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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.


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