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Pricing refugees? The Productivity Commission on Australia’s migration intake

Front cover of Productivity Commission reportHow should Australia decide who can migrate here? The Australian Government recently asked the Productivity Commission to look at this issue, saying that its aims were to:

  • improve the income, wealth and living standards of Australian citizens
  • improve the budgets and balance sheets of Australian governments
  • minimise administration and compliance costs associated with immigration, and
  • provide pathways both for Australian citizens to be altruistic towards foreigners including refugees, and for Australia’s international responsibilities and obligations to foreign residents to be met.

The Productivity Commission completed its report in April 2015, and it was released publicly in September 2015. So what did the Productivity Commission say about people coming under the Refugee and Humanitarian Program?

Selecting refugees: the relevance of cost

The Commission considered submissions, including the Refugee Council of Australia’s, arguing for a higher humanitarian intake, especially in light of its decline as a proportion of Australia’s migrant intake. However, the Commission decided that this issue went beyond the scope of the inquiry, because:

it is not simple to settle upon a desirable number for Australia’s humanitarian intake without taking into account ethics, attitudes, costs, benefits and policy options.

The Commission rightly rejected the idea that Australia should select people under its Refugee and Humanitarian Program on the basis of net benefit to Australia. Instead, the initial hurdle for selection should be greatest need. The Commission continued, however, that

if there are many people with equally great needs, but some are likely to socially and economically integrate with greater speed, there are grounds to adopt secondary selection criteria to achieve that outcome.

It did not, however, look further at this issue, and noted that ‘any new approach would need to avoid creating any unnecessary delays in resettlement’.

Getting jobs: challenges and opportunities

Not surprisingly, the report found that those coming as skilled migrants tend to do better in getting jobs than those coming under the humanitarian program. It noted the low labour force participation and employment of family members coming with the main applicant under the humanitarian program.  It found that people who applied for protection in Australia had a higher rate of participation in the labour force than those who were resettled.

People coming under the humanitarian stream were more likely to work in manufacturing, construction, transport, postal and warehousing, and health care and social assistance. Their median income was $22,800 annually. However, the gap between their median income and that of skilled migrants narrows over time. The average annual growth in the median incomes over 11 years was almost 15% for those coming under the humanitarian program, compared to 4% for those coming under the skilled migration program and 9% coming as family members.

The report found that their own unincorporated businesses accounted for a significant proportion of the income of those coming under the humanitarian program.  This proportion increased after about 5 years of living in Australia. It also found that their children were more likely to be engaged with the labour force than their parents. About 10% of those under the humanitarian program were self-employed.

The report also recommended that the Australian government should try to improve both the recognition of overseas qualifications and the quality of bridging courses.

Social impact

The report found that English language tuition, better pathways to employment and improved education outcomes are critical to the successful settlement of humanitarian entrants. These can improve social cohesion, and increase employment and productivity.

Language barriers continue to be a challenge in the integration of those coming under the humanitarian program. The report also noted the concerns and benefits of family reunion of the humanitarian immigrants in Australia. However, unless the number of visas were increased, the Commission did not see any point in restoring funding to professional migration advice services for family reunion.

Settlement services

The Commission noted that the settlement services funded by the Australian government were ‘well-regarded.’ However, it noted some concerns about the Humanitarian Settlement Service (HSS) program. These include the lack of support after the first five years of settlement, and the focus on cases rather than individuals. As a result, support may emphasise the needs of the leader of the household over other members of the family.The main area for improvement, however, would be a greater co-ordination between settlement service programs.

The Commission considered that the Adult Migrant English Program was well-targeted. It acknowledged that the 510 hours of free English tuition may not be enough, but argued that simply raising the amount of free English tuition was not a cost-effective way to assist immigrants. Other ways should be found to help people develop their language skills.

The Commission agreed that there were legitimate concerns about work rights and access to health care for people with bridging visas, but it noted that any changes in policy might undermine the objectives of the visa.

Fiscal impact

The Commission found that immigrants in the humanitarian program are likely to have a negative net fiscal impact, because of their lower labour force participation and higher use of government-funded services.

The median amount of tax paid by people coming under the humanitarian program is $2900 for primary applicants, and $2300 for secondary applicants.  65% of them needed income support, but the need reduces over time as they get jobs.

Significantly, the Commission noted that while the fiscal impact is relevant, ultimately the humanitarian program has different purposes than other parts of Australia’s migration intake.

Read the report

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