Australian government price-based immigration system

The Australian government would sell the right to immigrate to Australia - with migrants no longer accepted based on their skills or family connections - under radical proposals being examined by the government's independent think tank.

The Productivity Commission is investigating a price-based immigration system that would use entry fees as the primary determinant for who gains entry to Australia.

Such a scheme could help the government rein in the budget deficit by bringing in tens of billions of dollars in extra revenue and allow it to trim the number of public servants administering Australia's immigration system.

But the proposals have alarmed business groups and unions, who say tackling skills shortages should remain the focus of Australia's immigration policy.

Ethnic community groups say they would oppose any moves that would prevent poorer immigrants from re-uniting with their families.

The Productivity Commission issues paper on Australia's migrant intake, released on Friday, raises some dramatic proposals including introducing an immigration lottery and creating a HECS-style payment system for immigrants to pay back their entry fee.

The Australian migration programme issues permanent residency visas to three streams of migrants: those with particular skills; those with families in Australia; and others who meet special eligibility criteria.

The government established the inquiry, which will issue its final report next March, in a deal to secure Liberal Democrat Senator David Leyonhjelm's support for the reintroduction of temporary protection visas for asylum seekers.

In its issues paper, the Productivity Commission canvasses two options to introduce an "immigration fee": setting a price, with the size of the intake dictated by demand; or setting a cap on the intake and allowing demand to dictate the price of entry.

The commission notes there are also middle ground options such as allowing a capped number of places to be allocated via a tender process.

The United States - whose immigration program is less skills-focussed than Australia's - uses a "diversity lottery" to allocate up to 50,000 places a year to applicants from countries with low rates of immigration to the US.

The inability of many hopeful immigrants to pay upfront could be addressed by allowing them to borrow against future expected earnings or by introducing a loans programme.

The commission notes that introducing a price-based system could lead to some loss of government control over Australia's immigrant intake and could change the composition of those who apply to migrate to Australia.

Refugees would not have to pay the fee.

Senator Leyonhjelm said that a fee-based immigration system had been backed by Nobel Prize-winning economist Gary Becker.

Leyonhjelm nominated $50,000 as a possible amount for entry to Australia.

"This would make a substantial financial contribution to the Australian budget and I hope that would lead to lower taxes," he said.

Businesses needing skilled migrants could pay the fee or governments could waive the fee for particular professions or trades, he said.

Immigration Minister Peter Dutton said that the proposals were not government policy when releasing the inquiry's terms of reference earlier this year.

"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," he said.

Australia uses a mix of qualitative factors (such as skills) and charges in its immigration process, he said.

Australian Industry Group chief executive Innes Willox, said that "skilled migrants should remain the primary source of new entrants".

Australian Council of Trade Unions President Ged Kearney said: "We are concerned the Productivity Commission's inquiry is focused on allowing only those rich enough to migrate regardless of fulfilling the current requirements, including filling skills shortages."

The Productivity Commission will release a draft report in November and hold public hearings before it hands its final report to government next March.