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Posted by Iain on Oct. 2, 2020, 1:20 p.m. in Elections
Two weeks out from our general election we continue to see pressure being brought to bear on our political leadership to acknowledge and perhaps do something about immigration policy settings and what skills should be allowed to enter the country. Too late me thinks. The silence of the major parties in addressing our skills shortages and what we want out of immigration over the next few years is deafening.
Only this week the head of NZTech echoed my recent thoughts - (slowly) rising unemployment and a commitment to spend more on tertiary education is not a short term fix to the chronic and worsening shortage of IT skills. Labour market shortages and skills shortages can be quite different beasts. Unemployment might still be 4% (and potentially slowly rising) but that does not fill vacancies for software developers, systems analysts, testers, architects and the like. In the short term there’ll be some ‘musical chairs’ as locals lose one opportunity and take up another. Overall however we are not adding to the skills pool.
Thanks to the border closure around 5000 fewer highly skilled IT workers will not be coming to NZ this year. There was, earlier this year around twice that many IT jobs being advertised each month across the country. Already medium to large employers in this sector are struggling to fill vacancies. Our Universities only produce half the graduates needed to fill the thousands of jobs being created in this sector every year. Even if a few thousand 2020 school leavers decided they’d like to enter this field and went to University in 2021 we won’t see them graduate for three years and possibly four. Even then they are going to need a few years in the real world developing and hiring their skills because employers are not looking for truckloads of junior developers, they need the six or seven years of experience most skilled migrants bring with them.
To the IT sector you could equally add Construction with calls this week from employers struggling to fill construction and project management roles - all paying six figures. Then there’s the education sector with the country still 1500 teachers short across pre, primary and secondary schools. To that we can add agriculture with over 1000 manager jobs available and unable to be filled. Companies are still screaming for tradesmen/artisans - another workforce rapidly ageing and moving toward retirement.
If we don’t import the skills, how will these sectors thrive?
When every mid leveled IT job supports 4.5 other jobs what’s the downside?
The Government recently announced a $1.6 billion increase in spending on free apprenticeships. The only problem is they are about four years too late - the critical shortage in this area has been around for 30 years. Why did it take Covid to spur the Government into action? Even if young and not so young people take up the call (and history suggests they won’t with 74% of subsidised apprentices not completing their trade certificate) the labour market is still around four years away from them being qualified.
With a very a recent and widely unreported survey showing that New Zealanders support for immigration as a positive influence on the country running at a historical high it still perplexes me why no political party has published any sort of detailed immigration policy for the Covid world in which we now live. Plenty of promises about virtually everything else but nothing about what each party’s immigration policy might look like given the upheaval of recent months.
Every three years Government undertakes a ‘first principles’ review of our major immigration policies. Parents one year. Business Investors the next. This year the turn was to be for the Skilled Migrant Policy. As far as I am aware that has not taken place. No doubt the functionaries will tell us its because of Covid disruption, a very convenient excuse for no action. This Government wasted its first two years making a song and dance about the relatively insignificant issue of ‘migrant exploitation’. There was never any real evidence it was a significant issue, yet it tied up whatever Ministerial interest there was in this portfolio until the Minister resigned.
There could not be a better time, nor a greater need for that first principles review of the skilled migrant policy.
We should be asking ourselves if the policy is working. How it could be improved? How we might better integrate work and visitor policy with the labour market driven skills migrant policy in which getting a job is critical to success? How does international ‘export’ education feed into the migrant flows? Should we be dishing out graduate work visas to International students? Where do the lower skilled but no less valuable occupations like aged care or teacher aids fit into our long terms needs with an ageing population?
Is the policy even working?
I’d argue that the skilled migrant pathway is net positive for New Zealand but very hard on migrants. I often describe the process as ‘Darwinian’ and the survival of the fittest - those that are successful have the linguistic skills, the cultural capital, personal resilience, the financial wherewithal and skills to pass the ‘test’. Even for them the process takes its toll and migrants get precious little credit for bringing us their skills, energy and enthusiasm. Lord knows we make it hard enough to get the best. The country gets people that not only really want to build a future here but are wanted by the labour market. On paper it works for us.
That is not to say it couldn’t be improved in terms of a process as I have written about before.
Immigration policies this election, perhaps more than any other, demanded a rethink about who we let in, why we let them in and in what quantity we let them in. So much flows from that - think about housing, how many new schools we might need to build, infrastructure planning and build, health needs, hospitals and so on. Every decision any government must make flow from the number of people it is elected to serve.
I cannot fathom a country where immigration is viewed as a positive force for good by the significant majority, a country that so overwhelmingly welcomes new migrants, but that keeps squandering the opportunity by planning an active immigration policy rather than one that is reactive.
This is yet another missed opportunity by all the major and not so major parties to articulate a long term vision of what New Zealand might look like, literally and figuratively, in 10, 20 or 30 years from today. And to then plan for it and deliver it.
Alas we continue to be caught in this three-year electoral cycle where change is incremental and at snails pace.
All the while skills shortages will grow worse and that will hold us back as we grow our way out of this Covid induced recession.
Until next week
Posted by Iain on Feb. 14, 2020, 4:22 p.m. in Skilled Migrant Category
In Maori this means "stay strong”. It is one of those terms that has found its way into every day usage in New Zealand. I love it. It speaks to where I come from and the work that I do. People everywhere are freaking out over the skilled migrant resident visa allocation and processing times, frightened by what the government might do.
At my seminars I like to paint a picture that migration is like climbing Mount Everest. It takes a lot of good planning, careful execution, patience and courage. Mental toughness is rewarded. Migration is emotional, logistically complicated and generally expensive (as in, employ a cheap mountain guide, or no mountain guide at all and your chances of summiting Mount Everest are significantly lower — indeed that decision to do it on the cheap may cost you your future).
Migrants are always tested but never more so than today in New Zealand where allocation and processing times continue to get longer and longer. I have written recently something has to give in terms of what is going on with the skilled migrant category. Foolishly the government cut the number of resident visas they wanted to approve last year but left the points pass mark at 160.
Demand is not diminishing, nor increasing (as incorrectly claimed by the Minister of Immigration recently), but by cutting numbers while keeping the pass mark the same, has led directly to these processing backlogs - most skilled migrants are going to be waiting 18 to 24 months for their residence to be allocated, processed and approved unless they work in an occupation for which they have NZ registration or are earning at least $104,000.
Backlogs in and of themselves don’t necessarily suppress demand. Having dealt with the Australian system for some years the significant majority of resident Visa applications take 18 to 24 months to process. The big difference between Australia and New Zealand however, is none of those people wanting to move to Australia have sold their houses, given up their jobs, given the dog away to their neighbour, found employment in Australia and are now sitting waiting and worrying over their Resident Visa outcome. They are all still sitting at home getting on with their lives. All the people affected by the backlog in New Zealand, are in New Zealand on work visas. They have burned plenty of bridges to be part of the Government’s residence programme (that curiously they still spend millions of dollars marketing).
These NZ migrants cannot make any long-term decisions. Many have children finishing school and wanting to go to university during the waiting period and the majority simply cannot afford to pay international fees for university. Many are having to put on hold decisions to buy houses. Some might be stuck in jobs that are not ideal but serve the residence purpose.
I find we have two kinds of clients. Those that simply suck it up, and get on and enjoy life in New Zealand having faith we know what we are doing and residence is a matter of when and not if. They appreciate the delays are not of our making. As possibly the best Advisers in the game they appreciate that all we can do is to ensure that we file decision ready applications which is what we do.
Then there is the second kind. These are the people that take it out on us. Thankfully they are a minority but it isn’t very pleasant being blamed for changes in the rules half way through the game - when we don’t write the rules. There's nothing we can do to make the government go faster but we along with the entire industry has made it very clear to the government that the current situation is unsustainable and ignoring the problem will not make it go away.
Ultimately however it is the Minister that sets the pass mark to get out of the skilled migrant pool and it is the government that sets the criteria to qualify as a migrant. As I have written about recently I have no doubt some plan is being hatched in Wellington to deal with the situation. My major concern is the solution might be politically expedient rather than economically sensible.
Every single skilled migrant requires a highly skilled job to get into New Zealand. Employers the world over prefer to employ locally simply because of the perceived or real hassle getting visas. That means the government has in that backlog people who have been able to break into the labour market, secure a job for the most part against the odds, and that says one thing and one thing very clearly - their skills were desperately needed in New Zealand by that particular employer because no employer I’ve ever dealt with will play the visa game if they can avoid it. That reality seems lost on the politicians - or they choose to ignore it for political gain.
Obviously the simplest solution is for the government to increase the number of resident visas they will issue and clear the backlog. Sell it as a good economic news story, for that is what it is. Too many jobs, not enough Kiwis to fill them.
I was thinking the other day that another solution could be to return to the multi passmark system we used to have. The way things used to work was that applicants were ranked not just on raw points total as they are today, but according to what we deem more important and valuable e.g. claiming points for a job in an occupation on a national or regional skills shortage list, or having a partner with a skilled job offer, or higher salary - the criteria themselves could be ranked. Then, at least, it is transparent.
Or consider prioritising processing in terms of the points score that people claim. The more points you claim the faster your case could be allocated. The obvious problem with that of course is people would start claiming points they are not entitled to. I would then adopt the Australian approach – a bit of a scorched Earth - if you claim it and you can't prove it you’d be declined. That would force people into getting it right up front and first time but the flip-side of that is it would require immigration officers to understand their own rules completely — and we know how bad they are at that. It is however worth considering. It would certainly force migrants to make sure they have the evidence of their points claim before filing an Expression of Interest in residence. That alone should cut down on applications that are always doomed to fail under the current system.
A simple across-the-board increase in the pass mark would obviously decrease demand for the available places but equally it's going to deprive the labour market, particularly in Auckland, of skills desperately needed that we do not produce ourselves as a country.
And that makes the simplest solution, the best. Recognise that the skilled migrant category rewards those that are able to break into a labour market that is, owing to the disconnect between employers wanting people to have work visas, but the government not wanting to grant work visas without jobs, seldom easy. The annual target of resident visas allowed to be issued should simply be increased — at least while the Government comes up with a better idea that does not hurt the economy. The government backtracked on infrastructure spending recently, perhaps they should backtrack on cutting skilled migrant numbers as well - and take the heat they will rightly get for making silly, politically motivated decisions in the first place.
If they were to do that and the economy keeps growing, then of course it creates more jobs. So arguably the problem never goes away. It’s a valid point (unless and until we can create the skills we need locally). The government should recognise that with that would come an increased demand on infrastructure, schools, roads, housing and everything else that would come with a growing population.
Well, here’s a thought — how about a population policy?
What this situation shows is it is a complex issue and you can't solve the problem unless you have an idea about how many people we want to share this land with and that demands a population policy which New Zealand has never had.
And no New Zealand government wants to have a discussion about what our ideal population might be.
So we find ourselves in a situation where the government sits on its hands when it comes to this critical issue and I continue to fear they will do something really really dumb.
Some positive news to end, however. Visitor Visas now seem to be being issued once again and we have had at least one issued this week for a South African client that was filed in mid-January.
That's a real relief for us and our clients looking to come over and find jobs.
Remember, migration is stressful and our jobs at IMMagine exist because the process is legally complex, logistically challenging and emotionally very tough. Don't start the process if you're not up for it because there's no point getting halfway up that mountain and turning around and going back down again. And migration is as much political for any country as it is economic so you will always be at the whim of self-serving politicians (or well-meaning but simply stupid ones) until that precious resident Visa is in your passport.
For migrants to be one of Darwin’s ‘winners’ it takes the creation of a good strategy (usually incorporating a Plan B), a steady nerve and listening to the advice that you are paying for. In our case it's normally spot on and we continue to enjoy watching over 98% of our clients come to New Zealand and find skilled jobs and go on to secure their residency.
Even if now, it is going to be a two year process.
Until next week
Posted by Iain on April 27, 2018, 1:02 p.m. in Immigration
A few weeks ago I wrote a piece explaining that INZ now uses an ‘effective hourly rate’ to determine remuneration when deciding if a job is skilled or not under the Skilled Migrant Category. To be skilled, the effective hourly rate must be $24.29 to get ‘points’ for a skilled job. However, under the Work to Residence/Accredited Employer pathway, there is also a need to establish an effective hourly rate.
Strangely (or not depending on your day job), INZ approaches what is in effect the same question with two different processes.
As the new skilled migrant policy is now a few months old, we are starting to get a better idea of how INZ is interpreting this ‘effective hourly rate’ instruction which, on the face of it, seems pretty straightforward. As usual in the world of visas and bureaucrats, it is anything but.
This is owing to the fundamental reality that out here in the real world, employment contracts are not standardised and most people are not paid on the basis of an effective hourly rate but by salary or wages.
Both now must be broken down into this ‘effective hourly rate’ to determine points for skilled employment.
Employment agreements/contracts in NZ must confirm the hours an employee might, is expected to or will work (so there are three variables to begin with). To cover the possibility/probability (two more variables) that from time to time or regularly or never, (three more variables) these hours might vary; most employment agreements will say something along the lines of ‘hours of work will be 40 per week and any other such hours as might be required from time to time’. This outlines what is expected but covers the possibility that more might be necessary.
I can’t remember from my schoolboy maths what the possible total number of outcomes these variable might lead to, but it is a big number of possible permutations INZ has to deal with in deciding how many hours someone has, or wil work.
How does INZ deal with that in terms of breaking it all down to an effective hourly rate?
Not very well, is the short answer. As it turns out, it depends which office is processing it (and likely which officer) and which category of visa it is - skilled migrant or residence form work (for an accredited employer).
As it turns out, the applicants pay cycle is being used - even though you’ll find no reference to this is the ‘rule’ book.
INZ can, if it looks like there is any chance of the hours being variable and the possibility exists that the hours are not fixed, (and an officer can request evidence of actual hours worked) will attempt to calculate the hours per week. If, say, the applicant is paid monthly and in one week of that month they work an additional 5 hours, then the total hours worked in the entire month will be added up and divided across that month to give an average weekly number of hours. That will naturally then reduce the overall effective hourly rate but not by very much.
However, if the applicant is paid weekly and five additional hours are worked over the month, then the effective hourly rate reduces far more because the pay-cycle used to calculate the hourly rate is shorter i.e. one week. So this person is assessed as working 45 hours per week. The one on the monthly pay cycle is assessed as being paid 41.25 hours per week (assuming INZ works on a four week month)
How bizarre is that?
You could then have two employees doing an identical job in the same company - both are earning say $25 per hour. One is on a monthly pay cycle and works an extra five hours every month. The second also works an additional five hours a month but is paid weekly. The second one now has a job that will no longer be deemed to be skilled because once calculated, their average earnings falls below the minimum threshold to be skilled, but the first is fine. Both work the same job for the same company doing the same hours for the same gross hourly wage but the outcome is that one is granted a Resident Visa and the other isn’t...
The clear lesson here is if you are in a job where you might, from time to time, work a bit of overtime and you don’t earn significantly more than $24.29 per hour, ask your employer to put you on a monthly pay cycle.
If you are on a Talent (Work) Visa and working for an accredited employer things are a little different but INZ is, as usual, not being definitive nor helpful about how they might calculate those hourly rates.
When assessing the Resident Visa claim following 24 months in work for an accredited employer, INZ has suggested they calculats hourly rates by taking the annual amount paid, dividing that by 52 weeks and then by the hours worked as per the contract. The minimum hourly rate required to achieve the minimum salary threshold is NZD$26.45 per hour based on a 40 hour week over 52 weeks. Thus, someone being paid $55,000 (being the current minimum annual gross salary) but working 41 hours or more per week would not qualify for their Resident Visa.
There is, however, no similar clause in the 'rule book' to that in the Skilled Migrant Category in terms of how to deal with any additional hours that might be required to be worked contained in the employment agreement when calculating additional hours.
INZ has vaguely suggested that they may request evidence of actual hours worked at Residence stage for a Work to Residence applicant, and then add the total actual hours worked across the entire period (2 years) and divide that by 104 (being 52 weeks x 2) to determine the actual hourly rate.
So two different divisions of INZ are tasked with calculating remuneration and both apply different assessment measures to establish effectively the same thing.
I don’t know how I still have any hair.
Until next week...
Iain MacLeod, Southern Man
Posted by Iain on April 13, 2018, 6:27 p.m. in Immigration
Those of you who have attended one of my talks know about my four golden rules of surviving immigration bureaucracy without losing your marbles:
There could be a fifth:
And this is the subject of today's blog.
INZ always deny it, but when certain cases are historically assessed in one fashion and then - without any change in rules - outcomes start to change, it simply has to be a case of golden rule #3 above, or it could mean that someone, somewhere (could be a politician, could be a senior INZ Manager) has decided that the same rule can be interpreted in a different way to deal with a ‘problem’ and so deliver outcomes that serve a purpose other than the expressed aim and intent of the policy under which the migrant has applied.
We have just been through the excruciating process of dealing with INZ over an Indian national who came to NZ as a student. At the end of her course, she found ‘relevant’ employment which, in time, led to a promotion to Store Manager and which then evolved into a multi-store Management role. This role is largely autonomous and the owners of the business these days have little to do with the operation of it – they have found a highly skilled and highly competent Manager who runs these stores better and more profitably than they ever could.
The Skilled Migrant category is meant to be ‘occupation blind’ – by that I mean no consideration is to be given to whether we ‘need’ more Managers or Electricians or Teachers or Software Developers. If a job is skilled, it should get the points.
What is a ‘skilled’ job if you are a Manager? Simple really – it is one which requires ‘managerial expertise’. That’s it.
The case referred to here was declined on the basis that INZ tried to convince themselves that the applicant is not a Manager. They didn’t tell the applicant what they thought she was, only that she was not a Manager. They agreed that she was 80% a Manager and 20% something else. What that something else was nobody knows.
The argument that was presented to INZ was watertight – the tasks of this individual were at least an 80% match to the tasks that a Manager might carry out using INZ’s own reference materials, and in fact - it was argued - was closer to 100%.
The case was declined on the basis that of the 8 tasks they might choose to compare her role to what they believe Managers do, there were two that she didn’t do enough of.
INZ argued that those two remaining tasks were in fact key to being a Retail Manager and although the applicant was involved in these tasks, she wasn’t doing so to a high enough level. As a consequence, the applicant failed the ‘substantial match’ test which says that the applicant’s daily tasks must be ‘substantially consistent’ with an occupation in the Australia New Zealand Standard Classification of Occupations, or ANZSCO.
In this case, even doing 80% (6 out of the 8 listed) was not considered a ‘substantial match’.
The Collins Dictionary defines substantial as ‘large in amount or degree’. They offer this example:
The party has just lost office and with it a substantial number of seats.
To INZ, this must surely mean that the political party lost all of its seats. I think those of us who understand the word ‘substantial’ might suggest that the Party still has some seats in the Parliament.
ANZSCO is a reference tool created by the Statistics Departments of Australia and New Zealand which lists (as far as they can tell) all the occupations known to mankind and the usual tasks associated with each. It is, according to the immigration rules, to be the primary source of information used in the ‘substantial match’ test.
Naturally, many similar jobs have some overlapping tasks. This means immigration officers have to apply their minds in an objective way and assess the case on its merits.
This is when the opportunity presents itself to apply the shadowy golden rule #5. Officers apply the hidden agenda by arguing (usually with a straight face) that, in spite of the overwhelming evidence, a person is more something else than what they or their employer says they are. In effect, INZ predetermines what outcome they want. I have read enough to believe that their political or managerial masters don’t want as many Retail Managers in NZ despite it being skilled, so they find ways to decline them.
Not to get too technical on you but in terms of process (not followed, in this case) an officer must first determine ‘whether the work experience is in employment that is substantially consistent with the ANZSCO Occupation (6-digit) level description for the skilled employment occupation’.
In the case of a Manager, that 6 digit lead definition requires INZ to answer the question: does this person who claims to be a Manager of two stores ‘organise and control the operations of a retail trading establishment’?
The evidence in this case was an overwhelming ‘yes’. The owners said she did. The evidence said she did. However, the officer skipped over that first step (you have to wonder why?) and went straight to the second step which says that if INZ is ‘…unable to determine a substantial match to the ANZSCO occupation, (they) may also assess whether the previous employment displays the characteristics of that occupation in terms of the relevant ANZSCO ‘Unit Group’ (4-digit) level description of tasks for that role.’
The ‘Unit Group’ is where the task list comes into the picture - the list of usual tasks that occupation might involve. In the case of a Retail Manager there are 8 usual tasks and in this case, the officer agreed that the applicant does 6 but the last two not enough or at a high enough level. So in this case, even though INZ agreed that there was at least an 80% task match, this was not good enough and the case was declined.
‘…displays the characteristics of that occupation’ is a long way from an exact match and a reasonable person would likely conclude that if your tasks are at least an 80% match you are certainly ‘displaying the characteristics’ of it.
It is insightful that in independent appeals on decisions like this the Immigration and Protection Tribunal (IPT) has consistently ruled that INZ does not get to decide how important each of those tasks is relative to one another but simply whether the applicant does them. INZ agreed this applicant does 6 of the 8 and is involved in the last two.
So, how you might ask, could the case be declined?
There’s only two explanations - the officer and his superior who signed off on the decision should be considering career changes to something less intellectually challenging, or there is indeed an agenda at play. I have written about it before and INZ can deny it all they like, but you don’t have to look very far to see the evidence of it.
Two years ago, the then Government started making noises about the ‘dumbing down’ of the skilled migrant category where the average salaries of skilled migrants was heading down (sharply) and Retail Manager and Chef, being the two most common occupations of skilled migrants, were largely the reason.
Who were these applicants? Indians, by and large – tens of thousands of them who had often done relatively low level academic courses in NZ and who were securing relatively low paying but still skilled jobs as Retail Managers and Chefs. Instead of being transparent and honest with the market (and all those tens of thousands of mainly Indian students lured to NZ by a Government wanting to grow its export education market, unscrupulous education agents and NZ education institutions looking for quick money) and dropping these occupations from the list of what is skilled, a way had to be found to deal with the problem.
How have they done it?
Exactly what this applicant experienced – find a reason, however illogical, to decline. Argue that an applicant is ‘more something else’ than what they claim to be. If you are an applicant dealing with the system on your own how can you fight that? INZ simply washes their hands at that stage and says ‘if you don’t believe us, go and appeal it’. The fact that costs thousands more dollars than most young former international students have and takes around a year, undermining current employment because the employer starts to think the migrant might not now be around long term, means most applicants give up at that point and leave the country.
The system is intellectually, and to a large degree, morally bankrupt and while I know anyone in INZ reading this will tell themselves this is not the way they operate I believe they are delusional and/or in denial – having worked at this coal face for nigh on 30 years I know exactly how they work and what makes them tick.
Someone, be it senior INZ Managers or their political masters, don’t want to approve Retail Managers, particularly those in Franchise operations and they will ignore the overwhelming evidence to deliver the outcomes they have been told or decided (unofficially of course and you’ll find no record directing anyone) to deliver.
The misery that causes is repugnant to me when all people are doing is following INZ’s rulebook – unfortunately migrants don’t appreciate that no one ever really holds INZ accountable and this case is a prime example where INZ feels they can quite readily ignore their own rules, processes and some very clear directives of the independent Immigration and Protection Tribunal.
Until next week...
Iain MacLeod, Southern Man
Posted by Iain on Oct. 19, 2017, 10:40 p.m. in Politics
A few minutes ago the Leader of the NZ First political party - which gained a little over 7% of the popular vote in elections two week ago - announced it is forming a coalition with the Labour Party and the coalition will be supported outside of cabinet by the Green Party.
Already my inbox is filling up with ‘What does it mean for my chances of moving to NZ?’ emails.
Without wishing to sound like the aforementioned political leader, if you read my blogs you’ll know that my view has been (and nothing has changed with this announcement today):
Today the Leader of NZ First all but confirmed my suspicions as he ‘anointed’ the Labour Party and their Green Party sidekicks. Don't be too concerned if you are highly skilled but be very worried if you are in NZ studying or planning on doing so.
Those applying to study in New Zealand are defined as ‘migrants’ and all the hot air coming from New Zealand First in recent years that we are being overrun by foreigners was clearly bogus and played on a wide mis-understanding as to how ‘migrants’ are defined. NZ has become a very popular place to study but it is quite true that at least half those coming to study were using it as a spring board to try and get residence. Some got it, most did not.
People were confused that students and many work visa holders were considered as ‘migrants’. I think most of us think of migrants as people moving permanently to a country - not those coming to study for 2-3 years or have working holidays for a year or two.
That is the reason we have had ‘record’ numbers of migrants - tens of thousands of international students. Not permanent residents.
That ignorance has been exploited election after election by NZ First.
What the public has never been told by this politician is that the numbers of resident visas being granted every year has not changed. Not this year, not last year, not five years go. In fact, skilled migrant resident visas have also fallen as the Government pushed up ‘pass marks’ for skilled migrants in order to deal to the problems it created by promising international students a pathway to residence.
The Labour Party which forms the biggest bloc in the new parliament has always been pro-immigration.
It is insightful that the Leader of NZ First at his Press Conference confirmed that New Zealand continues to need and welcome skilled migrants, does not want low skilled ones and that international students should be coming to study. Which is precisely what the outgoing Government recognised — just too late electorally which was a bad miscalculation on their part. They have paid the price for seeming to have no solutions to population driven house value increases and infrastructure pressures - particularly in Auckland.
So watch for announcements in the next few weeks taking aim squarely at reducing pathways to residence for international students in order to take the heat off skilled migrants. That is a good thing as it should then allow pass marks to fall and those that can contribute most to the country will continue to be welcomed.
My pick is the new Government will leave the pass mark at its current historical high for a few months to carry on the (bogus) message of ’toughening and tightening up’ message. Then it may well fall back to levels where the current target of 27,000 skilled migrants and their families might be met. In the meantime it’ll be spun as ‘quality over quantity’.
Foreign buyers will be limited from purchasing of existing residential property but that is common in many countries. My pick is we will follow Australia's pathway of allowing foreign buyers to buy sections and build. Maybe.
Potential skilled migrants in my view should sleep well tonight.
Posted by Iain on June 12, 2017, 12:53 a.m. in Immigration
"Labour attempts to pick low hanging immigration fruit...that's already been eaten" - Iain MacLeod, Managing Director, IMMagine Australia & New Zealand Immigration Specialists
The Labour Party’s announcement today that they will make moderate cuts to immigration numbers will make no significant difference to the numbers of permanent migrants coming to New Zealand.
Putting the brakes on the numbers of students transitioning to work and potentially resident visas is a move that will, later this year, have enormous potential impact on thousands of international students that were studying with a clear intention to use the pathway to residence created by the Government. Clearly, an informed Labour Party is aware that the National Party had already played this card. Having promised cuts in the ‘tens of thousands’, I guess they had to come up with something, somehow.
Just as the Government hasn’t actually cut a single visa from its residence programme, it appears neither has Labour in its announcement today.
It’s all smoke and mirrors designed to take the wind of our of NZ First’s sails.
No one suggests that many of the jobs currently being filled by temporary work or student visa holders shouldn’t be filled by locals, they should – but most employers will tell you those young Kiwis are not around to fill these roles or don’t want the work.
Denying many employers casual migrant labour might make a headline and take a few votes off Winston Peters but it’ll be interesting to see what ideas the Labour Party comes up with to reform our welfare entitlements to ensure there are young New Zealanders being ‘encouraged’ to fill these roles. Let’s hope so because there are going to be lots of vacancies. (Labour provided the example of a paediatric oncologist as benefitting from "their" changes – truth be told, anyone with these skills and qualifications would always have qualified for residence: would under National’s upcoming changes and will under Labour’s proposed rules.)
On the plus side, there is no doubt the changes announced by the National Party earlier this year and the announcements by the Opposition today will increase labour market shortages particularly in hospitality and tourism, creating plenty of opportunities for young New Zealanders to find employment in these sectors and in other casual work.
The export education industry will take another hit with these changes. The Government’s (quietly dropped) goal of it becoming a $5 billion a year industry just took another politically inspired hit.
Iain MacLeod, Managing Director, IMMagine Australia & New Zealand Immigration Specialists
Posted by Iain on May 13, 2017, 11:57 a.m. in Government
A week after receiving the new points that attach to the various skilled migrant criteria in August 2017 (and both modelling and testing in the field on over 150 consultations so far in South Africa and SE Asia this past week), it is very interesting who wins and who loses from these changes.
Clearly, owing to the new salary thresholds attaching to skilled job offers, those with entry level jobs (international graduates studying in NZ by and large) are clear losers unless the role they secure is highly skilled (think many Engineering, IT, Technical and Trades roles).
Those with more entry level and ‘white collar’ or hospitality/restaurant/tourism jobs will lose owing salaries for those sorts of occupations coming in under the new threshold of $48,800. I’m thinking Chefs, Bar staff, banking, insurance, marketing, sales, Secretaries/PAs and many of the roles in what is known as Part C of Appendix 6 (list of occupations deemed to be skilled) in the rule book.
What has been very interesting to me is how many people I am meeting who will qualify after August 14 who do not qualify today.
With the pass mark at 160 most people today require qualifications – trade, technical or academic representing 2-4 years of study.
However, come August 14, even at 160 points, many people with no (or low level) qualifications, will qualify but will usually require a job offer outside of Auckland.
Anyone aged between, say 30 and 45 years old that has ten years of skilled work experience and a skilled job outside of Auckland now scores at least 160 points. I have seen many people in this situation this week.
That leads me to ponder something I read last week in the paper Immigration Department officials sent to the Government in which they said they believe that these points ‘spreads’ would deliver the government their target of 27,000. I was sceptical of that and to some extent I still am given the sheer numbers of international graduates that have been swamping the SMC pool in recent years, who are now going to struggle to qualify but there might be something to it.
That has led me to conclude the pressure on Government to drop the pass mark to achieve its targets might not be as great as it was nor the need to do so in the short term so great.
That reinforces my belief that there will be no pass mark fall before the election in September – the Government won’t wish to be accused of not going tough on immigration (even though they really haven’t).
As mentioned in previous blogs the media swallowed the ‘toughening and cutting’ line hook, line and sinker even though Government hasn’t (and has no intention of) cutting a single visa from the NZ Residence programme.
And what does all of this tell you?
International graduates from NZ institutions were a problem that needed to be dealt with. They were the ‘problem’ for the Government and the new points and salary thresholds has eliminated the problem.
What we will see over the next few months is a return to the historic profile of skilled migrant NZ traditionally sought – those aged 30-45 won’t need qualifications to get in.
If you have any questions about your eligibility -use theis link to order an assessment of your options: http://www.immagine-immigration.com/assessments/full-assessment/
Until next week...
Posted by Iain on May 5, 2017, 7:23 p.m. in Immigration
Information received under the Official Information Act proves (if any proof was needed) that the Skilled Migrant Category changes Government is implementing on 14 August are largely directed at stemming the flow of international students through to residence and will not radically reduce the chances of those over the age of 30 that would likely qualify today.
INZ officials are quoted in advice to Cabinet:
The remuneration threshold is likely to have a bigger impact on former international students than people entering through other SMC pathways. International students will typically have less experience and therefore earn less than migrants with more work experience. Around 50-60 per cent of the international tertiary graduates who were employed in New Zealand in 20135 (sic) earned below the proposed threshold.
Told you so...
The Government’s promise to international students to provide a residence pathway has, effectively, been broken. Under these new rules the minimum salary threshold of $48,800 will see significant numbers of graduates from our local institutions no longer qualifying.
That must hurt the $3 billion export education industry far more than they care to admit right now.
While I feel for them, New Zealand offers limited numbers of places to skilled migrants each year and demand far exceeds supply. We have an obligation to get the most for our visa ‘buck’ so while for me it is a shame these students have been let down badly and the Government hasn’t ‘fessed’ up to really stuffing things up in that quarter, something had to give and it was the 'lower value' migrants that are missing out.
It is worth repeating there is no cut to the annual target of 27,000 resident visas under this category.
So, what are the new points?
Those aged 39 and under will score 30 points for age. This represents status quo for those under 30 years of age but 5 more points for those aged 30-39.
We can also reveal that high paying jobs with remuneration (note, not necessarily salary it seems) of $97,713.00 will attract 20 new points.
Masters and Ph.D. holders will see their points for these qualifications increase to 70 points from the current 60. Goodness knows why......
In possibly the biggest change, those claiming points for work experience will only be able to claim points for that experience that is skilled (and in the jargon, Skill Levels 1,2 and 3 in ANZSCO). Right now, all work that is ‘relevant’ to a recognised qualification or a NZ skilled job offer gets points up to a maximum of 30.
However, the points that can be claimed from August 14 increases to a maximum of 50 points for ten years of skilled work experience. That's 20 more points available to those with ten years of skilled work experience than exits today.
A case of taking with one hand and giving with the other, reasonably in my view and recognising that those with greater levels of skilled work experience are better for the NZ economy.
New Zealand based work experience points increases from 5 to 10 once 12 months of skilled work has been notched up.
Gone, as reported in another blog post, are:
So, if you are aged over 29, have University, Technical Institute or Trade level qualifications these changes will be more or less neutral as I have written about before. Those that qualify today are almost certain to qualify after 14 August because they were not the targets of this fine tuning of the skilled migrant category.
The high salary/remuneration bonus points will assist some who don’t have qualifications to qualify but it is possible some will miss out.
What the Government might need to do (and may in fact be considering) is a return to multiple pass marks so that, for example, someone earning over $98,000 might have a lower pass mark than someone earning under that. The system is designed with and historically always has had multiple pass marks.
My analysis of these changes suggests government will still struggle to fill the annual 27,000 skilled migrant target it has had in place for over ten years with this new points spread.
That analysis demands a drop in the pass mark but given that is a political decision I suspect what happens from here is the Government will be pleasantly surprised the media completely swallowed the announced changes as a ‘tightening’ and ‘cuts’ (both of which have not happened) and leave the pass mark at 160 till after the election in September. They’ll be hoping they’ve painted a (false) picture of ‘toughening up’, New Zealanders ‘first’ and all that ‘anti’ talk in order to neutralise the opposition parties calling for reductions in migrants.
Then, once they have been re-elected (possibly in coalition with a small anti-immigration party), they’ll let the pass mark fall, confident neither will look like they haven’t ‘tightened up’ and have delivered on a promise to force a ‘cut’ to immigration without having done anything of the sort.
Wonderful use of smoke and mirrors that represent a few tweaks and a bit of fine tuning that in reality only impacts on those would be skilled migrants under the age of 30. Most of whom are international graduate students.
And we might see a few restaurants close around town because of the new minimum salary threshold of $48,800 unless we are all willing to pay more for our Phad Thai and pay migrant Chefs more.
Until next week...
Posted by Iain on April 28, 2017, 3 p.m. in Immigration
It took about a week after the Government announced its changes to Skilled Migrant policy and announced a review of temporary work visa policy for the message to finally get through to the mainstream media that things might not be quite as they at first appeared.
Why the Government did what it did and who it was really targeting was, in my view, actually quite different to the press statements.
I get an ironic chuckle the way a 24 hour, first-to-report-the-story news cycle meant that the way the Government ‘sold’ these changes was swallowed hook, line and sinker by the media and of course in this online and connected world of ours, on social media platforms around the world. Chat groups and forums are still full of jibber jabber about doors closing, migrants being unwelcome and more.
‘New Zealanders First’ was a tidy headline and in keeping with recent developments in the USA (Trump, walls, immigration), Brexit (‘too many bloody foreigners and Britain isn’t British any more’), Marine Le Pen’s right wing rise in France (‘immigrants won’t become French and they want to make us become Muslims!'), Australia’s ‘Australians First’ announcements last week set a nice scene.
We are in an election year and the two smaller but main opposition parties are calling for cuts to migration levels. One always did and is rewarded every four years with 8-10% of the popular vote. The other, always strongly supported by migrants, should simply be ashamed of itself. They are polling in the low 20% and are of course a desperate five months out to lift their support (but anyone who is ‘anti’ immigration will likely vote for the other ‘anti’ immigration party).
Naturally, neither are being specific about which categories of immigration they’d cut or in what numbers.
There is no doubt there is real pressure being brought to bear on the Government to ‘do something’ about infrastructure pressure in Auckland; clogged freeways and rampant house price inflation caused by the fact that...it’s a great place to live!
The economy is performing strongly, job growth is strong for the skilled, fewer Kiwis are packing their bags for overseas, more Kiwis are coming home and more Australians are joining them (there is a downside to every boom I guess!), pleasant climate, great public education and healthcare; the list goes on. Every year tens of thousands of wannabe kiwis want to join us.
How true is it that the changes announced last week represent some seismic shift and tightening...or indeed, any tightening at all?
The answer is pretty clear – the Government never announced any cuts to skilled migrant numbers.
Late last year the Government announced a modest, margin of error ‘cut’ to our overall residence programme which covers all migrants coming to NZ under all categories; not just the skilled. The two year residence programme was cut from 90,000 plus or minus 10%, to 80,000 - 85,000 plus or minus 10%. Do the math. The number of visas issued over the period may well be exactly the same.
The number of places available for skilled migrants has within that remained exactly the same – 27,000 plus or minus 10%. As it has for the best part of a decade. That did not change last week. An important fact that seems to have been missed by pretty much everyone in the media.
So if the numbers of skilled, investor and family migrants is going to be pretty much the same next year as it is this year then what is actually going on?
Again, I’d suggest it’s pretty simple. There are more people chasing those 27,000 skilled migrant places than ever before. Demand exceeds supply and that requires fine tuning from time to time to control the inflow.
Over the past two years the numbers of international students treading the promised pathway to residence has been climbing. These youngsters were increasingly jostling with older and more experienced skilled migrants.
We simply don’t have room for them all (apparently).
I explain the Government’s dilemma like this.
If there was only one resident visa left of that annual 27,000 to give away and there were two applicants on 160 points, which one is better for NZ if one was a 23 year old international student, recently graduated from Auckland University, no work experience but managed somehow to secure a job offer in Christchurch as a Retail Manager paying $38,000 a year? Or is it the 35 year old Software Developer with a degree in IT, ten years’ experience and a job paying $120,000?
The answer is pretty obvious. The Software Developer. Trouble is the Government promised and marketed a study to work to residence pathway to international students. Creating in the process a $3 billion dollar a year industry employing 35,000 New Zealanders. As of last year something like 127,000 were in the country. Half leave at the end of their study. The other half want to stay. There are only 27,000 places for all skilled migrants available. Again, do the math...
So, what did the Government do last week?
They announced that those under the age of 30 will get fewer points for their age, all their work experience will need to be skilled to attract points and unless the job offer in NZ pays $48,800, the job would not be deemed skilled and there is no pathway to residence.
Who does that impact? The older software developer looking to come here or the young international graduate entering the labour market?
The country will still get 27,000 skilled migrants but there will be a slight shift that favours those over the age of 30.
No cut to numbers though. Just a change in the ‘mix’.
Pretty obvious really and if you were a political spin doctor you’d be sitting back this week adding another wee drop of whisky to your glass and admiring your handy work.
You’d be thinking – it’s election year and immigration is a hot topic globally. Brexit started something; Government is getting it in the neck over not investing enough in infrastructure; Aucklanders are getting grumpy over their traffic woes; sky high house prices are an issue...
One piece missing – immigration. Migrants drive cars. Migrants stay in houses. Migrants are different to us.
So – announce a tightening to migration and let it be (mis)interpreted as a cut to get one headline out in front of the people – ‘New Zealanders First’!
I have to say I actually admire their gall.
Having created the problem of encouraging all those students to come here, they have been quietly pushing the knife into them for the past six months which, for the most part, the students never even felt (pass mark raised to 160 in October to ‘flush’ the pool of these youngsters). Most of these students think the cuts are to other immigrants and not the stinging in their own back.
What we saw last week was part two of what, to me, is a very obvious and well-crafted plan to extricate the Government from the indefensible position over international students and the promises they made them with as little fallout as possible.
We do have population pressures and particularly in Auckland but what great problems to have? We are a ‘victim’ of a strong economy for which the government deserves some credit; interest in settling here has gone through the roof, Kiwis don’t feel like leaving, more are coming home and we only have room for so many new migrants and the government is right to be choosy.
Trouble for me is no NZ Government ever seems to have any sort of end plan when it comes to immigration; we have no population policy (and immigration is a poor substitute), we have all these students coming seeking residence, we have around 70,000 young Holiday Working Visa holders having a great time - many of whom are seeking residence and we only have 27,000 skilled resident visas to give away.
What I cannot for the life of me work out is why the Government has not put the lid on these tens of thousands of young Holiday Work Visa holders.
At least the international students are spending big money to be here, are part of multi-billion dollar export industry and many are studying courses we cannot fill with our own young people.
At the same time the export education industry is going to be under severe threat if they don’t switch their focus to more ‘high value’ areas like Engineering, ICT, Medicine, Health and Architecture where entry level salaries will be above the newly announced minimum of $48,800, because thousands of students will go to other countries if the barriers to long term residence are lower.
In the meantime, if there was going to be anyone ‘cut’ from the pathway to skilled migration the Government should be focussing on putting limits to Holiday Working Visa numbers.
That would be a ‘cut’. But last week was a fine tuning, dealing with the international student ‘problem’ and anything but a cut to skilled migrant numbers.
Until next week...
Posted by Iain on April 14, 2017, 2:52 p.m. in Investor Category
In a few weeks’ time, new Investor Category rules will be rolled out. Government has indicated 27 May.
There is no change to those seeking a resident visa by investing NZ$10 million under the investor Plus category, the changes are only being made to the ‘Investor 2’ category.
This sub-category has traditionally been a points based assessment system where applicants claim points based on their age, business experience, an amount they wish to invest and who have an additional NZ$1m over and above the nominated investments for ‘settlement’ purposes.
This is not and never has been a ‘buy your way in’ policy but rather emphasised that those with wealth also had skills, acumen and perhaps more important than anything, linkages to the global business world.
Each year the number of places available for these investors was 300.
It has been moderately successful but dominated by investors from China which has given the Government pause for reflection, given the aim and objective is to build linkages through global business. China is our biggest trading partner and very important to the country but it became clear that the policy was too dominated by that one market. The policy also faltered owing to the crackdown by the Chinese Government on the transfer of funds out of their country in the recent past. Consequently, most investors from China have not been able to make their investments.
The number of places available under the category is being increased to 400 per year.
So, what are the major changes?
Mandatory English language testing has been introduced and points will be awarded based on the outcome. Although the Government hasn’t said as much this is clearly designed to try and broaden the number of countries from where these migrants come from.
The minimum investment amount has increased from $1.5 million to $3 million. At the same time the need for $1 million in additional settlement funds has been dropped.
Funds invested in ‘growth’ areas will attract additional points. The idea being to try and wean applicants away from lower risk Government bonds, which in reality don’t do a whole lot for New Zealand but are understandably preferred by investors for their guarantees and minimal risk. It is my opinion that the additional points for doing something more active with these investments won’t be of much interest to most investors; they’d rather invest more if pass marks demand in lower risk investments. We shall see.
Increased weighting on business experience as a percentage of a points claim. A smart move given New Zealand is more interested in the skills sets and ‘linkages’ investors can bring.
The big unknown is what the pass mark will be and where it will be set.
My sources suggest that the pass mark will be set relatively close to where it lies today, around 70. The type of person likely to qualify today will continue to qualify come launch day, if their English is good enough. This is simply to offer some consistent signals to potential investors which is to be applauded.
The change to English language requirements will also shape the pass mark. When the Government looked like it might be able to fill its 300-place quota two years ago they let the pass mark ’float’ off its minimum of 20 points. This resulted in creating a blind tender process where investors had to claim far more than the minimum investment amount of $1.5m to be certain of selection. As happens when there is scarcity and high demand the pass mark went through the roof (85-89 points) and, certainty for most investors, meant they’d agree to invest at least $3-5million.
That all went pear shaped given most applicants were from China (over 90%) and when their government cracked down on export of funds to support its currency our policy effectively collapsed.
This time with English being so important it will, in my view, act as a brake to pass mark increases as applicants will need to demonstrate a good command of English.
In essence, the changes are relatively modest in terms of criteria but significant for those from non-English speaking markets of whom we may see far fewer applicants unless they are willing to invest significant funds to compensate.
If anyone would like more information on the new investor rules feel free to email me directly – email@example.com
Until next week...
Southern Man – Letters from New Zealand
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