This story from the AFR about Australia’s 888 investor visas caught my attention recently. Australia now has an investor Visa program where by if you invest $5mm into just about anything in Australia then you can get permanent residency and a sure shot line of sight to citizenship. Canada has recently cancelled their program, much to the discontent of many people who were hoping to move there.
I am by no means opposed to investor visas but I am opposed to the Australian public not getting their money’s worth. Current requirements of the 888 Visa only require an investment of $5mm in one of a mix of the following:
- Australian funds whose investment focus is Australia
- Australian proprietary companies
- Government bond programs, in particular, in NSW the Waratah bond program
We have no idea how well this program is audited. Could investors be placing $5mm at Platinum and then pulling it once the visa is approved? Probably. Do we have any reason to believe that is not the case? No - because I cannot find any financial products listed that lock funds in for 5 years in this way aside from the NSW Waratah bond program. Australian proprietary companies are another matter - there is no reason you could not have an immigration agent set up a shell company, acquire it, and then use it to acquire a lot of property. There seems to be some disquiet about this already and countries like Singapore have already put in place major restrictions to stop foreigners buying so much property that it creates acute inflationary problems. In Singapore if you want to buy citizenship now you have to invest in SMEs and startups through long term investment programs like Spring - not just bag a bunch of property or shares and then flick them as soon as the Department of Immigration is not looking.
My advice to Australian policymakers wondering why this Visa is doing so “well” is to point out that maybe, just maybe its popularity is due to this type of citizenship for sale program is being sold too cheaply. Requiring funds get invested into long term vehicles or ensuring that proceeds are rigorously audited or go towards cheapening government funding may not be a terrible idea. The last thing Australia needs right now is more upwards pressure on its currency and housing markets.
Addendum: the program Singapore admits people under an investment visa can be found here. Note that the industries that can be invested in are listed below, one can only wonder at what such tight rules would do for, say, Australian startups and venture capital rather than the inner city apartment market.