Australia axes ‘golden visa’ scheme for wealthy foreign investors

Australia has announced that it will end its ‘golden visa’ scheme, which granted permanent residency to wealthy foreign investors who invested at least $5 million in the country. The government said that the scheme, which was launched in 2012, did not deliver the expected economic outcomes and was prone to abuse and corruption. The government will replace the scheme with a new visa system that will prioritize skilled workers and talent.

The ‘golden visa’ scheme and its flaws

The ‘golden visa’ scheme, officially known as the Significant Investor Visa (SIV) program, was designed to attract foreign capital and innovation to Australia. The scheme offered foreign investors a fast-track to permanent residency, without requiring them to speak English, have a business background, or meet any age limit. The investors had to invest at least $5 million in approved investments, such as government bonds, venture capital, or emerging companies.

However, the scheme soon faced criticism and scrutiny, as it was found to have several flaws and drawbacks, such as:

• Poor economic outcomes: The scheme did not generate significant economic benefits for Australia, as most of the investments were passive and low-risk, and did not create jobs, growth, or innovation. According to a report by the Productivity Commission, the scheme had a ‘negligible’ impact on the economy, and the benefits were ‘likely to accrue mainly to the visa holders and to fund managers’.
• Potential for abuse and corruption: The scheme was also vulnerable to abuse and corruption, as it allowed wealthy foreign nationals to launder money, evade taxes, or hide assets in Australia. The scheme was especially popular among Chinese investors, who accounted for 85% of the total applicants, and who faced political and economic uncertainties in their home country. A parliamentary inquiry in 2016 revealed that the scheme had ‘potential for money laundering and other nefarious activities’, and that the due diligence and verification processes were ‘inadequate’.
• Lack of business acumen and integration: The scheme also attracted investors who lacked business acumen and integration, and who did not contribute to the Australian society and culture. The scheme did not require the investors to have any business experience, skills, or qualifications, and did not assess their contribution to the public interest. The scheme also did not require the investors to live in Australia for a minimum period of time, and many of them maintained their primary residence and business interests overseas.

The new visa system and its objectives

The government has decided to scrap the ‘golden visa’ scheme, and replace it with a new visa system that will focus on skilled workers and talent. The new system will have two streams: the Global Talent Visa (GTV) and the Business Innovation and Investment Program (BIIP).

The GTV will target highly skilled and talented individuals who can make ‘outsized contributions’ to Australia’s economy, society, and global standing. The GTV will offer a streamlined and priority pathway to permanent residency, and will have a flexible and competitive criteria, such as age, qualifications, achievements, and endorsements. The GTV will also have a dedicated team to identify and attract global talent, and will work with industry partners, universities, and research organizations.

The BIIP will target entrepreneurs and investors who can bring innovation and investment to Australia. The BIIP will have a higher investment threshold, a more rigorous eligibility and compliance framework, and a stronger focus on economic outcomes. The BIIP will also have a points-based system, a quota system, and a nomination process, to ensure that the applicants meet the national interest and the regional needs.

The government said that the new visa system will align with Australia’s economic needs and priorities, and will support the recovery and growth of the economy after the Covid-19 pandemic. The government also said that the new visa system will enhance the integrity and reputation of Australia’s migration program, and will attract the best and the brightest from around the world.

The reaction and the outlook

The government’s decision to axe the ‘golden visa’ scheme has received mixed reactions from different stakeholders and experts. Some have welcomed the decision, saying that the scheme was ineffective, inefficient, and unfair, and that the new visa system will be more beneficial and transparent. Others have criticized the decision, saying that the scheme was valuable, successful, and popular, and that the new visa system will be more restrictive and complicated.

The government’s decision also has implications for the global market of investment migration, which has been growing in recent years, as more countries offer residency or citizenship in exchange for investment. The decision may affect the demand and supply of such programs, as well as the competition and cooperation among different countries. The decision may also affect the mobility and security of wealthy foreign investors, who may seek alternative destinations or options.

The ‘golden visa’ scheme was one of the major visa programs in Australia, which provided overseas wealthy investors with the right to live in the country. The scheme, however, was scrapped by the government, due to its poor economic outcomes and its potential for abuse and corruption. The government will introduce a new visa system, which will prioritize skilled workers and talent, and which will aim to boost the economy and the migration program.