There has been a lot of talk about the policy success of Operation Sovereign Borders, including the fact that no boats have arrived in six weeks, how our detention centres are rapidly emptying, and that prospective boat people currently in Indonesia are realizing they have no hope of entering Australia ever, and are starting to return home. Prime Minister Tony Abbott and Immigration Minister Scott Morrison have every reason to be proud of their remarkable achievement in meeting their election commitments so soon.
But what is lost in the various arguments over immigration, border protection, partisan politics, opinion polls, etc, is whether the government’s policies are consistent with classical liberal theory. It is no secret that Catallaxy is a classical liberal blog, and as lots of commenters here are strong supporters of Operation Sovereign Borders, the question still remains: is Operation Sovereign Borders a classical liberal and/or libertarian policy? Is it in keeping with the ideological stance of the blog? There is no doubt in my mind that it is.
Considering the cost of Operation Sovereign Borders, it has been reported that the government have bought 11 lifeboats which are being used to return intercepted unlawful entrants to their departure point in Indonesia.
The media claim that the cost for the lifeboat scheme is $500,000. It is not stated clearly enough if the total cost for the 11 lifeboats is $500,000 or if $500,000 is the cost of each lifeboat. For the sake of argument, I will generously assume that each lifeboat costs $500,000, however improbable this may sound. I do this only so that Leftists and pseudo-libertarian bean-counters are not able to derail the argument.
I will also assume that the average unlawful entrant, if they were allowed to land in Australia and receive a humanitarian visa, would receive a net lifetime welfare benefit of $500,000 from the taxpayer. This is a conservative estimate, given that the average arrival will be aged 20-30 years, but with limited English and far fewer saleable skills than the population as a whole. They will therefore be eligible for a lifetime’s unemployment assistance, free health-care and other benefits, as well as a pension. However, we will stick with the assumption, so that there can be no possibility of trolling.
Let us assume that the marginal cost of an interception and turn-around is $2 million (inclusive of everything – again, this is being overly generous to Left-wing trolls). What this means is that each turn-around would require only four illegal entrants to be onboard the lifeboat, out of a total capacity of 90 seats, for the marginal turnaround cost to equal their marginal net lifetime welfare saving (we’ll call this MC = MR for short). As it was reported that 60 asylum seekers were returned to Indonesia on a lifeboat recently, the marginal saving to Australia of that return voyage, minus marginal cost, was huge – in the realm of $28 million. All Micro-Economics 101 students know that if MR>MC, the entrepreneur will keep the enterprise open given they will be covering all the marginal costs and some of the fixed costs as well. This implies that Operation Sovereign Borders MUST continue to run for that reason at least.
We should note that the government’s actions are not simply resulting in the return of 60 people here, or 90 people there, but are actively deterring many thousands of people from attempting to enter Australia illegally in the first place. Given that over 25,000 unlawful arrivals did come to Australia in the 2012-2013 financial year, to deter the same number from arriving in the following year, under my conservative assumptions, would save Australian taxpayers at least $12 billion over their life-time, for that deterred annual intake alone. Of course, to keep doing this year-in-year-out, assuming a constant 30,000 deterred prospective annual arrivals (again, a conservative assumption given the exponential annual rise under the Rudd-Gillard governments of 2007-2013) yields a substantial annual budgetary saving compared to the very low costs of deterrence. The annual saving would keep increasing by $1 billion increments every 3-4 years, for over a generation.
There is no doubt, given everything we have discussed above, even under my very conservative assumptions of cost/benefit, that Operation Sovereign Borders is the greatest libertarian government program in history. No other measure, including spending on the police and the armed forces, yields a more tangible net benefit to taxpayers than this brilliant small-government policy of boat deterrence and turn-backs. Given these facts, I have no doubt that all classical liberals and libertarians will enthusiastically embrace Operation Sovereign Borders, without any hesitation or qualification, at once!