We offer prized Australian residency in exchange for people who can dole out money to buy government bonds.
This does not seem like a good bargain. Most of our state governments boast about their gold-plated AAA credit rating. They can raise money easily from the market without resorting to a cash-for-visa program. It is not clear whether state governments have any coherent investment strategy to invest that money in areas of need, such as infrastructure.
The Canadian experience also suggests that people who immigrated under the Immigrant Investor program pay significantly less tax over decades than other economic immigrants, have less proficiency in English or French and are less likely to actually live in Canada.
Given the similarities between Australia and Canada and the fact that both countries attract similar kinds of applicants, it is important for our policymakers to learn from Canadian experiences. For example, nearly 90 per cent of Australia’s Significant Investor Visa applicants are from China. There are 45,000 wealthy Chinese on the Canadian program’s waiting list who want to go to British Columbia alone.
The idea of using Australian residency to attract business people with significant assets is a sound idea. But it delivers dubious benefits to this country if they park their money in safe investment products such as government bonds or property.
The government should only offer visas to entrepreneurs who are serious about bringing in their capital, business acumen and connections to Australia and are committed to stay here. For example, Singapore still offers residency to people under its Global Investor program, which mandates that foreigners invest at least $2.5 million in a new business or an expansion of an existing business.
Read More: http://www.businessspectator.com.au/article/2014/2/12/china/how-australia-can-capitalise-foreign-investor-wealth
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