The economic impact of significant falls in migration as a result of COVID-19 could be offset by restructuring the Business Innovation and Investment Program (BIIP), leading wealth manager Atlas Advisors Australia says.
Executive Chairman Atlas Advisors Australia, Guy Hedley said an anticipated 85 per cent fall in migration in the 2020-21 financial year compared to 2019-20 year posed serious ramifications for Australia's economic growth and could exacerbate the potential for a deep recession.
This impact could be substantially offset by restructuring the BIIP to encourage a higher proportion of high net worth migrant investors with greater capacity to assist Australia's economic recovery, Mr Hedley said.
The Australian Government's review of the BIIP was an important opportunity for reform to enhance the economic and social outcomes of the program for the national economy.
"The BIIP should be revamped to give priority to higher net worth migrant applicants to Significant Investor Visa, Investor Visa and Premium Investor Visa," Mr Hedley said.
"These applicants have substantially higher investment thresholds and bring far greater and longer-term benefits to the Australian economy than applicants to other migrant categories, particularly given that many are entrepreneurs in their home markets.
"Importantly, these funds go towards local tax-generating enterprises that increase employment, innovation and market opportunities."
The BIIP also includes the Business and Innovation Visa, which enables applicants to establish a new or existing business and has historically attracted the largest proportion of BIIP applicants.
"The cap on the total number of BIIP places has had the effect of squeezing out opportunities for higher contributing investor migrants," Mr Hedley said. "This is thwarting high-level investment into Australia at a time when it needs it most."
In 2019-20 the BIIP was capped at 6,862 places, which makes up under six per cent of the total Skilled Migration stream of 108,682 migrants and just 4 per cent of Australia's total 160,000 migrants.
Mr Hedley said the cap for 2019-20 had already been reached meaning that no BIIP applications could be accepted until July.
"Australia has effectively closed its door to potentially hundreds of millions of dollars in foreign investment our nation needs to recover and grow," he said. "Reopening current applications could unlock around $100 million in urgently needed funds and ensure no disruption to applications over the next critical few years."
Mr Hedley said the BIIP should be redesigned to maximise incentives for high net worth metropolitan and regional investors.
Without reform, Australia risks losing out on vital foreign capital amidst a highly competitive international market for investment, he said.
"Australia should take urgent action to increase incentives for high net worth migrant investors and channel these funds towards sectors of the economy most in need including ailing entrepreneurs and startups."
