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New Zealand 5th Wealthiest Country (Australia 4th)

Posted by Iain on Nov. 8, 2019, 3:45 p.m. in New Zealand

 

A week ago a client, whose heart was clearly never really in the process, decided to leave New Zealand after two weeks in the country looking for work. We got a lengthy email telling us how unaffordable it is.

The fact that he never resigned his job in South Africa suggested to me a half-hearted effort. He never really wanted to leave behind his (good, well-paying by SA standards) job and his South African ‘lifestyle’ for his children, despite what he had told us. Although we warned him getting work inside of two weeks is usually reserved for teachers and tradesmen, he seems to have spent the entire two weeks convincing himself that he was going to be poor if he moved to this country.

As my colleagues and I explain to anyone who listens, until you have a job, hold a work visa and are earning local currency, you cannot get all the cost of living advantages that tourists, like him, cannot get (and therefore cannot see or possibly imagine). Education that is 97% funded out of our taxes, health care the same, drugs (prescription, I hasten to add) that are virtually ‘free’ is not something tangible a tourist (looking for work) will see for the most part because it comes later, after there is a job in hand. Likewise access to social security and pensions most of which are funded out of taxes are not on view for those visiting for two weeks.

All the South African sees is house prices (eye watering) and a cup of coffee costing twice as much as in South Africa. Suddenly New Zealand is unaffordable….

Garbage for the most part of course.

This viewpoint is reinforced by the Global Wealth Report released by Credit Suisse last week naming New Zealand as the fifth wealthiest nation on the planet on a per capita basis.

The countries ahead of NZ? Switzerland, Hong Kong, USA and Australia (4th).

While global growth in wealth increased by 2.6% over the past year, in New Zealand each adult New Zealander was more wealthy than the year before by around 3.1%.

Rising house prices was a large contributor to that growth which makes me wonder a little. I always say a house is only worth what someone writes me out a cheque for, if and when I sell it. Telling me my house is worth $1 million is all well and good - I don’t have $1 million in my pocket. I might feel wealthier but unless I am buying and selling real estate all the time for most of us the value isn’t being realised (don’t start me on capitalism as a giant Ponzi scheme please).…

In New Zealand around 47% of an individual’s wealth comes from the value of their property so any downturn in that assets class is going to lead to us getting ‘poorer’. Our wallets wouldn’t be any fuller or emptier but I suspect we would feel ‘poorer’.

Of interest in the local context is personal debt has been falling in relative terms since the start of the GFC in 2008. That event I suspect gave us all a bit of a fright. With record low interest rates most people (I know) have kept up the mortgage/bond payments at the same rate even as interest rates have plummeted by 65% in the past decade. The equity we all have in our homes has therefore increased.

Household debt in New Zealand now averages around US$67,500 (NZ$105,000).

Interestingly the analysis found that wealth in New Zealand is far more evenly spread that in most of other countries and this aligns with our socialist ethos of redistributing through a progressive tax system (the top rate of which is 33% on all income over and above $70,000). Those coming to live here that whine about our ‘high taxes” (among the lowest in the developed world) tend to forget that we get an awful lot for those taxes in terms of heavily subsidised education, health care and retirement along with a myriad of other benefits.

In New Zealand the top 1% hold around 19% of the wealth. Compare that to the top 1% holding around 45% globally.

I keep on saying it to those that think this is an expensive place to live (South Africans) or we have hideously high taxation (Singapore and Hong Kong), you need to look at what you start the week with in your bank account, what you have to spend to support the family and how much is left at the end of the week. I don’t believe there are many of the middle classes who aren’t as well off here, if not better off (and that’s before we add the intrinsic lifestyle benefits).

While in New Zealand we spend our money in quite different ways to many of our clients’ home countries, I don’t see too much evidence that Auckland, say, is significantly more expensive overall than Johannesburg (security, mandatory health insurance, private schooling and retirement self-funding). Singapore or Hong Kong is little different. It is just that we spend our money differently. I am not saying New Zealand is cheap, it isn’t, it is just that when you take into account how we spend our money it can be quite different to what migrants are used to. And what those on tourist visas experience.

When you are here, looking for a job, it does seem expensive but this latest report illustrates what I have long thought - while some slip through the cracks, we are well off here financially.

On top of that we maintain our place as the second happiest people in the world and in terms of prosperity (measuring things like quality of education, health care, environment, safety, etc) we are still at a very respectable number 8.

Long may it remain!

Until next week

Iain MacLeod

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A Social Services Revolution

Posted by Iain on June 12, 2015, 2:27 p.m. in Government

Something very interesting is happening in New Zealand. A quiet social service delivery revolution, that is being carefully watched around the world. 

If you asked most Kiwis however I doubt they’d even know it is happening. Such is the Government’s caution they might get offside with the voters if it isn’t handled very tactfully. So far they have done a masterful job of flying this well under the radar.

We have Government that accepts that if you want something done really well, don’t give it to a public servant - I’d suggest health and education being the two exceptions to a greater or lesser extent. Given the tax dollars spent every day runs into the tens of millions on delivering services to the populace, this Government is serious about getting more out of each and every dollar for the same dollar spend. 

And when a model appears broken or ineffective, to try something new. Such is the way of New Zealanders – a hotbed of social engineering and a willingness (usually) to try new ways of doing things.

What has been developed is a new social service delivery model which, on the surface, is like something out of the Hollywood blockbuster ‘Minority Report’. If you never saw it, the basic premise was that Tom Cruise’s character was tasked with preventing serious crimes before they happen - through profiling and intervention.

While Hollywood turned it into a big brother spectacular what New Zealand is doing is being quietly heralded across the developed world. 

A number of years ago through bringing together large quantities of socio-economic data, a model was developed to predict future behavior and social outcomes. When it was applied retrospectively to see what might have happened to children born say, seven years ago, there was by all accounts a stunning accuracy of expected future rates of contact with state and non-state agencies.

When applied, it was able to predict with 70% accuracy which children born seven years ago would by that age have had some contact with state agencies - be it Children, Young Persons and Family Service, the Police or similar.

The argument goes that if at birth you can identify those children who are at serious risk through socio economic circumstances who over their lifetimes cost the taxpayer $1 million (‘million dollar babies’ as the Deputy Prime Minister calls them) through ending up in prison for example, the State or other agencies can get be more focused in their efforts and target the most vulnerable of our babies and young people through assisting their parents.

When you think about it, it is a noble ambition and not just for the dollars it might save but for the personal and public good it offers.

Who wants to give birth to a child that has a 70% chance of ending up in prison?

Of course it also raises some uncomfortable questions about the ethics of it. Not all the children who fall into this high risk profile end up as offenders or delinquents.

How would parents react if they were approached when they have just given birth by a well-meaning social services official (or perhaps more palatably someone from an NGO like Plunket or Salvation Army) extending a hand and gently taking this family under their wing? Would they react positively or would they feel ‘big brother’ is interfering? Would they feel stigmatised?

You have to admit…it is an interesting one.

I believe most parents know and want what is best and would likely not view the approach as stigmatising. However I can imagine that some would. I suspect those that most need the assistance (teenage or young single mothers for example) might accept the offer if the approach was done in a sensitive and non-judgemental way.

What though of the 30% of these children that will turn out okay regardless? 

How should the State react if their approach is re-buffed?

Should intervention be compulsory? 

Should the State demand they participate in more frequent visits from helpers? From budgeting agencies? From the Police?

It is for this reason the Government is not rushing to roll this model out and are doing it on the quiet given the obvious sensitivities involved in it. They are clearly aware that if it is not done with great respect and compassion and based on nothing more than trying to effect positive change rather than saving money it could all go horribly pear shaped.

I have to say good on them though. For seventy years we have had a social welfare system that initially served us well yet has a horrible tendency to trap people in a cycle of poverty (our version not the live on $2 a day version).

The current system clearly does not work as well as it could, it sucks up tens of millions a dollars each and every day and the models would suggest it is often failing the most vulnerable.

An ongoing highly comprehensive University of Otago Longitudinal study that began following the lives of several hundred New Zealand babies in 1977 re-wrote the old adage ‘show me the child at seven and I will show you the adult’ to ‘show me the child at three and I will show you the adult’.

Those first three years are crucial to what happens for the next 77.

Too many young people are being failed by the current system.

I take my hat off to the current crop of senior politicians who are not willing to sit idly by and tinker with a system that with the best intentions in the world does not stop New Zealand having one of the highest per capita incarceration rates and where child abuse is part of a small but significant percentage of everyday lives for some of our most vulnerable.

The question is will New Zealanders accept ‘big data’ being put to such use that is potentially a force for powerful good?

Should a Government official be entrusted with it? 

When we have the likes of Edward Snowden banging on about Big Brother intruding into our everyday lives is this a chance for something positive to come from collection of data? After all New Zealand seems to measure and survey everything that lives and breathes (and then some).

We have the information. We now have a model - a highly accurate predictive model that can change futures for the better.

Shouldn’t we use it?

I for one give a cautious ‘thumbs up’ so long as it isn’t bureaucrats calling the shots. Our newest precious kiwis deserve every chance they can have in this country of ours.

Until next week

Iain MacLeod - Southern Man

Tags: population | economy

Time For A Population Policy?

Posted by Iain on Aug. 1, 2014, 8:28 a.m. in New Zealand Lifestyle

It is high time New Zealand had a population policy.

As touched on last week immigration policy seems to reflect political cycles – short term thinking and no long term plan. Say what you like about China and Singapore but at least they have long term plans even if you don’t agree with them. They do have population policies and yes Singapore’s is daft given the size of the place but all credit to them for trying to address low population growth and a rapidly ageing population.

In New Zealand our thinking on population is limited to immigration policy and filling immediate skills gaps in the labour market which is a partial solution but the bigger story is surely what sort of future do we want? What sort of country do we want to live in? How many people do we want to share this beautiful land with?

Why do we not have a population policy?

Let’s not kid ourselves – even in tolerant, welcoming New Zealand there still lies in many hearts a fear of being ‘overun’ by this bunch or that if we increase migration levels. 

The stark reality is New Zealanders are getting older and relatively quickly. Like all developed (and many developing) nations our low birth rate has created this rapidly ageing population. The overall population is growing through migration and natural increase. Net migration this year is running at a ten year high yet still only represents an overall gain of 0.7% of the population. Around 38,000 more people have moved here in the past 12 months than left. An important sidebar is this has NOT been caused by more foreigners being allowed in through the permanent residence programme but through fewer New Zealanders leaving, more New Zealanders returning from Australia and elsewhere and more Australians (they can just walk in….) moving to New Zealand.  This can just as easily turn into a net migration loss as this number is dictated not by population policy but by the fickle winds of local, Australian (common labour market border) and global economic conditions.

One thing is certain - New Zealand will look quite different in 50 years than it does today. What we have is no national plan to control how.

It is quite incredible to me that we have no population policy in New Zealand. We seem to have a policy on everything else.

After my recent trip to France and Spain and my regular trips to South East Asia I realise that one thing we have no shortage of in New Zealand is space.  And no shortage of highly skilled, financially secure and motivated migrants who would like to share it with us.

I suggest a New Zealand where we double the population to perhaps 10 million people over a twenty year period. 

Imagine the challenge. Imagine the planning – infrastructure, schools, hospitals, houses, public transport, roads and so on. Imagine the immigration policy we would have to have – the skills mix would be radically different to what we have now and would change over time. Imagine the communities and economic opportunities we would create for locals and new arrivals.

Where would the people come from? I fear this would spark the biggest debate.

I touched on the rapidly changing face of Auckland last week and there is little doubt that Auckland leads on social and racial tolerance and integration of migrants. Not that the other major cities are too far behind but they have some way to go to become as international, outward looking and welcoming as my home town if my clients are to be believed. In two generations Auckland has gone from being mono-cultural with few migrants to a city where today over 600,000 of our 1.5 million were not born in New Zealand and we are far culturally and economically richer for it in my view.

Locals are not being displaced from jobs despite what some might try and argue. I am not eating dog with chopsticks. I am not learning to speak Russian. I do however work in a city where when I step outside my office I hear a multitude of languages around me and can eat at different restaurant every night serving food from virtually every corner of the planet. My children have grown up with a circle of friends whose parents come from many different countries but who all think Richie McCaw is a living God, there is no sport but rugby, cricket is king in summer, who speak English like they do and who are connected to the world through social media.

New Zealand is many things but one thing it is not is crowded.  We have a country that is the size of Great Britain (which has 63 million people), Italy (60 million) and Japan (128 million – gulp…) yet we have only 4.5 million people.

That surely has its advantages that I would be the first to want to protect. 

Our air is clear, the streets are clean, our beaches, once out of the city, tend to be lonely private places where you and the family have plenty of room to spread out and kick a football, where the fish are plentiful, the sea free of rubbish and pollution and within our cities we have, and could retain or even grow, plenty of open spaces - city parks, playgrounds for our children, skate parks and the like. Within thirty minutes drive of most cities we are blessed with islands, regional and national parks with pristine beaches, mountain ranges, rivers, forests and virtual deserts and of course farmlands. In the middle of Paris I saw few children outside playing and those I did I wondered how often their feet ever actually touched grass. It is the same in places like Singapore, Jakarta, London and Hong Kong and mega city after mega city. I pity them. 

We could so easily fit in, if we thought it through, another 500,000 people a year for twenty years if we planned for it and built the infrastructure.

Our cities need not grow out and take up valuable farmland.

I loved Paris for its seven stories policy on so much of their central city buildings. How inspired of the town planners of three centuries ago to lay out a city where no building could be higher than seven stories and contain a mix of residential and commercial activities (pity they couldn’t inculcate a feeling of responsibility to clean up after one’s dog has poohed on the footpath). It means communities support local business and local businesses serve these residential communities. One feels part of a community, not trapped or isolated in dark urban canyons as in so many large cities. It is embracing and welcoming.

Likewise Barcelona (what a city) with its five stories building policy, its wide boulevards, tree lined streets, mad but cheap taxis and excellent public transport. And their population is virtually the same as Auckland’s – which sprawls endlessly and is generally poorly served by public transport (lack of population density to make it worthwhile). Spain might be broke but you cannot knock the vision of their town planners of two hundred years ago. If I could offer the Spaniards a wee bit of advice - get up a bit earlier and work a bit harder (the Spanish seem to have an even more laid back attitude to life than New Zealanders…) in order to keep paying for it all.

In Auckland we are still bickering about whether to keep our (already huge in area) city growing out or up.

I go home more convinced than ever that medium density along the height lines of Paris and Barcelona are the perfect urban design. Not too tall but tall enough to increase density without really compromising communities. Auckland’s plan to grow these medium density apartment blocks along main transport routes is a no brainer. It will enhance the city, not detract from it. It is interesting this is the approach being taken by those rebuilding downtown Christchurch.

All we need now is more people.

Ten thousand a week is a big number but if you could encourage these to be spread across Auckland, Hamilton, Tauranga, Wellington, Christchurch and Dunedin you’d be talking about, in rough terms 2000 people a week in each city and that suggests, if we selected migrants as we do now who tend to only have 2 children, about 500 families a week into each of these cities (and that is assuming they’d all want to live in one of those cities which many of course wouldn’t). I am not quite sure how you’d be able to force people to settle in particular cities – housing and tax incentives to businesses and home owners to settle outside of Auckland?

Break down the numbers and suddenly it is far easier to imagine doing.

I’d suggest that we decide how many people we want and work back from there. It would be the greatest undertaking in the history of New Zealand. It would be a chance to create within our major cities what the great European cities created two hundred years ago. A country that would eliminate once and for all the tyranny of being so far away from so many major export markets. A bigger and stronger domestic market would be created in a generation. Think of the opportunities without needing to compromise the lifestyle.

I don’t believe we would need significantly more land to be taken up to do it – the cities just need to be built a bit higher. Not high rise. Not ghettos in the sky. Modern. Mixed use.  Medium density.

Already my suburban Mount Eden Street is being flagged for this sort of building density in the Unitary Plan. What I understand but disappoints me is how so many in the neighbourhood are against it. It will destroy the social fabric they cry (even though they probably don’t know more than two of their neighbours). You can’t tear down those beautiful old Victorian villas (they don’t seem to mind cross leasing their back yards and plonking some architecturally bereft modern three bedroom house on the back lawn – so much for quarter acre paradise and preserving a way of life…).  I cannot wait. I’ll be the first to want to develop our property into a four storied apartment complex.

I confess it has taken me many years to reach this conclusion about what sort of New Zealand I want and strangely it is not because of the day job. For those who think you cannot have medium density housing but feel like you are still part of a community go and visit Barcelona. Cafes, bars, dry cleaning businesses, florists, schools and kindergartens all sit comfortably alongside one another. If anything it creates community.

We can preserve our parks and playgrounds – these can all be planned for. In fact we can learn from the mistakes of the European cities I have seen and expand on our open, public spaces. 

We are not short of land. We are perhaps short on energy, enthusiasm, vision and political will. We are short of a population plan. Nothing can happen in a vacuum and we need politicians who recognise the importance of a long term plan in a country where the population is greying but we have so much to offer so many and the chance to build a truly international and integrated society.

Until next week 

Iain MacLeod - Southern Man


My Kingdom For a Job...

Posted by Paul on June 28, 2014, 12:35 a.m. in New Zealand Employment

This week’s Southern Man comes to you a little late (apologies). The Southern Man himself is in Europe; we had two of the team in Singapore earlier this week and now one in Malaysia (me). All the while the rest of the faithful crew were busily working away in Auckland, fighting the good fight on behalf of our clients. A truly global effort!

This week’s topic is one often visited in our blog and almost always discussed with our clients both at the initial consultation we have with them and then throughout much of the journey. In fact I have just had this conversation over 40 times in the last week, speaking to hopeful migrants in Singapore and I am about to do it 30 or 40 more times in Malaysia.

So a good time to perhaps share it with the rest of you.

Whether you need the job offer to qualify or have enough points to secure Residence without one, at some point, you will become a member of the ‘job search’ club. You will be standing at the bottom of what looks like an insurmountable wall, wondering how on earth to scale it; but scale it you must and scale it, the well prepared will.

Having worked in recruitment for a short stint, I can speak with some authority on the subject and having helped many a migrant to tackle the task there are few tips I can share. These aren’t ‘magic potions’ or ‘simple fixes’, these are strategies, tools and hints that in almost all cases require a considerable amount of effort to implement.

Firstly, forget any idea of this being easy, it isn’t. Yes there are a few lucky souls that manage to secure work relatively quickly and without too much effort, but for the majority it’s a hard slog. It requires patience, persistence and perseverance, the same you might expect to find in a long distance marathon runner. 

The people that succeed understand this. They prepare for the challenge and gear up suitably. Understanding that the road ahead is a difficult one is half the battle won. I have seen many would be migrants arrive with delusions of grandeur, expecting jobs to be raining from the sky – they aren’t. We prepare people for what will be a fairly gruelling task and coping with the mental battle goes a long way to winning the war.

Secondly, you can dismiss any hopes of securing jobs from your home country, unless you are uniquely skilled and qualified and in an occupation in critical demand (don’t be fooled by INZ’s ‘Skills Shortages List’). Almost all clients secure jobs by being in New Zealand. We are possibly a bit unique in that sense. New Zealand employers like to meet people face to face and securing a job offer is as much about your personality profile and attitude as it is your skills. This is why you need to be in New Zealand. It displays a level of commitment and readiness that you simply can’t achieve sitting in your home country.

A lot of New Zealand employers don’t really know what they need until they really need it, or in many cases until it's too late. This is why most of them won’t entertain offshore applications, because they have no idea of when you might be ready to start, and they wanted you yesterday.

Thirdly, use recruiters but don’t rely on them. I know this for a fact. A lot of recruiters overlook good quality migrants, because to them, a migrant is in the too hard basket. They present a delay in achieving their commission and as such get filed under ‘R’ for ‘Recycling’. The good ones, do deal with migrants and see the skills and expertise rather than the quick commission cheque, but they aren't in ready supply. So don’t expect all recruiters to be able to solve your job search woes.

Going directly to employers is the key, alongside direct networking, Linkedin, Facebook and industry events. Get out there and make yourself visible. Talk to people in the business, make phone calls (yes cold calls) and get your details spread far and wide. Don’t just sit in your hotel/motel room, friend’s house or Starbucks on free WiFi sending your CV via online portals. It won’t work. Yes online search engines such as www.seek.co.nz and www.trademe.co.nz are useful and a good way to find jobs and employers but if you are sitting in NZ sending your CV out, you might as well be anywhere else in the world (refer to previous paragraph).

Finally, there are a few rules around ‘selling yourself’ that you need to bear in mind, after all this is essentially the key to it all – marketing yourself effectively to employers.

Some do’s:

  • Keep your CV simple, effective and relevant.
  • Tailor your CV and cover letter to the role you are applying for.
  • Build your LinkedIn profile and use this to network with people in the industry, but don’t ‘over connect’.
  • Research the companies you are applying to, find out who they are, what they do and their core business values and goals (you can usually find this all on their website).
  • Prepare yourself for the call/walk in, show you are serious and have done the research.
  • Be presentable, you can never ‘dress up’ at an interview if you are too casual; but you can dress down if your interviewers aren’t dressed as formally (remove the tie, jacket etc).

Some don’ts:

  • Don’t add a photo to your CV. Even if you fancy yourself as a GQ/Vogue model, leave it out.
  • Don’t overdo the task list in your CV’s. Keep it relatively short and focussed. Add in key achievements to show you not only can do the job but can do it well.
  • Don’t add in qualifications that you haven’t finished. This is a particularly strange trait for many countries. If you didn’t complete a degree, you don’t have a degree.
  • Don’t be over confident. Employers like confidence but not arrogance. Remember to talk about your skills and how you can accomplish the tasks required. You don’t have to talk about whether you met the queen or toured with Led Zeppelin.
  • Don’t put anything on your CV that you can’t explain. Nothing goes against you more than not being able to recall details from your CV accurately and clearly.

There are many other tips and tools that we utilise in the job search process but ultimately it comes down to hard work, patience and knocking on as many doors as you can. We can also guide you to 'career coaches' who are experts in this field and can give you a lot more guidance. For those that approach this process with a strategy in mind and a clear goal, they are overwhelmingly successful.

For anyone out there doing this, good luck and for those of you out there contemplating doing this, hopefully the above gives you a little bit of guidance along the way.

Until next week 

Paul Janssen – standing in for the Southern Man.


What does 2014 hold for NZ?

Posted by Iain on Jan. 17, 2014, 11:43 a.m. in New Zealand Economy

Happy New Year to all our regular Southern Man Letters from New Zealand readers.

The team is back in the office, tanned and relaxed (that lasted about two days!) and looking forward to an extra busy year. For us it is going to be a year of firsts – we are now dipping our toes in the Hong Kong and Indonesian markets. Across the Tasman Sea our Australian colleagues are heading to Botswana, Greece and Turkey to test the migrant waters there.

And what of New Zealand in 2014? How are the tea leaves looking?

If you can believe the various surveyors and economic forecasters we are in for a very good year and several beyond this. A few key points in recently released surveys show:

  • Business confidence is at a 20 year high
  • All sectors of the economy are growing – manufacturing, agriculture, services and tourism are all showing strong growth
  • All regions of New Zealand are in positive growth and confidence territory (spreading out from Auckland and Christchurch which dominated 2013)
  • ‘Own business’ confidence is running at multi year highs and this suggests GDP growth of at least 3.5% this year
  • Retail sales through Christmas were up 7% on the year before and have continued through the early part of January
  • Skills shortages are starting to bite (told you!!!!) - especially in the construction and IT sectors – everyone from Architects, Civil Engineers, Quantity Surveyors and Planners through to related trades workers. In ICT some are now calling the shortages ‘dire’ which might be a slight exaggeration but these shortages are going to be biting across most sectors within the next six months in my view .
  • Unemployment which currently stands at 6.2% is predicted to fall to 5.5% by years end and 4.5% by the end of 2015. It is worth noting that once unemployment gets down to 5% in New Zealand you’ll not be able to find a Secretary to do your word processing……or find someone to make you a cup of coffee. It is also worth reminding readers that skilled migrants seldom compete with the unemployed 6.2% - they tend to be un-skilled or semi-skilled.
  • Inflation is expected to remain subdued overall at around 1% but dog with rabies crazy in housing. There continues to be a chronic shortage of new housing supply meaning house values  are expected to continue their seemingly relentless increase by around 10% this year (higher in Auckland and Christchurch). This is feeding through into higher rental prices also.
  • Interest rates are predicted to increase by 25 base points each quarter for the next 5 quarters (starting March). The word is the economy is robust enough with exports booming even with a high exchange rate to offset any inflationary build up. I’d be expecting floating mortgage rates to be around 6.5% - 7% by years end.

Short of any major external shocks things are looking overwhelmingly positive. No one is talking about an overheating economy or boom times but there is a real and broad based momentum that has been building across all sectors and all regions.

This, I suspect, will embolden the New Zealand Government to continue with high skilled migrant pass marks and forcing a majority (note, not all….) of would be migrants to come and find jobs in order to have certainty of residency approval.

Those employers unwilling to recruit form the ranks of those offshore or who refuse to travel overseas to interview and recruit are within the next few months going to be staring into a very shallow pool of local talent. This will have an upward movement on incomes (we are already seeing it in construction and IT in particular).

While no one who reads this who thinks they may make a move this year should take getting work for granted, there is no doubt that 2014 for the vast majority of you will be a year of greater employment opportunities. Through 2013 we saw average times for most clients to find jobs here get down to a few weeks rather than a few months as it was through 2011-2012. If you are fluent in English, skilled, do your research on demand in the labour market for your skills set and are willing to get on a plane and get here, chances are you’ll find work within 4-6 weeks.

As we reported in December the Government has closed the Long Term Business Visa or self-employed pathway to residence while they think about a new ‘improved’ visa class for Entrepreneurs which they hope to launch in April. We have been offered an outline of the new criteria which we have agreed will remain confidential but what we can say without breaking those confidences is that the new criteria is less a pathway for the self-employed to demonstrate financial self-sufficiency to a move to focus on greater job creation and export related businesses as priority for approval. For the first time the amount of funds invested comes with a minimum and the more invested the higher the chances of success. In essence what we will gain is effectively a new sub-class of Investor – lower investment thresholds than those who apply to many looking to secure residence under the Investor Categories but a much higher threshold than historically in place for the self-employed. As always there will be winners and there will be losers.

Skilled Migrant Category also underwent its standard three year review during 2013 and I expect we may see changes this year. My own view is the changes will be minor (why change a formula that appears to be working?). My only two suggestions to Government were that we should be more prescriptive in regard to English language as the Australians are (better your English the higher your points) and I would also be re-instating points for those with capital they can transfer to New Zealand. Although it is proven that those with more money find it easier to settle I cannot see the Government taking me up on this suggestion; they might on the English language however. We shall see.

I head overseas today for the first round of seminars for 2014 and will be in Singapore this weekend, Jakarta next weekend and Kuala Lumpur the following. The seminar in Jakarta is now fully booked.

My colleague Paul will also be in South Africa in early February kicking for our first round of seminars there.

It is going to be a big, exciting and nerve wracking year for some of you as you pack up and join us here in New Zealand. For some 2013 was the moving year and 2014 will become the year of return to some sort of normality. For others 2014 will be the year of the ‘big decision’ to migrate or not. Wherever you are on that spectrum the Immagine team and I wish you every happiness and success for the year.

Until next week

Iain MacLeod

Southern Man – Letter from New Zealand


What was and what will be...

Posted by Paul on Dec. 13, 2013, 1:29 p.m. in New Zealand Economy

It’s about this time of year that people start ‘winding down’ and thinking about the holiday season ahead. It’s also a good time to take stock of the year that was and what potentially lies ahead in 2014. 

For many people (including a lot of our clients) next year might just be the year that they pack their bags, saddle up and mosey on over to the land of the long white cloud. For the vast majority of them, finding a job is going to be at the top of the ‘to do’ list, so let’s have a look at what happened in 2013 and what’s in store for when they arrive.

2013 was an interesting year for New Zealand.

We held our regular national census, which was postponed from 2011 due to the Canterbury earthquakes. It revealed that in the last 87 years our population has tripled and since 1981 the median age of New Zealander's increased by 10 years (we are getting older). 

The census revealed that if New Zealand was a village of 100 people, 70 of them would have been born in New Zealand, 24 would have been born overseas and 6 people apparently weren’t sure where they were born. To put that in context a quarter of our population wasn’t born here which represents a significant reliance on migrants for our economic growth.

Twice as many of our 100 strong village population would be working as skilled professionals rather than labourers and the second highest occupational group was managerial staff.

The proportion of our village community that considered themselves as coming from an Asian background almost doubled since 2001.

Overall the census data shows that New Zealand in 2013 continues to become more diverse in terms of our population mix and that ultimately migrants continue to make a significant contribution. Our population is growing, but ever so slightly, meaning that we continue to avoid the ‘rat race syndrome’ that consumes many developed countries. You can read the full report here: NZ Census

We also celebrated our second equal lowest Easter road toll on record, a fall in crime rates in most parts of the country, Wellington was hit by the worst storm since 1968 and a large portion of our country switched to digital television.  Not to mention passing the same sex marriage bill in August and legally allowing same-sex couples to tie the knot.

From an economic standpoint, it has taken several years for New Zealand to recover from the global financial crisis and to see growth levels return to semi-normal. 2013 saw a continuation of a trend largely started in the latter half of 2011. GDP rates continue to grow conservatively (0.2% up in the June 2013 quarter), unemployment has fallen from the 7.3 high in mid-2012 to its current levels of 6.2. This puts us somewhere around 60 out of 200 countries in any of the numerous country by country comparisons. The best result comes from Monaco with apparently 0% and the worst being Zimbabwe with 95%.

Auckland housing prices continue to rise although the Government has introduced lending restrictions on the banking sector and committed to opening up additional areas of land for development, in an attempt to cool things down. Whether this will have much impact has yet to be seen.

Overall 2013 was a positive year for New Zealand and particularly in terms of being able to ‘one up’ the Aussies in terms of our economic stability. For the first time in as long as anyone can remember New Zealand has outshone Australia in terms of overall economic growth by roughly 0.5%. 

So what does 2014 hold?

All the crystal ball gazers out there predict that the economy is set to grow strongly in 2014 with the Christchurch rebuild continuing to be a leading contributor to employment growth and direct investment. Increased household spending fuelled by increased optimism in the employment sector and robust house price increases will continue and unemployment rates are set to follow their slow trend downwards. In fact in October 2013 the ANZ announced that job adverts had increased by 4.5%, following a 1.3% rise in September. The jobs are there people – you just have to find them.

There are some caveats to all this prosperity however. Increased consumer spending obviously leads to increasing debt and if there was one positive thing the GFC did it was to get us all thinking more seriously about keeping our credit cards shackled up. As confidence returns to the market, people are starting to ‘splash the cash’ and retailers are already anticipating a bumper Christmas spend.

The Reserve Bank is tipped to increase the official cash rate in 2014 (most likely the first quarter) as pressure continues to mount over a very strong New Zealand dollar.

Overall for anyone looking to make the move next year, head over to New Zealand and either seek out that all important job offer to secure Residence or come with a Visa in hand, 2014 is set to be a pretty good year. Despite the fact that the vast majority of our clients continued to secure jobs even in the midst of the GFC, the signs for a strengthening New Zealand economy are all there.

We still have to tread cautiously of course, and there is always an element of trepidation when it comes to any forecast, particularly in recent times, however so far the polls and forecasts from previous years haven’t been too far off the mark.

Deciding on the best time to make the move is a tricky business and it comes down (usually) to your own personal commitments, children and schooling and obviously finances. However for those that have committed to the process and are bound for New Zealand in 2014 things definitely look positive.

Our offices will be closing down next Friday on 20 December and then opening again on 13 January, giving the team a well-deserved break after a very busy year. 2014 also signals an even busier year for our New Zealand and Australian offices with seminars scheduled or our usual locations (South Africa, Singapore and Malaysia) as well as new seminars being presented for Australia in Botswana, Greece, Turkey and Israel and for New Zealand in Indonesia and Hong Kong.

If you are chewing over your Christmas Turkey or Ham and thinking that you might want to be doing that in New Zealand next year, why not register for one of our seminars. Click on the links at the end of the blog for details.

We will be wrapping up our Southern Man newsletters for 2013 next week with one final instalment.

Until then try and survive the last few days of the silly season.

Paul Janssen - IMMagine New Zealand
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