Govt to leave migration tap turned off when the borders reopen
Nash delivers Faafoi speech, which announces 200 new places for wealthy arrivals; Refers to tougher minimum employer requirements and labour market tests, but no detail
TLDR: The Government has unveiled a less-than-detailed migration policy shift to leave the tap of cheap and easy temporary workers turned off once the Covid-19 border controls are lifted.
The ‘policy reset’ was pitched as the beginning of a ‘conversation’ with employers, referring to a full Inquiry that has only just begun at the Productivity Commission and an ongoing review by Faafoi of the skilled migrant settings.
In a speech written by Immigration Minister Kris Faafoi and delivered this evening in the Beehive by Tourism and Small Business Minister Stuart Nash, the only new announcement was of 200 new places for rich migrants. The speech referred vaguely to tougher rules for accredited employers and work tests, but gave no reference to residency targets, student numbrs, population policy or any suggestion of size of reduction in migration.
Nash gave the widely-promoted speech titled “Immigration system reset – setting the scene” on behalf of Immigration Minister Kris Faafoi, who was sick.
Nash made a broad case to tighten settings for temporary workers.
He said the Government would review the Skilled Migrant Category; “with more to say on that soon.” But he said there were no plans to change “specific purpose, short-term business or visitor visas, the Working Holiday Schemes, nor non-partnership family and humanitarian categories.”
‘An opportunity for a reset’
However, Nash said Covid-19 was an opportunity for a reset.
“It presents once-in-a-generation opportunity to change some of the shortcomings in the way we’ve been doing things, and that includes the way we manage immigration,” he said.
He announced a new “Investment Attraction Strategy” to encourage high-value international investment into New Zealand. Here’s the detail on that in the speech:
The strategy will guide our approach to attracting higher levels of productive investment to help establish, grow and scale New Zealand-based businesses; to increase the flow of ideas and talent to our shores; and strengthen our international connections as we prepare for the future.
We want targeted, high-quality investment that establishes frontier firms, brings skills and technology to New Zealand.
We have also created border exceptions for the Innovative Partnerships Programme and New Zealand Trade and Enterprise’s Investor Programme to enable representatives from global companies to come to New Zealand to conduct on-the-ground negotiations with companies that they wish to invest in.
He later said these schemes would be allocated 200 places in MIQ through the next year.
Nash made the case for change in the following parts of the speech (the bolding is mine:
Parts of our system have been performing well, and we want to retain and strengthen these areas to make them as effective and efficient as possible.
But while we’ve been progressively moving to reduce our reliance on lower-skilled migrants over time, we’ve still seen significant population growth – one of the highest in the OECD – driven, in large part, by migration.
Migration had become fueled by increasing numbers of temporary migrant workers and students.
Temporary work visa holders make up almost 5 per cent of New Zealand’s labour force. That is the highest share - by a significant margin – compared to other OECD countries. Poland is next with almost 4 per cent.
Increasingly, these temporary workers are at lower skill levels – nearly half of all Essential Skills visa approvals in 2019 were at the two lowest skill levels.
This means businesses have been able to rely on lower-skilled labour and suppress wages rather than investing capital in productivity-enhancing plant and machinery, or employing and upskilling New Zealanders into work.
In the decade prior to COVID-19, we saw the number of people on temporary work visas in New Zealand double – from fewer than 100,000 to more than 200,000.
We have also seen an increase in demand for residency in New Zealand, with the vast majority of applicants already being onshore. For example, around 80 per cent of applications for the Skilled Migrant category come from onshore applicants.
Temporary workers and new residents will always have an important role to play in New Zealand society, they make a significant contribution to our country, as do those who settle in New Zealand under the United Nations refugee quota programme – and we remain committed to that programme, just as we remain committed to an immigration mix which includes a portion of temporary workers.
But research by the likes of the Productivity Commission and the New Zealand Institute of Economic Research shows we can support New Zealand’s economic growth and wellbeing by making improvements to our immigration system.
The OECD, in particular, has said that ‘the employer-assisted temporary work visa system is not limiting recruitment of migrants to resolving genuine skills and labour shortages, is attracting too many low-skilled migrants and may be weakening incentives for employers to employ and train New Zealanders. This has limited our ability to create jobs and improve productivity.
‘We can’t turn on the tap again’
Nash summarised thus:
“When our borders fully open again, we can’t afford to simply turn on the tap to the previous immigration settings. That path is a continuation of pressures on our infrastructure, like transport, accommodation, and downward pressure on wages.” Nash said.
“In some cases, I suspect low-skilled jobs will make way for different, higher-valued jobs as industries invest in automation and new delivery models,” he said.
“Let me be clear, there will still be the need for migrant workers where there are no Kiwis to fill jobs. But a lesson we have learnt from the past 15 months is that it’s better to be prepared and resilient to global shocks.
“COVID-19 is a change-point.
“COVID-19 has starkly highlighted our reliance on migrant labour – particularly temporary migrant labour. The pressure we have seen on housing and infrastructure in recent years means we need to get ahead of population growth.”
What wasn’t in the speech
Nash later confirmed the speech did not include mention of the residency target, any details on changes to skilled worker visa settings. It also included no changes to student numbers or settings, no changes to holidaymaker work rights and no mention of a population target.