POST 7: THE AUSTRALIAN LABOR PARTY’S MISGUIDED VISA PROPOSAL.

Introduction.

Immigration Research Western Australia is concerned with the Australian Labor Party’s (ALP)  proposal for long-term parent migration. The policy will be implemented if the Labor Party wins the 2019 election could cause a sizeable increase of immigration arrivals in Australian states and territories. Western Australia will be particularly affected as the state has by far the largest proportion of migrant population compared to all other states and territories. The long-term parent visa proposal is uncapped which implies the ALP are uninterested in public concerns about Australia’s current level of migration and high population growth. Not only that but the door is left open for both sets of migrant parents to apply for long-term migration (see Table 1 below). The response to the parent visa proposal from immigration and population experts is published below .

Table 1: Australian Labor Party parent visa proposals 2019 election.

[table id=28 /]

Source: Australian labor Party, 2019.[1]

The 2019 election and the impending migrant parent deluge.

Dr Bob Birrell, President of the Australia Population and Research Institute is an experienced immigration researcher. He has worked as a consultant and advisors to successive Australian governments on immigration policy over several decades. His analysis of the Labor visa proposal The 2019 election and the impending migrant parent deluge follows in edited version.

Dr Birrel’s summary of Labor’s parent visa proposal:

Labor’s proposal is for an uncapped, low cost, temporary parent visa open to all migrant families who are citizens or are permanent residents. It will cost $2,500 for five years regardless of sponsors’ income or capacity to provide for their parents. All four parents in each household can be sponsored. The children eligible to sponsor their parents include all those who are permanent residents or citizens of Australia.

Labor’s parent proposal dismantles all the careful rules successive Australian governments have, over thirty years, put in place to control parent migration. The door is now wide open for parent sponsorship. This is an especially attractive prospect of Australia’s more recently arrived Asian and Middle-Eastern communities. And here it should be noted that Australia’s Asian born population (at just over 10 per cent) is higher than any other western country.

At present most permanent entry parent visas are from China, mainly because there is a balance of family rule in place. This requires that half or more of siblings are resident in Australia. Many readers will be aware that there is a waiting list of Chinese applicants for Australia’s existing permanent entry parent visa of near 100,000. They will likely take up Labor’s proposed temporary parent visa. However, many more Chinese will also become eligible. (These are people who don’t meet the present financial criteria for sponsorship).

The really big change in eligibility will come from Australia’s Indian subcontinent and Middle Eastern communities. They constitute a larger group of potential sponsors than the Chinese. Most do not currently meet the balance-of-family test or the financial requirements of the existing permanent entry parent visa.

Labor’s proposal could easily generate at least 200,000 parent applications, mainly from Chinese, Indian subcontinent and Middle Eastern country residents of Australia, over a three-year period. The number depends, of course, on how the visa is implemented. The information we have at this point on Labor’s proposal is that it will be open-ended.[2]

Population expert predicts much higher than 200,000 visa applications.

Dr Birrell calculates that the Labor proposal could result in 200,000 parental applications in the space of 3 years. This is a conservative estimate compared to others for example Melbourne University demography Professor, Peter McDonald, estimated that 1.5 – 2 million migrant Australians could be interested in Labor’s visa and predicted an early rush to take advantage of its generosity before a likely tightening of the rules by a future government. [3]

The population expert also asserted: “A rush on this visa would dramatically increase net overseas migration, greatly increase the average age of migrants to Australia and add very large numbers of older people to the population who did not speak English well”. “This will put pressure on services related to older people.”[4]

Labor’s parent visa proposal and the demographic issue.

In all advanced economies the main demographic argument, which underpins migration policy is that some immigration is necessary to achieve the demographic dividend. What is the demographic dividend? The demographic dividend is the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).[5] The economic benefits of the demographic dividend are estimated to occur when the working-age population represents more than 65% of the population.[6]

It is questionable that Australian migration advocates will endorse the ALP’s proposal. For as Bob Birrell points out:

For migration advocates the parent influx will deliver their worst nightmare. As noted earlier, many justify the current high net overseas migration numbers on the grounds that the migrant intake is ameliorating the effects of demographic ageing. This derives from the impending retirement of the large cohort of baby boomers born between 1950 and the mid-1960s. As these advocates have documented, this retirement will reduce the ratio of the working-age population relative to those of retirement age. Incoming migrants help to mute this effect, because they are currently younger, on average, than the resident population. The impending parent influx will have the opposite effect.[7]

Immigration Research WA is primarily interested in the impacts of this policy on Western Australia. In terms of demographics Western Australia has reached a healthy balance with a demographic dividend of 66.52% in 2017 (see Figure 1 below). However, having the largest proportion of migrants than all other states and territories, the migrant family response to the Labor policy could be an immediate increase in demand for parent immigration to Western Australia.

Figure 1: Western Australia’s population by age groups, 2017.

[visualizer id=”3789″]

Source: Australian Bureau of Statistics.[8]

How much could Labor’s parental visa policy cost taxpayers?

Some State governments have already begun to calculate the costs of Labor’s policy. New South Wales Treasury’s analysis indicates that the state would receive an additional 37,000-aged migrants under Labor’s family visa program, putting pressure on its hospitals.[9] NSW Treasurer Dominic Perrottet: “A Federal Labor cannot leave state governments to pick up the tab for their expensive immigration policies”. His concerns are that, “there is pent-up demand for permanent parent visas, with a backlog of almost 100,000 applications nationwide, mostly from Chinese-Australians, and some with no hope of a visa before 2040-50”. “Most of these migrant families would be expected to switch to a quick and easy temporary parent visa”.[10]

NSW Treasury based its estimate of parent arrivals under Labor’s policy on the 100,000 waiting list figure and the fact that the state accounts for 37 per cent of current family visa settlements. The Treasury estimate is conservative because it does not reflect much of the potential demand among the fast-growing Indian and Middle-Eastern diaspora.[11]

In 2016 the Productivity Commission’s (PC) Migrant Intake Australia Report 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 the 8700 parent visas in 2015-16 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.[12]

The Productivity Commission concluded:

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. Given the balance of the costs and benefits, the case for retaining parent visas in their current form is weak.[13]

In 2018 -19 the permanent migration program provided 8,675 parent visas. Australian Labor are proposing migration planning levels, if elected, will be set at 190,000 for 2019-20.[14] By deducting the 8,675 means that many of the 181,325 permanent visa holders will be eligible to bring both sets of parents to Australia under Labor’s parent visa policy. The current policy details are vague. However, the Shadow Minister for Immigration stated on his website that the visa would apply the Coalition’s minimum taxable income of $83,454 for migrant’s families, thereby limiting demand to households earning above that figure.[15] The long-term parent visas would have to obtain health insurance and any debts they incurred during their stay would have to be guaranteed by sponsors.[16]

The implications for the long-term parent visa policy in Western Australia?

The ALP if elected will implement what Dr Birrel describes as a policy that “dismantles all the careful rules successive Australian governments have, over thirty years, put in place to control parent migration”. “The door is now wide open for parent sponsorship”.[17]

In Western Australia this could lead to a considerable number of parent visa applications within the first term of a newly elected Labor government. Between 2006 and 2016 West Australia’s population grew by over 500,000 and the majority of those where overseas migrants. The impacts of this have been discussed in other Immigration Research Posts. Is West Australia looking at another phase of high immigration arrivals? Potentially the numbers of new arrivals could be immense as as the new rules proposed by ALP are very generous as shown in Table 1 above.

As was mentioned the addition of half a million people to Western Australian in the short space of ten years driven by overseas immigration means there will be a large cohort of new migrants (now permanent residents and citizens) which will be able to take advantage of what looks like an irresponsible migration policy. It will be interesting to see what the State labor Party have to say about this as they will have to provide the infrastructure and health services to accommodate any such rise in immigration.

The 2016 census revealed that Western Australia has the highest proportion of the population born overseas see the ABS list below. At 35% WA is higher than for all of Australia at 29% and the two major cities Melbourne and Sydney:

    • Western Australia had the highest proportion — 35%.
    • Tasmania had the lowest — 13%.
    • New South Wales — 30%.
    • Victoria — 31%.
    • Queensland — 24%.
    • South Australia — 24%.
    • The Northern Territory — 23%.
    • The Australian Capital Territory — 28%.[18]

 

The ramifications of the Australia Labor Party policy could be more strongly felt in Western Australia given the high number of overseas born migrants. The total number of overseas born in West Australia at 2016 was 895,000 (see Table 2 below).[19] The long-term parent visas are eligible to migrant families that are citizens or permanent residents. [20]The Labor proposal has not identified if the parents have to be pensioned and retired or still of working age. It is assumed that the Labor Party are allowing for both. If this is the case then there is the potential for a significant increase in immigration to Western Australia.

Table 2: Estimated resident population, top 20 countries of birth Western Australia and Australia, 30 June 2016.

[table id=29 /]

Source: ABS, 2019.[21]

Why would the ALP advocate such an irresponsible migration policy?

It beggars belief, given all the public concerns, surveys and in the face of recent political discussion about Australia’s massive migration program that the ALP would decide to develop such a policy. The health costs of taking on such a large number of overseas parents could be vast. The Productivity Commission costing of $2.5 billion for parent visas where based on the permanent stream of the migration program and those migrants are entitled to access Medicare. The number of visas capped at just over 8,000 for the permanent stream is minuscule in comparison with the parent visas on offer under the labor Party proposal which is uncapped.

There are some migration experts, for instance Dr Birrell predicts Labor’s visa proposal will cause problems with health services:

Problems within the health insurance system are certain to emerge. Labor’s proposed visa will require parents to take out private health insurance. But how will the private insurance sector react to pricing this insurance? The sector will have to take on parents likely to need expensive hospital treatment but who have made no lifetime contribution to the funds. As has been well documented, the sector is already struggling with low membership levels from Australia’s younger resident.[22]

Is the ALP using the parent visa to entice migrant voters?

Has the Australian Labor Party developed the policy squarely targeted at the migrant vote? Here is Dr Birrell:

Labor’s proposal must be taken seriously. It will not be easy to wind it back. Australia has the experience of the early 1980s to go on here, when there was a parallel opening up of family reunion eligibility in pursuit of the migrant vote. This led to years of competition between the major parties to use immigration policy to vie for this vote. It took thirty years to undo the consequences.[23]

 

References.

[1] Australian Labor Party, ‘Labors Fairer Long Stay Parent Visa’, 2019 <https://www.alp.org.au/policies/labors-fairer-long-stay-parent-visa/?fbclid=IwAR07L_I1B8GJ_PREpUbIw62Asyhu2zaFhXXg22wpJ1CPU-wCSA-zDWKTcAU> [accessed 14 May 2019].

[2] Bob Birrell, ‘The 2019 Election and the Impending Migrant Parent Deluge’, The Australian Population Research Institute, 2019 <https://tapri.org.au/research-reports/> [accessed 14 May 2019].

[3] Leith van Onselen, ‘Peter McDonald: Labor to Welcome 2 Million Elderly Migrants – MacroBusiness’ <https://www.macrobusiness.com.au/2019/05/peter-mcdonald-labor-to-welcome-2-million-elderly-migrants/> [accessed 15 May 2019].

[4] ‘2 Million Grey Migrants to Give Australia Economic Sclerosis – MacroBusiness’ <https://www.macrobusiness.com.au/2019/05/2-million-grey-migrants-to-give-australia-economic-schlerosis/> [accessed 14 May 2019].

[5] United Nations Population Fund, ‘Demographic Dividend’, Demographic Dividend, 2019 </demographic-dividend> [accessed 15 May 2019].

[6] Christopher J L Murray and others, ‘Population and Fertility by Age and Sex for 195 Countries and Territories, 1950–2017: A Systematic Analysis for the Global Burden of Disease Study 2017’, The Lancet, 392.10159 (2018), 1995–2051.

[7] Bob Birrell.

[8] Australian Bureau of Statistics, ‘3101.0 – Australian Demographic Statistics, Sep 2018’, 2019 <http://www.abs.gov.au/ausstats/abs@.nsf/mf/3101.0> [accessed 21 March 2019].

[9] Leith van Onselen, ‘NSW Government: Labor’s Elderly Visas to “Swamp Hospitals” – MacroBusiness’, Macrobusiness, 2019 <https://www.macrobusiness.com.au/2019/05/nsw-government-labors-elderly-visas-swamp-hospitals/> [accessed 15 May 2019].

[10] Leith van Onselen, ‘NSW Government: Labor’s Elderly Visas to “Swamp Hospitals” – MacroBusiness’.

[11] Leith van Onselen, ‘NSW Government: Labor’s Elderly Visas to “Swamp Hospitals” – MacroBusiness’.

[12] Productivity Commission, Migrant Intake into Australia, 2016 <https://www.pc.gov.au/inquiries/completed/migrant-intake/report/migrant-intake-report-overview.pdf>.

[13] Productivity Commission.

[14] Department of Home Affairs, ‘Australia’s 2019-20 Migration Program’, 2019 <https://www.homeaffairs.gov.au/reports-and-pubs/files/discussion-paper-australias-2019-20-migration.pdf>.

[15] Shayne Neumann, Tweet, @ShayneNeumannMP, 2019 <https://twitter.com/ShayneNeumannMP/status/1126640196840071170&gt; [accessed 15 May 2019].

[16] Leith van Onselen, ‘Labor Loons to Give Unlimited Visas to Migrant Elderly Parents – MacroBusiness’, Macrobusiness, 2019 <https://www.macrobusiness.com.au/2019/04/labor-loons-to-give-unlimited-visas-to-migrant-elderly-parents/> [accessed 14 May 2019].

[17] Bob Birrell.

[18] Australian Bureau of Statistics, ‘3412.0 – Migration, Australia, 2017-18’, 2019 <http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3412.0Main%20Features12017-18?opendocument&tabname=Summary&prodno=3412.0&issue=2017-18&num=&view=> [accessed 9 April 2019].

[19] Australian Bureau of Statistics, ‘3412.0 – Migration, Australia, 2017-18’.

[20] Bob Birrell.

[21] Australian Bureau of Statistics, ‘3412.0 – Migration, Australia, 2017-18’.

[22] Bob Birrell.

[23] Bob Birrell.

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