In July 2009 the Government introduced new Investor policies to encourage wealthy offshore migrants to settle here:
- Invetor 1: anyone able to invest over NZ$10 million for 3 years can obtain Residence almost outright;
- Investor 2: those able to invest NZ$1.5 million or more for 4 years can be granted Residence so long as they demonstrate strong past business experience and some English ability.
This was meant to invite a good dose of capital into the country. However, the reality has not been so dramatic. At a speech in July 2010 the Minister announced that 34 applicants worth $91 million had either been approved for funds transfer or transferred their investment funds to New Zealand already. In January 2011, according to another announcement:
over $102 million has been transferred and invested in New Zealand under the Business Migrant Policy and $133 million has been approved for funds transfer.
This may sound impressive, but remember that this is the total performance of the Policy over a period of 16 months. The Government is right to congratulate itself over an improvement on the last Labour Government’s Investor scheme which delivered just 3 approvals in 18 months. But even if we assume that all the “approved in principle” funds are actually transferred, it still only amounts to under $15 million per month. That’s a mere trickle at a time when New Zealand needs a flood.
We are told that New Zealand is a “very attractive” place for Chinese invetors to bring their riches. So why aren’t they pouring in? There are a couple of reasons for this. The first is that China’s strict currency controls prohibit the direct transfer out of the country of the sort of sums needed to fulfil investment requirements. The Government in public, and Immigration managers whom I have met in private, will not budge on their stance that “indirect” transfer of funds is not allowed. This is despite the fact that it doesn’t appear to bother such countries as Australia or Canada who vie for investor dollars.
In my role on the Board of NZAMI I have seen figures showing that almost no Chinese investors have been able to convert their “approval in principle” into actual Residence, probably because they can’t get their money out of China.
More generally, the requirement that high net worth individuals must stay in New Zealand for at least 5 months a year during their qualifying period of 3 or 4 years after the grant of Residence just doesn’t sit well with people for whom the world is their oyster. Yes, New Zealand is said to be the 7th happiest place in the world. People love coming here and admire our scenery. But would someone who can travel the world be content with sitting in Auckland or Dunedin for half the year, in a country which is not exactly a shopping or cultural mecca?
It’s fair to say that people who want the valuable privilege of New Zealand Residence should make sacrifices for it and be prepared to be part of this country. Yet if the object of the exercise is to bring in the people with the dollars, and those people can’t come in or are staying away in droves, then this stance is simply self-defeating.