The federal government has announced plans to conduct a review into the significant investment visa program, potentially opening up opportunities to incentivise foreign investors to come to Australia.
In a statement, chief executive of peak investor organisation AVCAL (Australian Private Equity & Venture Capital Association Limited), Yasser El-Ansary, says the review is a significant opportunity for startups.
“The Government has an opportunity as part of this review to send a message to the rest of the world that our economy is ‘open for business’ and that we are taking deliberate steps to attract foreign investment into our businesses to fuel economic growth and job creation for our future,” El-Ansary says.
A recently released study found Australia to be below the global average in attracting foreign direct investment (FDI).
The study by international accounting and consultancy network UHY, looked at FDI as a percentage of GDP in the period since the credit crunch from 2008 to 2012, highlighting Australia sits in 10th place with a rate of 15.2%. This is compared to a global average of 17.1% and well below the EU average of 20%.
El-Ansary describes the lack of intermediated investments through private equity and venture capital funds as one of the biggest shortcomings in the current regime to attract investment to Australia.
“There is no policy basis to justify excluding these funds from the significant investor visa regime, and so that should be addressed by the Government as part of the wholesale review into the existing rules in this area,” he says.
Several countries have implemented similar programs, such as the United States, Singapore, the United Kingdom and New Zealand.
“The global market for capital investment is highly competitive, so as a nation we have to constantly re-evaluate how we can ensure we have the right policy settings to continue to win our fair share of that investment pool,” El-Ansary says.
AVCAL has been campaigning for these changes for some time. It was one of three key policy reforms they suggested the government adopt for the upcoming budget.