House debates

Thursday, 10 November 2016

Adjournment

Migration

11:27 am

Photo of Ian GoodenoughIan Goodenough (Moore, Liberal Party) Share this | | Hansard source

Business migration to Australia is one of the best methods of attracting investment capital into our economy by people who are prepared to reside in Australia, bring their financial assets with them and subsequently take up citizenship. In the current economic climate, it is important for the government to promote investment through business migration to facilitate Australia's economic recovery. The banking sector has tightened its prudential lending criteria, which makes it difficult for mid-size firms to raise finance for construction and development projects. So investment through business migration will help bridge the gap.

Earlier this year I spoke in parliament on the effect of the changes to the complying investment framework for the significant investor visa, which came into effect on 1 July 2015. At that time, in February this year, the number of SIV applications lodged post July 2015 was approximately eight per month. I am pleased to inform the House that, based on the full 2015-16 financial year statistics from the Department of Immigration and Border Protection, the number has increased to an average of 18 applications per month as at 30 June 2016. However, the number of lodgements of SIV applications through the 2015-16 financial year has dropped to around 14 per cent of the previous year's application numbers. The 1,544 applications over the 2014-15 financial year under the old eligibility criteria dropped to just 213 applications under the new investment criteria in the ensuing 12-month period.

Industry sources have projected that this represents a potential loss of $6.65 billion of investment flowing into our country. The number of SIV applications was experiencing solid growth in demand since its introduction in 2012. However, the market reaction to the changes of the complying investment framework highlights the negative reaction by overseas investors, particularly from the traditional Chinese and Hong Kong markets, towards the changes to the complying investment policy.

At the time of the proposed change, it was predicted that the new complying investment framework for the SIV would cause great concern amongst the major investor groups applying for the visa. It appears that there is evidence to suggest that these concerns have been realised. Overseas investors who are qualified for SIV applications are often talented businesspeople with business acumen and often prefer to have direct control over their investments or business interests. By investing in proprietary limited companies, investors are able to select with confidence the industries and businesses in which they are experienced. Their capital investment is complemented by human resources in the form of business talent and expertise, creating economic development and employment opportunities for the Australian community.

I make the case for a government review to be undertaken of the changes to the complying investment framework for the SIV and the impacts on the investment and business migration. The government can improve investment through business migration by reintroducing more flexible investment options to the complying investment framework, such as restoring investment in proprietary limited companies, whilst keeping the benefits of newly introduced complying investments in managed funds and venture capital.

The current minimum eligibility threshold of $100 million for funds under management does not provide adequate opportunities for medium-sized businesses to compete with large banks and institutions in the market. I believe that this threshold should be reviewed with a view to improving access to capital by medium-sized firms, which represent an important sector in our economy that should not be neglected by the government. If the complying threshold for funds under management were lowered to, say, $25 million, this would allow more companies in the construction and development industry and other sectors to access investment funds from business migrants under the SIV and the premium investor visa schemes to commence projects.

I call for the complying investment framework for business migration visas such as the significant investor visa and the premium investor visa to be reviewed. Investment through business migration is preferable to foreign investment because it brings both financial and human capital into Australia—migrants who have a pathway to becoming productive Australian citizens.