$50,000 could soon be the cost of Australian citizenship under radical proposals being reviewed by the Productivity Commission. The government has asked the think tank to investigate a “price-based immigration system” which would effectively grant citizenship to those who are willing to pay the price, according to a report in the Sydney Morning Herald today.

With the budget blowout now estimated at $150 billion over the next four years – which is $50 billion higher than first thought – the government is seriously considering a radical shift away from migration based on skills and family connections to a person’s wealth.

“Such a scheme could help the government rein in the budget deficit by bringing in tens of billions of dollars in extra revenue and allow it to trim the number of public servants administering Australia's immigration system,” notes the report.

The Productivity Commission paper on Australia's migrant intake, released on Friday, raises some dramatic proposals including introducing an immigration lottery and creating a HECS-style payment system for immigrants to pay back their entry fee - those who cannot pay the fee upfront may be allowed to borrow against future expected earnings or by introducing a loans program.

Businesses needing skilled migrants could pay the fee or governments could waive the fee for particular professions or trades, according to the report.

The Productivity Commission will release a draft report in November and hold public hearings before it hands its final report to government next March.