‘Golden visas’ axed in crackdown on billion dollar passports-for-sale scheme

The $5m visas bought Australian citizenship for the super rich, with no requirement to learn English, but have damaged the economy and attracted foreign criminals.

The Significant Investor visa strand of the now scrapped program has always – and without subtlety – targeted Chinese citizens.

A business visa program which makes up a quarter of all the ­nation’s migration allocations has been quietly axed by Labor over claims it has had a profoundly negative impact on the economy, including a “golden visa” scheme allowing wealthy foreigners to live in Australia if they make ­investments of at least $5m.

The entire Business Innovation and Investment Program has been closed to new applications, with a shift to more skilled workers expected to boost Australia’s dividend from migrants by $3bn over the next decade.

The Significant Investor visa strand of the program has always – and without subtlety – targeted Chinese citizens, who make up 90 per cent of successful applicants The visa subclass was given the number 888 – which signifies ­triple good luck in Chinese ­numerology.

The visa required a minimum investment in Australia of $5m and conferred an automatic right of permanent residence. Investors could gain citizenship even if they spent only 40 days a year in Australia and, unlike other visa holders, they were not required to learn or speak English. There was also no upper age limit.

The crackdown follows revelations by The Australian that foreign criminals and corrupt regime officials have used the red-carpet schemes to acquire Australian citizenship.

While more than 7000 Chinese citizens have been granted Significant Investor visas, not a single applicant in the past 10 years has been rejected under the character test designed to help ­exclude criminals or those with suspiciously obtained wealth.

The move to replace the Significant Investor and other BIIP visas with more skilled worker visas will boost Australia’s dividend from migrants by nearly $120bn over the next 30 years, according to the Grattan Institute, because business ­investment visa holders retire about 20 years earlier than the younger skilled workers who will replace them.

The development was welcomed by the institute’s economic policy program director, Brendan Coates, who described the BIIP as “the single worst part of Australia’s skilled migration program”.

“Unlike all the other parts of the program, it has tended to ­attract older, less-skilled migrants that end up costing Australian taxpayers hundreds of thousands of dollars in the long run in pension and other health costs that far exceed any tax they pay over their lives in Australia,” Mr Coates told The Australian.

“So closing that down and re­allocating those visa places to other parts of the Skilled Migration Program will pay an ­enormous fiscal and economic dividend to Australia.”

Brendan Coates.

The Migration Review, spearheaded by public service chief Martin Parkinson, found that skilled migrants contribute $300,000 more in benefits over their lifetime than those who buy their way into the country.

More than 80 per cent of company directors within the Business Innovation and Stream were in retail or hospitality, which were “sectors not typically associated with major advancements in productivity and innovation”.

A much more tightly controlled Talent and Innovation Visa would create a single, streamlined pathway “to attract relatively small numbers of highly talented migrants to Australia, such as high-performing entrepreneurs, major investors and ­global researchers”, the federal government said, adding: “permanent residency is an important drawcard to attract these migrants as we compete with other nations in the global race for talent.”

Industry sources suggest an investment of at least $10m into more targeted venture capital projects will be required.

The abolition of the BIIP schemes will cause serious ructions in the multi­billion-dollar business investment visa industry, where financial advisers, migration agents, banks and specialist investment firms have reaped huge rewards for more than a decade.

The scheme has brought nearly $12bn in investment to Australia over the past 10 years, but the Productivity Commission has long maintained that the benefits were small, uncertain and accrued mainly to fund managers.

The visas also could be a pathway for “dirty money” into Australia and were prone to fraud, the commission said.

Chinese billionaire Huang Xiangmo, who was granted permanent residency, was one of the few investors under the program whose visa was cancelled on character grounds.

Huang Xiangmo pictured at the Sydney Opera House in 2016. Picture: Renee Nowytarger

Security agencies – but not immigration officials – had serious concerns about his links to the Chinese Communist Party, and the prolific political donor was later alleged to have personally delivered $100,000 cash in an Aldi plastic bag to Labor Party officials.

The Australian has also previously revealed concern that wealthy members of Cambodia’s Hun Sen regime have bought their way into Australia through the scheme, with at least 80 significant investor visas granted to Cambodian nationals in the past decade.

Many nations that offered golden visa schemes have shut them down to stop corrupt foreign officials parking their wealth in “safe” countries, leaving Australia as one of the last Western countries where it was possible to buy a right of residency and, ultimately, a passport.