20 March 2015

Productivity Commission Inquiry into the use of charges to determine the intake of migrants

Joint media release
with the Hon Peter Dutton MP
Minister for Immigration and Border Protection

The Treasurer, Joe Hockey, and the Minister for Immigration and Border Protection, Peter Dutton, today announced that the Productivity Commission will commence an inquiry into the impact of charges relative to quotas and qualitative criteria to determine Australia’s migration programme settings.

Treasurer Joe Hockey released the Terms of Reference for the review today.

Mr Hockey said that this review would look at potential future options for determining the settings of the temporary and permanent migration programmes to improve the Australian economy and standard of living.

Mr Dutton said the migration programme is currently regulated through a mix of qualitative requirements – such as skills, family connections, refugee-status, health, character and security – as well as quotas and imposts.

Mr Dutton made clear that this is an independent inquiry, not government policy.

The Government is keen to see the Productivity Commission analyse these issues thoroughly, however there are no plans to make significant changes to the migration programme.

The Productivity Commission is due to report within 12 months.

Public consultation will be undertaken as part of the inquiry, with information available on the Productivity Commission's website.

The Terms of Reference for the inquiry are attached.


Attachment - Terms of Reference

I, Joseph Benedict Hockey, Treasurer, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998, hereby request that the Productivity Commission undertake an inquiry into the greater use of charges relative to quotas and qualitative criteria to determine the intake of temporary and permanent entrants into Australia.

Background

The intake of temporary and permanent entrants is currently regulated through a mix of qualitative requirements (e.g. skills, family connections, refugee-status, health, character and security), quotas (e.g. the size of the Migration and Humanitarian Programmes, and of components within these Programmes) and imposts (including the cost of investing under the Significant Investor Visa).

The Australian Government's objectives in commissioning this inquiry are to examine and identify future options for the intake of temporary and permanent entrants that improve the income, wealth and living standards of Australian citizens, improve the budgets and balance sheets of Australian governments, minimise administration and compliance costs associated with immigration, and provide pathways both for Australian citizens to be altruistic towards foreigners including refugees, and for Australia’s international responsibilities and obligations to foreign residents to be met.

Scope of the inquiry

In undertaking this inquiry, the Productivity Commission should use evidence from Australia and overseas to report on and make recommendations about the following:

  1. The benefits and costs that the intake of permanent entrants can generate with respect to:
    1. the budgets and balance sheets of Australian governments, including from:
      1. entry charges;
      2. government services used (including public health, education, housing, social and employment services) now and in the future;
      3. taxes paid now and in the future;
      4. the dilution of existing, government-held assets and liabilities across a larger population; and
    2. the income, wealth and living standards of Australian citizens, including with respect to:
      1. impacts on the salaries and employment of Australian citizens, knowledge and skill transfer, productivity, foreign investment, and linkages to global value chains;
      2. cultural, social and demographic impacts; and
      3. agglomeration, environmental, amenity and congestion effects.
  2. An examination of the scope to use alternative methods for determining intakes – including through payment – and the effects these would have. This should include examination of a specific scenario in which entry charges for migrants are the primary basis for selection of migrants, such that:
    1. there would be no requirements relating to skills and family connections;
    2. qualitative requirements relating to health, character and security would remain;
    3. all entrants would have the right to work;
    4. entrants would have limited access to social security or subsidised education, housing or healthcare; and
    5. the charge could be waived for genuine confirmed refugees, whose entry would remain subject to current constraints.

      The scenario should examine the way in which the above charges could be set, and what they might be, to maintain the current levels of the migrant intake or to maximise the benefits for Australian citizens. The scenario should also examine the impacts of such charges – based on assessment of the factors listed in (1) above and also taking account of:

    6. opportunities for Australian citizens to be altruistic towards foreigners including refugees;
    7. the administration and compliance costs associated with immigration, including costs associated with criminal behaviour and the use of migration agents; and
    8. interactions with citizenship criteria and existing and potential bilateral agreements.
  3. The benefits and costs of temporary migration with an examination of the use of charges as the primary basis for regulating the level and composition of this migration, having regard to:
    1. complementarity with the Australian workforce; and
    2. achieving flexibility in responding to structural and cyclical adjustments in the Australian economy.
  4. Mechanisms for achieving an optimal interaction between temporary and permanent migration noting that temporary migration is an established pathway to permanent migration.

Process

The Commission is to undertake an appropriate public consultation process including holding hearings and roundtables (where appropriate), and releasing a draft report to the public.

The final report should be provided within 12 months of receipt of these terms of reference.

J. B. HOCKEY Treasurer