Below is an edited extract of a new paper by Dr Bob Birrell from the Australian Population Research Institute.
An alarmist headline? Not really. This judgement follows from an analysis of Labor’s proposed temporary visa for parents of existing migrants, entitled, a ‘Fairer Long stay parent visa for Australia’s migrant and multicultural communities’. The proposal was announced on 22 April, 2019.
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.
The visa will be renewable thus enabling parents to stay in Australia for ten years without having to leave. This means it is a de facto permanent entry visa since, as sponsors will know, it is highly unlikely that parents who have lived here for a decade will be required to return home.
Labor’s ‘temporary’ parent visa is an unprecedented offer. No other western country provides any similar parent visa. The trend across Western Europe is to tighten already stringent rules on parents’ access to obtain permanent residence status. The US, though it allows adult migrant children to sponsor their parents, has many hurdles, including that the sponsor must be a citizen and must meet financial capacity guidelines. Even Canada, the most overtly welcoming migration country in the west, has an annual cap of 17,000 on parent visas and, as with the US, sponsors must prove that they can meet stringent financial capacity criteria.
As we will see, 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.
Australia is an enticing destination to migrants from Asia because of the large gulf between the political, social and cultural conditions here and in most Asia countries. Given that many immigrants would welcome in-house help with child care and that most Asians recognise obligations to care for their parents, the potential for Australia’s Asian and Middle-Eastern population to take up Labor’s offer is huge.
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, which are outlined below.)
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 will make then eligible to bring their parents to Australia. They will have at least as powerful a motive to avail themselves of this opportunity as the Chinese.
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. This is explored below. The information we have at this point on Labor’s proposal is that it will be open-ended.
To grasp the significance of Labor’s proposal it needs to be seen in the context of Australia’s present rules governing the issuance of permanent entry parent visas. There are two subclasses for parent visas in operation. One is a contributory parent visa where the parents have to pay some $43,600 as an upfront contribution to the likely public costs of their stay. In 2017-18 6,015 of these visas were issued. By June 2018 there was a backlog of applicants of 44,886. The other entry point is a non-contributory parent visa with much lower up-front fees. In 2017-18 1,356 of these visas were issued. For this non-contributory visa there was a backlog of 50,642 and a wait time of over thirty years.
In effect, together the current permanent-entry parent visas are capped at less than 8,000 a year.
Moreover, both permanent-entry parent visa subclasses are only available to pension-aged parents who can meet the balance of family test. This is why most of the parents visaed are from China – since most Chinese residents are from one, or at the most, two sibling families.
However, there is another parent visa option, soon to be available for those wishing to sponsor their parents. This is a temporary parent visa which the Coalition legislated in November 2018. Residents can apply from 17 April 2019 to establish their eligibility as sponsors of their parents.
There is an annual cap of 15,000 parents and accompanying dependent for this new visa. It is for five years, and will cost $10,000. There is a limit of one set of parents for each sponsoring household. To qualify as a sponsor, the Australian resident family’s annual taxable income must exceed $83,000.
The visa can be renewed, once, for another stay of up to five years, but the parents need to leave Australia before applying for this renewal.
There was no official statement of the likely number of applications at the time. However internal departmental sources indicate that the 15,000 annual quota is likely to be filled.
Labor’s temporary parent visa proposal was announced in response to the Coalition’s temporary-parent-visa legislation. In response to lobbying from migrant communities, the Coalition promised prior to the 2016 election that it would establish a new temporary visa for parents. As is evident, it took some time for the proposal to be legislated.
When the Labor leader, Bill Shorten, announced Labor’s proposed visa on 22 April 2019, he declared that the Coalition’s temporary parent visa option was ‘heartless, callous and cruel’. It was claimed that the Coalition’s visa was far stricter than originally promised, thus justifying Labor’s much more generous alternative.
As indicated, Labor’s initiative potentially opens the flood gates for parent migration. It appears to be a reckless and irresponsible policy bid put forward to garner migrant votes.
Did the Labor leaders consider the possible implications? It is doubtful that they did.
The proposal came from out of the blue. There was no mention of the temporary parent visa in Labor’s 2018 policy statement. When the Coalition’s temporary parent visa initiative was debated in parliament in late 2018 Labor gave no indication that it was considering a counter initiative.
The policy announced in April seems to have been generated in the heat of the current election battle. The Labor policy experts who dreamt it up appear not to have thought through the implications. Nor, apparently, did the Labor leaders who must have signed off on the policy.
The political focus at the time was on a few seats with high concentrations of Chinese voters, including Banks, Bennelong, Reid and Barton in Sydney and Chisholm in Melbourne, all of which (except Barton) are narrowly held by the Liberal party. For Labor, the Chinese may have seemed to be the most responsive target for their new policy because Chinese-born residents have shown a high propensity to sponsor their parents.
Who is eligible for the parent visa and how will applicants be assessed?
The Labor proposal refers to parents without any qualification. There is no distinction made between those who are of working or retirement age. We have to assume that both are included. If so, the proposal will vastly expand the pool of eligible parents, since the existing permanent-resident parent visas are only accessible to aged parents, as is the Coalition’s new temporary parent visa.
It may also be that grandparents will be eligible. The Labor policy statement explicitly refers to the need to allow Australia’s migrant and multicultural community families ‘to reunite with parents and grandparents still overseas’.
The policy statement also implies that all adult children with parents overseas will be eligible to sponsor their parents. There appears to be no period-of-residence requirement. There is also no reference to any required assessment of the financial capacity of the sponsoring children to provide for their parents once in Australia. Indeed, the emphasis in the proposal on the restrictiveness of the Coalition’s parent options strongly implies that Labor considers the absence of any financial condition to be one of their policy’s key selling points.
Will there be any check on the medical condition of the sponsored parents before the new parent visa is issued? It is hard to believe that this would be the case. Yet, there has been no indication that there will be any such evaluation.
All that we have is an indication that the parents will have to take out a private health insurance policy.
The costs of Labor’s parent visa will soon be evident as the total climbs towards the 200,000 level mooted above, in just three years.
Most of the parents will locate in Sydney and Melbourne, since that is where the bulk of potential sponsors reside. The initial concentrations will be in municipalities with high concentrations of Chinese-born residents. Some of these are relatively affluent, including Chatswood and Ryde in Sydney and Monash and Box Hill in Melbourne.
However, as the projected flow from the Indian subcontinent and the Middle East ramps up an increasing number of parents will locate in relatively low-income outer suburbs of Sydney and Melbourne.
The main initial stress point will likely emerge via competition between these recent arrivals and the established communities for access to already scarce medical and welfare services, especially within the public hospital network.
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 residents.
These parents will be locating in Sydney and Melbourne, the two cities that are already failing to cope with high population growth – growth which mainly derives from net overseas migration.
The projected parent inflow will add to this stress. The numbers are likely to greatly exceed those resulting from the Coalition’s proposed streaming of skilled migrants into regional locations.
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.
For the hard-heads in the Treasury it will soon be apparent that the long-term costs of Labor’s parent visa are mounting as it morphs into a de facto permanent-entry program. Governments will be forced to acknowledge that these ‘temporary entry’ parents are in fact here to stay. They will then have to face the budgetary costs of providing them with the same aged person pension and health benefits as other aged residents receive.
It will not be easy to exit from Labor’s proposal once it is legislated. The current reluctance of the Prime Minister, Scott Morrison, to even mention the issue is an indication. Since Labor’s parent visa announcement on April 22, apart from an initial critique from David Coleman, the Minister for Immigration, neither Coleman nor the Prime Minister has had anything to say about the issue. This is presumably because the Coalition feels it has more electoral skin to lose by antagonising migrant voters than it has to gain by telling other voters about the serious consequences of Labor’s proposal.
It took thirty years for the opening up of family reunion in the early 1980s to be wound back. The process eventually involved a mobilisation of mainstream voters concerned about the impact of migration and multicultural polices favouring the migrant constituency. This first occurred conspicuously at the time of 1996 Federal election.
It will probably happen again, but at what cost to community harmony in Australia? It would be nice to allow Australians of Asian descent to bring their parents here. But these residents knew what the rules were when they came to Australia. They know that no other Western country provides anything like the open-door policy that Labor’s proposal offers.
As for Australia’s majority non-migrant community, they will have good cause to be concerned about the proposal once they understand the likely numbers involved. The influx will add to the urban congestion and to the fiscal costs of accommodating Australia’s rapidly growing population. Yet, under Labor’s proposal, these parents arrivals will not be required to make any contribution to these costs.
- Why work when you can speculate on property? - August 18, 2020
- Tell him he’s dreaming: Perrottet’s stamp duty reform fails cost-benefit - August 13, 2020
- Expect a swift snap back to ‘Big Australia’ mass immigration - June 24, 2020