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Moral hazard & the boat people fiasco

It seems yet another boatload of people has faced the possibility of sinking in Indonesian waters but, with the distinctive features that: (i) The attempted sinking (it seems) was engineered by those on board and; (ii) that those on board had the foresight to have satellite phones with the phone number of the Australian Federal Police (not the police in Indonesia) on board  and made ’emergency’ calls to the latter to have themselves ‘rescued’ by Australian vessels.

What we can expect I assume are for the legions of lachrymose Australian politicians and refugee advocates to wail and moan about the moral culpability of Australia for creating this contrived situation! It is obviously no such thing.  However, as a consequence of their actions and the prompt Australian naval response, those on this boat who didn’t drown will now jump to the front of the queue for consideration of their refugee status to Australia. This is a destructive and inefficient instance of moral hazard in public policy.

The hysterical and hypocritical views of  Australian politicians (and their lachrymose wailings) are driving this situation that creates costs for Australia, unwanted arrivals and deaths among those seeking to manipulate public policy in this way.  People who engage in such behaviour should never be considered for settlement in Australia and Australia should only agree to rescue them  if they agree to be immediately returned to Indonesia who also needs two agree to accept them.

Being tough here and demanding due process for Australian entry means that it is Australia who determines who comes here as a refugee – an absolutely central consequence of our legitimate status as a nation state – it also saves the lives of those who engage in such manipulative schemes.

7 comments to Moral hazard & the boat people fiasco

  • Jim Rose

    it does seem like sinking of leaky boats after a quick call to the AFP is the latest way to get to Oz without braving too much of the distance and uncertain weather. soon or later, boats full of teenagers will be sinking, if not already.

    temporary protection visas with no right of family reunion or to sponsor is another way to go.

    given the passion that is stirred in Australia, both now and in the 1970s by boat people, imagine how the Americans feel with a land border with latin america and millions of illegals

  • Uncle Milton

    Harry, you’ve got to think of this in game theory terms. Your solution is, unfortunately, not a subgame perfect equilibrium and therefore not a credible strategy. Talking tough now won’t work because it is not optimal to be tough if they come anyway. Knowing this, they will come.

    The game theoretic optimum is that we just give Christmas Island to Indonesia. It is just a few hundred kms from Indonesia and thousands of kms from the Australian mainland, so it makes geographic sense for them to have it. There is then no incentive for anyone to get on a leaky boat, because they would be travelling from one part of Indonesia to another. Knowing this, no one gets on any boats and no one drowns.

    Problem solved.

  • Jim Rose

    uncle milton, Christmas Island was a UK crown colony under the jurisdiction of colonial Singapore prior to its transfer to Australia in 1958

    Christmas Island residents are Australian citizens who vote in federal elections.

  • Uncle Milton

    Jim, I know all of that. There are about 1500 people on Christmas Island. They can be bought. Give them all $1 million and a house on the mainland, and $100K each for life. That would still be much cheaper than the cost of dealing with this big mess.

  • Jim Rose

    Uncle Milton, the boat people would just get better boats that make it to darwin. plenty have done so and others did from vietnam in the 1970s.

    Indonesia is on a nice little earner from the boat people, and get domestic political kudos for sticking to australia as a free bonus.

  • Jim Rose

    the country-specific elasticity of supply of refugees seems to be high as there were so few boats betwen 2001 and 2007.

    One reason was the temporary protection visas


    After being granted a Temporary Protection Visa, refugees were required to reapply several years later, in case conditions changed in their homeland.

    Temporary Protection Visa holders have no family reunion rights and no right to re-enter the country if they decide to depart Australia.

    Temporary Protection Visa have the right to work. They are also eligible for Special Benefit, Rent Assistance, Family Tax Benefit, Child Care Benefit, Medicare, Early Health Assessment and Intervention Program, and torture and trauma counselling.

    Refugees appear to be influenced by chain migration factors when choosing where to seek refuge.

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