By Raphael Hammond
For 12 years, Australia’s so-called ‘Golden Visa’ scheme has allowed people making investments of at least 5 million AUD to have Australian residency for 5 years and a path to citizenship. Formally known as ‘Significant Investor provisional Visas (SIV)’, the visas were branded subclass ‘888’ – triple fortune in Chinese numerology; it was hoped they would boost the Australian economy. But following the results of a review launched in 2022, the scheme has been axed in favour of more skilled worker visas. This comes as part of efforts to comprehensively reform Australia’s immigration system. As in the US and Europe, migration is a key issue in Australia - part of the culture war roster of issues - and Australian tactics have been credited with influencing UK government policy, including the ‘stop the boats’ priority.
However, the centre-left Albanese government has been attempting to take back control of narratives around immigration, by framing it in terms of economic benefits as well as in the conventional migration reduction sense. The Home Affairs Minister Clare O'Neil, when announcing the reform, underlined the historical importance of migration to Australian prosperity from after the Second World War, and said the policy had “not delivered”, citing the age of applicants and its associated tax exemptions as a drag on state finances. This was already known as early as 2016. The issues of corruption and integration play into this poor performance. At first, few questions were asked of the money or the migrants themselves: language requirements were removed, and the largely Chinese money inflows were not highly scrutinised. In response to criticisms about the finance sources and investment targets, the government implemented more restrictive criteria about investment types in 2015. This significantly reduced the scheme’s economic impact, more than halving applications between 2015-16 and 2018-19.
The argument for replacing this underperforming scheme with a higher permanent intake of young, skilled workers is a logical one: government-funded research finds they will contribute far more to the economy and the public purse. This is an uncontroversial move; countries concentrating young, skilled, English-speaking labour forces tend to do well, and the policy aims to assist the Australian healthcare, digital, and net-zero sectors, which are short-staffed. It’s also entirely possible many investments made under SIVs would have been made anyway, just without foreign capital. As a result, the scheme’s economic merits are dubious. Further limitations on capital inflows may also assist the Australian housing market, where prices are sky-high in part due to the influx of foreign capital and migration, which politically links the two issues of housing and migration. Australia’s urban development and migration policies are further intertwined, because migration policy has long been the country’s de facto population policy. Finally, in the context of ‘friendshoring’ efforts to rehome production and supply chains away from China across the West, an increased pool of skilled labour will ease this transition and encourage economic activity.
In the current global context, the policy shift bears wider significance relating to three major trends in the world economy: rising socio-economic populism and ‘friendshoring’ as mentioned above, as well as growing concerns around dark money, and the West seeking to build resilience in supply chains (and increasingly, financing) amid conflict. As authoritarian powers such as Russia and China are more willing than ever to flex their military muscle in Ukraine and Taiwan, capital inflow controls have tightened. In countries such as the UK, similar schemes closed as applicants’ links to crime, corruption, and the Kremlin became politically and strategically undesirable. Investigation by ABC journalists showed quite how prone to abuse by persons involved in corruption SIVs were. A meaningful global crackdown on dark money is long overdue and the removal of this mechanism is a small step in the right direction.
Whether Australia is working to detach itself from the Chinese economy is hard to determine: in 2022, China accounted for nearly 40% of Australian goods exports in 2022, but Chinese investment has been reducing over time. Australia has long walked a tightrope between political and military alignment with the US, and economic alignment with southeast Asia, notably China. Looking to the future, the economic challenges facing Australia today are multiple and will require more continued government intervention than immigration policy reform alone. This reform will likely bear fruit economically over the next few years, and in the meantime marks positive efforts in tackling corruption and ending citizenship-as-a-commodity in an important Western economy.
Image: PICRYL / The World Facebook - Australia - Flickr - The Central Intelligence Agency
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