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In June, the New Zealand Government announced that the investor age limit would be lowered 30 years from 85 to 54, the amount of investment required would double to $2 million and the money would have to be invested with the Government.
Business New Zealand, the country's largest advocacy group for enterprises, had predicted that changes to the investor category immigration rules would drive investors away. They say that their fear has now been confirmed by Labour Department statistics.
The New Zealand government stated when it announced the changes, that the rationale was to ensure investors were genuine. The money invested would be used by the Government to fund increased infrastructure spending. The changes meant private investment would no longer be allowed and the only return the investors would receive on their $2 million would be the rate of inflation.
Business New Zealand said at the time that this would make New Zealand a significantly less attractive investment option and slash the number of potential investors.
Business New Zealand released the following statement:
"When we first made our concerns known in June, New Zealand was attracting about 30 business investor migrants a month. Since the changes came into force in July, New Zealand has accepted just two.
"It is not hard to understand why. Potential investors are required to have high levels of business skills and experience yet they are forced to passively invest their money with the Government. Treasury, in its usual understated way, describes this as "counter-intuitive". Previously, investors were expected to show a commercial rate of return which encouraged more active involvement in the economy.
"It is also worth considering that official papers reveal the Government was predicting between 200 and 400 migrants a year to use the business investor category. As a result, they were anticipating significant funds being available for infrastructure spending.
"As we warned, the changes have deterred investors to such a degree that these expectations will not even come close to being met. New Zealand is losing access to investors' skills and capital and virtually no money is being channelled into infrastructure.
"This is a policy the Government should look at again. It sends the wrong messages to investors and above all it simply isn't working. It is a heavy-handed policy change that is succeeding only in driving potential investors to Australia."
