A Reform Agenda

 

When the Australian Department of Immigration and Citizenship (DIAC) turned the attention of its ongoing “Simpler Visas” reform agenda to what was then called the Business Skills Program, the immigration law profession spared little thought for the fate of the seven-year-old Program.

 

Comprising 13 visa Subclasses, the Program had separate on and offshore, investor and business owner, and regional and metro components, and issued about 7000 visas a year. Whilst relatively popular amongst the Asian entrepreneurial class, it failed to deliver the higher-level investors and business owners that DIAC had expected.

 

The Department’s 2011 Discussion Paper on the program took the view that so-called “mum and pop” operations, particular those businesses employing few local workers, were meeting the letter but not the spirit of the program and should be excised.

 

The Migration Institute of Australia, amongst others, made submissions to this review arguing that some visas of this type should be preserved for the diverse results they produced. The writing was on the wall, however, and few were surprised when DIAC announced in May 2012 that the new Business Innovation and Investment Program would have precipitously increased applicant “thresholds” and heighted “integrity” measures.

 

DIAC Mints a Golden Ticket

 

What did come as a surprise, however, was the announcement of a new Significant Investor visa category. Requiring applicants to invest at least $5 million in Australian bonds, managed funds or companies and carrying few restrictions whatsoever, this announcement made international news.

 

Dubbed a “Golden Ticket” by commentators, this two stage visa – officially the Business Innovation and Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa – has no English language proficiency conditions and requires applicants to reside in Australia for a mere 160 days over four years to maintain validity.

 

Undeniably intended to attract some of China’s supposedly one million millionaires, the visa’s Subclass number – 888 – is a less than subtle nod to Chinese numerology’s most auspicious number.

 

Breathless news reports aside, however, this visa will never be terrifically popular – there simply aren’t very many millionaires looking to migrate to Australia. Whilst DIAC expects the Business Innovation and Investment Program to attract numbers similar to the predecessor Business Skills Program – between 5000 and 10,000 migrants annually – the Significant Investor visa will almost certainly represent less than 10 percent of those visa grants.

 

State Level Controls

 

Whilst several of its requirements represent a tightening of entrance controls, DIAC has in other ways made the new Business Innovation and Investment Program more flexible than its predecessor.

 

It has, for example, moved away from a previous focus on “regional” areas – a poorly understood bureaucratic designation that actually meant, “Everywhere except greater Melbourne, Southeast Queensland, Sydney, Newcastle and Wollongong” – and has instead turned over some executive functions to state and territory governments, which must “nominate” each visa applicant for settlement.

 

In doing so, DIAC has initiated competition amongst the states and territories, particularly for the flagship Significant Investor visa.

 

The New South Wales Government was first to market with a tailored Significant Investment visa requiring applicants to invest 30 percent of their total investment – a minimum of $1.5 million – in state bonds. In doing so, the most popular state for new migrants is attempting to leverage inbuilt advantages to create new revenue; the results have been mixed, with Victoria issuing the lion’s share of invitations nationwide in the less than six weeks of data published so far.

 

For now, most prospective Business Innovation and Investment applicants won’t notice the minor differences in requirements between the states and territories. Over time, however, it is easy to imagine an innovative state or territory government dramatically altering its selection criteria to bring in specific types of investors – an exciting proposition indeed.

 

Growing Pains

 

In mid-2012, the Department rolled out the SkillSelect online application system, designed to operate as a clearing house to which prospective immigrants would put Expressions of Interest, and DIAC would respond with “invitations” to apply.

 

A massive piece of information technological infrastructure, SkillSelect has had an extremely buggy, if recently promising, rollout over the past eight months – the system has clearly struggled to effectively process the large volumes of traffic it has attracted.

 

Beyond these significant technological issues, however, the factor that will most limit the Business Innovation and Investment Program is its relatively small size.

 

Even if the Program were to shatter expectations and bring in more than 10,000 new business owners and investors, it would hardly be capable of shifting Australia’s massive services markets in a perceptible way – and certainly not compared to the 100,000 Temporary Work (Skilled) – Standard Business Sponsorship (Subclass 457) visa holders in the country at any given time, or the 200,000 new permanent migrants Australia welcomes annually.

 

Any prediction that this cohort of migrants will be the short term saviour for the housing or resources or financial services or any other sectors will be proven flatly untrue; the largest potential impact of these new migrants will be in the long term innovation they will spur, and the future fruits their investments will bear. ■

 

*Maurene Horder is the CEO of the Migration Institute of Australia.