Editorial: Welcome mat firmly out for rich migrants

Few policies have backfired so dramatically in the last decade as the placing of strict conditions on investor migrants in 2005. A healthy flow of rich migrants from North Asia dried up almost overnight. Such was the legacy of the previous Government's response to a wave of anti-immigration sentiment stirred up by Winston Peters, coupled with Labour's apparent belief that the quality of life in this country would be enough to persuade Chinese millionaires to jump through hoops to get here.

The Clark Government soon enough realised the magnitude of its error and set about undertaking repairs. But the damage was done. There has been little improvement in the number of investor migrants since. Turning the tap off was easy. Restarting it by enticing migrants to come here, rather than the likes of Australia or Canada, has proved difficult. The Government has, therefore, done the right thing in making it still easier for business and investor migrants to come to this country.

The new policy allows investors with $10 million to get residency in three years without any English skills or business experience. There is no age limit, and the migrants will have to remain in New Zealand for only 20 per cent of every year. Previously, such migrants required $20 million for four years, and had to have four years' business experience.

Migrants willing to invest $1.5 million will also get residency now, although they must meet language, age and business experience criteria, albeit at a lower threshold than before. A new entrepreneur category will be created allowing applicants to meet residency requirements more quickly once they have invested $500,000 and created three jobs.

The hallmark of the new regime is its strong strand of realism. In an ideal world, even the wealthiest of applicants would be required to pass an English test, if only because an understanding of the language is often cited as a major factor in successful settlement. But in the real world of China and Korea, the most prospective areas for applicants, most people do not speak English. The pragmatic Australians do not insist on proficiency in English, and nor should this country, especially in the case of the richest group of migrants.

A useful gauge for determining whether the new policy will be successful is to compare it with the 2005 approach that proved such a deterrent. The latter included astounding provisions, such as a requirement to surrender $2 million to the Government for five years for investment in infrastructure projects. The money was to be returned at the end of that period, with interest based on the inflation rate.

It is little wonder this caused potential investor migrants to take their capital and skills elsewhere. And that they were not convinced New Zealand was worthy of reconsideration when the same Government ditched many such draconian rules two years ago. Short-term rule-making sparked by xenophobia is never an attractive spectacle. At least now there is a consistent policy trend underpinned by a desire to be as welcoming as other countries keen to attract business and investor migrants.

Some safeguards have been retained. The Government says rules and monitoring will ensure money is invested and not just put in a bank account or spent on residential property. It is reasonable to ask whether the property restriction is equitable, given the rules that make real estate such an attractive investment to New Zealanders. Nonetheless, this policy clears out the vast majority of offputting obstacles. A welcome mat is now out, and this country finally stands a good chance of reaping a rich profit.