Investors are key to prosperity in Australia

It is simple economics: Migration has always been considered an investment in the future of the country. It allows us to ensure we have the right mix of people. Investment migrants are critical to that mix.

Background

At Projects RH we continue to work with Investment Visa candidates who meet the requirements of entry but need to wait in line and are unsure if they will be welcome.

Despite the business development activities of migration agents and fund’s managers supported by AusTrade many candidates we speak to fear they will be unwelcomed.

Most people who seek an investment visa have created their own wealth and wish to continue in business activity whilst moving to Australia for a better life for their partner and their children. Several we have worked with have come to choose Australia because either they or their children were educated here.

Australia has a declining population, and this will continue until we increase the number of migrants.

The economic impact of migration

In Australia, migration has always been one of the key levers of economic policy. In 2022 Australia is facing a series of economic challenges. These challenges are significantly different to many countries and are a function of the nation’s ongoing prosperity. Chief amongst these is the need for smart to come to our country.

Why Now

Australia like many Western countries now and has an ageing population despite prosperity and economic growth. Much of the ongoing housing shortage arises from the fact that families no longer live together. Children leave home and want their own place and our parents are enjoying ageing in place. The Covid-19 moved to the region’s phenomenon has also ensured that many desirable economic centres across Australia are also short of accommodation.

The key economic indicator it is that today the jobless rate is less than 4% and there are 1.3 unemployed people for every vacancy. Australia’s historic growth in population of 1.5% per annum can no longer be taken for granted. In reality has always been the product of migration and decision of migrants to stay and to have children.

The ongoing call of a big Australia code for we need 400,000 people now rather than ongoing commitment to 160,000 which we may or may not fill is a sign that the political leaders realise there is a problem.

The Australian government reduced its annual migration target from 190,000 per annum to 160,000 because of Covid.

It is simple economics

Migration has always been considered an investment in the future of the country. Australia has since its foundation had to pay an economic cost for having migrants come. Housing and services need to be provided and invariably children need to be sent to school and thus begins the cycle of supply and demand in having a bigger economy. The critical thing is migration allows us to ensure we have the right mix of people.

Investment migrants are critical to that mix. They bring with them a series of skills and experiences, plus a level of drive which is necessary to grow their businesses and therefore the economy. Very few migrants who come to Australia to resist the temptation to become involved in the generation of wealth and many come here with that in mind.

 

 

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This table was included in a recent article by Tom Dusevic published in The Weekend Australian (30th April, 2022). This shows that investment capital reflects the number of people available to work. Australia has always had a significant amount of overseas capital and this is followed the waves of migration. This story remains unchanged since 1788 when the colony of NSW was founded and paid for by the British.

Where is Australia at?

Based on the pre-election budget Australia is looking for some 160,000 migrants across a series of categories. The number of investment migrants is down from 13,500 to 9,500 over recent years Australia has not issued significant numbers of Golden Visas. It is also important to note that the Minister has the power to reallocate the numbers during the year.

Announcing that Australia will accept a further hundred and 110,000 skilled migrants does not solve the problem. Unfortunately for the central planners in Canberra migrants don’t just decide to come and their friends are Department of Home affairs take months if not years to process people. Statisticians tell us that we are already short 105,000 skilled people and despite the best efforts of announcements of training places in budgets these people will take years to produce and will be insufficient in number.

Tom Dusevic (The Australian) [1] it is clear that Australia needs not only business investment but committed innovators.  he sees the need for migration by business investment. what he is suggesting is that Australia needs investments in new sectors so we are not subject to the vagaries of mining and energy projects.  hear seeing not only the need for the development of human capital but for the growth of us Australia’s business sector which requires new entrepreneurs.

Clearly what he is advocating is the growth many medium-size businesses across Australia who by their nature will employ many skilled and unskilled Australians. It is important to note that in the recent years the Australian government has spent over $300 billion supporting the economy and business.  these activities in normal times would have generated new huge business activity. what is noticeable though is as being existing businesses which have taken advantage of these and not new businesses. What Australia needs is new businesses that will create new jobs skilled and unskilled people in the cities and the regions reducing Australia’s dependence on imports and creating new technologies  and products for export.

Despite the economic stimuli we are not seeing huge increases investment Rather investment has declined to 2.5% of GDP. This sends a clear message we need make Australia more attractive to investors and bring to Australia more entrepreneurs are willing to seize the day.

Conclusion

he solution clearly lies any attraction of new investment migrants who can transfer to Australia the entrepreneurial skills and drive and contributing their own capital to invest in Australia. These investors will need to employ and drive the economy. This will lead to prosperity and the creation of jobs without the need for ongoing subsidies. Australia will enrich its own valuable natural resources because is economically desirable to do so.

Australia needs people with business acumen and capital to make the most of Australia’s unique economic environment and natural resources as a path to prosperity.

At Projects RH we enjoy working with investment via candidates who want to make Australia their home – please call if we can assist you.

See you next time!

By Paul Raftery
CEO, Projects RH, based in Sydney. 1st May, 2022

[1]  Dusevic, T.; “Skilled migrants and business investment for path to prosperity”, The Weekend Australian 30th April-1st May, 2022, pp 15 & 18.