Auckland University academic says taxing migrants could generate $1 billion a year for infrastructure and services

A poll tax to be levied against immigrants is being suggested by an Auckland University academic, who says it could generate $1 billion a year for infrastructure and services.

Mark Keating, a senior lecturer in tax law at the University of Auckland Business School, argues the Government should impose a flat levy on most immigrants to New Zealand to help cover the extra infrastructure and service costs from population increase.

“New Zealand is a desirable country with excellent infrastructure and public services,” he says. “Immigrants get to share in all these benefits, so why shouldn’t immigrants also contribute to them?”

Keating suggests a flat immigration fee of $10,000-$15,000 per immigrant would provide a source of additional revenue to offset increased costs. He says there would have to be exceptions for some categories of immigrants (such as refugees or those filling skills shortages).

“But imposing a tax on most other migrants in return for their right to share in everything New Zealand has built up would be both reasonable and fair.”

A ‘poll tax’ is a duty imposed on all, or a particular category of persons, to fund a specific government expense.

Keating said that in 2016, Treasury estimated the extra spending required on hospitals, schools, roads and other infrastructure to cope with population growth – which is largely driven by immigration – at $100 billion dollars over 10 years.

The Treasury figures included:

  • an upfront $1 billion on a Housing Infrastructure Fund to help local government pay for water, roading and other infrastructure
  • an additional $530 million over six years to be spent on expanding and redeveloping 30 schools

“These figures suggest that New Zealand’s existing population of taxpayers will shoulder a huge additional tax bill to settle and assimilate its record number of new immigrants,” Keating said, adding that no one appears to have quantified the increased health costs yet.

Immigration New Zealand statistics show that demand for New Zealand visas consistently out-strips supply, Keating said.

“The laws of economics dictate that the market would set a price for what fee would-be immigrants might pay to join our club.”

In the year to January, there were 89,670 permanent and long-term arrivals to New Zealand, excluding refugees, Australians and returning New Zealanders.

If Keating’s suggestion were to be adopted this would mean that at $10,000 per arriving person, this would generate $896,700,000. At $15,000 per migrant, it would total $1.345 billion.

Keating pointed to other instances where the Government already imposes fees and charges on immigrants. In 2015 the Government reintroduced arrival taxes on non-residents of $22 to help fund tourism infrastructure. The Green Party continues to advocate a larger fee be imposed on visiting tourists to pay for environmental projects.

Australian tax academics are also calling for the re-introduction of a poll tax in Australia to compensate the Australian Government for the additional costs of enhancing the infrastructure necessary to cope with the new arrivals. Australia has recently imposed a partnership visa fee of AUD6865 on all spouses who qualify to join immigrants in Australia.

“At present, our Government simply gives away New Zealand residency – and passes the increased cost of building the necessary infrastructure on to current residents. Rather than continuing to be too squeamish about charging immigrants for residence or citizenship, perhaps we should embrace the idea and tax them appropriately.”

He acknowledges the negative historic association of past poll taxes on immigrants.

Under the Chinese Immigrants Act of 1881 New Zealand (like other former British colonies) imposed a “poll tax” on all Chinese immigrants. At its peak, the tax was £100 a person (equivalent to approximately $17,000 today). The poll tax allowed otherwise “undesired” immigrants to buy their way in to New Zealand in return for paying a fee to the Government. It was eventually scrapped in 1944, and the New Zealand Government rightly apologised to the Chinese community in 2002.

“Obviously targeting poll tax on racial grounds is indefensible,” Keating said.

“But shorn of its racial over-tones, what is wrong with taxing all would-be immigrants regardless of which country they come from for the right to move to New Zealand?”