Immigration New Zealand's contribution to growing the economy

  • Jonathan Coleman
Immigration

Good morning ladies and gentlemen.

Thank you for joining me at today’s breakfast briefing. All of us have a vested interest in immigration and I’m pleased to share with you some specific actions the Government is taking to enhance Immigration’s contribution to the economy, service improvement and changes to business migration.

Thank you for those opening comments Nigel. I’ve worked closely with Nigel since he became Immigration New Zealand head in February 2010. Nigel has been at the forefront of lifting Immigration New Zealand’s performance levels to become much more customer focused and aligned with the Government’s policy direction. Thank you your dedication and the hard work of your staff.

This morning I will update you on improvements in immigration policy and Immigration New Zealand’s performance, the steps we’ve taken to improve immigration’s value and our future focus.

Many of Immigration New Zealand’s key stakeholder organisations are in the room today and I’m confident that you will acknowledge the partnership approach that Immigration is now taking to provide tangible improvements to help support New Zealand’s economic growth. As Minister I acknowledge that although INZ has made significant advancements, there is still some way to go.

Lifting immigration’s economic contribution

Considering the economic challenges the country faces, lifting immigration’s economic contribution takes on more importance. New Zealandwent into deficit in 2009 after several years of surpluses and the economic situation has been compounded by the September and February earthquakes.

Currently, we’re borrowing $300 million dollars a week to keep public services ticking over – and this cannot continue and new spending will be directed only to a few areas of highest priority, mostly health and education.

This month’s Budget will outline a credible path which will return New Zealand to surplus while continuing to support the most vulnerable and maintaining public services. The Government has pitched its focus squarely on the economy and jobs, and that is likely to continue.

Benefits of immigration - growing our economy

The Government has a comprehensive economic plan to help New Zealand achieve those goals and immigration must play an important role in helping to drive that plan. The following numbers reinforce immigration’s economic contribution:

Most of you will be aware that one in four New Zealander workers are migrants. The reality is that New Zealand society is changing and we need to be at the forefront, ensuring that New Zealand remains an attractive destination for workers, students, tourists and capital.

Migrants fill acute skills shortages, removing constraints that prevent our businesses growing.

  • If we were to close off immigration entirely by 2021:
    • Population would drop by 9.6 per cent
    • GDP would drop by 11.3 per cent
    • The available labour force would drop 10.9 per cent
    • The export sector would drop by 12.9 per cent.

It’s important to highlight the economic value of Immigration here:

New migrants add an estimated $1.9 billion to the New Zealand economy every year.

  • Inbound tourists contribute $9 billion a year.
  • International students contribute around $2 billion a year in foreign exchange to the economy.

Immigration recognises the strategic importance of the tourism and export education sectors and the direct links they provide to employers. More on this shortly.

Given these compelling figures, my number one priority has been to ensure Immigration is contributing to the Government’s economic growth agenda.

Ultimately this is about attracting the people NZ needs and making quality decisions quickly. We are doing that by:

  • Helping employers find the skilled staff required to improve productivity if there are no suitably qualified New Zealanders available.
  • Supporting the $9 billion a year tourism industry by facilitating tourists’ travel and helping tourism tap into new markets.
  • Helping to grow the export education industry by streamlining processes, facilitating genuine students and improving the speed of decision making.
  • Attracting more high-worth individuals and raising investment levels through our Business Migration Package.

I’ll go into detail about these areas, and announce some new changes to the Business Migration Package and export education shortly. When talking about where Immigration is going and the improvements we’re seeing, it’s important to provide some context around the situation the Government inherited.

Immigration under the previous Government

I’m not overstating the case by saying Immigration was in a very poor state when I became Minister.

Following the Mary Anne Thompson affair, the Office of the Auditor General was asked to investigate the state of Immigration NZ. What they uncovered was a ticking time-tomb. The Auditor General’s report was one of eighteen external reviews that led to 226 recommendations for change.

In brief the OAG report found an unacceptable variation in quality of decision making between branches, training provided to staff, use of delegations, procedures for reducing back logs, and systems and practices for decision making and quality control.

I’m pleased to say today that of the 226 recommendations only ten remain to be fully implemented. This is a reflection of the change process undertaken by Nigel and his team as well as repositioning their relationships with you the stakeholders.

When talking about Immigration New Zealand’s performance, some context is required about its workload. More than 500,000 application decisions are made each year. This includes more than 130,000 temporary workers; over 90,000 students; about 45,000 new residents; and 750 refugees under our annual Refugee Quota Programme.

Immigration receives about 1 million phone and email enquiries a year and in the last twelve months its website recorded 9 million visits. Given these volumes, it is crucial to overhaul Immigration New Zealand's customer focus.

Quite simply, making good and timely decisions on visa applications, removing unnecessary business processes, lifting quality and improving customer satisfaction should be a basic function for Immigration New Zealand.

I’ve worked to develop simple metrics and targets to measure improvements in Immigration New Zealand’s services.

Over the past 20 months I have been driving them to deliver across specific areas including:

  • Improving the quality of immigration decision making
  • Focussing on the timeliness in processing visa applications
  • Improving satisfaction with Immigration New Zealand’s services.

In early 2009 the Auditor General’s report found 21 percent of decisions were poor or questionable, while Immigration’s own reviews found 25 percent were poor or questionable.

With Immigration focussing on improving the quality of decisions, now 87 percent of decisions are rated as good, 7 percent questionable and 6 percent poor.

Timeliness of decision making has to be a major focus, for many Immigration New Zealand customers this is the key metric. Initially, improving the quality of decisions was the focus for the department so timeliness took a hit.

Immigration New Zealand’s old targets made the service look good on paper:

  • 90 percent of work and 95 percent of visitors applications within 60 days
  • Student applications had a target of 95 percent within 60 days, but it was not being met.

A major effort went into improving performance in processing student applications.

Last year the Palmerston North branch was experiencing a severe backlog with 6,658 applications on hand. Today it’s down to 3,485.

We promised to process 90 percent of student applications within 30 days and we’re currently delivering on that, but we can improve further.

So the targets are now 80 percent of applications processed on average within 30 days and we’re starting to see progress. As at March 2011, 81 percent of work applications, 89 percent of student and 91 percent of visitor applications were being processed on average in 30 days.

In June 2010 only 76 percent for work, 73 percent for student and 89 percent of visitor applications were being processed in 30 days. Over the past two years employer satisfaction has increased from 70 percent to 90 percent and overall client satisfaction has risen from 68 to 80 percent.

Yes, there’s still more work to do, however the figures make it clear – the department’s performance in key areas is improving and the mechanisms in place will ensure it continues to make progress.

How we are increasing immigration’s economic value

The steps taken to improve its performance have been complemented by the changes made to increase immigration’s economic value.

Attracting skilled migrants to fill the skills gaps that exist in our labour-force are critical to improving our productivity. Make no mistake, the Government’s number one priority is to place New Zealanders into jobs, but when there are no suitably skilled or qualified Kiwis available, migrants meet that demand.

In spite of the global economic downturn, the market for skilled migrants remains keenly competitive. We still face strong competition from countries such as Australia, Canada, the United States and Germany. This competition will intensify as the world economy moves out of recession.

The Government has introduced new visas and policies to attract skilled migrants and transition them into the workforce. Launched last year, all 300 places for the Silver Fern Visa, which is aimed at skilled young migrants, were filled in 30 minutes. Our continued focus is on attracting the skilled migrants our economy needs.

Increasing Business Migration

One important economic driver immigration can capitalise on to help stimulate growth is business migration.

Upon becoming the Government, we identified significant gaps in the existing business migration policies.

Now we have a package that makes New Zealand very attractive to business migrants, and in 19 months we have attracted over $562 million in potential investment capital.

To date $142.5 million has been transferred and invested in New Zealand and an additional $167.25 million has been approved for funds transfer. Applications from investors worth an additional $252.5 million are being processed.

Since the policy has been operating, it’s attracted several times the amount of potential investment capital compared to the previous Government’s policy.

To ensure we’re getting the best return from this package we reviewed the Investor Migrant policy settings and I’m pleased to announce today some of the changes that will be introduced from mid-2011.

Some of the key changes include:

  • Reducing the residence requirements for Investor Plus migrants during the three year investment period from 73 days to 44 days per annum.

 

  • Investment opportunities will be expanded by allowing migrants to invest in entities established by parent organisations to raise funds. Migrants will also be allowed to invest in bank bonds and equities.
  •  We’re providing more flexibility around the requirement for business experience. Instead of previously having to meet both conditions, business migrants only need to meet one of the following criteria - to have owned or managed a business with five full time employees or to have owned or managed a business with a minimum $1m in annual turnover.

 

  • We’re allowing migrants to transfer funds through approved foreign exchange companies which recognises the emerging international trend in funds transfer.

I am confident the various changes will attract even more very high-worth investor migrants to New Zealand.

It will also provide incentives for wealthy migrants to upgrade their investment. These investors also have more capital and a greater ability to support New Zealand businesses. Yes, this package is about attracting investment, but what’s equally important is that we are attracting people with commercial nous, experience and global networks.

Immigration New Zealand is working closely with New Zealand Trade and Enterprise to link high-worth migrants in the Investor Plus category with New Zealand businesses.

The marketing of our Business Migration Package will also be smarter and will target key OECD markets including the United Kingdom and the United States. We’re also looking at the major developing markets in India and South East Asia.

Supporting Export Education and Tourism

Many people here already know and appreciate the value of the export education market.

As previously mentioned, it contributes around $2 billion dollars a year to our economy from approximately 90,000 foreign students. It also supports about 32,000 jobs and providers received nearly $600 million in fees last year – it’s a significant earner for New Zealand so we need to act smarter and ensure we are providing a top quality product to fee paying students.

Immigration has a crucial role to play in export education and it can help increase its value by streamlining its processes and reducing red tapewhile maintaining the system’s integrity.

We have introduced numerous changes in export education to simplify the system:

  • We made it easier for students to study short-term in schools by allowing them to study on visitor visas for up to three months per year.
  • Interim visas including for fee-paying foreign students were introduced which allows them to continue studying when applying for visas to further their studies.
  • Multi -year temporary visa holders will be allowed to study for up to three months in each consecutive 12-month period, rather than once only per visa.
  • The validity of police and medical certificates is also being extended from two years to three years.

INZ’s timeliness in processing student applications impacts on many education providers.

Last July I spoke at an education providers conference, Study Auckland, and it was clear we weren’t meeting timeliness standards. I told Immigration New Zealand this was not good enough and they needed to lift their game significantly. I’m pleased to say that over the past year they have been improving and it is my expectation that Immigration will process 80 percent of student applications within 30 days.

However as Immigration New Zealand moves into its peak processing periods, it must maintain its performance.

We are competing with other countries for foreign students. If processing times are too slow, we risk losing students to a faster competitor. Reducing processing times will enhance New Zealand’s reputation as a study destination.

We’re looking at reducing bureaucracy further by changing how we deal with applications. We’re seeing what other jurisdictions do, particularly in the India market, for example more succinct decline and PPI letters; declining fraudulent applications outright and banning the applicant from reapplying and working more closely with accredited institutions to fast-track bona-fide students.

In further changes, work visa holders will be exempt from having to apply for a Variation of Condition on their visa if they undertake formal training that leads to a qualification.

Other significant policy work on export education is underway and I will be making announcements on those in due course.

Tourism

Like export education, tourism is significant earner for New Zealand – it’s worth over $9 billion to our economy - and immigration makes it easier for the millions of tourists who visit yearly. Quicker processing times for tourists that need visas will only benefit the sector.

Immigration is also helping the tourism sector grow by tapping into new markets. The entry last month of China Southern Airlines into the New Zealand market with a thrice-weekly Guangzhou – Auckland route was a major coup for tourism.

Chinais one of New Zealand's fastest growing visitor markets. 123,000 people visited last year adding $365 million to the economy. Last month China Southern announced it would fly daily from later this year increasing the expected number of visitors on China Southern Airlines to 50,000 a year, worth an estimated $150 million to the economy.

This decision was made easier after Immigration New Zealand committed to providing a faster and more efficient service to meet the increased demand by increasing staffing, streamlining application processes and havinga Visa Acceptance Centre (VAC) in Guangzhou. VACs will also be established simultaneously in Beijing and Shanghai. The ability of Immigration New Zealand to respond quickly to the needs of an emerging market is testament to its flexible and adaptive approach.

Immigration New Zealand’s international footprint is steadily expanding with the recent opening of a new office in the New Zealand Consulate in Mumbai, the recent upgrade of Ho Chi Minh City to a full Branch and a new South African branch was opened in Pretoria last year.

 The future for Immigration New Zealand

So, how will the immigration service look in the future? It will be one that is less focussed on processes and rules rather much more customer focused, agile and responsive to employer needs. This re emphasises the need to make quality decisions in a timely manner.

Immigration New Zealand is already in the process of implementing a new operating model. This may ultimately mean a new way of working but will be focussed on aligning Government’s goals and stakeholders’ requirements.

Over the next year to eighteen months you should expect to see changes in the areas of health screening, streamlining labour market processes and working with accredited employers and licensed advisors as trusted agents for INZ.

A new IT system will also allow Immigration New Zealand to provide more online functions and adopt a more risk-based approach. 

Enhanced online capacity means we can streamline applications and reduce processing times by triaging low-risk people and high-value migrants while maintaining the system’s integrity.

Looking ahead, changes could be made in health screening. Do we need medical certificates for international students? Are there other areas where Immigration could change its criteria while not putting our health system at risk?

These areas, and others where New Zealand can gain a competitive advantage in attracting skilled migrants, will continue to be looked at.

The challenge ahead is to provide an immigration service that continues to meet the requirements of its current stakeholders but is proactive enough to meet our future requirements. Immigration NZ recognises that this is a partnership exercise and will engage your support to ensure that your service needs are met. These challenges are not insignificant and need to be viewed against current fiscal constraints.

Immigration New Zealand is moving in the right direction to build trust and the sort of service our international visitors, students, temporary workers and new migrants expect and deserve.

Now it is our turn to make these tools work better for New Zealand. For me, this means ensuring we achieve the best possible value from immigration.

Thank you