We’re selling visas for practically nothing, and missing a huge opportunity. Australia is great because Australians have worked hard to make it that way. That’s why so many people want to live here. Let’s not sell it short.
Here’s a thought experiment for you… How much would I have to pay you to take your Aussie citizenship off you?
And I don’t mean so you can pocket the cash and just pop over the New Zealand. I mean swapping your citizenship rights for Malaysia, or India or China…
… or somewhere in Africa?
How much would I have to pay you? $1mill? $10mill? $50 mill?
A gazillion dollars?
If you’re like me, you couldn’t actually pay me enough. There’s nothing in the world I’d trade it for. Maybe if we stretched it into fantasy. Perhaps I’d give up being an Aussie for a weekend on tropical island with 1980s Elle McPherson…
But even then… I love being an Aussie an awful lot.
And is there anyone here who doesn’t? Born and bread or fresh off the boat, we’ve found ourselves blessed to be citizens of one of the best countries in the world. (If you have little Australian flags, prepare to wave them now.)
We won the lottery of life, and I intend to honour that victory, and everyone who didn’t get so lucky, but enjoying my Aussieness to the limit.
But to come back to my thought experiment, how much would you sell me your citizenship for?
Have a think about it and keep that price in mind.
Now, if prices are symmetrical which every economics text books assumes they are, then that price is what you see the ‘value’ of citizenship as being. What you’re willing to sell it for should be about what you think people should pay for it.
So how much do you actually think it costs to buy Australian citizenship?
What if I said it’s $5 million… What do you think? Does that seem cheap? Expensive?
That’s the cost of the Australian Significant Investor Visa (SIV). In short, if you’ve got a stack of cash you’re willing to invest in Australia, you can effectively buy your way in to the country.
Or in the eloquent language of the Immigration Department (my emphasis):
The purpose of the visa is to provide a boost to the Australian economy and to compete effectively for high net worth individuals seeking investment migration. Migrant investors will be required to invest AUD5million into complying investments for a minimum of four years before being eligible to apply for a permanent visa.
There’s a couple of things that jump out. The first is that it’s very clear that SIV is meant to be a stepping stone towards permanent residency. There’s other visas available if you’re just setting up a business. This one’s about permanent residency.
The other thing that strikes me as odd is that the department sees us as in ‘competition’ with other countries for these high net worth individuals. Really? They make it sound like there’s some kind of bidding war going on…
Last time I looked, there weren’t too many countries in Australia’s league. If you wanted a prosperous and stable economy, a healthy civil society, strong rule of law, beautiful weather, and first class education facilities for your children, where else are you going to go?
Sure, I know the US, Canada and the UK are also popular destinations (the top 4 for wealthy Chinese investors). But last time I looked Canada didn’t have Koala’s.
Ok, maybe there’s a handful in Australia’s league. But I don’t reckon there’s many.
And I’m sure there’s no shortage of demand. There’s a lot of folk around the world who’d be willing buyers if they could be. The broker CLSA reckons that 1 in 7 households in China alone (that’s 10 million of the wealthiest Chinese households) are interested in moving to Australia.
So why are getting involved in this bidding war?
On the face of it, the SIV isn’t cheap by international standards. $5 million here compares with $1.5m in New Zealand, $1m in the US and a million pounds in the UK.
It was $800,000 in Canada before they scrapped their scheme due to overwhelming demand.
If this is a bidding war we need to talk to our negotiators. They’re way off base.
But this is where the SIV story is a bit odd. Because that $5 mill isn’t a fee. It doesn’t go into the government coffers. No. All it says is that you’ve got to park your money in approved investments for a minimum of 4 years.
You get it back at the end of that, plus you keep all the returns you’ve made along the way…
And what are complying investments? Well they are:
- Commonwealth, State or Territory government bonds
- Managed funds with a mandate for investing in Australia; and
- Direct investment into Australian companies.
(Note: property is not a complying investment, but there’s nothing to stop your managed fund taking on an exposure to property if you asked them to.)
So we’re saying to people who want to live and invest in a stable and prosperous economy, that they can do that, but in order to do that, they need to invest some of their money in our safe, prosperous economy.
So $5 mill sounds like a lot, but at the end of the day it’s close to nothing. You don’t have to give us $5 mill. You just have to prove you have it.
Personally, I reckon we should be auctioning these things off to the highest bidder. Take the money and reinvest it in nation building.
And it should go hand in hand with a significant social contribution visa – where we seek out the bold, the brave, the generous, the innovative from around the world – no matter what their bank balance is.
But selling off visas for practically nothing seems to be selling us, and the greatness of our nation, short.