Migrant intake into Australia

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:

• improving assistance to humanitarian immigrants and partners of skilled migrants so they better understand Australia's job market and gain employment
• removing unnecessary barriers to immigrants' labour market integration such as better processes to have their legitimate qualifications recognised in Australia
• improving the targeting of visas to areas of genuine skills shortages.

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.

• Immigration affects many dimensions of life in Australia. The changing backdrop of global migration patterns calls for a responsive and carefully balanced approach to immigration policy.
• The merit based immigration system used by Australia to allocate a significant number of permanent immigration places has served the interests of the broader community well.
  • 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.
• By attracting people of working age, the current system delivers a demographic dividend to Australia. By increasing the proportion of people in the workforce, immigration reduces the impacts of population ageing, but does not offer a panacea.
  • While immigrants benefit from their employment in Australia, preliminary modelling suggests that the Australian population as a whole benefits from higher output per person.
• The immigration system is not well suited to a price-based approach.
  • 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.
• Australia's current immigration system works well by international standards. However, there is scope for improvement, including by:
  • removing unnecessary barriers to immigrants' labour market integration
  • 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.

Migrant Intake into Australia - Draft report

The Australian Government asked the Productivity Commission to conduct a comprehensive review of our migration system and look at whether we could do things differently that would improve the income, wealth and living standards of Australians.

We looked at both temporary and permanent migration and what's happening in the rest of the world.

We looked at how our policies work in practice, and the effect immigration has on the economy, job market, society and our environment.

Immigrants make up a significant share of our population so decisions around the characteristics and number of people who come to Australia are important.

We currently make decisions around who can migrate to Australia through a mix of criteria that includes:

• security
• health
• skills and English
• education
• age
• family connections
• and humanitarian need.

Our current immigration system works well by international standards.

We were asked to look at the impact of a having a system where migrants would be selected mainly on the basis of a charge.

We found that moving to a system like this would carry significant risks. It could increase government revenue in the short term, but it could also attract migrants that won't make a positive contribution to Australia in the longer term.

For example, we currently have a high proportion of young skilled people in our migrant intake.

This means we are reducing the impact of an ageing population by increasing the number of people in the workforce.

We did find though that our current immigration policy could be improved by doing things like:

• helping the spouse and family of skilled immigrants learn English and better understand how the job market in Australia works so they can also find jobs
• improving the targeting of visas to areas where there are genuine skills shortages
• and reducing the exploitation of migrant workers.

If you are interested in learning more about Australia's migrant intake go to our website - www.pc.gov.au - to read the overview or our full draft report.