Labor better not reincarnate elderly parent visas

In 2019, the Shorten Labor Opposition launched one of the worst policies in Australia’s history, announcing an uncapped plan to allow migrants to bring two elderly parents into Australia for a continuous period of up to ten years.

Tellingly, this announcement was greeted with fierce condemnation from two demographers typically at opposing ends of the immigration debate – the Australian Population Research Institute’s Bob Birrell and Melbourne University’s Professor Peter McDonald – who estimated that up to 1.5 million to 2 million elderly migrants could come to Australia under Labor’s policy, and that they would effectively become permanent residents:

McDonald said there might be 1.5 million to two million offshore parents eligible to come…

McDonald agree Labor’s temporary visa could lead to a de facto permanent intake, with ministers facing heart-rending pleas not to send back aged parents after a 10-year stay, especially if their health has deteriorated.

Suffice to say, having potentially millions of elderly migrants inundate Australia, with most settling in Sydney and Melbourne, was a disaster in the making. Thankfully, the policy seemed to die with the failed Shorten bid for government.

With this background in mind, the Indian community continues to lobby hard for elderly parental visas:

Many in the Indian Australian community tell SBS Punjabi their vote hinges on ‘more affordable’ permanent parent visa options…

“My vote is for the party that will provide affordable permanent parent visa options,” [Melbourne-based Navdeep Singh said]…

Navdeep’s family is currently in Australia on a tourist visa, and he said a permanent ‘fairer visa’ for his parents is his core demand for the 2022 election…

When it comes to the existing parent visa options, migrant Australian families say high fees, long waits, capped places and complex tests make the process difficult…

Melbourne-based migration agent Navjot Singh Kailey has campaigned on parent visa issues for over a decade…

“Politicians often ignore migrant issues, and neither of the major political parties has given a single word about parent migration in their campaigns for the upcoming election…

Navjot explained that parents of migrants add up significantly to Australia’s population over time.

“With the temporary sponsored visa, they can live here temporarily but without any rights. They would always remain outside of social support and political participation, while being totally dependent on family for care and assistance,” he said.

These families are economic migrants. They chose to migrate to Australia, and be separated from their parents, under their own free will. There should never have been an expectation that they could bring their elderly parents along for the ride at taxpayers’ expense.

In its 2016 Migrant Intake into Australia report, the Productivity Commission (PC) estimated that the cost of the 7,000 to 9,000 parental visas issued each year are between $335 000 and $410 000 per adult in net present value terms, and warned of these visas divert scarce taxpayer funding from other government programs. It also called for their abolition:

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…

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.

The PC presented the below chart showing that the estimated lifetime fiscal cost of migrants grows rapidly with age:

Lifetime cost of migrants

While the above chart cuts off at 60, given the steepness of the curve, it is fair to draw the conclusion that each elderly arrival under Labor’s 2019 policy would have had a negative fiscal impact of at least $300,000 if they stayed permanently.

The PC also noted that these costs are likely to be underestimated, since “immigrants can also affect government budgets in ways that are more difficult to directly attribute. For instance, immigration can affect congestible public infrastructure which requires further government spending”.

For these reasons, the PC’s Shifting the Dial: 5 year productivity review 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.

There is no magic pudding with public finance. The gigantic fiscal cost of parental visas diverts funding away from other worthy social programs, including:

  • funding for schools and hospitals;
  • funding for the Aged Pension and JobSeeker;
  • funding for the NDIS; and
  • funding for infrastructure.

The fiscal cost of parental visas is already gigantic and growing, and threatens Australia’s welfare state as we know it.

These visas also obliterate the spurious argument that a strong immigration program is required to mitigate an ageing population. Instead, they add to the ageing problem.

To put it bluntly, Labor better not reincarnate its 2019 policy on parental visas. It should follow the PC’s advice instead and abolish these visas altogether.

Unconventional Economist

Comments

  1. They had better not! This is the reason I didn’t vote for Shorten but voted for Albo (neither were #1 😜)

    • Leroy Huggins

      You directly voted for their intake by voting Labor. You should have known this. Any vote for Labor, for the next 20 years will be a vote for this – the party is chock full of members that support such an intake.

  2. There should never have been an expectation that they could bring their elderly parent along for the ride at taxpayers’ expense.

    The White guilt industry can sow many expectations.

    “Politicians often ignore migrant issues

    So they should. They should concentrate on Australian issues.

    Navjot explained that parents of migrants add up significantly to Australia’s population over time.

    And migrants are being asked to cover the costs. That is a reasonable view to have.

    “With the temporary sponsored visa, they can live here temporarily but without any rights.

    Which is a feature, not a bug.

    They would always remain outside of social support and political participation, while being totally dependent on family for care and assistance,” he said.

    Yes.

  3. Frank DrebinMEMBER

    Good thing the first meeting of the National Cabinet is about the healthcare crisis then.

    Can’t see how bringing in 1 million underinsured elderly migrants would impact the current state of healthcare…..

    • Its much like workforce productivity really, the only way you are going to improve the quality and productivity of your aged care system is to fill it with another million users.

    • Strange EconomicsMEMBER

      The argument by Labor will be that
      – they cost nothing to healthcare as they pay 50K for a lifetime entry. Cheaper than 3k a year private insurance.
      – they add to GDP (and decrease GDP per capita)
      – more people renting and buying houses – keep prices up
      – Growwwwwwwwth
      – The major group of “tourists” arriving back since Covid are Indian, but about 95% are planned students/migrants. Not much for the tourist industry.
      Anyway Labor doesn’t have to do parent visas, its already planning citizenship for anyone who enrols at a Uni. Pity Canada is competing and offering even better deals at the moment.

    • The fed broke it. Now, they own it.

      I know of Russian immigrants that have their elderly parents living in Australia.

  4. Scomo and Jenny must be salivating at the possibility.

    What is it with Commonwealth countries and their addiction to visa fees.

    • One HouseMEMBER

      Scomo only has one house and no rentals.
      He clearly did not understand his own policies.
      Other Libs had several.

      • I was thinking more along the lines of their favourite cuisine and lack of cooking skills 🙂

  5. Leroy Huggins

    Of course they will. Are you stupid? This is what voting Labor has always meant. But some were so desperate to get rid of Morrison perhaps they didn’t actually think what it would mean? (something far worse).
    The right approach with Labor would have been to keep them in opposition until they finally returned to being a workers party, rather than a minority and ultra-progressive woke focussed, workers & Australians be damned, party.

  6. I’d be interested to see the chart beyond 60. Assume it pivots back the other way at some point as less years of support required before death?

    Regardless it’s an atrocious policy and surely a proven vote loser?

  7. Got any data on healthcare expenditure by govt on imported oldies vs reduction in childcare spend by govt on migrant children subsequently cared for by imported oldies?

    I don’t want more people here, just noodling it out

  8. Camden HavenMEMBER

    The answer to this problem is the same as with many problems we have. Higher interest rates are coming and government won’t be able to expand deficit spending.

    Forget about rates and focus on spreads as risk gets riskier

  9. They’ve already been very clear that they aren’t looking to do anything in the first term that they haven’t promised (including moving the 2030 target beyond 43% reduction).

    Hopefully that includes elderly parents’ visas too.

        • Don’t underestimate us. We’ve single handedly destroyed the reputation of the Migration Council of Australia by continuously stating that they are a big business lobby headed by parasite in chief Innes Willox.
          There’s a reason why you don’t hear from the MCA anymore.

      • Restructuring of Parental visas was one of the three announcements they had planned for the election campaign, but as far as i’m aware it never happened. The only one that was made was on agriculture visas, and most media weren’t interested despite the huge numbers that would be moving to the regions – visa holders AND their families.

      • Labor never distanced themselves from this policy, even in the aftermath of the 2019 election loss.

        I have a fear they have it sitting on the back-burner, ready to announce it when they feel the time is right.

        Never trust Labor.

        • Hey Olly, we were in convo the other day and you disappeared. How would you wind back women’s rights? Seriously, how?

          • If by “women’s rights” you mean female suffrage, I didn’t say anything about winding it back. It’s too late, No politician today would have the guts to do it. But if we’re to save Australia, it should be done.

            And women should be excluded from participating in government because they have been a disaster. And now with the grubby, billionaire funded Teals, it’ll get even worse.

            Women have been instrumental in destroying nations in the past and we’re seeing this play out in slow motion in Australia.

    • How many years till Canada becomes a third world country with 400k migrants per year?

      • It’s only a slightly higher rate than Australia’s been running for years, given their population is 37m

  10. rob barrattMEMBER

    So you thought you had to wait too long for an ambulance. If this lot goes ahead they’ll be slightly less often seen than Halley’s comet.

  11. If Australia does this it’ll be demographic & economic suicide and we’ll totally deserve it. Wouldn’t put it past us tho, white guilt combined with a political/business desire to compete with Canada for migrants could see parental VISAs offered to lure migrants to Australia.

      • I’ve been pondering this for ages, see above and previous threads over the past 3 years, what’s the truth? Do the numbers stack up? MB staff nor average punter has ever answered my queries, MB dog whistle?

        • Per the article and Productivity Commission, a Permanent parent visa costs taxpayers $300,000 each.

        • Read the PC reports. Enough said
          Is the PC dog whistling?
          Are you seriously suggesting that ramping up the elderly population would be good for taxpayers and the economy?
          Grow a brain, buddy.

          • Childcare vs medicare spend that’s what I’ve been asking buddy, may be a nothing comparison but intrigued about it an one has ever answered it directly. I’ll get onto that reading after I finish being overworked and underpaid to ensure all the stuff you like to buy gets transported round the country….

  12. Relax. Indian migrant parents live with the kids, so no additional demand on housing. If a policy dont push up house prices its too dangerous to even contemplate.

  13. marianna giordanaMEMBER

    1. Parent visas are critical to attracting skilled migrants: Many skilled migrants chose to migrate to Australia because of the permanent parent visa options. A New Zealand-based psychiatrist decided to move to Tasmania because Australia had maintained some options for sponsored permanent parent visas (https://www.rnz.co.nz/news/national/461782/migrant-doctors-lured-overseas-as-immigration-woes-mount). A New Zealand-based IT professional was also considering moving to Australia because there were clearer options for parent visas ( https://www.stuff.co.nz/national/126835639/migrants-will-leave-nz-if-residency-pathway-for-parents-remains-closed). It is important to note that the Australian health system is heavily reliant on migrant health workers (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3882294/) and on overseas-trained doctors in rural areas (https://human-resources-health.biomedcentral.com/articles/10.1186/s12960-018-0339-z).

    2. Parent visas will allow skilled migrants to return to work in critical sectors: Parent visas provide grandparents an opportunity to provide childcare for their grandchildren (https://theconversation.com/new-research-shows-how-hard-it-is-for-flying-grannies-to-care-for-their-australian-grandkids-169464). At present, Queensland parents have to wait up to 18 months before a spot is available at a childcare centre (https://www.abc.net.au/news/2022-03-23/queensland-childcare-waitlists-blow-out-to-18-months-in-regions/100930454). Also, some migrants are unable to work in their areas of expertise (including one story involving a medical specialist conducting research in neurological research) because they have to juggle with the responsibilities of caring for their young children and maintaining a demanding career.

    3. Parents must pass a health examination before being granted parent visas: At present, contributory parent visas cost AUD$47,825 and require the passing of the health requirement (such that their medical costs will not exceed AUD$51,000 in five years) (https://immi.homeaffairs.gov.au/help-support/meeting-our-requirements/health). It is important to note that the Australian government’s delay in processing parent visas (https://www.sbs.com.au/news/article/can-a-new-campaign-and-government-change-the-fate-of-120-000-parent-visa-applications-stuck-in-limbo/70uj6iuku) contributes to increased medical costs because applicants on parent visas are arriving at an older age. By granting them the visas at an older age, their potential to help out with childcare also becomes limited.