Andrew Martin – managing director of asset management at Moelis Australia, which helps wealthy Chinese to obtain an Australian passport through the Significant Investor Visa (SIV) program – has defended the SIV scheme, sighting its “massive success” amid calls for it to be abolished:
Immigration Minister David Coleman recently flagged a review of the business and investment visa scheme, of which the significant investor visa (SIV) is a prominent feature…
[Andrew Martin] said the SIV program in Australia has been “a massive success”, leading to direct investment of more than $11 billion since it commenced in 2012.
“It has been estimated that the follow-on investment from SIV investors has been up to four to five times more than the mandatory $5 million, meaning capital invested into Australia could be as much as $50 billion”…
“It is widely accepted that Australia’s SIV program is best of breed in terms of investment migration — especially in terms of its key investment requirements such as the $5 million amount which is much, much higher than most competing programs,” he said.
He suggested the Government could increase the proportion of funds that had to be invested into emerging companies, but that “we are getting fair value”…
SIV holders qualify for permanent residency if they have spent just 40 days in Australia per year…
The SIV program, affectionately named “Golden Ticket Visas”, allow wealthy foreigners to purchase Australian citizenship by investing $5 million into qualifying assets or ventures. They have been used primarily by the Chinese, who account for 87% of SIVs issued:
These sorts of visas are marketed widely to wealthy investors seeking multiple residency and tax regimes, as noted by investigative reporter Michael West:
The Productivity Commission explicitly recommended abolishing SIVs its 2016 Migrant Intake Australia report, arguing that they provide “negligible” economic benefits and are used as pathways for fraud and money laundering:
The broader economic benefits of the Significant Investor and Premium Investor visas are negligible, and any benefits accrue mainly to those visa holders and to fund managers. It is likely that immigrants through these streams have less favourable social impacts than other skilled immigrants. These visa subclasses should be abolished…
Because there are no English-language requirements for the Significant Investor Visa and Premium Investor Visa, and no upper age limits, it is likely that these immigrants will generate less favourable social impacts than other immigrants. Further, compared to other visa streams, investor visas are prone to misuse and fraud. Concerns about visa fraud played a part in the Canadian Government’s decision in 2014 to scrap its investor visa scheme…
There is a risk that SIV and PIV might be used as a pathway for investing ‘dirty money’ in Australia, an issue that has been raised for other similar schemes (Sumption and Hooper 2014)…
Overall, the case for retaining the Significant Investor Visa and Premium Investor Visa streams is weak and the Government should abolish these visas.
It is also worth reminding readers that the UK Government recently suspended their equivalent of SIV because it generated minimal economic benefits and was being used to launder money:
Ministers are halting a “gold-plated” visa scheme offering foreign investors a fast-track to settling in the UK, as part of a crackdown on financial crime.
Tier 1 investor visas were introduced in 2008 to encourage rich people from outside the EU to invest in the UK.
A £2m investment bought a visa and indefinite leave to remain after five years. But concerns were raised the scheme was being used to launder money…
“We will not tolerate people who do not play by the rules and seek to abuse the system,” said Immigration Minister Caroline Nokes…
…the Migration Advisory Committee said the scheme brought little economic benefit for British citizens…
Through the SIV, the Australian Government has created a program where citizenship is for sale to anyone with enough money to pay. There are few questions asked. There is no rigorous background checks on the applicants or the sources of their money. There is no requirement to speak English. And there is no requirement for the applicants to work or contribute to Australian society.
The federal government must follow the Productivity Commission’s recommendation and abolish the SIV scheme in it entirety.
