NSW government continues to back wealthy foreigner visa program

Source: The Sydney Morning Herald, 07/10/2018

A lesser known visa scheme that provides wealthy foreigners with a
pathway to permanent residency continues to be embraced by the NSW
government, despite a federal review finding the scheme had few
economic benefits and should be axed.
The NSW government nominated 112 people during the first full year of
the permanent visa scheme in 2017-18, according to the latest figures
supplied to the NSW Legislative Council.
Under the scheme, known as the Significant Investor Visa (SIV) stream,
`high net worth individuals` are granted permanent residency in
exchange for investing $5 million in Australian `complying
investments`, such as venture capital projects, shares, and corporate
and government bonds.
In order to be eligible, investors need to be nominated by state
governments and must show a `genuine and realistic commitment` to
residing in that state.
While the scheme accounts for a tiny proportion of Australia`s total
migrant intake, the Productivity Commission, in a 2016 review, flagged
concerns it generated the perception `that visas are being `sold` to
wealthy foreigners`.
NSW Premier Gladys Berejiklian, via a spokesman, justified the
government`s participation in the scheme on economic grounds, and said
only 78 of investors it nominated in the past financial year had been
approved for SIVs by the federal Department of Home Affairs.
`Each of these individuals invested at least $5 million into the NSW
economy, creating opportunities and jobs for the broader population,”
the spokesman said.
The NSW Department of Industry also endorsed the program, with a
spokesman saying NSW was `well positioned to leverage additional
investment from business and investor migrants to the benefit of NSW.`
`NSW is headquarters for many of the financial companies that offer
SIV complying investments and these companies facilitate SIV
investment heavily into NSW businesses through the program,` the
spokesman said.
However, the Productivity Commission rubbished the scheme`s purported
broader economic benefits in its 2016 report, finding they were
`negligible` and `any benefits accrue to mainly those visa holders and
to fund managers`.
It also identified the potential for SIV holders to have poorer social
integration than other visa subclasses because of the lack of language
requirements or age thresholds, and the risk the scheme could be `used
as a pathway for investing `dirty money` in Australia.
It recommended the SIV scheme be abolished.
One company which has capitalised on the scheme is Moelis Australia,
an investment bank with headquarters in Sydney and run by Sydney Swans
chairman Andrew Pridham.
In a 2017 pitch to the Queensland government, the company billed
itself as the `pioneers of SIV in Australia, and a `one stop-shop of
SIV complying investment options`. It also claimed to have $1.5
billion of assets through the SIV scheme.
Labor`s Industry spokesman Adam Searle said the Berejiklian
government`s continued participation in the scheme demonstrated `the
wrong priorities` around migration. But he stopped short of committing
Labor to abandoning the program if elected in March.
“Given the criticism of the program we would take a lot of convincing
to keep the program but as a first step we would undertake a strenuous
review,” Mr Searle said.
The scheme was created under the Gillard government in 2012, and has
two sub-streams �` an initial four-year SIV temporary visa (s188C),
which is the precursor to applying for the permanent SIV visa (s888C).
To date, the NSW government has nominated 1329 people for the
temporary visa, but the four-year condition means it has only been
able to nominate applicants for the permanent stream from November 2016.
A spokesman for the Department of Home Affairs said that as of June
2018 `more than $10 billion has been invested in complying investments
as a result of the SIV program.`
Chinese nationals have been the main beneficiaries of the scheme,
accounting for 87 per cent of all 2022 SIVs granted since 2012.