Greens’ elderly visa plan will bankrupt Australia’s welfare state

Yesterday, we learned about the Greens’ ridiculous plan to import 200,000 elderly parents via the ‘Family stream’ of Australia’s permanent migration program.

Below is a breakdown of the Greens’ policy proposal, which you can read in full on its website:

  • There are 200,000 parents of migrants ‘stranded’ overseas.
  • Some migrant families have to wait 30 years to obtain a visa to bring their parents into Australia.
  • The “system is grossly unfair and inequitable”, according to the Greens.
  • The Greens want to “make this broken visa processing system faster, fairer and more affordable” and have initiated a Senate Inquiry to examine the issue.

The Greens’ policy proposal fails dismally on economic, budgetary and social equity grounds.

The Productivity Commission’s (PC) 2016 Migrant Intake into Australia report estimated that the cost of the 7,000 to 9,000 parental visas issued each year at between $335 000 and $410 000 per adult in net present value terms. Accordingly, the PC recommended abolishing parental visas altogether:

“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”.

Based on the PC’s own estimated cost of between $335 000 and $410 000 per elderly adult, the cost to taxpayers from the Greens’ plan to import 200,000 elderly migrant parents would be between $67 billion and $82 billion in net present value terms – almost double the annual cost of the Aged Pension.

There is no magic pudding with public finances. The enormous cost of the Greens’ elderly parent visas would divert funding away from other social programs, including the Aged Pension, JobSeeker, the NDIS, and schools. It would also raise infrastructure and hospital costs, especially given the elderly are heavy users of the health system. It would effectively bankrupt Australia’s welfare state.

The Greens’ policy also contradicts the bogus claim that a strong immigration program is required to mitigate an ageing population. Instead, the Greens’ policy would dramatically age Australia’s population.

The fact of the matter is that the Greens’ policy would impose a massive burden of direct and indirect costs on the Australian community. It completely disregards the interests and well-being of existing citizens and taxpayers of this country in a shameless attempt to win favour with a relatively small number of migrants.

Those migrants chose to leave their families when they moved to Australia. They knew the deal when they made the decision to leave. They should not expect the Australian people to subsidise reuniting them with their families. Australia cannot afford to look after other countries’ older people when there are so many of our own citizens in need, be it the elderly, the homeless, the disabled or the unemployed.

The Greens’ policy breaches every principle of economic, social and environmental sustainability. It trashes the principle of inter-generational equity across the budget. It devalues the citizenship of Australians by subordinating their legitimate interests to those of the elderly in foreign nations. It abdicates every duty of care that any elected government has towards its people.

For these reasons it is done nowhere else in the world, by any other government, and frankly, the policy cements the Greens as Australia’s lunatic fringe.

Australian politicians’ number one priority should be to look after the welfare of its voting constituents (i.e. Australian citizens). The Greens’ parental visas policy contravenes this very principle.

Unconventional Economist
Latest posts by Unconventional Economist (see all)

Comments

    • Indeed. It is not clear to the ordinary folks who will pay the price of UBI, and everybody wants to spend somebody else’s money in a dying civilization, so the scheme will more likely proceed than not.

      It will be fun.

      • 200,000 old disease infected useless Indians, Bangladeshi, Chinese, south East Asians, Africans and Middle Eastern non productive slum clearance.
        The productivity commission didn’t take into account their wider impact in congestion, public infrastructure, housing contention, demand on welfare & healthcare.
        The figure is easily $700,000 over say a 20 year burden on Australian taxpayers.

        At $30,000 a year in welfare health care and social impact for say 20 years each + CPI – thats a $700,000 impact each.
        $700,000 each x 200,000 = $140 billion economic and social impact.
        Madness.

    • Gordon Flashman

      … and we’ll be importing a huge number of sick old people with long Covid symptoms.

      India now has the most Covid cases in the world.

      NZ has banned any arrivals from India as so many of them have Covid despite being “tested” before getting on the plane.

    • Even StevenMEMBER

      +1

      I am reading Leith’s (remarkably restrained) post through a red film of rage.

  1. I don’t want a welfare state for the elderly parents of foreigners or the elderly parents of the locals. I don’t want a welfare state period. I pay well over than half of everything I earn in taxes of one form or another and am sick of picking up other people’s tabs. Thank the lord I have property and super that provides at least some tax breaks and some people want to get rid of that too!

    • boomengineeringMEMBER

      Agree, I’m still working and paying taxes well after retirement age and now they want to spend it on foreigners who have and wont pay any. Adding to this, with all the corruption and fake passports many will probably be much younger than I with fake age as many look older than they are.

      • happy valleyMEMBER

        Me too. Meanwhile, talking of a burden on the taxpayer, let’s not forget John Howard’s boomer excess franking credit refund leaners costing the budget $6bn a year.

        • bolstroodMEMBER

          Let us also not forget the foreign and local Multinational corporations that also pay no tax.

    • Ronin8317MEMBER

      If you pay over half of what you earn in tax, you need to buy a negative geared investment property!!

  2. You think it would be common sense. But apparently not, but where is MSM to question Green MPs on this blatantly bankrupt scheme?

    • Not quite sure why you’re asking me…

      It’s bad policy. There’s a core idea that’s reasonable (by all accounts reunion visa processes are pretty terrible), but that’s completely overwhelmed by the sheer numbers and the apparent lack of any workable way to control the inevitable negative impact on public services, particularly healthcare.

      The Greens response to that will be (and is, policy-wise) “fix the public services”, which isn’t in itself wrong – public services need fixing – but does raise the obvious point of “why ‘fix’ Australian public services to accommodate people who aren’t Australians (even if they really want to be)” ?

  3. Lunatic fringe? You mean, like Shorten Labor? Which went to the 2019 election with their virtually open-ended “Chinese Grannies” scheme. Which Birrell estimated could pull in an extra 200K parent visas over three years. Which the targeted migrant-heavy electorates in western Sydney largely ignored.

  4. If Chinese immigrants can bring their parents then that’s one less bit of leverage the CCp has on them?

    • Not worth it with the health profile of Chinese people 60 and above. It’s horrendous. Even if you get them to payfor privatehealth insurance the demand I hospital beds means every single person in Australia will need to bribe their way into a hospitalbed, which btw is exactly what you have to do in China on top of paying the Dr extra just to make statethey do their job proudly in the operating theatre.

      Fun future that’ll be

  5. Lord DudleyMEMBER

    The unholy alliance between the “big Australia” loony left, and the “big Australia” neoliberal right continues unabated.

    Just think of what decades of policies like this will do to Sydbourne house prices! I think Reusa will prefer the right’s approach to the population explosion; the Green’s grannies aren’t his style.

    • You could invest in Woolworths and the pharmaceutical companies to capitalize on this impending mega-boom. As I understand, you no longer live in Straya, so you could handsomely profit from the skyrocketing cash flows of these great businesses without suffering from the negative consequences of the Greens policy. Go Greens!! I love you!!

    • NoodlesRomanovMEMBER

      It definitely is not ‘green’, and is typical minor party cr8p to be on the virtuous side of every argument and be simultaneously:
      – for open borders, increased imm.
      – against development/infrastructure (required to house these new numbers)

  6. Display NameMEMBER

    Liberal and Labour corrupt, neoliberal, big Australia, sell everything off. Greens certifiably mad.
    Independents are the only solution. And as many as possible.

  7. This is why no one should ever vote Green. A bunch of moronic ideologues disguised as a political party. Plus they don’t give a stuff about the environment, otherwise they wouldn’t keep trying to jam more people into the country. They should be forced to rename themselves. Monster Raving Loony Party maybe.

    • A bunch of moronic ideologues seems a fairly apt description for most of australia’s political parties especially the magors.

  8. Rubber manMEMBER

    So during a pandemic we should import elderly to come here contract or bring a disease, be treated for it, potentially add to our covid stats… hang on, this would assist in keeping the general population locked up… labour will support it

    • The first law of Straya; If a policy does not make sense it will find a way to materialize.

  9. Even more insanely, they have policies that would essentially end the private ownership of firearms. Who could conceive of such nonsense, even in the most drug addled of green “brains”.

    I’m firmly convinced that each member of the greens leadership was, at some point in their early childhood, dropped on his or her head from a fairly substantial height, with obvious lifelong consequences for their cognitive processes and mental acuity. Nobody could be born that way.

    • Do not underestimate the power of indoctrination. You don’t need to be a David Koresh to know what it can do.

  10. PalimpsestMEMBER

    It’s the logic I find fascinating:

    Australia has an aging population. “We need young skilled migrants to rev up the economy and help support the demographics”.
    The migrants arrive.
    Then: “We need their aging high cost parents to come to help them”.
    Umm … Demographics? Infrastructure overload? higher aged care peak cost? What happened to the reasons for starting this immigration program? Whether or not you believe the current settings are right, it seems to undermine the whole process.

    • It is said that facts are stranger than fiction, the reason being fiction is obliged to stick to plausibility while facts are not.

    • SoMPLSBoyMEMBER

      Yes- infrastructure ,medi /age care and cost of providing the ‘arrivals’ an income are all important and inter-connected.
      However, the only concern right now is the ‘trouble’ the vacant apartment owners are facing. An easy fix this program.
      In Straya’s unique economy, never forget that FIRE come first and all the other ‘issues’ will just have to adjust around what’s most important.

    • You can’t understand it because it’s not logic at play, its ideology.

      This is simply the Green’s party showing that at the end of the day, they are either as intellectually bankrupt or morally bankrupt as the parties they so ‘passionately’ oppose.

      Intellectually because the economics are clear to anyone whom is in a position to pen such a policy and/or morally, because despite the economics being clear, they pursue the policy anyway and don’t give 2 F’s. The policy is an ‘ism’ inducing vote winner for a reasonably small demographic, but if an ideological brain fart, devoid of any logical merit results in individual(s) gaining political seats that remunerates them at levels likely far above their private sector potential…. then it’s a winner. If I they pursue that policy while labelling everyone else whom objects as a bigot and racist…. double winner (notice how their page explicitly links racism and immigration under the one policy platform banner?)

      The only thing worse than you’re average political scumbag is a self righteous one, once up on a time the religious right had a strong monopoly on that, plenty of competition these days.

  11. Would you be ok with this policy if all the government’s housing schemes were removed?

      • Then your sweeping generalisation re migrants leaving their parents behind is harsh. Some people want to establish themselves before bringing over direct relos. I’d rather subsidize some of these these people over some of the blushes fortunate enough to have been born here.

        • Even if the elderly relos were entirely self funded and self supported in all regards, I’d still object. For example, the country has a finite supply of hospital beds. If an elderly foreigner is occupying a hospital bed, it’s not available for a local, even if the foreigner is paying for it. In times of pandemics, the limits of physical resources become very important considerations.

          How would you feel if you had a desperately ill child or were ill yourself, and were told care was unavailable or restricted because of the demands of the fully funded elderly foreigners?

          Now, factor in that they’re not fully funded and will be using the health and other infrastructure built up by generations of people who paid for it with their taxes.

          • Your theoretical would never happen. Again, these elderly relos are family of citizens. Some on this board may consider them lesser citizens than, 3+ generation Australians but their taxes should be considered with being able to bring some of these relos back (I don’t agree with opening the floodgates either though).

  12. ErmingtonPlumbingMEMBER

    And Yet these Green mongrels like to claim the left for themselves.
    Their hatred and contempt for Working Class Australians makes them not “Left” at all.

    Here is a story about how Australia built a standards of living, the envy of most of the world, through working class struggle, solidarity and compromise.
    Something that doesn’t really exist in todays political landscape.

    “The two major influences on the lives of your mob have been industrialisation and the emergence of the Welfare State. During the stage of the industrialised market economy when the Welfare State was developing, the lower classes consisted mainly of a huge, homogeneous industrial army and their dependents. Since they lived and worked under similar conditions and were in close contact with each other, they had both the incentive and the opportunity to organise themselves into trade unions and struggle for common goals. They possessed a bargaining position through collective industrial action.

    Many of your great grandparents and their parents were members of this industrial army, and they got organised to insist on a fair deal for working people and their families.

    At the same time it was in the objective interest of the industrialists to ensure that the working class didn’t turn to radical ideologies, and that the workers weren’t worn down by the increasing speed and efficiency of industrial production. Health care, primary education, pensions, minimum wages, collective bargaining, and unemployment benefits created a socially stable and secure working class, competent to perform increasingly complex industrial work, and able to raise a new generation of workers.

    These two factors, the organisation of the workers and the objective interest of the industrialists, produced an era of class cooperation: the Welfare State. The support and security systems of the Welfare State included the overwhelming majority of the citizens. The welfare ideology predominated in Australia during the long period of bipartisan consensus founded on what Paul Kelly called in his book The End of Certainty “the Australian Settlement”, established by Prime Minister Alfred Deakin just after Federation and lasting up to the time of the Hawke and Keating governments in the 1980s.

    At this point let me stress two points about the Welfare State that developed in Australia from 1900.

    Firstly, the key institutional foundations of this Welfare State were laid down by theLiberal leader, Alfred Deakin. As well as the commitment to a strong role for government (what Kelly calls State Paternalism) it included the fundamental commitment to wage conciliation and arbitration which became law in 1904. Throughout most of the twentieth century the commitment to a regulated labour market enjoyed bipartisan support in this country. Whatever complaints the non- Labor parties harboured about organised labour, there prevailed a consensus about the necessity and desirability of a system of labour regulation in this country, right up to the government of Prime Minister Malcolm Fraser. It is important to remember the bipartisan consensus around the general shape of the Welfare State established in the early 1900s.

    Secondly, it is also important to remember that the Welfare State was the product of class compromise. In other words it arose out of the struggle by organised labour – it was built on the backs of working people who united through sustained industrial organisation and action in the 1890s. It was not the product of the efforts of people in the universities, or in the bureaucracies or even parliament. Whilst academics, bureaucrats and parliamentarians soon came to greatly benefit from the development of the Welfare State – and they became its official theorists and trustees – it is important to keep in mind that the civilising achievement of the Welfare State was the product of the compromise between organised labour and industrial capital.

    When the Arbitration bill was introduced into Parliament, Deakin spoke of thiscompromise as “the People?s Peace”. He said:

    “This bill marks, in my opinion, the beginning of a new phase of civilisation. It begins the establishment of the People?s Peace…which will comprehend necessarily as great a transformation in the features of industrial society asthe creation of the King?s Peace brought about in civil society…imperfect asour legal system may be, it is a distinct gain to transfer to the realm of reason and argument those industrial convulsions which have hitherto involved, not only loss of life, liberty, comfort and opportunities of well-being.”

    The Social Democrats have given three reasons for defending the Welfare State:

    Firstly to counteract social stratification, and especially to set a lower limit to how deep people are allowed to sink. People with average resources and knowledge will not spend enough on education and their long term security (health care and retirement), and they and their children will be caught in a downward spiral, unless they are taxed and the services provided. This is the main mechanism of enforced egalitarianism, not confiscating the resources of the rich and distributing them among the poor, because the rich are simply not rich enough to finance the Welfare State, even if all their wealth were expropriated.

    Secondly to redistribute income over each individual?s lifetime. This is oftenperformed not on an individual basis (those who work now pay some of older peoples’ entitlements and will be assisted by the next generation), and there is some redistribution from rich to poor, but the principle is that you receive approximately what you contribute (in the case of education you get an advance).

    Thirdly because health care and education (the two main areas of the public sector ofthe economy) can?t be reduced to commodities on the market, because health care andeducation are about making everybody an able player on the market. In other areas of the economy you can then allow competition.

    Classical welfare is therefore reciprocal, with a larger or smaller element of redistribution.

    But now, alas, the circumstances that gave rise to the Welfare State have changed. 4

    The modern economy of the developed countries, including our own is no longer based to the same extent on industrial production by a homogeneous army of workers. The bulk of the gross domestic product is now generated by a symbol and information-handling middle class and some highly qualified workers. These qualified people have a bargaining position in the labour market because of their individual competence, whereas traditional workers are interchangeable and depend on organisation and solidarity in their negotiations with the employers. A large part of the former industrial army is descending into service jobs, menial work, unemployment. Many of their children become irrelevant for economic growth instead of becoming productive workers like their parents and grandparents.

    New growth sectors of the economy of course absorb many people who can’t make a living in the older sectors. Also, income stratification is now in many countries being permitted to increase. Employment is created at the cost of an increase in the number of people on very low wages. But even if mass unemployment is avoided, the current economic revolution will have a profound effect on our society: it will bring about the end of collectivism.

    The lower classes in developed countries have lost much of their political influence because of the shrinking and disorganisation of the only powerful group among them, the working class proper. The shift in the economy away from manufacturing, and economic globalisation which makes it possible to allocate production to the enormous unregulated labour markets outside the classical welfare states, have deprived the industrial workers in the developed countries of their powerful position as sole suppliers of labour force to the most important part of the world economy. The lower classes are therefore now unable to defend the Welfare State. Nor is there any longer any political or economic reason for the influential strata of society to support the preservation of the Welfare State.

    Those who have important functions in the new economy will be employed on individual contracts, and will be able to find individual solutions for their education, health care, retirement and so on, while the majority of the lower classes will face uncertainty. And the Welfare State will increasingly be presented as an impediment to economic growth.

    In Australia the effects of this revolution and the dismantling of the 80 year old Australian Settlement, have been alleviated by the compromises between the traditional Australian social system and the economic internationalisation that was carried out during the Hawke-Keating years. These successive Labor prime ministers presided over this transition in the Australian economy, and they sought to introduce reform without destroying the commitment to the welfare state. Labor eventually lost the 1996 election but the earlier endorsement of the electorate of this compromise to a large extent forced the coalition parties to be more cautious about dismantling the welfare state, notwithstanding their preferences.

    But the story does not end here. The welfare state will continue to face pressure to retreat. As I have said, it will increasingly be presented as an impediment to economic growth. You do not need me to tell you this.

    When I consider the history of your people, I am struck by the ironies. Few Australians today appreciate their history. They do not realise that the certainties they yearn for were guaranteed throughout the twentieth century by the Welfare State to which the great majority of Australians were reconciled and committed. They do not realise that this civilising achievement was founded on the efforts of organised labour. Instead of appreciating the critical role that the organised labour movement played in spreading opportunity and underwriting the relatively egalitarian society which so many Australians yearn for today – organised labour has been diminished in popular esteem. It has come to be demonised, and whilst working people have a proud story to tell – of nation building no less – this is not understood by Australians today.” – Part of Noel Pearson’s 2000 light on the hill speech.

    https://capeyorkpartnership.org.au/speeches/the-light-on-the-hill-ben-chifley-memorial-lecture-noel-pearson/

    • It will make more sense if you think of the Greens as yet another political party full of career politicians. They have a niche voter base that ensures all their self-serving politicians are employed for many years to come.

  13. FUDINTHENUDMEMBER

    The party should be stripped of the right to use the term “Greens”. Absoloutely woeful. Go back to protecting environmental assets plus providing equitable and sustainable policy ideas. I can honestly almost see why folks vote one-nation and similar. There are no options.

  14. Not to worry. This is just the Greens trying for some immigrant votes. It’s not as if they’ll do anything other than self-righteously claim their moral superiority over everyone else once the voting is over.

    • Problem is the ALP will try to match them. Most of their leadership are from inner city seats that compete with the Greens for the same votes.

      • We’ll have to wait and see. It’s unlikely to get broad support, especially from the remaining traditional supporters of the ALP. To the ALP’s credit they have tried tax reform a few times but not been successful. Perhaps we have to wait until the majority of people rent rather than own their homes. That shouldn’t be long on current policies.

  15. bolstroodMEMBER

    Well Im’ stuffed when it comes to voting.
    The LNP are proven incompetants.
    The ALP are incompetnts in waiting.
    The Greens lose me with this sort of policy.
    Independants are ( as said above) unreliable.
    More and more I am drawn to binning what is laughingly is called Democracy,
    and selecting our parliamentry representatives from the jury roll.
    I will be voting for this at the next election.