Auctioning off Australian visas could boost the country’s bottom-line by $7.6 billion per year but the Productivity Commission has rejected the idea saying that it is short-sighted and would attract the wrong sort of people. The commission also suggested that even the SIV program should be abolished.

In its draft recommendations, the Productivity Commission's report has instead called for improvements in the immigration system stating that it needs to focus on attracting skilled migrants, removing barriers to immigrants integrating into the labour market, and improving access to humanitarian migrants.

The draft recommendations have backfired on Liberal Democratic Senator, David Leyonhjelm who originally called for the investigation into the price-based visa system and suggested that charging $40,000 per permanent visa would allow for large tax cuts for Australians.

The commission said its research and analysis found that gains from auctioning off visas would be minor compared to the ongoing contributions and income tax that can be collected from younger immigrants over their lifetime. It said, skilled immigrants contribute much more in tax than they cost in services and warned that selling visas could hurt the economy in the long term.

The commission also stressed that migration levels need to be maintained for decades to increase income levels of Australians. It said that at current levels of immigration, Australia's population will reach 40 million by 2060, and real per capita incomes will climb 50 per cent.

The commission's report also made a call to abolish the significant and premium investor visas saying that Australia's “open and deep capital markets are no barrier to foreign investors.” It argued that the economic benefits of such visas accrue mainly to the visa holders and fund managers selling assets to foreigners.

"The benefits to Australian businesses seeking investment and the economic benefits to the broader Australian community are likely to be very small or nonexistent," it said. "Overall the case for retaining the Significant Investor Visa and Premium Investor Visa streams is weak."

The commission’s final report is due to be released in May next year. Follow this link to make submissions on the Commissions draft report. http://www.pc.gov.au/inquiries/current/migrant-intake#draft

Sourced from various media reports including the ABC, The Australian Financial Review and Sydney Morning Herald.