The Australian Government wants to attract existing big foreign companies to relocate their operations and staff to Australia. So, the Australian Government has announced the creation of a special task force – “The Global Business and Talent Attraction Taskforce”.
The purpose of the new team (a.k.a. “Taskforce”) is creating new jobs for Australians and attract further investment from foreign investors.
This new team (a.k.a. “Taskforce”) will co-ordinate the investment-attraction programs on offer by separate Federal and State Government departments, e.g. “AusTrade” and, in Victoria, “Invest Victoria”, or in NSW, “Invest NSW”. This will make things a little easier for foreign companies to be able to access the benefits available.
There are three (3) industry areas that the Australian Government believe are fundamental to building a stronger future Australian economy, namely:
1/ Advanced Manufacturing
2/ Financial Services; and
3/ Health Companies.
This makes a lot of sense, from the perspective of Australia.
But how attractive is relocating to Australia from the perspective of a big foreign company?
Firstly, Advanced Manufacturing necessarily involves more automation and therefore fewer manual workers. So, how will this create more jobs for Australia? Given Australia’s small population (only 25 million people), is the proposal that the manufacturer will export the products overseas? It would certainly be great if the “Manufactured in Australia” brand could become a real and high value proposition on both quality and price.
Secondly, Australia has a high cost of labour and has strong trade unions representing the best interests of workers. The interests of workers are not always aligned with the interests of company shareholders. Convincing shareholders of large companies to relocate to Australia will be a big challenge. Perhaps Australian labour laws will need to change to become more favourable to the owners of Australian-based companies.
Australia’s high rates of income tax for companies and individuals may prove too high a barrier to attract Financial Services companies. There are other countries around the world that will also compete to attract Financial Services companies with historically strong public markets, e.g. London and New York. What will these countries do to attract big companies to relocate to England and USA?
In the Health sector, Australia is already a global leader in the regulation of vitamins and other complementary medicines. Australia’s strict regulatory system is the envy of health professionals and consumers around the world, who admire Australia’s approach to manufacturing standards and the requirement of suitable evidence to support any health claims.
Therefore, one must ask the question if big foreign-owned health companies haven’t already decided to locate in Australia, why would they choose to do so now?
On 4 September 2020, in an interview by the ABC, the Acting Minister for Immigration, the Hon Alan Tudge MP was asked, “So what are you offering? Tax breaks or what?”
An abbreviation of the response from the Acting Minister for Immigration is:
- We want to attract large businesses with 200-250 million dollars in revenue
- Financial incentives will be negotiated by each company and the relevant Government departments
- A Taskforce consultant will be appointed to help co-ordinate access to all the Government services and other people
- The Taskforce is not just about attracting big companies we also want to attract talented business-owners, scientists and technology people
It is in the last bullet point/ comment from the Acting Minister for Immigration that we can understand the link between the Taskforce’s objectives and migration to Australia.
In the table below we explain the existing visa programs that the Federal Government Department of Home Affairs has on offer for wealthy or talented foreigners.
|188 TR – 888 PR||A two-stage process to permanent residency under the Business Innovation and Investment Program (BIIP). In existence since 2012.||Current processing times (approx.):
· 188 TR = 24 months
· 888 PR = 18 months
|132 PR||The direct to permanent residency 132 visa Business Talent Program. In existence since 2012.
|Current processing times:
· 132A = 18 months
|482 TR||Temporary Skill Shortage visa + negotiation with the Global Talent Employer Sponsored (GTES) Program consultants at Department of Home Affairs. Previously the 457 visa program.||Ordinarily, not all jobs/ occupations provide a 482 visa holder with a direct path to Permanent Residence. Under the GTES program, variations can be negotiated, providing 482 holders with rights to apply for PR visas|
|124 PR/ 858 PR||The Distinguished Talent visa (124 is offshore applicants and 858 is for onshore applicants) + negotiation with the Global Talent Visa Program consultants at the Department of Home Affairs. 124 and 858 has been in existence since 1994 and 1999, respectively. The GTV program was introduced in 2019.||Applicants from certain industries are given priority processing via application to the Global Talent Visa Program. However, direct application for the 124 or 858 is available via IMMI with no requirement to negotiate with the Global Talent Visa Program.|
To reiterate, the above visa programs already existed long before the announcement of the Global Business Talent and Attraction Taskforce.
In September 2020, JADE conducted a survey of 40 Vietnamese business and investor visa holders in Australia. One of the important findings was that 75% of people were living in Australia on a full-time basis. These same people said that if they were granted Permanent Residence faster that wold provide them with certainty of their future and they would invest substantially more capital into Australia, in both business, property and other managed fund investments.
We look forward to learning that one of the first “tasks” for this new Global Business Talent and Attraction Taskforce is to consider the current business and investors waiting for their 188, 888 and 132 visas to be processed.
The business case is clear. If the Department of Home Affairs had more staff to process the 188, 888 and 132 visa applications then the EXISTING TALENT already in Australia will quickly invest more and hence create more jobs.
We look forward to seeing processing times cut down to less than 6 months on average. This is what business advisers call “The low-hanging fruit”.