Immigration Reset: Setting the scene

Economic and Regional Development Immigration

Tuia te whakapono
Tuia te tumanako
Tuia te aroha
Tuia te hunga ora
 Ki te hunga ora
 Tihei Mauri ora
 Ka nui te mihi ki a koutou
 Tena koutou, tena koutou, tena koutou katoa.

Thank you for being here tonight as I outline the government’s planning to improve New Zealand’s immigration system so it works for New Zealand. Unfortunately, my colleague, Immigration Minister Kris Faafoi isn’t well enough to join us.

I would like to take the opportunity to outline the government’s planning to improve New Zealand’s immigration system and ensure it delivers better outcomes for our communities and economy.

COVID-19 has presented enormous challenges – disrupting travel, trade, and family ties. I want to acknowledge that from the start.

But it presents once-in-a-generation opportunity to change some of the shortcomings in the way we’ve been doing things, and that includes the way we manage immigration.

Migrants have always and will always play an important role in New Zealand society. They make a valuable and significant contribution to our economy and enrich our communities.There are thousands cases of impressive achievement academically, in business, sport and entertainment, not to mention those here in Parliament like my colleagues, Aupito William Sio, Priyanca Radhakrishnan, Marja Lubeck, Ibrahim Omer, Naisi Chen, Vanushi Walters and others in our caucus who are proud to serve New Zealand and call this place their home.

But getting our immigration settings right is a balancing act.

There are multiple facets at play, including humanitarian, social and economic objectives, along with our international commitments and New Zealand’s annual UN-linked refugee programme which resumed at the beginning of this year.

We also take seriously our commitments and responsibilities to other countries - notably the Pacific Islands through the Recognised Seasonal Employer Scheme, which provides valuable income that improves wellbeing and livelihoods in the Pacific. The Pacific residence programme and family categories are also part of that immigration balance.

It’s also about managing the benefits and impacts of immigration as one of the levers for achieving the outcomes we want for New Zealand’s economy.

This means getting the right mix of people and skills to ensure we’re meeting our economic objectives, minimising pressure on our infrastructure – such as housing - and ensuring Kiwis have job opportunities.

When we get this balance right, our immigration system enhances communities, builds economic growth and develops people’s skills.

It provides opportunities for high-value investment in New Zealand and attracts highly-skilled workers to our shores. This boosts knowledge, skills and technology sharing, supports businesses and entrepreneurship, increases our connections to the world, and creates jobs for New Zealanders.

Parts of our system have been performing well, and we want to retain and strengthen these areas to make them as effective and efficient as possible.

But while we’ve been progressively moving to reduce our reliance on lower-skilled migrants over time, we’ve still seen significant population growth – one of the highest in the OECD – driven, in large part, by migration.

COVID-19 has put a brake on this and, again, I want to acknowledge the difficulties that has presented for so many people in different ways, including our migrant families who have been separated by the COVID border closures.

We are working on solutions as circumstances allow; as we’ve just done with new border exceptions for families of separated healthcare workers. We will continue to look for ways to broaden those sort of measures.

Wider still, we are working on how to better manage future migration in the post COVID world. We want to ensure a better balance that will allow us to build the foundations for the future.

High levels of migration have contributed to 30 per cent of New Zealand’s total population growth since the early 1990s.

This has been fuelled, in particular, by increasing numbers of temporary migrant workers and students.

Temporary work visa holders make up almost 5 per cent of New Zealand’s labour force. That is the highest share - by a significant margin – compared to other OECD countries. Poland is next with almost 4 per cent.  

Increasingly, these temporary workers are at lower skill levels – nearly half of all Essential Skills visa approvals in 2019 were at the two lowest skill levels.

This means businesses have been able to rely on lower-skilled labour and suppress wages rather than investing capital in productivity-enhancing plant and machinery, or employing and upskilling New Zealanders into work.

In the decade prior to COVID-19, we saw the number of people on temporary work visas in New Zealand double – from fewer than 100,000 to more than 200,000.

We have also seen an increase in demand for residency in New Zealand, with the vast majority of applicants already being onshore. For example, around 80 per cent of applications for the Skilled Migrant category come from onshore applicants.

Temporary workers and new residents will always have an important role to play in New Zealand society, they make a significant contribution to our country, as do those who settle in New Zealand under the United Nations refugee quota programme – and we remain committed to that programme, just as we remain committed to an immigration mix which includes a portion of temporary workers.

But research by the likes of the Productivity Commission and the New Zealand Institute of Economic Research shows we can support New Zealand’s economic growth and wellbeing by making improvements to our immigration system.

The OECD, in particular, has said that ‘the employer-assisted temporary work visa system is not limiting recruitment of migrants to resolving genuine skills and labour shortages, is attracting too many low-skilled migrants and may be weakening incentives for employers to employ and train New Zealanders. This has limited our ability to create jobs and improve productivity.

Last year, our immigration system, as we knew it, was brought to an abrupt halt.

In March 2020, we closed our borders to everyone but New Zealand citizens and residents, in order to keep COVID-19 out, keep New Zealand communities safe, and keep our economy operating.  

In normal times, we would see more than seven million people enter New Zealand each year. In the 12 months from March last year to March this year – just 165,000 people came in.

There was a 98 per cent drop in arrivals and a 96 per cent decline in departures, prior to the Trans-Tasman bubble.

This has greatly affected many sectors of the economy, such as international education, tourism, and hospitality. It’s created labour shortages where the usual sources of temporary and migrant seasonal labour has been constrained.

It’s seen much of the immigration workload shift to assessing applications for border exceptions and providing advice and options for criteria around border exceptions for various sectors, as well as implementing extensions and other variations to visa conditions.

Since June last year, we’ve been able to let in over 8,000 critical workers.  This has allowed us to accelerate our recovery.

We’ve welcomed CEOs, engineers, financiers, research and development practitioners, digital and IT specialists, agricultural workers and film industry people – to support New Zealand’s economic growth while our border is closed.

Opening up quarantine free travel with Australia, and now the Cook Islands, has opened up new options.

Last week we announced that over the next 10 months, thousands of skilled and critical workers will be allocated spaces in MIQ to help provide a boost to key sectors.

These include a further 2,400 Recognised Seasonal Employer workers by March next year, to help prepare for harvests, pick Autumn and Summer fruit, harvest grapes, and prune through winter.

The new MIQ allocations also include 300 specialised construction workers, between June and October, to help progress key infrastructure projects such as the Auckland City Rail Link, Transmission Gully and Te Pae Christchurch Convention Centre.

And we’ll also be putting MIQ spaces aside for 400 international students in June, underscoring our commitment to the international education sector, which is important in the country’s long-term recovery.

The Government will continue to look for more options for border exceptions to help accelerate our COVID-19 recovery as we continue to plan what re-opening the borders might look like.

While the pandemic continues to rage, as we have all-too-tragically seen in India in recent weeks, we need to maintain what the Prime Minister has described as a ‘phased’ approach to our COVID response plan.

Quarantine free travel with Australia and the Cooks is part of that phased reconnection with the world. And there will be more to come but, again, as the Prime Minister has explained, while vaccine roll outs are incomplete, the number of countries New Zealand can safely open up to will be limited.

A reset is not merely about numbers, it’s also about ensuring we have the right incentives to support the growth path we want in our post-COVID recovery.

It also isn’t a single piece of work. It will be an ongoing process made up of multiple projects.

One key initiative we’re confirming tonight is our new Investment Attraction Strategy to encourage high-value international investment into New Zealand.

The strategy will guide our approach to attracting higher levels of productive investment to help establish, grow and scale New Zealand-based businesses; to increase the flow of ideas and talent to our shores; and strengthen our international connections as we prepare for the future.

We want targeted, high-quality investment that establishes frontier firms, brings skills and technology to New Zealand.

We have also created border exceptions for the Innovative Partnerships Programme and New Zealand Trade and Enterprise’s Investor Programme to enable representatives from global companies to come to New Zealand to conduct on-the-ground negotiations with companies that they wish to invest in.

Some of the companies that have taken part in these programmes in the past include Wisk that tested their revolutionary air taxi technology in New Zealand, and LeoLabs, an American space innovator that unveiled its first ‘next-generation’ space radar in Naseby, Central Otago. The radar system tracks small satellites and space debris and is the first of its kind in the Southern Hemisphere.

These border exceptions will enable over 200 people, representing high-value international investment interests, to come to New Zealand over the next 12 months to conduct due diligence and transact the sort of deals we know will play an important role in supporting New Zealand economic recovery from COVID-19.

Investment through these programmes will create highly-skilled jobs, enable the valuable transfer of knowledge and technology, and increase international connectivity for New Zealand firms as they allow us to position ourselves globally.

We are also looking at other ways to attract people wanting to make large, long-term investments in business and jobs here that will contribute to New Zealand’s economic recovery. And I hope to have more to say on that in due course.

In further process changes, we are taking steps to address immigration systems to make operational settings simpler, easier to use, automated – where possible – and remove room for confusion as much as possible.

These changes will take time but we want a better experience for the people who deal with New Zealand’s immigration services.

As we focus on re-opening New Zealand’s borders, we are determined not to return to the pre-COVID status quo.

One key focus of the reset will be temporary workers, partner work rights, and the Skilled Migrant Category visa settings.

Temporary work visa reforms are designed to give more flexibility to migrants filling highly skilled roles, and the reforms will strengthen both the minimum employer requirements and labour market test to be met before a migrant can be hired. We may consider further adjustments to these settings in the future.

Reforms, such as the temporary work visa changes announced in 2019, that will come into effect this November, are in line with the OECD’s recommendation that we require employers to be accredited to recruit migrant labour and meet standards of good practice in order to be accredited.

Further objectives of these temporary work visa changes include supporting employers to access the skills and labour they need, ensure that temporary workers are only recruited for genuine job shortages, make the immigration system easier to navigate, and improve the way immigration, education, skills, and welfare systems work together.

Again, this is in line with the OECD’s recommendations that we ensure checks confirm that ‘migrant labour is only recruited where there are genuine shortages.’

And we’ll be reviewing the Skilled Migrant Category; with more to say on that soon.

COVID-19 has enabled us to look again at whether we’ve got these new settings right or whether we should go further.

There are no plans, at this stage, to change specific purpose, short-term business or visitor visas, the Working Holiday Schemes, nor non-partnership family and humanitarian categories.

We’re also taking action to tackle migrant exploitation.

The exploitation of temporary migrant workers – such as paying less than the minimum wage or making people work excessive hours – is unacceptable and breaches New Zealand law.

It is an issue that affects us all. It’s an affront to the humanity of these workers, legitimate businesses who are undercut by these practices, and New Zealand’s reputation as a fair place to work, live and do business.

A whole-of-government enforcement response is already being taken to combat migrant worker exploitation.

Since July 2016, the Labour Inspectorate has successfully taken 81 migrant exploitation cases to the Employment Relations Authority.

An increasing number of joint compliance operations have been carried out between Immigration New Zealand and the Labour Inspectorate together with other agencies, including Inland Revenue, WorkSafe and Police.

We’ve also made policy changes in recent years to ensure better protections for employees, including migrants, and we’ve committed additional funding of $50 million over four years to focus specifically on migrant exploitation in New Zealand.

While the forced labour, people trafficking and slavery action plan focuses on the most extreme forms of exploitation, this funding is an acknowledgement that action also needs to be taken against lesser forms of exploitation.

We want to send a strong message that no form of exploitation is acceptable in New Zealand.

Part of that $50 million migrant worker protection fund is going to be used by Employment New Zealand and INZ for additional compliance and enforcement, a dedicated 0800 number for workers, businesses and the public to call about potential exploitation, and an educational campaign to promote these services in the community.  

The 0800 number and a new online process for notifications will be available from July 1st this year.

We want to put a stop to migrant exploitation and ensure people who call New Zealand home, even temporarily, are treated with the dignity and respect they deserve.

To a certain extent we’ve already set the scene for a reset with the types of border exceptions, and criteria for those exceptions, we’ve put in place since the COVID-19 border closure, such as requirements to pay workers the living wage, have industries provide plans for recruiting, training and providing career paths for people in their industry.

The Government is playing its part with vocational and trades training delivering significant increases – including more than 106,000 people signing up for free vocational training and apprenticeships under the Targeted Training and Apprenticeships Fund since the Fund was set-up last July.

We want to build on this and encourage employers to hire, train and upskill more New Zealanders to fill skill shortages, which will bring benefits in productivity, innovation, and help address New Zealand’s infrastructure challenges.

We’re also making sure we take a longer-term view of New Zealand’s immigration needs.

The Productivity Commission inquiry into immigration will help give us that long-term insight, while we make more immediate adjustments for the post-COVID recovery. And we’ll be engaging with you over the coming months to test our thinking.

Of course, an immigration reset process alone isn’t the solution to all our economic objectives.

This work ties in with other government initiatives to boost skills and training and productivity, like the Review of Vocational Education, Regional Skills Leadership Groups, and Industry Transformation Plans.  

Part of the aim of the reset is to complement those sort of initiatives and reinforce with employers New Zealand’s direction of travel so they can plan accordingly.

When our borders fully open again, we can’t afford to simply turn on the tap to the previous immigration settings. That path is a continuation of pressures on our infrastructure, like transport, accommodation, and downward pressure on wages. Since the borders closed, we’ve seen a reversal in the horticulture sector – for example – where there’s been a lift in wages to bring in local workers.

We’ll be looking for opportunities where workers and investors who come to make new lives here come to meaningful opportunities that can contribute to meaningful, well-paid employment for Kiwi workers.

Sectors which rely on migrant labour, like tourism and the primary industries, will look different in future.

Some sectors have done incredible work over the past year to think creatively about ways to address labour shortages, with adjustments to wages and working conditions, and changes to job offerings and career paths better suited to local labour.

The tourism industry will be brought into the framework of Industry Transformation Plans (ITP), which will involve developing a workforce plan and lifting industry standards.

An ITP will cover broad questions of industry standards, tourism industry data, innovation, and environmental initiatives. The ITP will enable improved collaboration across central government, local government, iwi, tourism businesses and the tourism workforce, researchers and other industry bodies.

It will look at ways to develop and trial solutions that could lead to system-wide innovation and improvements to transform tourism.

New Zealand Apples and Pears has launched a new micro-credential offering skills development in picking and packing in the horticulture sector. And, as part of the agreement to grant over 4,000 experienced seasonal workers border exceptions to come here from Pacific countries, horticulture and wine sector employers are paying their workers the living wage.

I know both Minister Faafoi and Minister O’Connor want to thank the horticulture and wine sectors for the way they have worked with Government. It hasn’t always been easy but they have been able to work through issues.

To all those sectors and others, I say keep it up. Any and all initiatives are critical to addressing labour shortages now and in the future.

COVID-19 has reaffirmed how resourceful and adaptable New Zealand businesses can be. We saw it in the lockdowns and alert level restrictions where businesses shifted to other ways to keep operating. It has kicked us into a new way of working and I think we are all beginning to get into a new rhythm.

We need to harness that resourcefulness.

But this won’t be an overnight transformation.

What we are talking about is a transition which both business and government engage in together, and we, as government, want that discussion with you to hear your ideas.

The Government is already playing a role in this transition, through initiatives like Industry Transformation Plans, and we will continue to find ways to support you and work with you to find solutions in this process of change.

Part of this transition is also a call to action for sectors and employers to assess your businesses and look to new ways you can operate. Engage with your industry bodies, training providers, and Regional Skills Leadership Groups. Talk with your relevant government agencies and when appropriate engage with the Industry Transformation Plan process.

I encourage you to come up with creative and innovative ways to attract local talent and to explore alternative ways to produce your goods and services.

In some cases, I suspect low-skilled jobs will make way for different, higher-valued jobs as industries invest in automation and new delivery models.

Let me be clear, there will still be the need for migrant workers where there are no Kiwis to fill jobs. But a lesson we have learnt from the past 15 months is that it’s better to be prepared and resilient to global shocks.

With that in mind, this plan is a long term vision to ensure our economy and our communities are being more efficient, and looking for ways to create more value for businesses: creating new opportunities and developing skills in our future workforces.

COVID-19 is a change-point.

COVID-19 has starkly highlighted our reliance on migrant labour – particularly temporary migrant labour. The pressure we have seen on housing and infrastructure in recent years means we need to get ahead of population growth.

The immigration system has an important role to play in helping us deliver on that goal by ensuring New Zealand businesses can access the highly skilled workers they need to rebuild and support New Zealand to reconnect with the world.

New Zealand is an open economy, and our connections to the world are important for our wellbeing and prosperity.

Immigration supports our global connectedness and access to talent and knowledge.

The direction of change we are seeking will preserve and enhance the aspects of immigration that work well for New Zealand and provide meaningful opportunities for those who move here. It will allow us to build back better and accelerate our recovery while laying the foundations for the future

We will continue to allow genuine skills shortages to be filled.

We will continue playing our part in creating a strong and resilient Pacific region.

And we will continue our role in helping to manage global crises through New Zealand’s humanitarian policies.

As I said at the start, we find ourselves with a once-in-a-generation opportunity to take a different path for immigration while New Zealand’s borders are closed. It is a journey that can bring real benefits in productivity growth, high-value innovation, and well-paid jobs; not just for New Zealanders but for all those coming here to call New Zealand home.

Nga mihi nui.