they will be seeking a pay increase from their current employer. Over three quarters of employees said they are likely or very likely to enter the job market to look for a better paying role.

“To avoid staff retention becoming costly, especially in those industries with a high proportion of overseas professionals, employers should be using non-financial drawcards to retain the best talent,” Hourigan said.

Hourigan believes there are five easy ways to recruit and retain overseas professionals: Employers must sell the Australian standard of living, and explain to candidates that our economy survived the global financial crisis and is still growing. Also essential is selling the company culture and offering career progression, as well as making the move easy for family and providing an appropriate remuneration package.

“Attraction strategies should be designed to draw the desired candidates to the region, not only from overseas but interstate as well, by presenting them with a well rounded opportunity that is too good to refuse,” Hourigan said.

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