Immigration system should not be primarily price-based.
Australia’s immigration system is not well suited to a price-based approach according to a draft inquiry report released by the Productivity Commission.
‘Our current system allows us to focus on education and skills. Most of Australia’s immigrants, and their children integrate well into the labour market and society as a whole, and become self-reliant citizens,’ said Commissioner Paul Lindwall.
‘Additionally the humanitarian intake and programs such as the seasonal worker scheme help Australia to meet its international obligations.’
The report found that issuing permanent visas based mainly on price would lead to a short-term gain in government revenue but could have negative medium and longer term economic effects.
‘The demographic composition of immigrants matters. Australia should be seeking skilled migrants of a working age who can contribute positively to the workforce and help to mitigate the impacts of our ageing population,’ said Commissioner Paul Lindwall.
While the report notes that Australia’s current immigration system works well by international standards, it makes recommendations for improvement including:
Immigration is a defining feature of Australia’s economic and social life. More than one in four Australians are born overseas and close to half have a parent born overseas.
Temporary and permanent immigration are managed as separate processes in Australia. Temporary immigration often serves as a pathway to permanent immigration. In 2013-14 around half of all permanent visas went to people already in Australia on a temporary visa.
Australia’s migration system is currently managed through a range of criteria including character, health, financial capacity, age, skills, family connections and humanitarian needs.
The Migrant Intake in Australia publication is a draft report and the Productivity Commission will take submissions for consideration before it issues its final report to Government in March 2016.
The Productivity Commission will do further analysis of pricing for permanent visas in combination with current eligibility criteria.
The focus on education and skills targets immigrants with characteristics that enable them to integrate successfully and deliver good labour market and economic outcomes.
Opportunities for family reunion are important for the wellbeing of Australians and for Australia’s attractiveness to prospective skilled immigrants.
A separate quota for immigrants who meet the criteria for humanitarian resettlement allows Australia to meet its international responsibilities.
While immigrants benefit from their employment in Australia, preliminary modelling suggests that the Australian population as a whole benefits from higher output per person.
By changing the composition of the migrant intake, a price-based immigration system could reduce the demographic dividend from migration, while realising few of the gains normally associated with a market based system.
The ‘selling’ of visas to those who can pay without meeting other criteria would essentially place short term revenue raising objectives ahead of medium to longer term economic and social considerations. It could have a negative net fiscal impact on government.
Public confidence in Australia’s immigration system could also be undermined by such a system.
improving the effectiveness of settlement services, especially for humanitarian immigrants
acquiring a better understanding of the labour market impacts of temporary migration programs, and improving the targeting of 457 visas to areas of genuine skill shortages
investing in cost effective measures to mitigate the risks of exploitation faced by migrant workers and to better enforce regulation
abolishing the investor visa streams
establishing a more systematic and transparent framework for visa charging
investing in data collection, integration and dissemination to support evidence based policy.
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