New INZ announcement, no improvement

On Thursday the 10th of June, the government announced that onshore visas have been extended for approximately 10,000 migrant workers on Working Holiday and Supplementary Seasonal Employment (SSE) visas. For the first time, SSE visa holders were also granted the right to work in any sector, with Immigration Minister Kris Faafoi saying the extension should help with ongoing labour shortages.

Immigration Lawyer Aaron Martin of NZIL addresses the changes announced and argues that they won’t serve migrants or businesses in the long term.

Minister Faafoi is claiming that the changes to onshore visas provide employers and visa holders with more certainty, but actually, it’s another last-minute announcement intended to help the horticulture and viticulture industry – while doing nothing for the rest of the business community. This on the heels of Minister Nash’s “great immigration reset” announcement, which turned out to be nothing but a damp squib, and shows the siloed thinking of ministers in our government and the officials who advise them.

What’s causing the most uncertainty is the Minister’s inability to get his house in order. We have a two-year backlog of residence cases for skilled workers in healthcare, education, and construction – and practically every other industry crucial to our economy.

The overly rigid criteria for what constitutes a critical purpose worker is also preventing many employers from bringing skilled candidates across the border. Yet, still, we have a lack of direction and leadership.

What the latest Immigration law changes are

Around 10,000 Working Holiday and Supplementary Seasonal Employment (SSE) work visas will be extended for six months. SSE visa holders will also be allowed to work in any sector. Essential Skills visas for jobs paid below the median wage will increase from six to 12 months, taking them back to pre-COVID settings and the stand-down period will be further postponed until July 2022.

Buried in this announcement is the biggest concern: from 19 July, visa applications will be assessed against the updated median hourly wage of $27 per hour. This pay rate will determine whether jobs are treated as higher or lower paid but will effectively make it harder to obtain a three-year work visa.

That also applies to residence criteria, meaning those in skill level 1-3 job need $27 and those in skill 4 and 5 jobs will need $40.50. Bonus points for high remuneration requires $54 an hour.

Why artificial wage increases won’t help Kiwi workers

Increasing wages is an excellent thing; it raises the standard of living, increasing the capacity for domestic consumption. But raising wages while artificially suppressing access to skills compromises the ability of businesses to grow and create employment opportunities.

Anti-migrant groups will say that migrant labour suppresses local wages, but it’s basic economics: When the supply of anything keeps up with demand, the price remains the same.

Saying this wage rate was set following public consultation also makes me wonder whom they consulted. Immigration policy allows for the adjustment of the work visa and residence wage to keep it in line with the median wage. While the median wage increase was announced on the Statistics Department’s website in December 2020, the government didn’t announce it as they normally would have. Why? Because they knew the data it was based on was skewed due to lockdowns and wage subsidies.

The median wage increase will flow to all sectors through pay parity mechanisms, including sectors where the government is a significant employer or financial contributor: healthcare, education, and construction. If they think that costs have increased already because of COVID and supply chain disruption, they could be in for further surprises down the line.

Stop denying it: We need migrant labour to prosper

The government’s decision to step away from immigration as an economic lever illustrates the true naïveté of the ill-informed. In a young country trying to develop its economy and keep up with fast-moving, high-tech innovations that are transforming the way business is done, failing to see the economic impact of migration and factor it into your overall economic policy is short-sighted.

Social outcomes are important. Encouraging employers to train is important. Increasing domestic wages to improve people’s standard of living is important. But using immigration policy to increase costs to employers (including the government itself) while reducing access to skills is madness.

Minister Faafoi, it’s time to apply some willpower and get your department’s administrative machinery working efficiently. The substantial budget allocated to INZ to develop efficiency is a cruel joke to those who have been stuck in residence limbo for the last two years. Especially when you know what impact it will have.

Need help or advice on your immigration situation? Contact Aaron Martin at NZIL for an honest and helpful appraisal.

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