The Federal Government’s extension of its migration agreement with the NT Government for another year will directly benefit the local workforce by opening up more jobs across the territory, it has said, while the Opposition says the 12-month extension does not go far enough and will cost small businesses.

Extending the Designated Area Migration Agreement (DAMA) for one year will cover 625 temporary skilled visas for new workers that are critically needed in the NT, the federal and NT governments said on Thursday, leading to more pathways for permanent residency for existing workers.

“This agreement will be used by over 280 employers here in the Territory—covering up to 625 temporary skilled workers,” Chief Minister Natasha Fyles said. “This is not about just encouraging people to move to the Territory for the short term, we want to incentivise them to stay.”

DAMA’s extension is expected to deliver more care workers, nurses, dental assistants, cooks and chefs for local NT communities, and ensure Territory employers can hire and retain workers for positions previously unfilled by local workers.

The Albanese Government is also removing the former federal Liberal Government’s non-monetary compensation, meaning workers will have more pay in their pockets. The DAMA’s extension will also expand pathways to permanent residency for workers and their families.

“The Albanese Government is bringing governments, businesses and unions together to build a migration system that works in the interests of all Territorians,” Minister for Immigration, Citizenship, and Multicultural Affairs Andrew Giles said.

The DAMA will now also come with the much-need professions like primary and secondary school teachers, and software engineers, relaxing eligibility restrictions to appropriately address workforce shortages.

“The Northern Territory is a place of enormous opportunity but it also faces challenges. Attracting and retaining skilled workers can be difficult,” Federal Minister for Resources and NT Minister Madeleine King said.

However, the CLP Opposition said their calculations show the DAMA extension “will cost Territory small businesses an extra $7,000 per year, per VISA holder, a 14.6 per cent increase in labour costs, adding to inflation and the cost of living”.

They also criticised why the DAMA was only being extended for one year, which they said provides no certainty beyond 2024.

“It is a quick fix to address a seven year problem that the NT Labor Government and their Federal counterparts have failed to address,” CLP Business spokeswoman Marie-Clare Boothby said.

“The Territory is going backwards under NT Labor. After seven years of this Government, the Territory has more debt and the worst performing economy in Australia.

“With stagnant population growth, lack of investment in the housing market and poor consumer confidence, the Territory is facing even stronger economic headwinds.”

To be able to meet salary thresholds starting next year, minimum wages under the agreement’s extension will rise from around $48,000 to $55,000.

Both federal and NT governments said they would continue to work with businesses and unions as the third NT DAMA is negotiated in 2024, to begin in 2025.