The Australian government would sell the right to immigrate to Australia - with migrants no longer accepted based on their skills or family connections - under radical proposals being examined by the government's independent think tank.

The Productivity Commission is investigating a price-based immigration system that would use entry fees as the primary determinant for who gains entry to Australia.

Such a scheme could help the government rein in the budget deficit by bringing in tens of billions of dollars in extra revenue and allow it to trim the number of public servants administering Australia's immigration system.