Chapman Tripp Breakfast Briefing

  • Lianne Dalziel

Thank you for the opportunity to talk to you this morning, to share some of this Government’s vision for New Zealand’s economic future and the work we have done and will be doing to help the country achieve its potential. My particular focus is on immigration policy, but I wish to place that in the context of the government’s Growth and Innovation Framework released in February this year.

The economic objective of our framework is to return New Zealand’s per capita income to the top half of the OECD rankings over time. This requires New Zealand to achieve and sustain growth rates in excess of our past economic performance over a number of years, which is a challenging goal, but one that this government is committed to.

Our focus on achieving stronger economic growth should be seen as a means to an end. That end is higher living standards and the ability to provide a better quality of life for all New Zealanders. Stronger economic growth will allow us to finance the provision of first world public health and education services, provide real opportunities for all New Zealanders, and create returns that attract further capital to New Zealand.

Our approach sees government, business, local government, and communities working together to achieve shared goals and a shared vision of what New Zealand can be.

Local economist, Paul Dalziel, was asked a couple of years ago to describe the concept known as the ‘Third Way’. He described the ‘first way’ in the context of the ‘Muldoon era’ as one of ‘government intervention’; he described the ‘second way’ in the context of Rogernomics and the Richardson era as one of ‘government indifference’; and he described the ‘third way’ as ‘government involvement’.

This government is not an interventionist government, nor are we indifferent to the role that government can and should play in shaping economic and social transformation. We are a government of involvement. We prefer to work with all sectors so that the energy each can commit to restoring New Zealand to its rightful place in the OECD ranking is harnessed for the benefit of all. That is why we believe in working in partnership with business, with local governments, and with communities.

There are two key aspects to building an economy capable of sustaining the higher growth rates needed:

·Strengthening the foundations of the New Zealand economy; and

·Building opportunities for more effective innovation.

The two go hand-in-hand. On their own, solid economic fundamentals, which have been a priority for this government, will not guarantee that we will achieve the growth rates necessary to return our per capita income to the top half of the OECD rankings. We also need to improve our ability to innovate - to create wealth from ideas.

Our framework involves initiatives in four key areas:

·Developing Skills and Talent through increasing investment in education and industry training, implementing ‘smart’ immigration policies that address skill shortages and networking with talented New Zealanders living off shore.

·Enhancing New Zealand’s innovation system through increasing spending in research and development and providing start-up capital and support for new businesses.

·Increasing New Zealand’s global connectedness through attracting foreign direct investment, intensifying export promotion, and improving the national branding of New Zealand.

·Focusing Government resources on three areas with tremendous potential: biotechnology, information and communications technology, and creative industries. Not only are these high growth sectors in their own right, they also have the ability to add value to industries that use or could use these technologies. For example, biotechnology has applications across many other sectors such as forestry, agriculture, specialist food production and pharmaceuticals.

The Growth and Innovation Framework recognises that immigration policy has an important role to play in building a more innovative economy. This Government wants to make it easier to attract talented individuals who can bring new skills and opportunities to New Zealand. Talented people are a key driver of innovation and economic growth and the market for talent has become global. New Zealand needs to perform more effectively in competing to attract talented individuals who can contribute to building a more dynamic and innovative economy, and also to address specific skill shortages, which can be a major barrier to firms expanding.

In direct response to this, the government has introduced the NZ Immigration programme, which establishes three separate streams:

Skilled/Business Stream 60%
Family Sponsored30%

In addition we have established a Work-to-Residence programme, which provides for Talent Visas and Skills Shortage Work Permits.

The Talent Visa enables accredited employers to recruit highly skilled and talented individuals from overseas.

Once accredited, employers are able to recruit talented individuals directly from overseas as the need arises. The Talent Visa allows successful applicants to work for an accredited employer for two years. After this period, Talent Visa holders are eligible for permanent residence, provided they have met the conditions of their visa, meet standard health and character requirements, and have an offer of on-going employment.

The Skills Shortage Work Permit complements the Talent Visa. Where an acknowledged skill shortage exists, employers no longer need to go through the standard labour market test to prove that no New Zealander is available to fill the position. The New Zealand Immigration Service will maintain a Labour Market Skill Shortages List of occupations that qualify. The List will be reviewed and enhanced in consultation with employer groups, unions and government & non-government recruitment agencies. A Skills Shortage Work Permit is issued for up to two years and, again, allows permit holders a pathway to permanent residence.

Overarching all the changes in immigration policy, this government has focussed on results. This government does not believe immigration should be about numbers, it should be about the success of settlement outcomes.

We cannot lose interest in migrants after they arrive here; we need to know how well migrants do here, and how well they are received into the communities in which they settle. That is why we have allocated a proportion of the migrant levy to the development of settlement programmes, most of which were included in Immigration baselines in this year’s Budget.

My driver with respect to these changes is the observation I made at the time I became Minister, and that was there were people in New Zealand who had residence, who couldn’t get work, and there were people in New Zealand who had work, who couldn’t get residence.

The settlement programmes were directed at the former, and the work-to-residence policy to the latter.

These approaches were an important adjunct to the NZ Immigration Programme, which despite the election year comments from Richard Prebble and Winston Peters, is planned and balanced, in that it prioritises skilled and business migration, while providing for family reunification and our international & humanitarian commitments. Some of you may be surprised that I include Richard Prebble, however, let me quote from a speech he gave on 9 April 2002, to a Chapman Tripp seminar in Auckland:

“Act has consistently called for quality, not quantity, in immigration. Winston Peters has been asleep on this issue – well he has actually been asleep on everything. I think that when he does wake up, he will give the government the deserved hiding on the immigration issue.”

Mr Peters has responded to Mr Prebble’s ‘wake-up’ call, but is either of them acting in New Zealand’s long-term interests, or are they both political opportunists prepared to jeopardise our international reputation for a few votes at the ballot box?

We saw New Zealand’s net migration gain turn into an overnight net migration loss after the events of 1996, and it has taken until now for New Zealand to return to a net migration gain.

I believe the key to immigration policy is balance – the balance between skilled migration and other migrants; the balance between the needs of NZ communities and migrant populations; the balance between long term arrivals and departures; the balance between Auckland and the rest of the country; the balance between the cost/benefit of migration for migrants and receiving communities; the balance between infrastructure and population (both in terms of pressure and critical mass); the balance between the workforce needs of industry and the training of our existing & future workforce; the balance of understanding around international obligations and NZ’s broader role as a good international citizen.

I believe that we have got that balance just about right, and that means that immigration policy can support a growth and innovation strategy that will return New Zealand to its rightful place in the OECD ranking.

Thank you again for the opportunity to address you, and I would happy to respond to any questions you may have.