Visa Fee Monopoly
When you are the only game in town, the ability to charge whatever you like is pretty easy and that appears to be how the current Government sees our immigration system, who are in fact, the only game in town. Having a monopoly over the visa process, means they control the pricing and in today’s media announcement from the beehive, INZ has been tasked with increasing almost all visa application fees, effective from 01 October 2024.
None of this is unexpected, given the Minister has been signaling fee increases for some time and in news only a few weeks ago, those discussions were being held at cabinet level. At that time, there were some pretty big numbers being thrown about and what we have been given today, appears to be a slightly watered down version of the initial proposal.
Fees have increased across the board for skilled applicants, family category applicants and almost every other category, although visas for tourists and similar temporary categories have only had minor changes.
There is no doubt this will have an impact on specific sectors, who regularly employ higher volumes of migrant labour, where visa charges have doubled for Work Visas and there have been small increases to the job check process. For these high-volume applications, there will be a few people thinking twice before writing the cheques.
For most other applicants, these fee increases, whilst being unavoidable, are actually not that significant in the context of an international move and once the dust settles, they will just become the price you have to pay (as we have seen with every other fee increase over time). However these changes are significantly higher than any we have seen in the past, and clearly the Government is aiming to achieve a bit more than just additional revenue.
Price Increases
If you want to wade through the full list of fee increases you can do so here (Visa Fee List), however we have summarised some of the key changes below, for the most common categories. Whilst all skilled category applicants will be handing over a bit more dosh, the increases are slightly lower than were initially predicted.
Fee Increases
Skilled migrants will end up paying an extra few thousand dollars, depending on how many applicants are included. Investors will be forking out another $20,000.
Work Visa applicants will need to pay twice the original fee, with the cost going up from NZD$750.00 to NZD$1540.00 (just over double). Partners, who wish to accompany the main visa holder, will also be paying twice the amount to come along, with their fee increasing to NZD$1,630.00. No specific mention of dependent Student Visas, but I suspect these have jumped as well. So on the temporary visa front, a family of four, are now going to be paying a fair bit more to make the move, which will be stage one of the process. The Resident visa costs will also increase but for some that will be a bit a future cost, payable after one to three years of working here. For some applicants this won’t really be much to consider, and when you have no other choice as to who you pay, you just have to end up wearing it.
However for lower skilled migrants and particularly the employers who on occasion are supporting those fee payments, this will represent a significant increase. For example, if you are a high-volume employer, bringing in 10, 20 or more staff, the costs are going to stack up, if you are the one covering the visa fees. If your applicant’s cover those costs, it might be a deterrent for some, although realistically if you want to get here, you will find the money.
Those applying for Straight to Residence (no temporary visas) will have to cover that additional Resident visa cost upfront at an extra NZD$2,000.00 plus per family. Whilst some might claim that is too big a jump, compared to other countries we are still very competitive on the Resident visa score. Australia charges a base fee for the main applicant and then additional costs per family member, which can easily see the total, get close to or even exceed AUD$10,000.00.
So while prices have jumped in what appear to be Olympic hurdle quantities, they are still very competitive compared to other countries seeking to lure in skilled migrants. There is one standout though and that is the Active Investor Visa which jumps by a very hefty $20,000.00 (from approximately $7,000). I guess if you are investing at least $5 million here to qualify, that fee is probably not going to put you off (although the actual policy might).
Family applicants will now have to pay more and their increase is fairly significant, at nearly double the original pricing. However, the Government is very aware that when you are bringing in family you are a captive audience and will likely pay whatever you need to pay (particularly for partners).
When you shake it all out, the fee increases will first appear as a bit of a shock to the system (no one likes to pay more for anything), however the market will eventually absorb the cost. The more challenging part will be how employers (particularly those funding their staff shortages and visa applicants) will react to the changes, which for some, will create a disincentive - one might suggest that the Government had this in mind (more on this below).
Why The Change?
The Minister, in her official press release, largely focused the changes on shifting the benefit to those using the system and away from tax-payers, as well as citing the need to recover costs and increase efficiencies.
“The new charges reflect the costs associated with visa processing, assessing and managing more high-risk applications, and increased compliance costs as we deal with higher levels of migrant exploitation, managing more asylum claims, and maintaining and upgrading Immigration New Zealand’s ICT systems”
The irony of course being that those sought-after efficiency gains are largely based on the sink-hole that is a $60 million dollar and counting visa processing system that needs millions per month in ongoing maintenance work. There are very few organisations in the world, who have sunk that much money in to an ICT ‘solution’ that still doesn’t work properly. That system was supposed to streamline processing, reducing head count for INZ and leading to swifter decision making times - the end goal of that would be either a reduction in fees or the status quo. What we have here is the opposite.
The Pricing Agenda
When INZ increases prices, particularly to this extent, it is hard not to see a potential hidden agenda.
Migrants, who actually don’t benefit from the this new system (because it is slower, more clunky and full of holes), are going to be the ones paying for it (or rather repaying for it).
The Minister mentions the increasing cost of dealing with exploitation, which also ironically was a result of the previous Government’s decision to take its foot off the brakes and essentially reduce verification and quality control, in a means to get to decisions more quickly. That lead to rogue actors, sneaking through the back door to take advantage of hopeful migrants. So to deal with that mistake, the Government appears to be tacking on some additional fees for future applicants (I might have written that a little differently if I were the Minister).
There is no doubt that the cost to process visas has increased and to be fair, our visa fees haven’t really kept up with those increases. However those additional processing costs are as a result of years of poor planning, over-priced IT projects and policy failures, leading to a massive deficit that someone needs to pay for.
There is also chatter within the industry that there is a bit more to all of this, and increasing work visa charges is going to help suppress lower skilled migration, which in fairness it will do, but not directly. I am not sure if that was a part of the Governments specific agenda, but it might just be a pleasant consequence.
What is probably less obvious, but more relevant is that the INZ budget is blowing out, they have ICT systems that are crumbling under the weight of their own mismanagement and despite all of that money spent, the tax-payer is still picking up the tab. This is a bit of a scramble to recover wasted spend, some political optics to push the cost back on to migrants and will help the coalition as they try to find money to spend elsewhere (like tax cuts).
Beat The Increase
Personally I think that the Government could have approached this differently and I would have been in favor of a model similar to Australia, where the quantity of applicants, influences the fee - after all a single skilled migrant is paying the same amount as someone bringing a family of four and yet the cost to INZ is substantially higher, the more applicants there are to assess.
Fortunately, the Government has given applicants a little bit of time to adjust and those that were on the fence about applying, but who qualify to do so, have just under two months to beat the price hikes. The fee increases will take effect on 01 October 2024 and so there will be a few people able to get the current “bargain” that existing fees now represent.
However for many applicants who are waiting to clock up enough work experience in New Zealand or the time they need with their partner, they wont have much choice but to stomach the higher fees. For anyone who was thinking about applying but has yet to do so, and if they qualify and have the documents they need, then my advice is to move now. It could save you a fair bit of cash along the way.
If you need some help getting that application across the line, before it costs you a bit more, then get in touch with the team today.
Until next week!
