‘There is no case for it’: Dutton’s visa plan could cost $2.5b

The federal budget is exposed to more than $2.5 billion in lost value from a Coalition policy to restore a “golden ticket” visa for wealthy investors, according to warnings from the nation’s peak productivity agency.

The forecast intensifies a political dispute over migration after Opposition Leader Peter Dutton told a migration agent at a Liberal Party fundraiser he thought the Coalition would bring back the significant investor visa if it won power at the election.

Labor scrapped the visa last year after being told of flaws in the program to allow entry for people who promised to invest $5 million, but Dutton has argued for a return to letting big investors gain a special visa.

“People bringing money to our country and investing has been part of the success that we’ve got,” he said on Thursday when asked about his plans.

But the Productivity Commission, a federal agency charged with giving independent advice to governments, warned of the cost to the country from the significant investor visa and similar business visas because they “crowded out” better options.

The commission said the scheme had to be considered in broader terms because it limited arrivals from other programs that offered bigger economic benefits.

Peter Dutton during question time last week.Credit: James Brickwood

It found if the special investor visas were replaced by visas for skilled workers, the economic difference over the lifetime of the workers would be $2.5–$3.4 billion.

“There is no case for retaining this category of permanent visa,” the commission said in the February 2023 report, which helped to make the case that led Labor to scrap the significant investor visa.

Grattan Institute deputy program director Trent Wiltshire said the permanent migration intake was limited each year and should be used to bring in more of the skilled workers that Australia needed.

Wiltshire said history showed that significant investor visas generally went to older people who did not face an English-language test as strictly as others and who brought in more family.

“We think the significant investor visa is not the best way to go about it – we should expand the skilled migration program,” he said.

“If we’re looking for entrepreneurs to come in and start businesses, a better approach is probably along the lines of the government’s proposed new national innovation visa – trying to identify talented people that have started businesses overseas and bringing them here, rather than just bringing people with lots of money.”

The government started the Subclass 858 national innovation visa last December with rules that say applicants must have a “record of exceptional and outstanding achievement” in a profession, sport, the arts or research.

The Coalition has a stated policy of reducing the permanent migration intake but has not said what part of the program would be scaled back, a key issue when the cuts would have to fall on the skilled intake, family reunion or other parts of the program.

Former Immigration Department deputy secretary Abul Rizvi said restoring the significant investor visa was a bad idea.

“It’s a high-risk visa in terms of both ensuring benefit to Australia – it is hard to find much evidence of this – and checking the source of the money the applicant had made,” he said.

“Given the strong risk of links to crime and the difficulty of checking against this, I am surprised Dutton would want to resurrect this visa.”

Rizvi said the visa had been dominated by older applicants interested in retirement in Australia, which meant it did not achieve the goal of helping the ageing of the population. He said applicants needed to have only “functional English”, and this was poor policy.

“It’s actually a very cheap way to buy retirement in Australia,” he said.

The Coalition plan was revealed when the migration agent posted a video of her asking Dutton to restore the significant investor visa. He replied: “I think we’ll bring it back.” This masthead reported the conversation last weekend.

The Coalition has not outlined a detailed policy, but Dutton said the goal was to start more companies.

“I want people to invest in businesses, I want there to be start-ups in the IT space where we can attract capital from international partners, and you need all of the requisite security checks – I mean, all that’s a given,” he told radio station 2GB.

Home Affairs Minister Tony Burke attacked the Coalition move in parliament because the visa only required people to commit money.

While the Coalition took offence in parliament when Burke used the phrase “cash for visa” to describe the policy, he repeated the phrase on Thursday.

“The way you qualify for a significant investor visa is that you have cash,” he said. “That is how you qualify for that visa. The significant investor visa is a visa designed to be cash for visa.”

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