Politics Analysis

Budget aims to fix Dutton's migration policy disasters

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The Labor Government had much work to be done in fixing the Coalition's migration mistakes (Image by Dan Jensen)

From relieving the backlog of visa processing to maintaining integrity of the migration system, the 2023 Budget seeks to repair the mistakes of the Coalition. Dr Abul Rizvi reports.

THE BIG NEWS in the 2023 Budget is that for financial year 2022-23, the Government is suddenly forecasting a surplus after forecasting a massive deficit for the same financial year just in October 2022. The Coalition was forecasting an even bigger deficit in 2022-23 in March 2022.

While the Treasurer talks only about commodity prices and employment growth as the factors that brought about this change, the fact is the rapid employment growth could not have occurred without record net migration. But not since Bob Hawke have politicians been prepared to say this to the public. Howard/Costello were also reluctant to mention rapid growth in net migration being a key factor in the surpluses they delivered.

It is ironic the Coalition’s Shadow Treasurer Angus Taylor says the drover’s dog could have delivered a surplus in 2022-23, but then the Coalition is also happy to decry the record net migration in 2022-23 that enabled the surplus. Opposition Leader Peter Dutton may well take the same line in his budget reply speech.

Whether record net migration in 2022-23 was good policy or not (and it would have occurred whoever was in power) is another matter. But it would help if politicians were prepared to be a bit more honest about all the different impacts of immigration.  

Net migration forecasts

In the May 2023 Budget, Treasury has updated its forecasts for net migration as follows:

  • 2022-23: 400,000;
  • 2023-24: 315,000;
  • 2024-25: 260,000;
  • 2025-26: 260,000; and
  • 2026-27: 260,000.

Treasury has not yet provided any details on how it arrived at these forecasts.

On my calculations, these forecasts are on the high side assuming:

  • COVID-era migration policy settings are largely withdrawn from 1 July 2023;
  • policy tightening recommended by Parkinson (and likely Nixon) reviews are implemented; and
  • labour market weakens as forecast by Treasury, leaving large numbers of students, working holidaymakers and newly arrived migrants either destitute or forced to leave.

Treasury appears to have increased its long-term net migration forecast/assumption from 235,000 per annum to 260,000 per annum.

This may have predominantly (and a little late) been driven by the Government’s decision to increase the size of the permanent migration program from 160,000 to 198,000. However, over 60 per cent of this increase is likely to be for people already in Australia on temporary visas and so would not impact net migration.

Also relevant to this may be the Government’s decision to provide a direct pathway to permanent residence to NZ citizens who have been in Australia long-term. This is expected to have a net cost of $400 million. This decision will also effectively expand the migration program by around 10,000 per annum as the places freed up because these are no longer taken up by NZ citizens will be available to applicants from other nations.

Note that net migration of 260,000 per annum would require relatively facilitative policies on students and skilled migrants.

I wrote on this earlier this week (before the Budget).

Visa processing

The Budget allocates $75.8 million over two years from 2023-24 to extend the current surge in visa processing resources to ensure timeliness of visa processing and improve existing visa processing systems. This was essential to enable the Department of Home Affairs (DHA) to stay on top of its day-to-day visa processing work and to process visas in a reasonable timeframe.

A fascinating announcement is that:

‘...the Government will return funding of $163.2 million over two years from 2022-23 to the Department of Home Affairs to continue its visa processing capabilities, recognising the cancellation of the Global Digital Platform, associated with the 2016-17 Budget savings measure titled Reforming the Visa and Migration Framework, by the former Government.’

This might sound technical but it’s really just saying DHA promised to achieve massive savings by privatising the visa IT system that was never delivered. DHA asking for the assumed savings to be reversed would have been hugely embarrassing for Secretary Mike Pezzullo after $90 million was wasted on this misadventure.

A further $4 million in 2023-24 has been provided to continue the Immigration Assessment Authority pending establishment of a new Administrative Appeals Tribunal (AAT). This will be crucial to limiting growth of the massive asylum seeker backlog at the AAT.

Immigration compliance

The Budget provides $50.0 million over four years from 2023-24 (and $15.3 million per year ongoing) for additional enforcement and compliance activities to maintain the integrity of the migration system. Funding from 2025-26 will be held in the Contingency Reserve, pending an evaluation of the effectiveness of the activities. This is desperately needed as immigration compliance activities have been steadily degraded since Peter Dutton was Home Affairs Minister. I wrote on this a couple of weeks ago.

In addition, $17.9 million has been allocated to maintain or expand the Airport Liaison Officer function which is critical to disrupting illegitimate travel to Australia. A key aim of this will be to reduce labour trafficking abusing the asylum system, particularly as international travel ramps up further over the next 12 months.

Temporary protection visas

The Government will also provide a permanent visa pathway for a Temporary Protection (subclass 785) visa (TPV) and Safe Haven Enterprise (subclass 790) visa (SHEV) holders who held or applied for a TPV or SHEV before 14 February 2023. The pathway to permanent residency is estimated to increase payments for government services and benefits by $732.5 million over five years from 2022-23. This measure is estimated to have a negligible impact on receipts over the five years from 2022-23.

But this leaves around 12,000 legacy boat arrivals in immigration limbo. At some stage, the Government will have to address the situation of these remaining legacy boat arrivals.

Visa application fees

To fund some of the above, visa application fees will be increased, particularly for visitors (up from $150 to $190), students (up from $650 to $715), working holidays (up from $510 to $640), business innovation and investment visa fees will increase by 40 per cent.

Overall, the Government expects this will reap an additional $100 million per annum.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.

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