The New Zealand government is creating a new 6-point system for the Skilled Migrant Category (SMC) visa. The SMC visa offers a pathway to residency for workers who meet the criteria.

While this has apparently been designed to simplify the process for migrants and employers, precise criteria must be addressed to gain entry under the new regulations. Unfortunately, these criteria carry some serious complexities, which could cause significant issues for New Zealand businesses, particularly across manufacturing and trades.

While the current points system is a 160/180 points set-up, the proposed new scheme works on a 6-point system, which is slated to come into effect in mid 2023. It requires applicants to meet the new criteria of 6 points by choosing to apply under the skill category that offers the most points according to their circumstances.

How does the new Skilled Migrant Category (SMC) work?

You can get 3-6 points based on your professional registration, qualifications, or income with an accredited employer in New Zealand. 

You can also gain points towards residency by working in New Zealand in a skilled role. For every year you work, you get one point.

Where it becomes tricky for those who are not able to gain points with professional registration or qualifications, is that the required income you are paid as a migrant worker by an accredited employer must meet strict boundaries.

You must be paid at least the median wage for ANZSCO 1-3 roles or 1.5 times the median salary for higher-skilled ANZSCO 4-5 roles, which require lower levels of training and experience.

In essence, employers offering work that falls within the lower levels of training or experience are now expected to pay well over the median wage to get the staff they need from the migrant worker pool.

Removal of caps and bonus points

To further complicate the process for employers and potential migrants, there are now fewer opportunities for those who have job offers outside of Auckland, with the removal of the bonus points that were available under the old system. Also, where a highly skilled partner may have garnered bonus points in the past, this no longer applies.

While many degree holders and those with qualifications at the top end of their profession may benefit from these changes, those in trades such as machinists and CNC operators will struggle to meet the new wage threshold. This will mean they basically have no recourse to apply for residency under the new points system.

The pathway is narrowing

Although Immigration New Zealand (INZ) has discussed adjustments based on forecasting and the new processes “to demand” as with the current temporary visa system, the posited changes to the Skilled Migrant Category will likely see the pathway to residency narrow substantially.

Those workers who were already onshore when Covid restrictions first hit have largely been shuttled through the 2021 Resident Visa process, but going forward, most people in trades and manufacturing who wish to apply under the new system will likely have to work in New Zealand for three years before they are eligible to apply.

With the proposed changes and the implementation of the 6-point system, INZ is signaling quite clearly to those offshore looking in. Unless you have a formal job offer from an accredited employer that meets the new wage threshold, or professional qualifications at a degree level, you probably shouldn’t even start an application. 

New regulations will price trades too high to fill jobs

Some trades have professional registration overseas, recognised in New Zealand, but many migrant workers have not been through these processes – nor do they aspire to. 

Additionally, the employers looking to attract people to New Zealand to fill trade positions – some of which are in-demand Green List positions – will need to offer potential migrants around $92,000 per year. This is not a median 1.5 of the wage currently on offer across specific trades; it is a median taken from across the entire employment sector.

This change is being rolled out as a way to protect migrants by ensuring they have a three-year offer and a wage well above the living wage. However, this also puts migrants in a position where they could be putting down roots for three years with no real settled pathway to residency.

Increased vulnerability for migrants and employers

While the New Zealand government is calling for submissions and positioning the 6-point system as being in a consultation phase, many in the immigration industry are expressing concern that the accreditation system – which was supposed to remove vulnerability for migrant workers – is working at cross purposes with proposed changes.

Migrants applying under the median 1.5 wage criteria may have the security of a three-year contract up front. However, those who make it through are advised to spend that period attempting to secure New Zealand-recognised qualifications or professional registration if that is available to them., as they may still be refused residency. 

Additionally, there is a genuine risk that median wages will shift during their initial three-year period, creating an impossible situation for employers who can’t meet the new wage threshold.

This could put migrants in an increasingly difficult position. Returning home after three years could be untenable, staying in New Zealand illegal, and options such as taking their skills across the ditch to Australia more attractive. Alongside these difficulties is the possibility that if a migrant working a trade were to fall ill under their temporary arrangement, they might lose their job.

Industries will struggle to fill vacancies

Certain industries will never be able to meet the median wage requirements, nor do they have a professional registration process. These industries are essentially priced out of the game. While the government may be expecting to fill these jobs from within the citizen pool, the reality is that there are not enough school leavers to fill these positions. Furthermore, alongside that fact is the idea that those New Zealanders looking for work are not necessarily looking for that type of work.

Among those that would be hardest hit by the proposed 6-point system will be the manufacturing sector, which would then potentially need to outsource production offshore if they can’t find the workers they need here. Trades may also feel the blow heavily, as, for example, many people who are great builders would prefer not to register as a Licensed Building Practitioner (LBP) as it comes with heavy liabilities for the worker if anything goes wrong on the job.

Industry regulation or elitist attitudes?

It may be that underneath the 6-point system is a scheme by Labour to force unregulated industries to form a regulatory framework and a qualifications body. This opens the door for a further fee structure to be implemented, which would place extra strain on an already pushed sector.

While there may be some long-term thinking at the root of these proposed changes, there also appears to be a kind of class division underway. This means those who have degrees or professional qualifications would be easily ushered through, while those who work in those trades that are currently crying out for migrant workers would be dealing with roadblocks that in many cases would be insurmountable.

While there are certainly plenty of jobs available in New Zealand at this time, it would pay potential migrants to look into securing professional registration in their trade if it is on offer, as this will certainly pay off if the new 6-point SMC system goes forward.

Those who don’t have the option are likely to be checking out the greener fields across the ditch, which will almost certainly leave the New Zealand trades and manufacturing industries struggling to fill jobs.

We have written a summary of what the new points system will entail from the Immigration New Zealand proposal made public in November. To see the proposed system, click here.

For professional advice or any other questions about the Skilled Migrant Visa, contact the experts at New Zealand Immigration Law.