Auctioning the right to come to Australia could raise $35,000 to $45,000 per immigrant, enough to boost the budget by $7.6 billion per year, a Productivity Commission analysis has found.
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But the commission has found against the idea in a draft report to be released on Friday, saying that stripping the government of the right to decide who comes to Australia could lead to unpredictable changes in the immigration program and cost it community support.
The Coalition asked the Productivity Commission to examine the idea as part of a deal struck with Liberal Democrat Senator David Leyonhjelm in return for his vote on the reintroduction of temporary protection visas for asylum seekers.
The report finds that immigrants willing to bid to come to Australia are more likely to be older and wealthier than other immigrants, and as a result less likely to contribute to the economy.
At present, no country auctions the right to immigrate. The commission says that if Australia did it first, good quality applicants with other options would look elsewhere.
It says the likely charge of $35,000 to $45,000 per immigrant would be minor compared to the income tax normally collected from immigrants over their lifetimes. A shift away from skilled immigration would put that revenue at risk.
Skilled immigrants contribute much more in tax than they cost in services while partners contribute a little more than they cost and parents and humanitarian arrivals contribute less than they cost.
The Commission says at current levels of immigration, Australia's population will reach 40 million by 2060, and real per capita incomes will climb 50 per cent.
Without any further immigration, Australia's population would climb to only 27 million and real per capita incomes would climb only 42 per cent.
The draft report says that in some areas Australia is already charging high fees for immigration. Applicants for parent visas are charged more than $45,000 in return for "accelerated processing". Those who don't pay the extra fee face waiting periods of up to 30 years.
So-called significant investor and premium investor migrants are required to invest $1.5 million and $15 million each. The commission describes the programs as "questionable" and says the government should abolish them.
Senator Leyonhjelm welcomed the report but not the commission's draft conclusion.
"I am extremely encouraged by the Productivity Commission's desire to establish a more systematic and transparent framework for visa charging," he said.
"The commission is not enthusiastic about a single charge being the primary mechanism for determining our migrant intake after health, character and security requirements are met. This is not surprising - I asked the commission to do this work because of their professionalism, not because they agree with the policy platform of the Liberal Democrats."
"A modest entry fee would gain greater acceptance if we use the revenue to fund tax cuts. Joe Hockey told us that $7.5 billion would allow us to cut our highest income tax rate of 47 cents in the dollar to 33 cents. That would make hundreds of thousands of Australians better off."
The commission is calling for comments on the draft report. It will deliver its final report in May.
