28 May, 2012

Preparing for “Asian Century,” Australia Eases Visas to Draw Rich & Talented

Imtiaz Muqbil

Canberra, 25 May 2012 — The Australian Government has announced the launch of a new visa program, the Significant Investor visa, targeting migrants who could make an investment of at least $5 million in the Australian economy. It has also approved its first Enterprise Migration Agreement (EMA), granted to help a new iron ore mining project in Western Australia meet a critical shortage of skilled workers.

The move is designed to help Australia “take full advantage of the Asian century.” According to Craig Emerson, the Trade & Competitiveness Minister, “Australia will continue to lose businesses whose practices are based on low wages and outmoded technologies. But we can gain many more businesses by playing to our strengths of abundant mineral, energy and agricultural resources, our proximity to Asia, and our acquired endowments of skills, innovative flair and entrepreneurship.”

Over the long term, increased migration into Australia will drive inbound travel for leisure, VFR, study and business. On the flip side, however, the move is likely to accelerate both a brain-drain and a capital flight from developing countries, especially in Asia, and raise further challenges for those studying the impact of global migration patterns on social, economic and cultural development.

The Significant Investor visa

The Minister for Immigration and Citizenship, Chris Bowen MP, and the Minister for Financial Services and Superannuation, Bill Shorten MP, jointly announced the new Federal Government reforms to attract successful investors and entrepreneurs to Australia.

The new visa program, the Significant Investor visa, will target migrants who could make an investment of at least $5 million in the Australian economy. It is designed to “provide a boost to our economy and help Australia to compete effectively for high net worth individuals seeking investment immigration,” Mr Bowen said.

“Our migration program is important to our economy, not only in the area of skills but also innovation and capital investment. This new visa will make it easier for investors coming to Australia by offering some concessions on visa requirements – such as not having to meet a points test and reduced residence requirements – in recognition of their meaningful investment contribution.”

Investor options under consideration include state and territory bonds, Australian Security Investment Commission (ASIC) regulated managed funds and direct investment into Australian companies.

“This creates a new source of investment capital and increases the pool of funds managed locally. This is good for jobs and growth in areas such as financial planning, fund administration, stockbroking, accounting and funds management,” Mr Shorten said.

The changes will bring Australia into line with other countries, such as the United Kingdom, Canada, Singapore and New Zealand, which provide for migration on the basis of investment of a specified size and conditions.

Mr Bowen said the Government was also reforming the Business Skills visa program to attract more entrepreneurial talent and diverse business expertise to Australia. It will target migrants “who have a demonstrated history of innovation and success in business,” he said.

“Such individuals make a strong contribution to the Australian economy, innovation and job opportunities for Australians. We are implementing several measures to increase the volume and quality of applicants for this program, which will be renamed the Business Innovation and Investment program.”

The measures include:

(+) Facilitating permanent entry of entrepreneurs who have sourced at least AUD1 million in venture capital funding in Australia;

(+) Cutting red tape by reducing the visa subclasses from 13 to three;

(+) Introducing a points test for provisional visa applicants giving weight to people with a history of business innovation;

(+) Allowing business migrants to extend their provisional visa should they need additional time to establish their business in Australia before applying for permanent residence; and

(+) Increasing asset thresholds to better align with the Australian business community.

Under the new program, the Business Talent visa will be a state or territory nominated permanent visa with two streams: significant business history stream and venture capital entrepreneur stream. “The significant business history stream is intended for high-calibre business owners or part owners of a business who have a genuine and realistic commitment to manage a new or existing business in Australia.”

Another Provisional Business Innovation and Investment (subclass 188) visa will be a state or territory nominated provisional visa with no minimum English requirement.

The innovation points test for a provisional visa is a key reform of this program. The points test gives points for various elements of human capital and business innovation, coupled with objective measures of business performance. It aims to select innovative entrepreneurs who will transfer their skills to Australia and diversify its existing pool of business expertise.

“The Government is also considering further changes to the program to attract significant investment to Australia,” Mr Bowen said.

The Department of Immigration and Citizenship grants between 7,000 and 7,800 Business Skills visas per year. There have been 7,200 places allocated to the program in 2011-12.

The Significant Investor visa will be introduced in the 2012-13 program year, while the new Business Innovation and Investment visas will be integrated with the skilled migrant selection model, SkillSelect, commencing on 1 July 2012.

More information on the changes is available by clicking here and here.

First Enterprise Migration Agreement Approved

25 May 2012. Source: Chris Bowen Mp, Minister For Immigration And Citizenship, & Martin Ferguson Am Mp, Minister For Resources And Energy

The Australian Government has approved its first Enterprise Migration Agreement (EMA), granted to the new iron ore mining Roy Hill project in the Pilbara region of Western Australia. The approval has been described as “an important development in helping to meet critical skills shortages in the resources sector.”

“The Government’s first priority is always ensuring jobs for Australian workers, but there is a need for temporary workers to help keep our economy strong,” Mr Bowen said. “With more than 8,000 workers required during the construction phase of the Roy Hill project, there simply aren’t enough people in the local workforce to get the job done.”

EMAs are a custom-designed, project-wide migration arrangement uniquely suited to the resources sector, ensuring skill shortages do not create constraints on major projects or jeopardise Australian jobs.

Mr Bowen said the EMA would allow Roy Hill to sponsor up to 1,715 workers for the three-year construction phase through the 457 visa program, where they cannot find Australians to fill the positions.

The project will support Australian jobs in the economy through training and apprenticeships, which are an integral part of the agreement, and follows rigorous consultation with state and territory governments, industry and unions.

“As part of the EMA, Roy Hill will provide up to 2,000 training places for Australians. This includes places for more than 200 Australian apprentices and trainees, as well as preparing over 100 Indigenous Australians to work in the construction industry,” Mr Bowen said.

“The EMA also sets out protections to ensure that foreign workers are only recruited after genuine efforts to first employ Australians, and that visa holders engaged on the project receive the same wages and conditions as their Australian counterparts.

“Of course, the Government is committed to ensuring jobs arising from the project are filled locally. To this end, the Government will establish a Jobs Board, and expects that foreign workers are only recruited after genuine efforts to first employ Australians.”

The Government will also ensure that visa holders are aware of their workplace rights and obligations through a specific induction program, as well as having information available in writing, online and through video presentations.

Mr Ferguson said the agreement with Roy Hill was the first of its kind and will ensure this major resources project gets off the ground and delivers long term jobs and benefits to the local community and broader Australian economy.

“This is a great outcome for the industry, that will create new jobs and opportunities for the local workforce and drive growth in the economy,” Mr Ferguson said.

“We need Enterprise Migration Agreements to cut red tape for very large resources projects such as Roy Hill which have a very strong demand for labour.

“EMAs address one of the biggest risks to many of these projects which is inadequate supply of labour and skills in the short-term construction phase.”

The EMA will come into effect shortly. More information on EMAs is available here.

Australia Needs to Position Itself for the Asian Century

By Craig Emerson, Minister of Trade and Competitiveness

Source: http://www.trademinister.gov.au/releases/2012/ce_mr_120526.html

Australia is undergoing its second major post-war economic transformation. Whether it constitutes a threat or an opportunity depends on our willingness, as Australians, to adapt to irreversible change.

Resist and we’ll be left behind; adapt and we will build a safer, more prosperous and fairer future for our nation.

Though anxious about change, most Australians are up for the task of economic transformation as we free ourselves from the great complacency that economist Ross Garnaut had observed gripping politics and the community from the middle of previous decade.

Just as surely as an unsustainable global credit boom had lulled the Western world into complacency about the need to adapt to a transformational shift in the global centre of economic gravity to Asia, the global financial crisis shattered the illusion of wealth built on asset price bubbles.

Though the economic transformation centred on Asia was well under way by the early years of this century, many Western businesses were able to maintain outdated business practices and preserve entire industries based on unsustainably strong domestic demand built on capital gains financed by borrowed money.

Those borrowings were used to fund artificially high living standards.

In the poorly regulated US housing finance markets, home loans were granted to borrowers who had little capacity to repay unless house prices continued to escalate.

Businesses supplying the housing and fit-outs — and those offering consumer goods and holidays financed by credit cards — had little need to adjust their business models in response to Asia’s rise. In many Western countries, new technologies were spurned and labour was hoarded, proprietors being acutely aware of the high cost of replacing departing staff.

It all had to come crashing down and it did, the GFC morphing into the deepest global recession since the depression.

Though decelerating from its breakneck speed, East Asia continued its rise during the global recession. Many American and European banks and most carmakers could not have survived the cataclysm, so they were bailed out or bought up by the US government. Southern Europe had lost its competitiveness long ago but was propped up by an industrious, entrepreneurial Germany within the eurozone.

Many Western business owners now complain: “I haven’t changed my business model in 20 years; what’s the government going to do about it?”

And for those wanting to change, easy credit is no longer available. Manufacturing plants in Western countries are using old technology, unable to access the funds they need to adapt their operations to the realities of shifting comparative advantage associated with the rise of Asia.

Australia can respond to Asia’s rise in one of two ways: yearn for the past or seize the future.

Yearning for the good old days of soaring house prices and booming stockmarkets funded by easy credit is to deny that the years of the great complacency were illusory, based on unsustainable borrowings from future generations. Those years of squandered opportunity and reform fatigue artificially forestalled the adjustments we must now make to take full advantage of the Asian century.

Australia will continue to lose businesses whose practices are based on low wages and outmoded technologies. But we can gain many more businesses by playing to our strengths of abundant mineral, energy and agricultural resources, our proximity to Asia, and our acquired endowments of skills, innovative flair and entrepreneurship.

Australia needs retooling for its second great post-war transformation. Building on the open, competitive economy constructed in the Hawke-Keating era for its first economic transformation, the Gillard government is joining forces with the business community, union leaders and working people to achieve Australia’s second coming.

Australia’s retooling requires the removal of productivity-sapping business impediments, stronger incentives for workforce participation and mobility, and better incentives for investment in productivity-raising technologies and infrastructure.

Business and the Gillard government are working together with the states through a Council of Australian Governments business advisory forum to help drive reform measures to lift productivity growth.

A national industrial relations system, school curriculum, trade licensing system, occupational health and safety system, business names register and consumer credit system are but a few of the reforms completed or in progress.

Next on the agenda are streamlined environmental approvals, improved pricing and competition in national energy markets, more efficient processes for approving major projects, and ending duplication in carbon reduction and energy efficiency schemes.

The government is undertaking a review of the industrial relations system with a view to boosting workplace productivity while preserving fairness for working people.

Workforce participation incentives are being improved through a trebling of the tax-free threshold and greatly increasing the amount that single parents and young unemployed people can earn before their benefits are affected.

Investment in productivity-raising infrastructure is being encouraged by giving investors greater certainty that tax losses in projects can be used, and by preserving the value of any accumulated project losses by indexing them at the government bond rate.

Tax incentives are being rolled out to facilitate productivity-raising business investment, including instant asset write-off and loss carry-back provisions for small business. The government’s business tax working group will continue to look at ways to deliver productivity-raising tax relief for businesses struggling in the patchwork economy.

Australia’s second coming can defy Yeats’s lament that “the best lack all conviction, while the worst are full of passionate intensity”. Our economic transformation requires the best of us as a nation as we transform our economy again to take full advantage of the splendid opportunities on offer in the Asian century.

Australia Tops OECD “Better Life Index”

Australia performs exceptionally well in measures of well-being, as shown by the fact that it ranks among the top countries in a large number of topics in the Better Life Index. Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Australia, the average person earns 26 927 USD a year, more than the OECD average of 22 387USD a year. But there is a considerable gap between the richest and poorest – the top 20% of the population earn five times as much as the bottom 20%.

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