Government Productivity Commission Investigates a Price-based Model of Immigration for Australia

The Australian Government’s Productivity Commission has been tasked with identifying options for Australia’s future intake of migrants in order to improve the wealth and living standards of Australians, assist the budgets of the Government, and minimise the costs associated with immigration. The inquiry will primarily focus on the greater use of charges to determine the intake of both temporary and permanent migrants into Australia, and its findings will be published in a report due for release by March 2016.

A price-based model of immigration has been discussed at length by various economists over the years, but most recently by Gary Becker. Becker’s proposal focuses on how this model would deliver greater benefits to both the immigrants, and the host countries.

The May 2015 Productivity Commission Issues Paper, Migrant Intake Into Australia, identifies four areas that will need to be investigated, to determine the effectiveness of the proposal in the above objectives:

  1. The benefits and costs that can be generated from the intake of temporary and permanent residents, with respect to:

a) The income, wealth and living standards of Australians, and how they will be impacted by such a change; and
b) The budgets and balance sheets of Australian governments;

  1. An examination of alternative methods for determining the intake of migrants to Australia, including through payment, and the effects these would have. This would include the examination of specific scenarios where entry charges would be the primary criteria for selecting particular migrants. The scenario would need to consider how the charges could be set, to not only maintain the current level of migrant intake, but also to maximise the benefits for Australian citizens;
  2. The benefits and costs associated with temporary migration, which should examine the use of charges that will form the primary basis for determining the level and composition of this kind of migration; and
  3. Mechanisms for achieving collaboration between temporary and permanent migration, noting that one ultimately leads to the other.

Also of relevance to the Commission will be policies relating to services provisions including: infrastructure; social security; education; health care; housing and so on. Other factors will include domestic policies relating to the impacts of immigration on such issues as the environment and social cohesion. These policies and provisions will have a vast impact on the way in which a price-based system will work and ultimately succeed. They will need to be considered along with abovementioned wider benefits to the Australian community.

FCB Smart Visa will continue to provide updates on the Commission’s Inquiry when they become available. If you have any migration matters that you would like to discuss, please call an FCB Smart Visa migration agent on 02 9922 5188.