Harriet Spinks and Henry Sherrell
Australian Government expenditure on immigration (not
including border protection)[1] in 2019–20 is estimated
to be $2.9 billion, representing 0.6 per cent of the Australian Government’s
total expenditure.
Expenditure on immigration consists of:
- Management of unlawful non-citizens, which includes the
onshore immigration detention network as well as spending on irregular maritime
arrivals (IMAs) who have been transferred to regional processing centres in
Nauru and Papua New Guinea (PNG). This is by far the largest component of
immigration expenditure. It currently accounts for around 65 per cent of total
immigration expenditure and, despite expected reductions in spending, is still forecast
to account for around 57 per cent of expenditure in 2022–23 (see Table 2).
- Citizenship, visas and migration which includes migration
policy for permanent and temporary visas, future planning, visa processing, and
citizenship policy and processing.
- Regional co-operation, and refugee and humanitarian assistance,
which includes co-operation with other countries and international
organisations on migration and border management, and the provision of visa
pathways and settlement assistance to refugees and people who are found to be
owed protection in Australia.
Total expenditure on immigration is expected to decrease
from $3.8 billion in 2018–19 to $2.5 billion in 2022–23 (see Table 1). The key
driver of this decrease is an expected reduction in the number of unlawful
non-citizens in both onshore detention facilities and offshore processing
facilities as people have their claims processed and are moved out of detention
facilities—spending on the management of unlawful non-citizens is forecast to
decrease by 17 per cent in real terms between 2019–20 and 2022–23.[2]
However, past Budget figures suggest that spending in this area may not
decrease as rapidly or substantially as forecast. A significant portion of
expenditure in this area comes under Program 1.4 IMA Offshore Management, in
the Department of Home Affairs. Over the past several years, actual spending in
this area has often varied significantly from forecast Budget figures, with
anticipated decreases not being realised. In 2018–19, for example, the Budget
figure for Program 1.4 was $760 million, but the 2019–20
Budget papers show that actual estimated expenditure was $1.16 billion.
In addition, expenditure on citizenship, visas and migration
is forecast to decrease by 17 per cent in real terms between 2019–20 and
2022–23. The Budget documents do not provide further information on this;
however, it may be due to lower departmental expenditure on permanent residency
visa processing, due to the decision to reduce the number of permanent visas
granted (see below).
Table 1: total immigration
expenditure
| ($ million) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Management of unlawful
non-citizens |
2 457 |
1 624 |
1 443 |
1 430 |
1 444 |
| Citizenship, visas and migration |
841 |
782 |
706 |
684 |
695 |
| Regional co-operation and refugee
and humanitarian assistance |
463 |
448 |
389 |
393 |
402 |
| Total |
3
761 |
2
854 |
2
538 |
2
507 |
2
541 |
Source: Australian
Government, Budget measures: Budget Paper No. 1: 2019–20. Note: Figures may not add due to rounding.
Figure 1: Breakdown of immigration expenditure
Source: Australian Government, Budget strategy and outlook: Budget
Paper No. 1: 2019–20.
Table 2: proportion of total immigration expenditure
| Proportion of expenditure (%) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Management of unlawful
non-citizens |
65.3 |
56.9 |
56.9 |
57.0 |
56.8 |
| Citizenship, visas and migration |
22.4 |
27.4 |
27.8 |
27.3 |
27.3 |
| Regional co-operation and refugee
and humanitarian assistance |
12.3 |
15.7 |
15.3 |
15.7 |
15.8 |
Source: Parliamentary Library analysis of figures in Australian
Government, Budget strategy and outlook: Budget
Paper No. 1: 2019–20.
Key trends
In general, migration and visa policy announcements tend to
have modest fiscal effects compared to other portfolio areas. Key drivers of
expenditure in immigration are the numbers of people entering Australia on
permanent and temporary visas.
Humanitarian Program
This year’s Budget does not include an announcement on the
size of Australia’s Humanitarian Program. However, previous Government
announcements indicate that it will be set at 18,750 places. The number of
visas available each year for refugees and other humanitarian entrants under
the Humanitarian Program hovered around 13,750 for many years, until it was
gradually increased to 16,250 in 2017–18, and 18,750 in 2018–19.[3] This followed a commitment
made by the Government in 2014 as a result of negotiations with the Senate
cross bench over the passage of the contentious Migration and
Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload)
Act 2014. The increased number of humanitarian places was formalised in
a Determination
made by then Immigration Minister Scott Morrison in December 2014. This
Determination did not specify the number of places to be available beyond
2018–19. However, in 2016 then Prime Minster Malcolm Turnbull, in a speech
to a Leaders’ Summit on Refugees in New York, stated that Australia’s
Humanitarian Program would be maintained at 18,750 places ‘from 2018–19
onwards’.
Migration Program
On 20 March 2019, the Morrison
Government announced a reduction in the permanent visa migration ceiling
from 190,000 to 160,000 and the introduction of two new provisional regional
visas. The Migration Program is the collective number of permanent skilled and
family visas. While the number of permanent visas available in any one year
influences the rate of migration to and from Australia, this figure is not
equivalent to the rate of immigration to Australia.
There will be 160,000 permanent skilled and family visas
available for each of the years in the forward estimates period. This is a
change in planning approach, as previously the number of visas was set either
one or two years ahead. The Department of Home Affairs has published
a breakdown of the various permanent visa categories.
In early 2018, the Prime Minister, as the then Treasurer,
highlighted the loss of fiscal revenue associated with a reduction in the
number of permanent residency visas. However, the 30,000 reduction in permanent
visas in this Budget
is offset by the estimated increase in net overseas migration and the measure
has ‘no further budget impact’ (p.11).
Net Overseas Migration
Net Overseas Migration (NOM) is the difference between
incoming and outgoing people to Australia and represents the rate of migration
for Australia.[4]
Table A.2 in Budget Paper No. 3 outlines the NOM assumptions used for the
Budget:
|
2018 |
2019 |
2020 |
2021 |
2022 |
| Net Overseas Migration, Australia |
259 600 |
271 700 |
271 300 |
267 600 |
263 800 |
Source: Australian Government, Federal
financial relations:
Budget Paper No. 3: 2019–20, pp. 91–92. Note: The NOM estimates
are provided for calendar years in the Budget papers.
The NOM estimate in this Budget represents a 17 per cent
increase in 2019 compared to the 2018–19 Budget. The
rate of NOM has an important role in population growth and, subsequently,
aggregate economic growth. Total population growth is projected at 1.7 per cent
per year (Budget
Paper No. 1, Statement 2, p. 5).
As the most recent Australian
Bureau of Statistics preliminary estimate of NOM was 240,100 for the 12
months to September 2018, it appears the Budget assumptions are expecting NOM
growth in the coming years.
There is no additional information in relation to what
categories of migration are driving this expected increase in net migration.
Given the permanent visa reduction, it is likely that the increase assumes some
combination of more new migrants holding temporary visas, including
international students and temporary skilled workers, as well as a potential
reduction in the number of people (citizens and migrants) leaving Australia.
Significant policy announcements
Budget Paper No. 2 key measures
| Budget
measure ($ ’000) |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
| Regional
Processing Arrangements–Christmas Island |
161 400 |
23 700 |
-- |
-- |
-- |
| Regional
Cooperation Arrangement |
-- |
39 500 |
-- |
-- |
-- |
| Migration
Program–Reducing the planning level |
-- |
-- |
-- |
-- |
-- |
| New
Regional Visas–Population Package |
5 300 |
30 100 |
5 800 |
4 900 |
4 400 |
| Better Distribution
of Medical Practitioners |
-- |
(4 800) |
(43 800) |
(92 800) |
(154 900) |
Source: Australian Government, Budget measures: Budget Paper No. 2:
2019–20. Note: Revenue, expenditure and related capital for
these measures is often cross-portfolio.
- The Budget provides $185.1 million over two years, commencing in
2018–19, for Regional Processing Arrangements–Christmas Island. The bulk
of this ($178.9 million) is to manage the transfer of IMAs from Nauru and PNG
to Christmas Island for medical treatment. This measure follows the passage in
February 2019 of the Home
Affairs Legislation Amendment (Miscellaneous Measures) Act 2019, which
provides for the medical evacuation to Australia of asylum seekers and refugees
in Nauru and PNG who require urgent medical treatment. The Government
announced that it would reopen the Christmas Island immigration detention
centre to house the expected large numbers of arrivals of people medically
evacuated from offshore processing countries. It indicated at the time that
this was expected
to cost around $1.4 billion over the forward estimates. This Budget measure
provides for a much smaller amount of spending, because it is based on the
Government’s commitment to repealing the Act and closing the Christmas Island
detention centre. Spending in this area will therefore be dependent on the
Government’s ability to win support in the Senate for the repeal of the
legislation. Actual spending will also likely be determined by the number of
people transferred to Australia under the provisions of the legislation. The costings
regarding the reopening of the Christmas Island detention centre were reportedly
based on an assumption that 1,000 people would be transferred. The
Department of Home Affairs confirmed
in Senate Estimates on 4 April that to date,
only one person has been transferred to Australia under the new process, and
that person was not taken to Christmas Island.
- $39.5 million is provided for the Regional Cooperation
Arrangement (RCA) in Indonesia in 2019–20. The RCA supports countries in
the region in managing asylum seekers in their country. Australia has funded
initiatives under the RCA since it was agreed in 2000.
- There is no fiscal effect listed for the 30,000 reduction of
permanent skilled and family visas, for the Migration Program–Reducing the
planning level. This is due to an increase in the estimate of net overseas
migration. For 2019–20, there will be 108,682 skilled visas, 47,732 family
visas and 3,586 child and special eligibility visas for a total of 160,000
permanent visas (Budget Paper No. 2, p.11). Compared to the nominal
composition under the previous ceiling of 190,000, these are reductions of
19,868 skilled visas, 9,668 family visas and 464 child and special eligibility
visas. There are several possible consequences of this reduction. The Government
has argued that this will reduce congestion in urban areas; however, with the overall increase in the rate of
net migration it is unclear what extent the reduction in permanent visas will
have on the overall rate of migration. In addition, there are increasing
numbers of people waiting for permanent visas. For example, there were 80,539
pending applications for partner visas as at 30 June 2018 (p. 16). It is
possible the reduction in visas will further extend waiting periods if demand
for permanent visas outstrips the new, reduced allocation.
- The Budget provides $49.6m over five years commencing in 2018–19
for New Regional Visas–Population Package. This measure introduces two
new three-year provisional visas from November 2019 targeted at regional
Australia (defined as outside Sydney, Melbourne, Brisbane, Perth and the Gold
Coast). The visas—Skilled Work Regional (Provisional) and Skilled Employer
Sponsored Regional (Provisional)—replace the existing Regional Sponsored
Migration Scheme (subclass 187) and Skilled Regional (Provisional) (subclass
489). The two new visas will account for 14,000 places. A provisional visa is a
precursor to a permanent visa, where a number of eligibility criteria must be
met at the end of the provisional period. In contrast, other skilled permanent
visas such as the Employer Nomination Scheme (subclass 186) and the Skilled
Independent (subclass 189) visas are permanent visas which do not require a
provisional precursor. Both regional visas being abolished are also permanent
visas. It is unclear whether the change from permanent to provisional visas for
regional areas will have potential effects on people choosing to apply for regional
visas.
- The Budget forecasts a $296.3m saving over four years, commencing
in 2019–20 under the
Better Distribution of Medical Practitioners package. This saving is
predominantly generated from lower Medicare and Pharmaceutical Benefits Scheme
payments due to 155 fewer overseas trained doctors being granted permanent
visas. A Department
of Health factsheet states that in some areas, ‘growth in medical services
is due to an increase in the number of doctors, rather than genuine increases
in patient need for services’ and notes that overseas trained doctors have
increasingly been working in metropolitan areas rather than areas of shortage. As
growth in the pool of new overseas trained doctors slows, Medicare expenses in
the form of rebates, derived from medical appointments and other services, is
also expected to fall. This measure is an extension
of a similar measure from the 2018–19 Budget.
Department of Home Affairs Portfolio Budget Statement key
measure
| Budget
measure ($ ’000) |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
| Immigration
Reform |
(17 779) |
(12 817) |
(9 161) |
(12 127) |
(12 781) |
-
There is a $71.0m saving over five years in the Department of
Home Affairs Portfolio
Budget Statement in relation to ‘specific aspects’ of previously announced Immigration
Reform expenditure and capital measures which are now not proceeding. The
‘specific aspects’ of the Immigration Reform program not being progressed are
not outlined. Immigration Reform is the name given to the procurement process
for a market-based service provider to engage with the design and delivery of
visa processing systems. The Immigration Reform package began in the 2017–18
Budget and was followed by IT upgrades announced in the 2018–19 Budget. In MYEFO 2018–19,
additional funding of $72.3m was provided (expenditure and capital). The
Opposition has signalled concerns
with the Immigration Reform measure. The procurement process is not planned
to be finalised prior to the 2019 election.
[1] For
a discussion of border protection see separate Law
enforcement and security overview brief.
[2].
Estimates of real fiscal growth rates are based on 2018–19 dollars
with the consumer price index as the deflator, and have been calculated by the
Parliamentary Library.
[3].
The program was temporarily increased to 20,000 places under the Labor
Government in 2012–13, and was supplemented by an additional 12,000 places for
refugees from Iraq and Syria granted in 2015–16 and 2016–17. See J Phillips, Australia’s
Humanitarian Program: a quick guide to the statistics since 1947,
Research paper series, 2016–17, Parliamentary Library, Canberra, 2017.
[4] A
person is counted as an addition to the population if they are in Australia for
12 of the previous 16 months and likewise, are excluded from the population if
they are not in Australia for 12 of the previous 16 months. See ABS
Demography for more information.
All online articles accessed April 2019
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