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What curtailing immigration might do to New Zealand businesses

Last month, the Government announced major changes to the ‘skilled migrant’ Visa category, with anyone earning under $49,000 a year now no longer meeting the ‘skilled’ criteria. Immigration lawyer Aaron Martin weighs in on the impact this will have on New Zealand's business sector.

Under the changes due to start in three months, anyone who earns less than $49,000 won’t meet the requirements for the skilled migrant category visa.

As well as this, lower skilled visa holders will be limited to a period of three years maximum, after which a stand-down period will apply before another visa can be approved.

These changes are intended to ease the pressure on infrastructure, housing and public services, particularly in cities such as Auckland, where residents are growing increasingly frustrated with bottleneck traffic and skyrocketing house prices.

It’s also a move by the Government to curtail foreigners from taking jobs that Kiwis could do.

However, immigration lawyer Aaron Martin says these changes won’t solve the problems New Zealand’s labour market is facing, considering the country doesn’t have enough people on the ground to fill those vacancies.

“We’re facing a major skills shortage and now it is even more difficult to recruit from offshore. The overall impact will be businesses will find it increasingly hard to find the talent pool that they need,” Martin says.

New Zealand is currently in the midst of a problem that many first-world countries are facing, he says, with historically low birth rates not helping to fill vacant jobs in booming areas like housing and tourism.

He says migrants are a crucial part of filling this gap in the labour force in New Zealand.

“When you’ve got ageing population to support that’s costing you more and more in terms of health and you aren’t pumping out enough people in science, people in construction, people in IT – then trying to impose restrictions on the number of people coming through is dangerous,” he says. “From a macroeconomic perspective, they’re running the risk of exacerbating skill shortages.”

With the current rules in a lot of cases, employers have to prove they can’t find a New Zealand citizen or resident to do a job.

Martin says if the jobs aren’t being filled by New Zealanders, it’s illogical to restrict migrants coming in.

“If the employer has proven that already, why is it we’re suddenly trying to limit people getting work visas? It means the demand is there,” Martin says.

More money = more skills?

One of the key issues of the immigration changes is using the New Zealand median income as a measure of skill.

Martin says using the national average income as a benchmark to judge people’s abilities by is troublesome.

“They’ve taken a statistical income figure and said we’re going to use that as a measure of skill, when in fact, what it is a measure of average income,” he says. “We’re using a piece of statistical data for a use that it wasn’t intended for, and we’re applying that as entry criteria. They’re going to run into some problematic issues with that.”

He says many occupations that are considered skilled will now no longer be able to meet the threshold, based on the government using a statistical piece of information for an improper purpose.

“It’s based on an average imposed or created from the market, so why on earth is it a reflection of skill?” he says.

Recently, highly skilled industries like New Zealand’s tech sector have been on a mission to recruit overseas talent with campaigns like Looksee.

The tech sector – and in particular, IT jobs – feature prominently on the IT skills shortage list.

Under the new rules, migrants will no longer get points for qualifications areas of "absolute skills shortage" or for experience and qualifications in future growth areas, like the ICT and creative industries.

However, jobs in the tech field are usually well paying, with Payscale saying the average annual income for a web developer being around $56,000.

Martin says these changes may impact some of the less lucrative jobs in the tech sector, like customer services and sales support roles.

But there’s also a handful of occupations in The Australian and New Zealand Standard Classification of Occupations (ANZSCO) top ‘highly skilled’ category that are notorious for being highly skilled yet lowly paid, such as teachers, journalists, and nurses.

Filling these occupations is integral to a well-functioning society, but under the new rules, migrants in these industries may struggle to meet the requirement.

Meanwhile, those who earn upwards of $73,299 will automatically be classified as highly skilled.

Tending to the regions

Another issue arising from the changes is whether employers in New Zealand’s regions will be able to meet this new bar set for ‘skilled’ annual pay.

“There’s going to be situations where people are undoubtedly doing a skilled role, and sure, in a market like Auckland, you might get paid above $49,000, but in a provincial centre, maybe that isn’t really the market level,” Martin says.

Notably, the skilled migrant visa isn’t designed for entrepreneurs, start-ups and those who are self-employed.

Instead, there are other visas dedicated to this like the entrepreneur visa (which you need lots of money or experience for) or the Global Impact Visa, which give Edmund Hillary Fellowship participants a three-year open work visa to live and work in New Zealand and grow a global business.

Martin says his recommendation for what should happen to help the skill shortage is for the government to take the same approach as the Australian government and remove jobs they no longer wanted to be considered ‘skilled’ from the existing list of skilled occupations.

“If there are certain jobs that are causing you problems, redefine those particular roles and pose requirements around those roles,” Martin says.

“A blanket, arbitrary approach means there’s going to be a lot of employers who can't get long term commitment from staff because of this.”

The changes are due to take effect August 14.