EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 70

 

Issued by the Minister for Immigration and Citizenship

 

Migration Act 1958

 

Migration Amendment Regulations 2010 (No. 3)

 

Subsection 504(1) of the Migration Act 1958 (the Act) provides, in part, that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.

In addition subsection 31(3) of the Act provides that the regulations may prescribe criteria for a visa or visas of a specified class.

The purpose of the Regulations is to amend the Migration Regulations 1994 (the Principal Regulations) with the aim of improving the integrity of the business skills visa program.

 

In particular, the Regulations:

 

·        remove a criterion providing that an applicant may be eligible for the Subclass 163 (State/Territory Sponsored Business Owner (Provisional)) visa on the basis that they are a “senior manager” to address integrity issues with the caseload;

·        specify different values of business ownership interest required to be satisfied by certain business skills visa applicants according to the size of the business and the type of company that operates the business; and

·        increase the amount of the net value of assets required to be satisfied by certain business skills visa applicants to ensure these amounts reflect current business establishment and living costs in Australia.

 

Details of the Regulations are set out in the Attachment.

 

The Regulations commence on 19 April 2010.

 

The Office of Best Practice Regulation’s Business Cost Calculator and Assessment Checklists were used to determine that there was no compliance cost on business or impact on competition in relation to these amendments.

The state and territory governments were consulted in relation to these amendments. No other consultations were conducted as the amendments have not relevant implications for any external agencies or other bodies.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

 

ATTACHMENT

 

Details of the Migration Amendment Regulations 2010 (No. 3)

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the Migration Amendment Regulations 2010 (No. 3).

 

Regulation 2 – Commencement

 

This regulation provides for the Regulations to commence on 19 April 2010.

 

Regulation 3 – Amendment of Migration Regulations 1994

 

Subregulation 3(1) provides that Schedule 1 amends the Migration Regulations 1994 (the Principal Regulations).

 

Subregulation 3(2) provides that subject to subregulation 3(3), the amendments made by Schedule 1 apply in relation to an application for a visa made on or after the day on which the Regulations commence.

 

Subregulation 3(3) provides that the amendment made by item [1] of Schedule 1 does not apply in relation to an application for a visa if:

·        the applicant applies for:

o       a Business Skills - Established Business (Residence) (Class BH) visa; or

o       a Business Skills (Residence) (Class DF) visa, on the basis of seeking to satisfy the primary criteria for the grant of a Subclass 890 (Business Owner) visa or a Subclass 892 (State/Territory Sponsored Business Owner) visa; and

·        the applicant held a temporary visa immediately before the commencement of these Regulations; and

·        the applicant purchased an ownership interest (within the meaning of the Migration Regulations 1994) in a business in Australia:

o       before the commencement of these Regulations; and

o       while the applicant held the temporary visa.

 

This subregulation ensures that applicants who hold a temporary visa that provides a pathway to the Business Skills - Established Business (Residence) (Class BH) visa, the Subclass 890 (Business Owner) or the Subclass 892 (State/Territory Sponsored Business Owner) visa are not adversely affected by the amendment made by item [1] of Schedule 1 below. The provision ensures that the current business ownership value of 10 percent will continue to apply to temporary visa holders who have already purchased an ownership interest in a business as the holder of the temporary visa and then seek to satisfy the criteria for a permanent business skills visa, regardless of whether the business is operated by a publicly listed company.

 

Schedule 1 – Amendments

Item [1] – Paragraph 1.11(1)(c)

This item substitutes a new paragraph 1.11(1)(c) in Division 1.2 of Part 1 to the Principal Regulations.

Regulation 1.11 currently provides, among other things, that for the purposes of the Principal Regulations that a business is a “main business” in relation to an applicant for a visa if the applicant has, or has had, an ownership interest in the business of a value of at least 10 percent of the total value of the business.

Substituted paragraph 1.11(1)(c) provides that, for the purposes of the Principal Regulations, a business is a “main business” in relation to an applicant for a visa if, among other things, the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:

·        if the business is operated by a publicly listed company – at least 10 percent of the total value of the business; or

·        if the business is not operated by a publicly listed company; and the annual turnover of the business is at least AUD400 000 – at least 30 percent of the total value of the business; or

·        if the business is not operated by a publicly listed company; and the annual turnover of the business is less than AUD400 000 – at least 51 percent of the total value of the business.

The purpose of the amendment is to ensure that where the business is not operated by a publicly listed company, the applicant must own a substantial or controlling interest in a business. The increase in certain ownership percentages is to limit applicants from passively investing in businesses or swapping ownership with other business migrants for visa purposes. This aims to improve the integrity of the business skills visa program. The ownership percentages developed in consultation with the state and territory governments that sponsor the majority of applicants.

Item [2] – Schedule 2, paragraph 160.214(1)(a)

This item substitutes the amount of “AUD500 000” with “AUD800 000” in paragraph 160.214(1)(a) of Division 160.2 of Part 160 of Schedule 2 to the Principal Regulations.

Paragraph 160.214(1)(a) currently provides that to be eligible for the grant of a Subclass 160 (Business Owner) (Provisional) visa, the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $500,000.

The amendment requires that the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $800,000.

The purpose of the amendment is to ensure that the net value of the business and personal assets an applicant is required to have to satisfy the criterion is consistent with current living and business establishment costs. The current amount of $500,000 was set in March 2003 and living and business establishment costs have significantly increased since that time. The new amount was arrived at by factoring in the increase in the cost of living, median house prices and business establishment costs, and was developed in consultation with the state and territory governments that sponsor the majority of applicants.

Item [3] – Schedule 2, paragraph 161.213(1)(a)

This item substitutes the amount of “AUD500 000” with “AUD800 000” in paragraph 161.213(1)(a) in Division 161.2 of Part 161 of Schedule 2 to the Principal Regulations.

Paragraph 161.213(1)(a) currently provides that to be eligible for the grant of a Subclass 161 (Senior Executive) (Provisional) visa, the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $500,000.

The amendment requires that the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $800,000.

The purpose of the amendment is to ensure that the net value of the business and personal assets an applicant is required to have to satisfy the criterion is consistent with current living and business establishment costs. The current amount of $500,000 was set in March 2003 and living and business establishment costs have significantly increased since that time. The new amount was arrived at by factoring in the increase in the cost of living, median house prices and business establishment costs, and was developed in consultation with the state and territory government that sponsor the majority of applicants.

Item [4] – Schedule 2, clause 163.111, except the notes

This item omits clause 163.111, except the notes, from Division 163.1 of Part 163 of Schedule 2 to the Principal Regulations.

Clause 163.111 currently defines “senior manager” for the purposes of Part 163 of Schedule 2 to the Principal Regulations.

This amendment is consequential to item [5] of this Schedule, which omits the criterion relating to applicants who are a “senior manager”.

Item [5] – Schedule 2, clause 163.212

This item substitutes clause 163.212 with a new clause 163.212 in Division 163.2 of Part 163 of Schedule 2 to the Principal Regulations.

Paragraph 163.212 currently provides that to be eligible for the grant of a Subclass 163 (State/Territory Sponsored Business Owner) (Provisional) visa, the applicant must either (a) have, for the last two out of four fiscal years, had an ownership interest in a main business that had an annual turnover of at least $300,000; or (b) be a senior manager.

New clause 163.212 reflects current paragraph 163.212(a) and would provide that the applicant has, for at least two of the four fiscal years immediately before the application is made, had an ownership interest in a main business that had an annual turnover of at least $300,000.

The amendment removes current paragraph 163.212(b) which provides that, as an alternative to the requirement in paragraph 163.212(a), the applicant must be a “senior manager”. The term “senior manager” is defined in clause 163.111 which would also be removed by item [4] of this Schedule.

The purpose of removing paragraph 163.212(b) relating to a “senior manager” is to aim to improve the integrity of the business visa program. Currently a “senior manager” of a small business with little demonstrated skill and experience at senior management level can apply as a “senior manager” for a Subclass 163 (State/Territory Sponsored Business Owner) (Provisional) visa. A “senior manager” would instead be encouraged to apply for an employer sponsored visa (such as the Subclass 856 (Employer Nomination Scheme) visa or Subclass 857 (Regional Sponsored Migration Scheme) visa) or a business skills visa (such as a Subclass 161 (Senior Executive) (Provisional) visa or Subclass 164 (State/Territory Sponsored Senior Executive (Provisional) visa) after this amendment.

Item [6] – Schedule 2, paragraph 163.213(1)(a)

This item substitutes the amount of “AUD250 000” with “AUD$500 000” in paragraph 163.213(1)(a) in Division 163.2 of Part 163 of Schedule 2 to the Principal Regulations.

Paragraph 163.213(1)(a) currently provides that to be eligible for the grant of a Subclass 163 (State/Territory Sponsored Business Owner (Provisional)) visa, the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $250,000 that is available for the conduct or establishment of a business in Australia.

The amendment requires that the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $500,000 that is available for the conduct or establishment of a business in Australia.

The purpose of this amendment is to ensure that the net value of the business and personal assets an applicant must have available for the conduct or establishment of a business in Australia to satisfy this criterion is consistent with current living and business establishment costs. The current amount of $250,000 was set in March 2003 and living and business establishment costs have significantly increased since that time. The new amount was arrived at by factoring in the increase in the cost of living, median house prices and business establishment costs, and developed in consultation with the state and territory governments that sponsor the majority of applicants.

Item [7] – Schedule 2, paragraph 164.213(1)(a)

This item substitutes the amount of “AUD250 000” with “AUD500 000” in paragraph 164.213(1)(a) in Division 164.2 of Part 164 of Schedule 2 to the Principal Regulations.

Paragraph 164.213(1)(a) currently provides that to be eligible for the grant of a Subclass 164 (State/Territory Sponsored Senior Executive (Provisional)) visa, the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $250,000 that is available for the conduct or establishment of a business in Australia.

The amendment requires that the business and personal assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, must have a net value of at least $500,000 that is available for the conduct or establishment of a business in Australia.

The purpose of this amendment is to ensure that the net value of the business and personal assets an applicant must have available for the conduct or establishment of a business in Australia to satisfy this criterion is consistent with current living and business establishment costs. The current amount of $250,000 was set in March 2003 and living and business establishment costs have significantly increased since that time. The new amount was arrived at by factoring in the increase in the cost of living, median house prices and business establishment costs, and developed in consultation with the state and territory governments that sponsor the majority of applicants.