Why Liberal MPs fear proposed welfare cuts to permanent residents could alienate migrant communities
Morrison-era immigration minister Alex Hawke said the Coalition’s policy of restricting benefits to citizens should be revised as opposition MPs feared the tough stance would be misunderstood and cause alarm in Chinese and Indian communities.
The debate over Australia’s high measured immigration rate compared to OECD countries has been further sharpened by Opposition Leader Angus Taylor’s announcement of a policy that will exclude permanent residents from family tax credit, Jobseeker, NDIS, disability pension and other payments.
Adding to the national conversation was the intervention of former Treasury boss Martin Parkinson, who said the immigration system had become a de facto guest-worker program for which Australians never voted.
Coalition MPs are mostly happy with Taylor’s cultural conservatism, which he portrays as a way of winning back voters who flocked to One Nation. But some worry that Taylor’s welfare plan, which has dazzled the conservative wing and moderates’ senior shadow ministers, will further alienate large diasporas.
“She has not yet been led by her colleagues or come into the party room,” Hawke, Sussan Ley’s former lieutenant, told this imprint ahead of a party room meeting on Tuesday to discuss immigration, tax and the rights of biological women in the wake of the controversial Tickle v Giggle decision.
“People hope that the policy will be changed into something more positive and targeted at what we are trying to achieve rather than working immigrants.”
Hawke, who served as immigration minister from 2020 to 2022, was one of the big losers of Ley’s ouster and a long-time factional rival of Taylor in the NSW division of the Liberal Party.
Prime Minister Anthony Albanese has told colleagues he believes Labor can win Hawke’s once-safe seat of Mitchell, where almost a quarter of the population in the 2021 census has Indian or Chinese heritage.
Liberal senator Andrew McLachlan also spoke out against the party’s line last week, saying Taylor’s policy would create “two types of members of society” who he said were not Australians.
Labor and activists in multicultural community groups are concerned Peter Dutton will turn the welfare scheme into “work from home 2.0”, a MP has said, citing Labor campaigning at the last election over office attendance policies.
The lawmaker said non-citizens do not vote, but many are on the citizenship waiting list and will vote in the coming years, and their families vote and pay taxes.
A source close to Taylor said the plan required clarification and that the Coalition could win the debate if communities understood the changes would be grandfathered, meaning no welfare recipients would be affected during the policy change. Exemptions will also be provided for refugees, domestic violence and child protection cases. Another source close to the leadership acknowledged that members of diaspora communities had expressed concerns.
Taylor’s allies believe the policy is popular in the broader community, even among segments of immigrant communities. Conservatives in countries such as Britain and Germany are increasingly focusing on the welfare of non-citizens.
Taylor said the policy would generate “billions” in revenue, without specifying how. Party sources said this income would not be realized in the short term due to devolution of policy, but would come to fruition in future years as many non-citizens take part in programs such as the NDIS. Reporting inside Australian Financial Review It found that suburbs in the most ethnically diverse areas of Melbourne and Sydney, including Liverpool and Tarneit, had the highest number of NDIS providers.
Finance Minister Katy Gallagher previously told this imprint that welfare fraud was a growing problem and said the government was aware of sophisticated criminal operations manipulating the NDIS, including the remittance of proceeds to countries in Africa.
Parkinson, a respected bureaucrat who is reviewing Labour’s immigration system in 2023, said flaws in the scheme were “clearly a legitimate issue for people to be concerned about”.
“The government and the opposition need to be worried because you are losing your social licence,” he said.
Parkinson’s comments came after he made candid admissions on the subject. Joe Walker PodcastA show focused on public policy.
In the long section, Parkinson said that the huge increase in temporary immigration over many years has resulted in “a group of permanent temporary workers who are almost quasi-guest worker system.”
When asked whether voters would vote for such a program if it was brought to the elections, he said: “I don’t think they will vote at all.”
The gradual shift from a program that previously focused on high-skilled immigrants potentially leads to lower productivity growth because employers “get used to relying on cheap labor that’s really low-skilled,” Parkinson said.
Paul Sakkal is the Chief Political Correspondent. He has previously covered Victorian politics and won the Walkley award as well as the 2025 Press Gallery Journalist of the Year award. Contact him securely on Signal @paulsakkal.14.Connect with: X or email.
