Breaking: Govt opening borders to migrant workers early

NZers returning from Australia can self-isolate from Feb 28; NZers from rest of world, visa holders and working holidaymakers can also avoid MIQ and self-isolate from March 13; Migrant shackles eased

TLDR: The Government has announced New Zealanders will be able to return from Australia and self-isolate from Feb 28 as previously planned, but it will also open the borders to a much wider group of returning residents, visa holders and working holiday makers from March 13, which is five weeks earlier than previously planned.

After months of pressure from New Zealanders stranded both here and overseas, along with mounting calls for more migrant workers to address labour shortages, the Government has acted to open the border sooner and wider for working visa holders, including dropping salary cap for essential workers and removing a work test.

The shackles are being eased. Finally.

But the risks of worsening the peak of any outbreak through March and April have increased, along with a risk of a return to the old easy growth model of pumping up total nominal GDP, exploding house prices and weak real wage growth.

My base case is the Government would cave under pressure from employers calling for a resumption of the cheap migrant labour flows before the 2023 election, with many businesses unwilling or unable to invest in transforming their businesses to rely less on low-wage labour.

It has happened earlier than I expected, thanks in part to fears about an inflation-led spike in interest rates, along with intense pressure in the construction and health sectors, where the risks to both health and housing supply are extreme.

Low wage growth will douse those employer fears about a price-to-wage-to-price spiral, but unsettle those who believed the Government would stick with its plan to tighten migration settings in some long term way to try to pivot to higher productivity and real wages.

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Here’s the official statement and reasoning (bolding mine):

“The five-step plan prioritises returning New Zealanders and brings forward the reopening of key visa categories in just over 5 weeks’ time in order to address worker shortages.

The Government’s reconnecting plan will see all New Zealanders and key visa holders able to start to enter the country over the coming three months, assisting with the economic recovery and immediately address worker shortages. 

“This is a very carefully developed plan that replaces MIQ for the vast majority of travellers while ensuring we maintain ongoing measures to reduce the spread of COVID-19 in our community from recent arrivals.

“Having MIQ for every traveller was a temporary setting for when none of us had protection. New Zealanders need to reconnect with one another. Families and friends need to reunite. Our businesses need skills to grow. Exporters need to travel to make new connections.” Kris Faafoi and Chris Hipkins in a statement released at 11am.

Faafoi and Hipkins said “further visa categories would reopen throughout the year to help accelerate economic recovery.”

The key details of the announcement include:

• The New Zealand border will reopen to vaccinated Kiwis and other current eligible travellers from Australia at 11.59pm on 27 February;

• It will open to vaccinated New Zealanders and to the same groups from the rest of the world only two weeks later on 13 March (the previous schedule was for an April 30 start for these groups);

• The self-isolation requirements for travellers will mirror the way contacts of cases in New Zealand self-isolate, which means a current requirement of 10 days, but that will drop to 7 days after a move to phase two of the pandemic plan;

• All arrivals will be provided three rapid antigen tests at the airport, one for use on day 0/1, and one for use on day 5/6, with one extra for backup; and

• Unvaccinated New Zealanders will continue to need to go through MIQ.

Here is more detail of the schedule from the announcement:

STEP 1 From 11.59pm, Sunday 27 February 2022

• Reopen to New Zealanders and other eligible travellers under current border settings (e.g. people with border exceptions) from Australia

STEP 2 From 11:59 pm, Sunday 13 March 2022

• Reopen to New Zealanders and other eligible travellers under current border settings from the rest of the world

• Open to skilled workers earning at least 1.5 times the median wage

• Open to Working Holiday Scheme visas

STEP 3 From 11:59 pm, Tuesday 12 April 2022

• Open to current offshore temporary visa holders, who can still meet the relevant visa requirements

• Open to up to 5000 international students for semester two

• Further class exceptions for critical workforces that do not meet the 1.5 times the median wage test will be considered

STEP 4 By July 2022

• Open to anyone from Australia

• Open for visa-waiver travel 

• The Accredited Employer Work Visa will open, meaning the skilled and health worker border exception can be phased out

STEP 5 October 2022

Border fully reopens to visitors from anywhere in the world, and all visa categories fully reopen.

Hipkins and Faafoi also said the planned reopening to visa-free tourists was also likely to be brought forward, with July being the latest date we anticipate this happening.

Faafoi promotes migration to solve skills shortages

Faafoi, who last year was talking about a visa settings review to reduce the numbers of migrants coming in for lower-paid jobs, talked up the early entry plan for people with work visas, and plans to widen accessibility.

Here’s his statement (bolding mine):

“This plan represents a significant step forward in addressing skills and labour shortages and accelerates our economic recovery. Reopening of the border to a range of visa holders is a critical part in our plan to rebuild from COVID.

“From 13 March, just over 5 weeks away, we will start re-opening Working Holiday Visa schemes. This will supply urgently needed workers for the tourism, hospitality, wine and horticultural sectors as well as providing some much-needed visitor spending.

“Also from 13 March, we’re simplifying the application process for the critical worker border exception. Skilled workers with job offers paying at least 1.5 times, instead of double, the median wage will be able to come in without the need to demonstrate that their skills aren’t readily obtainable in New Zealand.

“Before COVID, New Zealand was issuing over one million visitor visas per year. What’s being announced today is about gearing up in manageable steps to fully re-open as safely as possible to enable us to live with COVID, but not be overwhelmed by it.” Kris Faafoi

Extra info from the news conference

I attended the news conference held by Ardern, Grant Robertson and Faafoi at BusinessNZ’s premises in Auckland after the speech.

Key details that emerged from that:

• The Government expects the lower wage threshold for essential skills workers to increase visa numbers by 10,000 to 20,000 a year, and for an extra 50,000 people to come in as holiday makers with work rights;

• The arrivals are being phased so the backpackers arrive as tourists through the winter and set as employees as tourists come in through the second half of the year and into the 2022/23 summer;

• Ardern said the Government wanted to bring forward the end of July deadline for the MIQ-free arrival of anyone from Australia and anyone from countries that have a travel visa waiver, which include US, UK, EU, South Korea, Japan, Canada, Argentina, Singapore and Malaysia, but not China, India, the Phillipines or South Africa;

• Ardern said she would lead trade delegations to Australia, the USA, Asia, and Europe at unspecified times later this year; and,

• She described the Feb 28 and March 13 as very firm: “We have no intention of changing those dates.”