Australia’s New Move Signals a Shift in Global Visa Policy

Australia’s New Move Signals a Shift in Global Visa Policy

It looks like fewer immigrants will be singing “Waltzing Matilda” down under in the coming years.

The Australian government recently announced that it is eliminating an entire class of investor visas. These so-called golden visas allowed people who invested more than $3.3 million in the country, either in business or in residential property, to settle permanently.

Home Affairs Minister Clare O'Neill said a rigorous analysis of the costs and benefits of the golden visa program showed that there was no net benefit to Australia. Most people who received the visas put money into property or financial assets rather than in productive areas of the economy.

Moreover, most of these visas went to people who are close to or already in retirement. Given Australia's generous social safety net, a golden visa makes them eligible for taxpayer-funded services, even though they haven't provided a meaningful contribution to the broader economy, either in terms of growth and employment or tax revenues.

This isn't a turn away from immigration, however. Instead, it's further evidence of a trend I've been watching for the last year. Countries that offered golden visas based on a one-off investment—Portugal, for example—are shifting towards visas that encourage either immigration by skilled working people or retirees who bring in steady income from abroad.

It's easy to see why.

The golden visa craze started in the early 2010s, a response to the collapse of housing and investment markets in the global financial crisis. Residential property-based visas, for example, led to inflows of foreign exchange, boosted sagging property markets, and rebuilt bank balance sheets. But eventually all those factors recovered. When the dust settled, it was clear that these one-off investments weren't generating ongoing benefits to the country. And locals began to complain that they were pushing up housing costs to unsustainable levels.

When someone wins the lottery, they have the choice of taking a lump sum payment upfront or regular distributions for the rest of their life. People who opt for the latter invariably do much better than those who want everything right now.

That’s what governments are realizing when it comes to golden visas. The benefits of regular, if smaller, long-term contributions to the local economy are greater than a one-off investment, especially if it’s in something as inert as real estate. Regular inward flows of foreign passive income generate economic activity and jobs. Houses don’t.

So what does that mean for people dreaming of a life abroad?

For younger folks in the middle of their careers, many countries—including Portugal, but also some new golden visa opportunities in Southeast Asia—really want to bring in technical skills and management know-how. You don't necessarily have to have a job in that country. If you can work for a foreign employer or clients on a digital nomad visa, the combination of your foreign income and your skills rubbing off on the locals makes you a desirable immigrant.

For retirees, this is an ideal time to take advantage of independent means visas. Some of these have age limits, but many don't. The main thing is that you have enough money to support yourself without being a burden to the government.

If either of the categories describes you, you’re the ideal candidate for an immigrant visa in countries around the world these days.