Changes in Australia's Business Innovation and Investment Programme: An Analysis
Australia's Business Innovation and Investment Programme (BIIP), since its launch, has aimed to attract foreign entrepreneurs, investors, and business owners, thereby stimulating the national economy. However, the programme has undergone substantial modifications over the years, reflective of governmental shifts in priorities and varying economic landscapes.
Tracing the Journey of the BIIP
Initiated in 2012, the BIIP introduced drastic changes from its predecessor by doubling the minimum investment prerequisite from AUD 750,000 to AUD 1.5 million. With four main categories - Business innovation, Investor, Significant investor, and Entrepreneur - the programme seeks to serve a diverse spectrum of business professionals and investors. Successful applicants initially receive a provisional visa for five years, which can transition into permanent residence status after three years, provided certain conditions are met.
In 2015, the Significant Investor visa category underwent substantial modifications. Furthermore, between 2015 and 2019, processing timeframes saw a substantial increase due to a surge in applications. The COVID-19 pandemic was a turning point, dramatically expanding the program’s scope. A critical change in 2021 further amplified the minimum investment requirement to AUD 2.5 million.
However, the year 2022 was marked with criticism from the newly instated national government in Australia. The Australian Labor Party, traditionally associated with workers' unions, eliminated priority processing for the significant investor visa, also setting in motion the reduction of the program size.
Present State and Anticipated Directions
In the recent times, the Australian Labor Party has pivoted towards amplifying the number of general skilled (professional) and employer-sponsored visas. These visas experienced an impressive increase from 50,900 in 2021/2022 to 91,652 in 2022/2023, and an anticipated 129,900 in 2023/2024.
Conversely, the BIIP's planning levels have dwindled. From 13,500 places in 2021/2022 (6,860 for new applications), the allocation fell to 9,500 and then further to 5,000 places (810 for new applications) in 2022/2023. These planning levels act as an upper limit on annual visa grants, with regular reviews to adjust for economic demands and conditions.
A considerable backlog of BIIP applications, 32,412 as of June 30, 2022, presents a significant hurdle. With the current planning levels, it would take more than three years to process this backlog, a timeline expected to further stretch due to reduced planning level for 2023/2024. One noteworthy issue related to processing times involves the age limit for dependent children, as any child turning 23 before application decision would be ineligible for a visa.
An extensive review of Australia's migration system initiated in November 2022 yielded its final report in April 2023. The report critiqued the BIIP, asserting that BIIP migrants' economic contributions were inferior to those of average Australians or skilled independent migrants. Concerns were raised about passive investments and low-productivity businesses, often resulting in subpar business outcomes compared to those owned by longer-standing residents. However, the report recognized stronger outcomes in the Significant Investor stream, suggesting a reconsideration of the BIIP's future as a substantial programme.
The Road Ahead
The BIIP stands at a crossroads, with the 2023/2024 planning level set at a mere 1,900 places, a drastic cut from previous years. While the number of new applications for this year remains unannounced, it is expected to fall significantly from the 810 places in the current year. Details are anticipated by July 2023.
A noteworthy shift in the BIIP landscape includes a 40% fee hike, effective from 1 July 2023. This will significantly increase current fees across all streams.
Despite its initial intention of inviting foreign investment and boosting the Australian economy, the BIIP has confronted numerous hurdles and criticisms over the years. The future of the program is uncertain, with recent policy shifts, dwindling available spots, a swelling backlog of applications, and looming fee increase. The migration system review's critique of the BIIP could potentially lead to further revisions, consequently redefining Australia's strategy to attract foreign investors and entrepreneurs. As these shifts transpire, it will be vital for potential applicants to stay abreast of the changing landscape of business immigration to Australia.
