Category Archives: AES Information

New SIV and PIV announced by Austrade

Today the Government announced the new complying investment framework for the Significant Investor Visa (SIV) and Premium Investor Visa (PIV) programme. The Government intends that the framework will be implemented from 1 July 2015 and will encourage investment into innovative Australian ideas and emerging companies. Austrade will also become a nominator for the SIV, alongside State and Territory Governments, and the sole nominator for the PIV.

The new arrangements are part of the Government’s Industry Innovation and Competitiveness Agenda, announced by the Prime Minister in October 2014. Since the announcement, Austrade has undertaken extensive consultations with interested stakeholders, including public consideration of complying investment design options through two rounds of public written submissions (receiving approximately 170 submissions). Austrade and the Department of Immigration and Border Protection will continue to consult with stakeholders to explain the investment framework ahead of the changes to the programme being implemented on 1 July 2015.

Under the new framework, SIV applicants will be required to invest at least $5 million over four years in complying investments, which must now include:

• At least $500,000 in eligible Australian venture capital or growth private equity fund(s) investing in start-up and small private companies. The Government expects to increase this to $1 million for new applications within two years as the market responds;

• At least $1.5 million in an eligible managed fund(s) or Listed Investment Companies (LICs) that invest in emerging companies listed on the Australian Securities Exchange (ASX); an

• A ‘balancing investment’ of up to $3 million in managed fund(s) or LICs that invest in a combination of eligible assets that include other ASX listed companies, eligible corporate bonds or notes, annuities and real property (subject to the 10% limit on residential real estate).

Previously, investment through the SIV programme was largely going into passive investments like government bonds and residential real estate funds – areas that already attract large capital flows.

Direct investment in real estate has never been a complying investment for SIV and this will not change under the new arrangements. Indirect investment in residential real estate through managed funds will also now be limited. Importantly, a SIV holder can still independently invest in residential real estate so long as it complies with foreign investment rules, but this would not count as a complying investment to qualify for a visa.

The Government intends to introduce a new PIV from 1 July 2015 targeting talented entrepreneurs and innovators. The PIV will offer an accelerated 12 month pathway to permanent residency, for those meeting a $15 million threshold. The PIV will be available at the invitation of the Australian Government only, with potential recipients to be nominated by Austrade. This programme will be rolled out over the next year, focussing on attracting a small number of highly talented and entrepreneurial individuals. States and Territories will play an important role in helping to identify potential applicants.

A link to the Government’s announcement and further information on the new complying investment framework for the SIV and PIV can be found on Austrade’swebpage  Information on the process of applying for a SIV can be found on the Department of Immigration and Border Protection’s webpage.

Is it time to keep an eye on small cap stocks with the changes to the SIV?

Anyone here know a good small cap stock fund manager? Australia’s venture capital groups and small cap stocks fund managers probably had a great weekend given the announcement that a significant portion of funds under the SIV programme is to be directed their way from 1 July 2015.

If the SIV program leads to the grant of 1000 visas a year, there could well be an injection of AU$5 billion into the Australian economy annually. Venture capital groups are expected see $500,000 million of this with the Australian small cap stocks possibly absorbing AU$1.5billion.

The question hanging over the changes is whether the wealthy Chinese investors who make up over 90 per cent of SIV applicants will still remain keen on the programme. Venture capital groups and fund managers who spoke to The Australian Financial Review (AFR) were quick to play down the higher risk element introduced into the SIV program with one saying,

“…they [Chinese investors] like to keep their money so it won’t disappear, but they also understand that with high risks such as VCs come high returns.”

According to an AFR report, last year, Australian small-cap managers posted a remarkable 16.25 per cent (their equal-weighted average return) against the S&P/ASX Small Ordinaries 0.76 per cent loss, according to the S&P Dow Jones SPIVA Australia Scorecard.

But small cap fund managers are known to charge hefty fees which can strip 20% of any gains for their work in investigating hundreds of companies each year to find the most promising ones for their clients.

Minister Robb said the previous SIV framework had set the bar too low, with investment largely directed into passive investments such as government bonds and residential real estate schemes – areas that already attract large capital flows. Australia is looking for investors with a different mindset.

It however, still remains unclear how the government is going to deal with the ‘loan-back’ schemes of some SIV fund manager apart from Minister Robbs statement that, “Indirect investment in residential real estate through managed funds will now be restricted.”

Some analysts have pointed out such schemes were allowing SIV funds to be directed into the Australian property market with banks making it easy for investors to access their investment funds by way of loans against their SIV investments.

Source: Migration Alliance

Visa application charge increases 1 July 2015

Following the release of the Federal Budget for 2015-16, the increases in visa application charges (VAC) have been announced on 13 May 2015 by the Department.

While relatively minor changes have been made to many VACs in line with inflation or where sustained volume is expected, significant increases have been made for the Significant Investor Visa subclasses and also for offshore Partner visas.

VAC increases include:

• 3% for GSM, Skilled Graduate, 457, Visitor and Student streams

• 5% for Temporary Short Term Business, Entertainment, Working Holiday, RRV, Retirement and Contributory Parent streams

• 10% for Remaining Relative, Carer and Aged Dependent Relative and non contributory Parent visas

• 50% for Significant Investor visas and Offshore Partner visas.

Please refer to the following link to access the full list of fee increases from 1 July 2015 for each visa subclass/class:

http://www.immi.gov.au/pub-res/Documents/budget/VAC-increases-fact-sheet.pdf

2015 Budget Immigration Highlights

• Funding to international aid reduced by a further $1 billion from 2014-15
• $14.5 million being allocated in 2015-16 for an expansion of the Adult Migration English Program to include refugees on temporary visas
• $22.1 million over four years to support young people from refugee and migrant backgrounds to build skills to improve their participation in education and work ( in Social Services portfolio)
• Funding to international aid reduced by a further $1 billion from 2014-15
• Working Holiday visa holders no longer be eligible for the tax free threshold on earnings and will pay 32.5% tax from the first dollar earned
• Free trade agreement with India opening the possibility of Working Holiday Visas for Indian nationals
• Increase scrutiny and transparency surrounding foreign investment in agriculture and agribusiness
• Net loss of over $8 million to the Department over four years by not requiring lawyers to register as RMAs
• Saving of $1 million by merging the OMARA back into the Department

Source: MIA

Immigration department to get more money to say ‘no’ more often

In the upcoming budget, the federal government is expected to allocate an extra AU$400 million to the department of immigration with staffing levels expected to hit a record 6000 officers within the next few years. Hundreds of people are currently being interviewed for jobs.

Labelled as the ‘once in a generation overhaul’ the department is the only one, other than Defence, to receive a funding boost. The new funds are to support the major reorganisation for bigger flows of people and goods in and out of Australia under a more ‘rigorous enforcement regime’ according to a report in The Sydney Morning Herald.

Part of the funds will go toward arming of officers; taking over Australia’s immigration detention network; and taking up positions on the frontline at airports, shipping terminals and at sea to gather intelligence and detain offenders.

A new website, Border.gov.au, will also be launched to replace the websites for the formerly separate Immigration and Customs departments.

In a major speech on the future of the merged agencies in April, Immigration Department secretary Michael Pezzullo said the focus of the new department would be to “manage a system of border processes by which we will oversee the flow of people, and goods, to and from our nation”.

“Our staff will, where necessary, be expected to say ‘no’ more often than they do now, where circumstances warrant and within the law, as a result of the better use that they will make of new intelligence systems and other capabilities, as well as improved relationships with law enforcement and intelligence agencies, and better training and support to make defensible adverse decisions,” he said adding “The Australian community rightly expects us to deliver those benefits, and to keep the public safe. This is not a choice. It has to be done simultaneously and seamlessly.”

Source: Migration Alliance

Volunteer work activities proposed to be excluded from the eligibility framework for applying for a second working holiday visa application

The Department of Immigration and Border Protection is currently in the process of making a change to the second Working Holiday (subclass 417) visa initiative, to exclude volunteer work activities, such as Willing Workers on Organic Farms (WWOOF), from its eligibility framework. However, this change will take some time to introduce, and is not yet in effect, so it does not impact upon current second Working Holiday visa applications.

When the Department knows the exact date of implementation for the change, it will be announced publicly on our website. This public announcement will be made well ahead of the implementation date so that participants have suitable advance warning. While it is likely the change will commence towards the end of 2015, participants should regularly check this website for updates.​​​​​

Source: the Department of Immigration and Border Protection

A new ‘low-skilled’ visa could help prevent the exploitation of our young visitors

The exploitation of sc417 (Working Holiday) workers revealed by the ABC report this week put into the spotlight a shadow economy reliant on low-skilled workers which various governments of the day have refused to acknowledge.

“Officially, Australia only has a high-skilled migration programme (namely, the 457 visa), but in truth the Australian labour market is flooded with low-skilled temporary migrant workers on other visas”, state two academics in an opinion piece in The Age today.

There is a large underclass of workers in the agriculture and hospitality industries made up foreigners on various types of temporary visas including work/holiday visas, student visas and tourist visas. The numbers are not known but their plight is only talked about when media reports pierce the veil of secrecy behind which these vulnerable individuals work and are exploited.

“So how have we allowed this to happen? Successive Coalition and Labor governments have not only tolerated this unskilled migrant workforce, but have encouraged its growth,” state the opinion piece by Dr Joanna Howe and Associate Professor Alexander Reilly of the Adelaide Law School.

The academics propose that Australia introduce an official entry stream for low-skilled workers.

“This visa would be subject to strict independent labour-market testing so that only occupations that are in shortage can be accessed. This independent labour-market testing would also confirm that the skill shortage was not owing to a lack of investment in training and/or Australia’s apprenticeship program, or because of unacceptably poor wages and working conditions for that occupation.”

Dr Joanna Howe and Associate Professor Alexander Reilly work in the Adelaide Law School and are members of the Public Law and Policy Research Unit at the University of Adelaide Law School. Their article “Meeting Australia’s Labour Needs – the Case for a Low Skill Work Visa” will be published in the Federal Law Review later this year, according to The Age.

Source: Migration Alliance

Call for the Government to ensure fair work conditions for Working Holiday Makers

The department of immigration says that the exploitation of foreign workers in Australia is hard to uncover. ABCs hidden cameras however had no trouble revealing some of the shocking practices. There are now calls for the introduction of a low-skill work visa to allow for greater transparency and monitoring of foreign workers in the agriculture industry.

A Four Corners investigation this week has revealed that food being picked, packed and processed by exploited workers is being sold to consumers nationwide. The programme alleges that supermarkets and fast food outlets are involved naming Woolworths, Coles, Aldi, IGA, Costco, KFC, Red Rooster and Subway as retailers receiving produce from such suppliers.

Baiada, Australia’s largest poultry supplier came under the spotlight in the programme with allegations that it has deliberately engaged labour contractors in order to avoid direct responsibility for the exploitation. Baiada has previously been caught out by the Fairwork Ombudsman for underpaying workers, according to the programme.

The report says that workers are forced to work a relentless pace, criticized and abused endlessly, not allowed to drink water or even go to the toilet for hours on end. They live in cramped quarters and are paid well below the minimum wage with the contractors skimming off on their wages. There are claims that underpayment is estimated in some cases at about AU$30,000 per individual per year.

“All of the major suppliers are using dodgy labour hire contracting arrangements that fundamentally exploit the workers who pick and pack the vegetables,” alleged George Robertson of the National Union of Workers, Victoria.

Industry insiders and federal politicians are calling for urgent reforms to Australia’s fresh food supply chain before it is too late. There are calls at a federal level for the supermarkets to stop shirking responsibility by passing accountability back to the suppliers and farmers. There have been calls to introduce a low-skill work visa in order allow for more transparency and monitoring by the authorities.

“We will be known as a country that exploits vulnerable people who are looking for a better chance at life,” warned Labour law academic Dr Joanna Howe, a senior lecturer with the University of Adelaide Law who called for urgent reform.

“We would never accept this if it were Australian workers being treated in this way, but because it’s 417 visa holders and we don’t know them, there’s a lid on it, we accept that it’s OK” said Dr Howe.

Assistant Minister for Immigration, Senator Michaelia Cash issued a media statement indicating that the majority of employers are doing the right thing and the Four Corners programme’s allegations while concerning are exceptions.

“Both the Department of Immigration and Border Protection and the FWO are active in ongoing compliance campaigns to ensure that 417 visa holders are being paid in accordance with Australian pay and conditions” said Senator Cash.

Source: Migration Alliance

Australian Visa could cost AU$50,000 from next year

$50,000 could soon be the cost of Australian citizenship under radical proposals being reviewed by the Productivity Commission. The government has asked the think tank to investigate a “price-based immigration system” which would effectively grant citizenship to those who are willing to pay the price, according to a report in the Sydney Morning Herald today.

With the budget blowout now estimated at $150 billion over the next four years – which is $50 billion higher than first thought – the government is seriously considering a radical shift away from migration based on skills and family connections to a person’s wealth.

“Such a scheme could help the government rein in the budget deficit by bringing in tens of billions of dollars in extra revenue and allow it to trim the number of public servants administering Australia’s immigration system,” notes the report.

The Productivity Commission paper on Australia’s migrant intake, released on Friday, raises some dramatic proposals including introducing an immigration lottery and creating a HECS-style payment system for immigrants to pay back their entry fee – those who cannot pay the fee upfront may be allowed to borrow against future expected earnings or by introducing a loans program.

Businesses needing skilled migrants could pay the fee or governments could waive the fee for particular professions or trades, according to the report.

The Productivity Commission will release a draft report in November and hold public hearings before it hands its final report to government next March.

Source: Migration Alliance