The Productivity Commission’s (PC) Migrant Intake into Australia report, released in 2016, recommended significantly tightening parental visas and raising their price, given they are costing taxpayers an estimated $335 000 to $410 000 per adult, or between $2.6 and $3.2 billion per annual intake in present value terms (and growing):
There is a strong case for a substantial increase in visa pricing in relation to some elements of the family reunion stream. This would provide scope to recoup at least a portion of the high fiscal costs typically associated with immigrants in this category. In the medium term, the allocation of parent visas should be revised…
The contributory visa charge of just under $50 000 meets only a fraction of the fiscal costs for the annual intake of roughly 7200 contributory parents. And an additional 1500 parents make a minimal contribution. Overall, the cumulated lifetime fiscal costs (in net present value terms) of a parent visa holder in 2015-16 is estimated to be between $335 000 and $410 000 per adult, which ultimately must be met by the Australian community. On this basis, the net liability to the Australian community of providing assistance to these 8700 parents over their lifetime ranges between $2.6 and $3.2 billion in present value terms. Given that there is a new inflow each year, the accumulated taxpayer liabilities become very large over time. This is a high cost for a relatively small group.
Ultimately, every dollar spent on one social program must require either additional taxes or forgone government expenditure in other areas. It seems unlikely that parent visas meet the usual standards of proven need, in contrast to areas such as mental health, homelessness or, in the context of immigration, the support of immigrants through the humanitarian stream, and foreign aid.
Given the balance of the costs and benefits, the case for retaining parent visas in their current form is weak.
The PC’s subsequent Shifting the Dial: 5 year productivity review also doubled-down against parental visas, claiming that their long-term costs to the Budget are immense:
… parent visas, which provide a short-term benefit to the budget via visa charge income, but impose very large costs in the longer term through their impacts on expenditure on health and aged care, and social transfers. In previous work, the Commission estimated the budgetary costs associated with the 2015-16 parent visa intake alone to be $2.88 billion in present value terms over the lifetimes of the visa holders. By comparison, the revenue collected from these visa holders was only $345 million. Ten year estimates of the fiscal effects of the current parent visas would show a similarly stark disjuncture between revenue and costs, and would therefore provide the insights for a more informed policy decision on the pricing or desirability of these visa types than the current decision-making framework.
With this background in mind, up to 15,000 sponsored parental visas will be granted each year, starting from April 2019. From SBS News:
Migrants who wish to bring their parents to Australia for longer periods will be able to lodge a sponsorship application to sponsor their parent for the much-debated new temporary Sponsored Parent visa from April 17th this year.
The legislation tied to this new visa which allows sponsors to bring their parents to Australia for longer periods was passed in November last year…
Applications for the visa are intended to open from 1 July 2019…
The Sponsored Parent (Temporary) subclass 870 visa provides parents and grandparents with a new pathway to reunite and spend time together through having the opportunity to visit Australia for a continuous period of up to five years.
There is also the opportunity to apply for a second visa for another five years after a short period outside Australia, meaning parents and grandparents will be able to spend up to 10 years in Australia…
The new temporary Sponsored Parent visa being introduced by the government has disappointed certain members of the Indian community, who have said the new visa is ‘too expensive’.
The new parent visa will cost migrants $5000 for a three-year visa, $10,000 for a five-year visa and $20,000 for a ten-year visa.
Along with visa fees, children will have to bear the financial burden of healthcare for migrant parents, with sponsors legally required to act as a financial guarantor for any outstanding public health costs incurred by the visa holder.
Arvind Duggal, an Adelaide resident, who kick-started the ‘Long Stay Visa for Parents’ campaign that saw national participation before the federal elections, told SBS Hindi they will continue to fight for a fairer visa.
“Our fight to make it fairer and affordable to everyone in the community will continue regardless,” Mr Duggal told SBS Hindi.
This version of parental visa is better than the one initially proposed before the 2016 Federal Election, since it will require sponsoring children to be financially responsible for medical costs as well as limiting the visa to one set of parents per household.
Unbelievably, the open borders nutters at the Labor Party vehemently opposed these sensible safeguards – as if having four elderly people draining Australian taxpayers and crushing infrastructure is preferable to two.
Regardless, these new parental visas are unambiguously poor policy and a very bad deal for incumbent Australian taxpayers. This is because aged migrants will add pressure to already strained economic and social infrastructure and will not work, pay taxes, or contribute in a meaningful way to the economy.
Existing residents will be required to foot the bill for the additional federal government investment in hospitals and infrastructure required to keep up with the expected migrant influx.
Moreover, because these migrants would be old, and likely be heavy users of health services, they would place upward pressure on private health insurance premiums for everyone else. They would also place greater pressure on health care professionals – both private and public – whose training is paid for, to a large extent, by the taxpayer.
Stupidly, our federal politicians have chosen to increase the quantity of elderly migrants flowing into Australia, thus adding to strains on infrastructure, housing, the Budget, as well as exacerbating the aging of the population.
Rather than trying to ‘fix’ the Budget deficit by cutting back spending on welfare and other important community programs, they should first tackle wasteful and illogical programs like parental visas.
