Australia Sharply Reduces BIIP Visa Availability for 2023/24 Despite Record Backlog

James Hall
Singapore

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When it first launched the Business Innovation and Investment Programme (BIIP) the Australian government had a clear objective: To attract entrepreneurs, investors, and business owners to contribute to the growth of the Australian economy. Over the years, however, the program has undergone significant changes that reflect the government’s shifting priorities and economic conditions.

Evolution of the BIIP

The BIIP, as we know it today, first opened in 2012. It represented a significant change from the previous policy, increasing the minimum investment required from AUD 750,000 to AUD 1.5 million.

The program has four core streams:

• Business innovation;
• Investor;
• Significant investor; and
• Entrepreneur.

Each stream caters to different types of business people and investors. The initial provisional (temporary residence) visa is valid for five years. After a minimum of three years, subject to meeting requirements for activities in Australia, applicants may submit permanent residence applications.

In 2015, the Significant Investor visa program underwent structural changes and, between 2015 and 2019, the processing time increased due to a surge in applications. The COVID-19 pandemic significantly increased the program’s size. In 2021, the BIIP saw more major changes, including increasing the minimum investment from AUD 1.5 million to AUD 2.5 million.

The program faced criticism in 2022, however, from the new national government in Australia. The Australian Labor Party, historically aligned closely with worker unions, removed priority processing for the significant investor visa and took steps to reduce the program size.

Current Status and Future Direction

The Australian Labor Party has been focusing on increasing the size of the general skilled (professional) and employer-sponsored visa categories. The number of places for these visas increased significantly from 50,900 in 2021/2022 to 91,652 in 2022/2023 and 129,900 in 2023/2024.

The BIIP’s planning levels, by contrast, have been reduced. In the 2021/2022 program year, 13,500 places were available, with 6,860 for new applications. These numbers dropped to 9,500 places, then further lowered to 5,000 places (810 for new applications) in 2022/2023. The planning levels, a ceiling for the maximum number of visa grants per year, are reviewed regularly and can be adjusted in response to economic conditions and demand.

The backlog of BIIP applications is a significant issue. As of June 30th, 2022, the queue consisted of 32,412 applications. If current 2022/2023 planning levels were maintained, it would take over three years to process this backlog. However, with the reduced planning level for 2023/2024, this will increase further. A particular concern related to processing times is that the age of dependent children is assessed at the time of the decision of the application and, in most cases, if a child turns 23 before this decision, the child will not be granted a visa

A review of Australia's migration system commenced in November 2022 and culminated with the publishing of the final report in April 2023. The report was critical of the BIIP, indicating that, on average, BIIP migrants make a lower economic and fiscal contribution than the average Australian or skilled independent migrants. The report raised concerns about the tendency for migrants to invest passively or in low-productivity businesses, and their businesses' turnover results were often poorer than those owned by longer-standing residents. The report cited the estimated average per-person fiscal impact as negative AUD 80,000 for BIIP migrants compared to a positive AUD 205,000 for skilled independent migrants.

Despite these criticisms, the report noted that outcomes for the small Significant Investor stream have been stronger than for the remainder of the BIIP. It suggested that the BIIP's future as a substantial program should be reconsidered.

A Look Ahead

The future of the BIIP is uncertain. The planning level for the 2023/2024 year was announced this week, with only 1,900 places, a sharp reduction from previous years. The government has yet to announce the exact number of new applications it will permit, but it is likely to be significantly lower than the 810 new places for the current year. These details should be available by July 2023.

Another significant change to the BIIP is the increase in fees. Effective from 1 July 2023, BIIP fees will surge by 40%. This means the current fees of AUD 4,240 for the entrepreneur stream, AUD 6,270 for business innovation and investor, and AUD 9,195 for the significant investor stream will see substantial increases.

While the BIIP was designed to attract foreign investment and stimulate the Australian economy, it has faced several challenges and criticisms over the years. With recent policy changes, a reduction in available places, a backlog of applications, and an upcoming fee increase, the program’s future is in flux. The review of the migration system and its criticisms of the BIIP may lead to further modifications of the program, potentially reshaping Australia's approach to attracting foreign investors and entrepreneurs. As these changes unfold, it will be crucial for potential applicants to stay informed and adapt to the evolving landscape of business immigration to Australia.

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