State Of The Nation
The news media in New Zealand this week has had plenty to discuss, given our Prime Minister (Christopher Luxon) delivered his second “State of the Nation” speech yesterday, during which he rolled out a pretty strong agenda for growth. In fact, amongst many quick one-liners, the stand out was this one “We have to go for growth. It isn’t up for negotiation any more.”.
Given New Zealand has been dragging its heals over the last few years, trying to shake off the post-Covid hangover, this sort of rallying cry is potentially long overdue. There are some fairly grand plans in here to target a variety of sectors and to lift overall economic performance - the message being that saying no to things that might generate us an income is not language that this Government wants to entertain.
In amongst all of this, there are several very significant implications for our immigration system and some interesting signals for potential migrants to interpret. This week, we are going to try and interpret a few of those here, and how this big push for growth might translate in terms of the changing nature of our visa system.
Immigration & The Economy
Immigration, for a country of our size (population of just over 5 million) isn’t just a nice to have, but rather it is an economic necessity. No matter what state our economy (or nation is in) we are very reliant on being able to bring people across our borders for a variety of different reasons.
Visitors contribute significantly to our earning potential and GDP and despite a big push from our tourism sector, we are still below our pre-Covid levels. Our Minister of Finance (now also Minister for Economic Growth), hinted at this issue earlier in the week. She wants more visitors and she wants them in a hurry.
Students bring in a huge level of investment and support to our tertiary education sector, as well as assisting primary and secondary schools to secure additional revenue.
Investors are an obvious benefit, bringing in capital for investment and also their business skills, networks and expertise.
Skilled migrants contribute to our longer terms skill shortages, bring human capital and assist in growing various aspects of the economy.
Temporary Workers help to fill short to medium term skill shortages, with many being able to secure a longer term future here, creating a longer term benefit.
Migrants of all shapes and sizes and flavours are essential to our country being able to function and will form a significant part of that growth proposal. However how that actually all works in practice is a far bigger fish to fry. A simple example is wanting more tourists - great idea, but hard to execute when you have a visa system so focused on mitigating risk. Some of the biggest tourist markets for New Zealand are also considered to carry the highest level of risk. So balancing those two things is going to be a challenge.
However what our Government does appear to be pushing for, which I suspect will have flow-on effects to our visa system is a less risk-averse approach where saying “yes” to anything that might generate dollars in pockets here, will be the order of the day. That should mean a more pragmatic approach to visa processing and less of the “you shall not pass” mentality.
Investor Migrants
Investor Visa Changes
The current investor scheme is set to be replaced as early as 01 March with a new and hopefully improved policy.
If the Government is looking to bring more money in to New Zealand, then alongside tourists, our investor visa applicants are an easy win. We already know that the current investor visa policy has flopped, largely because it is too complicated, requires investors to assume far too much risk upfront and is riddled with bureaucrats, all wanting to control the process (and get tickets to some glitzy offshore marketing events).
You dont need to market to investors, you just need to have a policy that works, be open to these individuals coming here and understand that they will bring their wealth here over time. In fact its often the money these applicants bring much later on (not as part of the visa application itself) that generates the greatest benefit. The last Government failed to recognise that, when rolling out the current Active Investor Visa Plus category (nice title, terrible policy).
We know however that this category is about to be overhauled, with a new and we hope improved version being released in early March. The current Minister for Immigration made that announcement last weekend and has assured people that it will be a far more workable and practical process. I suspect that we will see less emphasis on NZ Trade & Enterprise being involved, more relaxed investment criteria and a multiple category approach, rewarding those looking to invest more or in to more active investments. A balance perhaps, between what we have now and what we had previously.
This category has always been interesting, because for many locals, it is perceived as “buying your way in” and in it sort of is, but so what? If applicants bring their wealth and entrepreneurial skills here, and we benefit from it, and they do as well by securing the right to live here, then its a win-win situation. I am encouraged by the fact that our Immigration Minister and Prime Minister seem to be singing from the same page in terms of welcoming these people here, with a system that makes sense.
Skilled Migrants
Skilled migrants, form the lions share of our Resident Visa approvals, although that number has been dropping in recent years, due to a change in the way our policy works. Previously all applicants under this category had a threshold to meet in terms of points and as soon as they met that (usually right away with a job offer) they could apply.
Our current system however allows some applicants to apply right away (Straight to Residence or six point candidates) whereas others have to work their way towards the Residence goal (some over a three year period). For some applicants, working towards Residence is a good idea, but for others, it makes little sense.
Skills Bring Benefits
We still have a way to go, to get this particular category right but the will is there to change it.
For example, a PhD holding applicant who secures a job here as a Cafe Manager qualifies to apply for Residence right away, whereas a Bachelor Degree holding, Accountant, earning twice the likely salary as the Cafe Manager, has to work for potentially three years.
While I dont have an issue with people having to earn their way to Residence, that process should also take account of the level of value people bring, and the often enormous sacrifices they make to get here. In reality, securing a job offer here, in a skilled position, earning a good income and being prepared to settle are really all the commitment you need to show.
With more and more New Zealanders leaving this country in search of high salaries across the pond, I suspect that the spotlight will eventually land on this category as a means to balance out that equation. The Government has already signaled that changes are coming and of course this new “go for growth” ethos, which will rely heavily on injecting skills and labour, could mean some fairly significant changes in this space.
It follows that the Government will be looking at every aspect of our immigration system closely in the coming months, because from an economic standpoint, immigration is an easy lever to pull. Making that work however, is not just about changing the rules (which can be done quickly if there is the will), but making sure the system comes to the party will be the bigger challenge.
Where To Start?
If it were me and if I were in charge, I think the first step would be to take a look at INZ’s approach to risk and understanding how that ties in with the need to increase temporary visa numbers, particularly tourists. Are we genuinely assessing risk when its required or just applying the same cautious approach to every applicant.
I would roll out the investor visa and ensure that in doing so, we make as much noise about that as possible. There are a lot of people with money, looking to relocate their wealth and so now is a golden moment for NZ to open the doors to those individuals.
I would push ahead with a review of the skilled migrant system and consider what our key goals are and whether the disincentive for people having to work here for several years, before having the certainty of Residence, is actually something we need to keep. If we want skills, then why not attract those skills with the one thing migrants treasure the most - certainty and speed of outcome.
For migrants, considering the move, don’t fear the change. As I say to all of the people I consult with, if you are skilled, employable and speak English, then odds are, there will be a way for you to make this work. Change will happen, as it always does, but don’t let that distract you from pursuing a new life in this great (not perfect) little country.
Interested…then get in touch with us today.
Until next week.
