OPINION PIECE - An analysis of the Significant Investor Visa (SIV) by Vincent So, Policy Manager, Investments and Global Markets
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The Morrison Government is currently reviewing the Significant Investor Visa (SIV). Since late 2012, it has been a route to permanent residency (PR) in our country, issuing more than 2,300 primary visas and bringing more than $11.56bn into the Australian economy. It is a golden goose that has laid the foundations for more jobs and business growth, and crucially, keeps Australia attractive for investment.
The program issued 191 primary visas in the 2018/19 financial year – that is less than one double-decked train carriage worth of passengers. The review is sound public policy to ensure the program is aligned with our national interest, but in these fragile economic times, exacerbated by the COVID-19 induced global market meltdown, we caution against killing the golden goose in an attempt to fix something that is not broken.
Getting this visa is not easy, and it should not be.
SIV holders must invest $5 million over four years – with a ban on residential real estate – before being eligible to apply for PR. Even so, in an uncertain global environment it is vital the Government ensures the visa aligns with our national interests. However, Australia’s economic interests are in the national interest.
SIV applicants face rigorous vetting by the super national security apparatus known as the Department of Home Affairs. Processing times for background checks can take an average of 15 months or more and the 2018/2019 acceptance rate was only 45 per cent.
To understand the positive financial impact this policy has had over the last seven years, the amount of capital invested in Australia has exceeded three years’ worth of the combined health and education budget of Tasmania. Federally, the capital invested equates to six-and-a-half years’ worth of the Australian Federal Police budget.
In fact, one of the visa’s biggest successes has been in regional Australia – an agricultural investment headquartered in Toowoomba. Mort & Co is one of Australia's largest independent cattle feedlot businesses. Investment through the SIV program helped develop additional cattle capacity at its feedlots. It has employed 30% more staff since the initial investment. The rural business now employs over 150 people and continues to expand and employ locally at its feedlots in QLD (Grassdale and Pinegrove) and NSW (Gunnee).
Demand is not unlimited. Australia has much stronger threshold requirements for this visa compared to other markets. The US equivalent EB-5 visa’s threshold is $1.8 millon USD. Importantly, the SIV is targeted so that investments are job creating, with large parts of the investment allocation required to fund small cap or emerging businesses that can find it difficult to obtain a bank loan.
Currently, the top five countries for visas granted in order are China, Hong Kong, Malaysia, South Africa and Vietnam. An unintended consequence of increasing the investment dollar threshold is that it can reduce diversity, as applicants outside of China are potentially less able to afford a higher threshold.
We urge the Morrison Government to maintain the rich tapestry of our diverse immigration program while ensuring the right people – who are net contributors – are prioritised for entry into our country. We caution against trying to fix what is not broken.
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