Peter Mares from Monash University has written an article in The Conversation on the blowout in elderly parents of migrants awaiting visas that would allow them to live permanently in Australia.
The expensive path is a contributory parent or aged parent visa with a price tag of close to $50,000 per person. The cheaper option is a standard parent or aged parent visa, which costs “only” $5,125, but takes much longer.
The government sets an annual cap of 8,500 parent visas, with about eight in ten granted to “contributory” applicants. This is 4,000 more places than the Coalition granted in its last year in office, but is still way too few to meet demand.
As a result, the logjam grows. On June 30 2023, Home Affairs had 140,615 parent visa applications on hand. A year later, it was 151,596.
Mares argues that “scrapping permanent parent migration would be the honest approach, since neither Labor nor the Coalition will expand the parent visa program to meet demand”.
However, he believes that Labor and the Coalition are reluctant to scrap parent visas because it risks upsetting overseas-born voters in marginal seats.
Last year, The ABC cited Treasury estimates that each parent permanent migrant costs Australian taxpayers $393,000.
Thus, the federal budget would be in the hole to the tune of $59.5 billion if all of the outstanding 151,596 parent visa applications were approved.
Peter Strachan made the salient observation that parental visas actually create skills shortages because parent visas “create more demand for services and become dependents”:
Years ago, the Productivity Commission (PC) calculated that the cost of the 7,000 to 9,000 parent visas awarded annually ranged between $335 000 and $410 000 per adult in net present value terms.
The PC also expressed concern that parent visas sap scarce public funds from other government programs and services:
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 majority of a person’s health-care costs usually occur in their later years.
Therefore, importing thousands of elderly parents who have made no contributions to Australia is a dumb policy, especially when the health system is already badly overstretched.
There is no “magic pudding” in Australian public finance. Parent visas place a significant financial burden on taxpayers, lowering funding for other programs including schools, hospitals, the Aged Pension, JobSeeker, the National Disability Insurance Scheme, and infrastructure.
The financial cost of parental visas is already enormous and rising, jeopardising the viability of Australia’s health system and welfare state.
Parent visas also contradict the mistaken assumption that a robust migration program is required to address an ageing population and skills shortages. Instead, these visas make the ageing problem and skills shortages worse.
The Albanese government should act on the PC’s advice and abolish parent visas immediately.
Just because someone comes to Australia as an economic migrant does not entitle them to bring their parents at taxpayer expense.
