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NEWS
A variety of immigration, business and general news articles taken from New Zealand newspapers, websites and other sources (sources are mentioned at the bottom of each article) and selected by Terra Nova Consultancy Ltd. It may assist the reader being more or less up-to-date what is happening in Aotearoa, "the Land of the Long White Cloud". Happy reading, enjoy ... and if you have any questions on these updates - please contact us...
Newest article always on top.
Jul
05
29/06/07 - Skills shortage reaching critical stage
Friday June 29, 2007
Employers in New Zealand are more concerned about a skills shortage than their equivalents in any other country in the world, a new survey shows. The "brain drain", whereby our top skilled and educated young people are quitting New Zealand for greener pastures elsewhere, has led to skilled staff being the number one concern among businesses surveyed.
In its latest international business report, Grant Thornton International said 60 per cent of the New Zealand businesses surveyed put skills shortages at the top of their list of expansion constraints. That made it a greater concern than the traditional bugbears of bureaucracy, the rising dollar, taxation and interest rates.
The figure was up from 38 per cent a year earlier and just ahead of two other southern hemisphere nations, Australia with 59 per cent and South Africa with 58 per cent.
Grant Thornton, an organisation of independently owned and managed accounting and consulting firms, surveyed 7200 owners of medium sized businesses in 32 countries, during September and October 2006. In New Zealand, 150 businesses were surveyed.
New Zealand spokesman Peter Sherwin said red tape or regulation normally had the highest rating in this country. That concern, while still high, seemed to have stabilised at the same time as the skilled worker shortage escalated, he said.
Despite that, New Zealand was still in the top group when it came to worrying about red tape, with the table headed by Brazil, Russia, Poland and Greece.
Most commentators pointed the finger at the rising New Zealand dollar and interest rates as being a major factor in manufacturing businesses moving operations overseas, Mr Sherwin said. Those elements had probably been compounded by the fact that New Zealand's migrant flows had not always had the desired worker quality.
"A continuation of this will cause further problems in our economy and we may well see more businesses leave New Zealand to solve their skilled worker shortages or exchange rate problems," he said. "We need a more balanced economy and we won't get that with a lack of truly skilled workers." While New Zealand had migrant flows, the skills of those coming in were often not in appropriate areas, Mr Sherwin said.
Nor were the skills at the same level of those that northern hemisphere countries were gaining from their influx of migrants.
Among the survey's findings was that in three Asian countries, Japan, Thailand and China, the most significant concerns were shortages of orders and lack of demand.
(Source NZPA)
Jun
22
21/06/07 - Trickle of migrants double-edged sword
Thursday June 21, 2007
The net inflow of migrants has dwindled to a trickle this year, easing pressure on the housing market but doing little to relieve labour shortages.
Last month permanent and long-term arrivals exceeded departures by 360, Statistics NZ reported. The figure is based on airport declarations of people saying they intend to stay, or intend to be gone, for at least a year.
For the first five months of 2007 the net inflow has been 2100. If that rate is sustained for the rest of the year the gain will be only 5000, compared with the average gain of more than 12,000 for the past 16 years.
While the number of arrivals is relatively steady - the 6440 last month was only 10 more than in May last year - departures have been on a rising trend; 6800 left last month, 9 per cent more than in May last year. The loss is mainly to Australia. Just under 4000 migrants moved across the Tasman in the year ended May, an 11.6 per cent increase on the year before. With a tight labour market in Australia as well, economists do not expect that trend to change soon.
Net migrant inflow since has been running at only half the rate the Reserve Bank assumes for 2007.
Given the close correlation between net migration and house sales this was good news for the Reserve Bank, said Deutsche Bank chief economist Darren Gibbs.
The central bank's submission to a parliamentary inquiry into housing affordability called on the Government to manage migration inflows with an eye to moderating housing demand.
ANZ National Bank chief economist Cameron Bagrie expected signs of softening in housing market activity later in the year as well as an easing in house price growth. "However, easing migration represents a double-edged sword to monetary policy as it will accentuate skill shortages."
Incoming
* The net inflow of migrants was 360 last Month.
* If current trends continue, a net 5000 migrants will arrive this year, well down on the average of 12,000.
* The drop is likely to relieve pressure on house prices but add to a skill shortage.
(Source NZ Herald, Brian Fallow)
Jun
21
19/06/07 - Govt out to ease impact of migrants
Tuesday June 19, 2007
The Government is taking a cautious approach to immigration, pushing down the numbers of incoming migrants while seeking further advice on the impact of immigration on inflation. It is understood a paper is being prepared for the Cabinet which will address, among other things, the effect of immigration on the housing market.
As the Reserve Bank and New Zealand First highlight the effect of immigration on inflation and the housing market, the Government has decided to drop the target of incoming migrants this year to 47,000, the bottom end of the 47,000 to 52,000 forecast.
Despite this, Immigration Minister David Cunliffe is standing by his comments in May, when he said the impact of immigration on the housing market was "likely to be relatively small". He concedes that immigration does have an impact, but says the size of the impact is uncertain. He said the large influx of migrants in 2002 and 2003 and a strong surge in the housing market suggested a strong relationship between the two, but he stopped short of saying that one caused the other.
However, New Zealand First leader Winston Peters dismissed Mr Cunliffe's views. "He's wrong. Immigration has had a rippling effect right through New Zealand and it has had the most profound effect on the rising price in Auckland."
Mr Peters acknowledged that the influx of tens of thousands of immigrants was offset by a similar number of people leaving, but that did not alter the demand pressures from immigrants.
The Reserve Bank, in its submission to the parliamentary inquiry on housing affordability, pointed to curbs on immigration and a capital gains tax as ways to dent demand in the housing market.
(Source NZ Herald, Derek Chang)
Jun
15
13/06/07 - Thailand Working Holiday Scheme
Wednesday, June 13, 2007
The new year for the Thailand Working Holiday Scheme (WHS) opens on 2 July 2007, with 100 places available.
For more information about the scheme, how to apply and what is required of applicants, please contact TNC.
Jun
13
11/06/07 - NZ loser in international race for skilled migrants
Monday June 11, 2007 by Lincoln Tan, NZ Herald.
When I went to Taiwan last year, I met a few men who called themselves ex-Kiwis. In Taiwan, they were highly qualified in their fields, and were citizens of both New Zealand and Taiwan. But they told me that when they were in New Zealand, they struggled to find employment. Without a means to earn a living, they had no choice but to return to Taiwan.
Then, I shuddered at the thought of moving back to my country of origin. But a week back in Singapore and looking at the opportunities around me, I am very tempted to do just that. A far cry from the country in financial crisis that I left for New Zealand, Singapore is now booming. Business opportunities and jobs are plentiful. New developments are happening everywhere - two big casinos, a Universal Studios theme park and even a giant ferris wheel.
Moves to attract more overseas investment dollars have been intensified and the feeling is the economy is set to move rapidly upwards. To help fuel its economic growth, Singapore has set its sights on bringing in skilled migrants and investors - setting a target to grow its population by two million.
This move would pose a challenge to New Zealand in the face of competition for skilled immigrants, Minister for Immigration David Cunliffe said last week.
Singapore, with a population and living standards similar to our own, had announced plans to increase its population to 6.5 million by targeting skilled migrants from countries including New Zealand, he said. That is the kind of challenge we are up against.
But is New Zealand's response to the challenge of overhauling its immigration policy and laws enough to lift it to meet this global challenge to draw the best and brightest to our shores?
Changes to the investor and skilled migrant categories for entering New Zealand still carry the same mark of arrogance. The focus is mainly on what the immigrant can give to New Zealand and not vice versa - a stark contrast to Singapore's drive, where the focus is on what the country has to offer to investors and skilled migrants.
New Zealand and Singapore differ greatly in the way they view immigration and they way they treat their investor and skilled immigrants. For example, Singapore values international work experience. Singapore employers see overseas work experience as an asset. Such experiences count for nothing in New Zealand where most employers continue to view Kiwi experience as the only skill that would make someone employable.
So as employment doors continue to get slammed on skilled immigrants here, many are finding new opportunities elsewhere where they feel valued and able to contribute. In a trip to Jakarta last week, I met a Dutch engineer with New Zealand residency who moved there because he couldn't find employment in his field back in Auckland.
While New Zealand has immigration requirements such as a high level of English to deter immigrants from Asia, Singapore has been eyeing the investment dollars of the newly affluent Chinese, Indians and other Asians.
The Singapore Government has been busy forming alliances with its ethnic communities to help break into new markets and promote ties with their home countries. The Straits Times last week reported how Singapore was working with the Arab Association helping with a push into the Middle East and to help promote the perception the country was Arab-friendly.
In New Zealand, ethnic community groups are often sidelined, and politician involvement is often limited to attending cultural events and delivering speeches. There is no working partnership to push New Zealand abroad.
Looking at the multi-pronged approaches to wooing immigrants and investors made by a country like Singapore has left me wondering if a change of policy alone would be sufficient to make a difference to New Zealand's sorry state of immigration.
If the facts and figures produced in MP Pansy Wong's newsletter are correct, then it is very worrying. Citing various sources, she claimed investor applications fell from 5654 in 2003/04 to just 227 this financial year, and approved skilled investor numbers dropped from over 1000 in 2004/05 to 18 in the year to date. She said there were also fewer immigrants coming to New Zealand, and the 10,100 gained for the year ending in April was below the annual average recorded between 1990 and 2006.
At a meeting with businessmen in Jakarta, a comment was made that New Zealand was known abroad as a land of extremes - high taxation, high dollar, high property prices and low returns. Other than it being able to offer the lifestyle that would make for a good retirement, none of them said they would put their money in active investments there.
If indeed such perceptions are widespread, then the Government has a lot more to do than just changing policies if it is serious on wanting more immigrants of the skilled and investor kind.
(Source Lincoln Tan NZ Herald)
Jun
08
07/06/07 - Cunliffe proposals unlikely to end active investor migrant drought
07 June 2007
The migration consultants' national organisation (NZAMI) has welcomed changes to policy indicated today by the Minister of Immigration, the Hon. David Cunliffe.
However, the New Zealand Association for Migration and Investment (NZAMI) has questioned whether Mr Cunliffe's proposals will do much to combat the current drought in 'Active Investor' migration.
The NZAMI's Chairman, Bernard Walsh, describes the Minister's speech to the Auckland Chamber of Commerce, as notable for the emphasis placed on long-term, underlying objectives.
"We certainly welcome this emphasis, as, over the years, there has been far too much short-term thinking in the formulation of immigration policy and an unwillingness to harness it to our overall economic goals as a nation.
"Similarly, we welcome indications of change in Skilled Migrant policy and, particularly, the minister's commitment to a more flexible interpretation of what constitutes skilled employment.
"The abandonment of stringent English language tests and age limits for active investors are also sensible and necessary steps. However, these and other Active Investor Policy measures, will only have a chance of working, if taxation and investment policy are harmonised with immigration policy," he says.
"Even with the best possible policy mix, we would still need to be realistic over the levels of active investor migration we can attract, given the overall state and size of our economy, as compared with those of other potential migrant destinations.
"With only 18 successful applicants in the year to date under current investor policy, we clearly have a huge task ahead of us if we are to benefit substantially as a nation from the global market in active investor migration. The policy changes outlined by the Minister thus represent a very small step in the right direction.
"We would welcome discussions with Mr Cunliffe and his team over how to maximise the benefit to New Zealand of Active Investor Policy," Mr Walsh adds.
(Source NZAMI Press release)
Jun
07
06/06/07 - Skilled Migrant Category fine-tuned to deliver more
Wednesday 6 June 2007
The flagship Skilled Migrant Category has been fine-tuned to deliver more for the country while still ensuring quality, says Immigration Minister David Cunliffe.
"The SMC is generally working well, and is delivering high quality skilled migrants," Mr Cunliffe said. "We need to keep testing our policies to find ways of improving them and better target the people New Zealand needs. The SMC needs to be well positioned to attract quality skilled migrants in an increasingly competitive market.
"International competition for skills is intensifying, with many countries, including Australia, investing heavily to pursue the same migrants. Hence we have done some fine-tuning."
The changes include:
• An increase to the bonus points awarded for skilled employment, a recognised qualification and work experience in an identified future growth area
• An introduction of bonus points for a post-graduate New Zealand qualification (Masters or Doctorate)
• A reduction in the number of years of New Zealand work experience required to claim the applicable bonus points
• An increase to the bonus points awarded for a principal applicant’s partner’s recognised qualification and skilled employment in New Zealand
• A restructure of how bonus points are awarded for study in New Zealand
• Removing the award of bonus points for skilled employment, a recognised qualification and work experience in an identified cluster.
• A review of the list of recognised qualifications
• A more transparent and appropriate definition of skilled employment.
"The revised points more closely target the people who New Zealand needs and recognises, for example, that the partner of a principal applicant can be of significant value to New Zealand in his or her own right," Mr Cunliffe said
The Skilled Migrant Category is New Zealand’s premier immigration product, providing residence opportunities for skilled people. Most skilled migrants are granted residence through the SMC, which comprises 60 per cent of the New Zealand Residence Programme.
Jun
07
06/06/07 - Active Investor Migrant policy good news
Wednesday 6 June 2007
New Zealand will be better placed to attract serious investor migrants under the Labour-led government's new Active Investor Migrant policy, says Immigration Minister David Cunliffe.
"The new policy will increase both the number of investor migrants and their contribution to New Zealand," Mr Cunliffe said.
"Active investment is about creating a closer link between investor migrants and New Zealand businesses. More active investment will ensure that investor migrants are more likely to utilise their human and financial capital to support New Zealand’s economic development.
"It will mean more investors who are actually creating goods and services in New Zealand and employing Kiwis."
The new policy is based on the three principles of seeking more active high-quality investment directly or indirectly in New Zealand firms; segmented risk management; and more realistic investment levels that will increase investor migrants’ financial contribution to New Zealand.
It aims to increase productivity by boosting output more than demand. It excludes residential property development.
The policy has three sub-categories:
• Global Investors – the top priority category for high value investors investing $20 million (including $5 million in active investment), which requires minimal policy conditions and facilitated, fast-track processing.
• Professional Investors – a second priority category for migrants investing $10 million (including $2 million actively) with moderate policy condiions and facilitated, fast-track processing.
• General Active Investors – a category for those investing a minimum of $2.5 million.
"All three categories will be closely monitored to ensure transparency, probity and effectiveness.
"Investor migrants can make a significant contribution to New Zealand’s economic transformation through their business experience, international connections and financial capital," Mr Cunliffe said.
"It is important that New Zealand does not miss the opportunity to support our businesses through investor migrants. An investor policy that attracts and facilitates these high-value migrants while managing risks is essential."
Jun
07
06/06/07 - Immigration quality focus balances numbers
Wednesday 6 June 2007
It is important that the New Zealand Residence Programme focuses on the quality of migrants and be set at a level in balance with economic conditions, Immigration Minister David Cunliffe says.
"New Zealand's immigration programme targets skills and productivity growth to expand the capacity of our economy," Mr Cunliffe said.
"Accordingly, I expect that the total NZ Residence Programme numbers for 2006-07 to be around 47,000, down from the 50,000 earlier forecast.
"I expect next year's programme to be set at about similar levels.
"At the same time, we are redoubling our focus on acute short-term skill shortages, with work on an expanded range of temporary skilled migration policies.
"We have also radically shifted the investor migrant policy toward active investment in real businesses and employment.
"This should expand productivity and economic capacity, more than demand, while being appropriate for current economic conditions.
"The new Active Investor Migrant programme is capped at 1000 people (300 investors plus family members) a year."
Jun
07
06/06/07 - Immigration and economic transformation
Speech to Auckland Chamber of Commerce on 06/06/2007
The story is told of an unreasonable politician whose disgruntled speechwriter was about to retire. At the opening of a carefully scripted major speech, the politician proclaimed how, in his following remarks, he would solve the budget deficit, the balance of payments and world poverty.
Turning to page two, he found only the words: "You're on your own you old bastard, I quit," and 10 blank pages.
Today I am saved from such a fate by two key facts – first, more modest intentions, and second, I have already edited the draft.
Like the politician who always wants everything yesterday, we, and the public, expect a great deal of our immigration system.
We expect it to process hundreds of thousands of applications a year with hardly a hiccup. We expect to attract an inexhaustible supply of the world's best and brightest to our shores and retain them.
We expect to transform our economy without adding to inflation, social welfare burdens or unemployment.
Joking aside, and without promising to end world hunger, I do not believe those should be unreasonable aspirations given the needs our country faces. But to address these goals and to contribute to the transformation of our economy we must have three things:
• a piercingly clear vision of where we want to get to ?
• a realistic appreciation of the challenges we face ?
• a robust strategy to get us from here to where we need to go
Today I will articulate the government's vision for how immigration can contribute to economic transformation. I will recognise the pressing and growing challenges we face.
I will offer a simple framework for targeting our policies on skilled and investor migrants – that is, we must raise productivity and expand the capacity of our economy faster than we expand aggregate demand.
I will then announce several new policies designed to take us in exactly that direction:
• a new Active Investor Migrant policy ?
• refinements to the Skilled Migrant Policy ?
• improvements in how we assist migrants to settle in jobs and be productive.
There has been considerable public debate lately about whether migration is "good" because it reduces skill shortages, or "bad" because it boosts inflation. I intend to tackle that debate head-on.
I am today announcing a renewed focus on migrant quality in setting residence approval numbers. I will outline new policy work designed in consultation with industry to alleviate acute skill shortages.
I will conclude by reiterating the importance of immigration to economic transformation, and of that transformation to New Zealand's future.
The role of immigration in economic transformation
The Labour-led government's vision is to transform New Zealand's economy to a dynamic, knowledge-based economy and society, underpinned by the values of fairness, opportunity and security.
We have a distinctive New Zealand way of responding to the challenges and opportunities of the 21st century: An approach founded on Kiwis' creativity and innovation, on seeing our size and place in the world not as a limitation, but as offering opportunities to succeed.
Immigration is a key lever in our quest to transform the New Zealand economy so that all New Zealanders, young and old, will have a prosperous future.
Why is it a key lever? To state the obvious first, because we are short of the workers and skills we need for that transformation. And because immigration also brings with it other resources for transformation: capital, technology and skills transfer, and access to international networks.
We know that we have acute levels of skill shortages in difficult parts of the economy, from information technology specialists to tradespeople like electricians and builders.
We know we can't sustain the economy we want without the skills, investment and international connections that migrants can bring.
It is not just a skills shortage. We know our population is aging. While our birth rate continues to exceed our death rate, the proportion of over-65s in the community is increasing steadily, as it is in most OECD countries.
But to maintain a society and an economy that will continue to allow a decent lifestyle for people of every age group, we need to maintain and grow our working-age population.
So fostering immigration is a no-brainer.
Of course, one must choose the right people. That implies an immigration policy that shifts away from past practices of passively accepting whoever turns up asking to live here, to an active immigration policy where we go out and recruit the people we want.
Responding to the challenges we face
We are not alone with this realisation. We are in competition with many other countries that are doing the same thing. Some of them are actively recruiting our own best and brightest.
In a very recent development, Singapore, with a population and living standards similar to our own, recently announced plans to increase its population 6.5 million by targeting skilled migrants from countries including New Zealand, Australia, the UK and the US.
That is the kind of challenge we are up against. We have no choice but to lift our game.
To ensure we do so, we are in the midst of the biggest overhaul of immigration policy and laws for 20 years.
There are four key drivers of the changes we are making:
• Circulation – there are now greater people flows around the world. In general, people are more transient now than they were 20 years ago.
• Competition – the global competition for skills, labour and talent. As labour mobility increases, countries will increasingly compete for migrants.
• Diversity – New Zealand is becoming more culturally diverse. One in five Kiwis were born overseas. We must identify what this diversity means for our communities and respond by ensuring the best settlement outcomes for migrants.
• Heightened risk and pressure on the border – Unfortunately, a sign of our times is the heightened threat of international terrorism, illegal migration and trans-national organised crime.
Faced with this new global environment, the government has initiated what we call the Immigration Change Programme.
It isn't simply about keeping up with the times. This is a long-term vision for immigration that acknowledges its importance to New Zealand and manages the risks. It is based on three core elements or "pillars":
• First – the legislative base. This includes a vigorous review of the Immigration Act. The existing Immigration Act was passed in 1987. The world has changed dramatically since then. The replacement legislation will be introduced to Parliament shortly and passed by early next year.
• Second – the substantive policy mix: developing a new Immigration Policy Framework. It includes reviews of seasonal and non-seasonal work policies, work to residence, the Skilled Migrant Category, the Investor policy, Family-sponsored policy and temporary migrant flows. I will be making announcements on some of these later in this speech.
• Third – the operational side. This requires transforming the operational business of immigration from a reactive, border-focussed activity to one that proactively seeks the migrants we want, keeps out those we don't, and works consistently to a high quality from end to end.
Today's focus is on the policy layer, and more specifically on the contribution of skills and investment to the overall goals.
Immigration, productivity and economic transformation
Maximising the economic value of immigration requires not only a clear vision for our desired goal: transformation to a high-knowledge, high-value economy.
It requires a clear strategy that guides us to make good choices between potentially competing demands and trade-offs.
In the bad old days of governments past, the main economic impacts of immigration were assumed to be on population.
More people meant more workers, meant more GDP.
OK as far as it goes, except in times of high unemployment when displacement of local workers fuelled acute resentments and waves of anti-Polynesian and anti-Asian politics of a kind we remember only too well.
Increasingly, this Labour-led government is focussing immigration more directly on the key levers of productivity, not just population.
That is particularly important right now, because our unemployment rate is at a near-record low and our labour participation rates are among the OECD's highest.
There isn't much more juice to squeeze out of that side of the equation.
But our GDP per capita is just below Tasmania's, so we absolutely have to go up a gear. Tinkering won't do it – we need deep transformation.
Deep transformation means producing new high-value goods and services from our traditional resources. It means creating neutraceuticals from milk powder; timber-ceramic composites from pinus radiata; export education from polytechnics.
It requires capital, skills and technology, lots of it. Capital rooted right here in New Zealand, returning sustainable income streams to New Zealanders.
Technology transferred in, or grown by leading New Zealand businesses supported by world-class skills.
It doesn't mean relying on tidal waves of Aussie or other private equity or the hot money of the Eurokiwi carry trade to fill the current account deficit driven by our savings and trade gaps.
It means hot-housing innovative Kiwi businesses further through from start-up to scale-up. It means protecting Kiwi technology and intellectual property, not hollowing out our economy by selling up and shipping out tomorrow's stars.
Immigration – smart, strategic immigration – can contribute to all of these goals.
It can make a positive contribution to Kiwi productivity by ensuring we win on the global brain exchange, by importing more world-class skills than we lose.
It can reinforce Kiwi business growth, by giving active investors a reason to not only build real businesses here, but to becoming real Kiwis themselves in the process.
It means focusing on actively acquiring assets: financial, technological, skills and international connections – not just waiting to see who turns up, then having to socialise their 'liabilities'.
Avoiding key risks
Smart, strategic innovation must also avoid key risks.
We must always ensure capable Kiwis get jobs first. Immigration should never substitute foreign for domestic labour because it is cheaper. Our new Recognised Seasonal Employer policy, for example, has that rule built in from the outset.
We must ensure our social infrastructure and settlement strategy are up to the task of integrating new migrants into productive work and a harmonious society.
We must avoid contributing to the "hollowing out" of the New Zealand economy, by anchoring investor and other migrant here.
And we must avoid fuelling inflation by ensuring migration occurs at sustainable net levels, and that in economic terms it contributes to expanding economic capacity more than aggregate demand.
All of these factors are achievable.
These principles in fact form the basis of the economic migration strategy that guides the key policies that I will now announce.
KEY PRO-PRODUCTIVITY POLICIES
Active Investor Migration
Investor migrants can make a significant contribution to New Zealand’s economic transformation through their business experience, international connections and financial capital.
It is important that New Zealand does not miss the opportunity to support our businesses through investor migrants. An investor policy that attracts and facilitates these high-value migrants while managing risks is essential for New Zealand.
Getting the investor policy right is admittedly difficult. The quality and contribution of investors can vary greatly and the quantity of applicants fluctuates depending on how strict policy requirements are.
There have been several changes to the investor category over the last 10 years.
The pre-2002 policy was being frankly rorted. So-called investors were buying real estate and parking families here before departing overseas, or simply depositing short-term money in bank accounts.
The current policy was introduced in 2005. It requires that $2 million is deposited with the government, with a return equal to the rate of inflation. The policy was designed to ensure only genuine investors would gain residence, committed to living in New Zealand and with the ability to contribute long-term to the New Zealand economy and society.
But the current policy has not proved to be optimal either. It attracts very few applicants –18 in the year to date – and excludes some successful international business people who are interested in living and investing in New Zealand.
Today I am announcing a new Active Investor Migrant Policy that will increase both the number of investor migrants and their contribution to New Zealand. This policy will position New Zealand to better attract serious investors.
Active investment is about creating a closer link between investor migrants and New Zealand businesses. More active investment will ensure that investor migrants are more likely to utilise their human and financial capital to support New Zealand’s economic development.
The new policy represents a fundamental policy shift and is based on three principles:
• more active high-quality investment – investing directly or indirectly in New Zealand firms. This will increase the attractiveness of the new policy to genuine investors by allowing them to select more profitable investment options. It will also strengthen the link between investor migrants and New Zealand businesses, providing more opportunities for positive human capital and technology spill-over.
• segmented risk management – distinguishing between different types of investor migrants. This will provide different levels of policy controls for different types of investors. It will also help to attract more investor migrants by accepting greater risks in some areas, for example English language skills and settlement funds, in exchange for more high value migrants.
• More realistic investment levels – investing a greater amount. This will increase the investor migrants’ financial contribution to New Zealand. More importantly, it will also motivate migrants to maximise their investment outcome. This will result in a greater return from their human capital, while building loyalty to New Zealand over the longer term.
The policy is in turn divided into three sub-categories that have been segmented on the basis of the migrant’s potential contribution and according to the level of risk:
• Global Investors – the top priority category for high value investors investing $20 million (including $5 million in active investment), which requires minimal policy controls and facilitated, fast-track processing.
• Professional Investors – a second priority category for migrants investing $10 million (including $2 million actively) with moderate policy controls and facilitated, fast-track processing.
• General (Active) Investors – a category for those investing a minimum of $2.5 million.
The General (Active) Investor category will be a points-based system to prioritise migrants on the basis of their potential to contribute to New Zealand businesses. The points system will recognise:
• The importance of having both financial and human capital
• The benefit of active investment
• The value of export linkages, entrepreneurship and management skills.
The government has set an annual cap on the number of places available under the Active Investor Migrant policy at 1000 people (around 300 applications).
Global and Professional investors will be selected first and the remaining places will be available to the General (Active) investor category, driven by recognition of the productivity spillovers (skills, technology, active stance and international connection of each investment proposal.
Summing up the new policy, it represents a substantial shift from both the pre-2002 and pre-2005 policies.
Based on consultation with key stakeholders, we believe it will be internationally competitive and attractive. It will be responsibly risk-managed. It will capture the productivity benefits of high-quality, high-spillover investment and be set at worthwhile levels of financial capital.
The Skilled Migrant Category
The Skilled Migrant Category is New Zealand’s premier immigration product, which as you know, comprises 60 per cent of the New Zealand Residence Programme. In 2005-06, 27,539 people were granted residence under it.
A recent review of the Skilled Migrant Category found that it has generally been successful in delivering skilled migrants who settle well in New Zealand:
• ninety-eight percent of skilled migrants were working for pay or profit
• eighty-one percent of employers rated migrants’ performance on the job as “good” or “very good”
• migrants were highly satisfied with New Zealand as a destination, and
• the new selection mechanism introduced in December 2005 is appropriately prioritising the most skilled and talented.
However, there have been increasing concerns about whether the SMC is attracting sufficient quantity and quality of skilled migrants in an increasingly competitive market.
International competition for skills is intensifying, with Australia in particular investing heavily to pursue the same migrants. Fine-tuning it is essential to ensure it can fully meet the target 60 per cent of our Residence Programme with the desired quality.
Accordingly, in April I announced that people granted Work to Residence permits under the SMC would henceforth be given nine months instead of six to find a job, with an additional three months to get to New Zealand before that nine months begins. In addition skilled migrants who found a job would no longer need to work for three months prior to getting residence.
Today I am announcing changes to the Skilled Migrant Category to increase its ability to deliver for New Zealand while still ensuring quality. The main features are:
• A more transparent and objective definition of skilled employment
• Change and increase to bonus points
• Work to update and expand the List of Recognised Qualifications
The changes announced today involve changes to bonus points to emphasise the types of attributes of most value to New Zealand:
• An increase to the bonus points awarded for skilled employment, a recognised qualification and work experience in an identified future growth area
• An introduction of bonus points for a post-graduate New Zealand qualification (Masters or Doctorate)
• A reduction in the number of years of New Zealand work experience required to claim the applicable bonus points
• An increase to the bonus points awarded for a principal applicant’s partner’s recognised qualification and skilled employment in New Zealand
• A restructure of how bonus points are awarded for study in New Zealand
• Removing the award of bonus points for skilled employment, a recognised qualification and work experience in an identified cluster.
The revised points more closely target people who New Zealand needs and recognises, for example, that the partner of a principal applicant can be of significant value to New Zealand in his or her own right.
The List of Recognised Qualifications allows potential SMC applicants to self-assess whether they can claim points for their overseas qualifications, and is a significant tool for making the policy requirements easy to navigate.
Updating the definition of skilled employment will allow increased transparency and more objectivity, along with flexibility to include occupations in shortage.
The changes to the points for the SMC policy will take effect on and after 30 July 2007. All SMC applications made on or after 30 July 2007 will be assessed against the new points.
The more transparent definition of skilled employment will take effect from November 2007 to allow time for significant system changes to take place. Improvements to the List of Recognised Qualifications are being explored by the Department of Labour and the New Zealand Qualifications Authority and will be progressively implemented.
A further, more fundamental review of the Skilled Migrant Category is planned for 2008.
Subject to Cabinet approval, it is intended this will ensure that the SMC stays off our competitors in the global race for talent by:
- Offering more flexibility to match opportunities in New Zealand to the individual profiles of skilled migrants
- Better segmenting skilled migrants by skill type and country of origin and
- Using enhanced marketing and recruitment techniques to ensure we further increase the quality of our SMC flows.
Implementing these policy revisions will require operational changes being sought as part of the Immigration Business Transformation project.
Optimising Employment Integration
Once skilled migrants, and others, arrive in New Zealand they need to be assisted to settle quickly, harmoniously and productively into our community and workforce.
Settlement is multi-facetal, and most definitely a two-way street. We have made great progress in this area under the $64 million settlement strategy announced in 2003 by my predecessor Hon Lianne Dalziel.
That work is continuing this year with the rollout of the multi-agency, multi-partner New Zealand and Auckland regional settlement strategies.
Matching employers with workers
We know that the single most important factor in good settlement is getting a good job.
That means matching up employers with prospective new employees. We are addressing this need across a range of fronts, working with employers, to provide advice and information to both sides.
An outstanding example of this is the NewKiwis programme co-funded by Immigration and run by the Auckland Chamber of Commerce – a web-based referral service to match onshore migrants to employers.
This has placed many migrants and has received rave reviews.
I have to say, quite frankly, that the Department of Labour counterpart service for matching offshore migrants – NetworkZ Online – has not been a similar success.
While this was a great concept, the IT infrastructure was not very user friendly and it could have been better promoted.
I have listened carefully to the concerns raised and I am delighted to announce that the Department of Labour and the Chamber have reached agreement in principle to develop a new recruitment website for offshore potential migrants called NZRecruitme.co.nz.
The new website, I believe, will provide an improved service to offshore migrants and employers.
It will run alongside the New Kiwis site which provides a similar service to onshore skilled migrants. The two markets are very distinct and the two brands will be kept separate to avoid confusion by the clients. Client data will be transferred between the systems as required.
NZRecruitme will have extra marketing and administration capability to support employers, who will be targeted by the chamber. Access to a large pool of employers will be gained through the chamber network when it is rolled out to all chambers after an initial trial.
I am pleased that this will build on the chamber's existing work. There will be no additional costs for the change over the first several years.
FOCUS ON MIGRANT QUALITY
There has been an active debate in the media over recent months about the contribution of migration to aggregate demand and inflation. The Reserve bank has noted some correlation between housing prices, particularly in Auckland, and net permanent and long-term migration.
Conversely, some politicians have attempted to play up fears based on outbound migration numbers that the "end is nigh". It is time to separate fact from fiction.
In the 12 months to March 31, the net inflow of permanent and long-term arrivals was only 12,100 people. Without our immigration programme, we would have an economically unsustainable net loss of people. We are, therefore, winning on the global "brain exchange".
Moreover, we know that some three quarters of all New Zealanders who leave also come back. The great kiwi OE has long been part of our culture, and I wouldn't have it any other way.
The relationship between inflation and net migration is complex. And the data, I am advised, is fairly mixed. Migration effects are likely to be relatively small compared to other monetary factors. However, as stated earlier, it remains the government's intention to ensure that migration contributes more to expanding the capacity of our economy, than it does to aggregate demand.
Therefore, despite our need for migrants, my intention is to concentrate on quality settlers, not quantity for its own sake.
The challenge is to address skill shortages and contribute to the non-inflationary expansion of supply in the economy without expanding demand at inflationary rates.
On this basis, I am today indicating that the number of migrants approved under the New Zealand Residence Programme over the last 12 months is likely to come in at the lower end of the 47,000 to 52,000 band set out in this year's programme.
This managed trend has already seen a movement of net migration figures closer to balancing over the last few months. I expect that trend to continue.
Similarly, quality is going to predominate over quantity when I announce the targets for the next 12 months in the next few weeks. My expectation is that this will result in a modest downward movement of the Residence Programme band for the 2007-08 year.
Immediate measures to meet skills shortages
At the same time that quality, capacity and demand balance factors point to some moderation of our Residence Programme, acute skill shortages continue to exist in many areas of the economy.
Because many of these are short-term, we believe they can be appropriately addressed through enhanced temporary policies.
In the latest Institute of Economic Research Quarterly Survey of Business Opinion:
• A net 41% of firms reported difficulty finding skilled staff in the March 2007 quarter. This was up from a net 29% in the December 2006 quarter.
• A net 21% of firms reported difficulty finding unskilled staff in the March 2007 quarter, up strongly from a net 11% in the December 2006 quarter.
• A shortage of labour was the main constraint on expansion for 22% of firms at March 2007. This figure is up from 19% measured in December 2006 and is the highest result since June 2005.
The most recent Department of Labour labour market outlook says conditions are expected to stay tight in the coming year. The unemployment rate has now remained below 4 per cent for eleven quarters.
We are therefore working on both long-term and short-term initiatives to address further skill shortages.
First, it is important to ensure that New Zealanders are being upskilled and retained. Schemes like the Labour-led government's Modern Apprenticeships Programme, introduced in 2000, are part of this – some 10,000 young Kiwis are either in training or have finished their Modern Apprenticeship training.
Similarly, the abolition of interest on student loans for graduates who stay in New Zealand is aimed at keeping our skills at home rather than exporting them to the world.
Within the immigration portfolio there are a number of initiatives being undertaken:
-A more proactive approach is now used for updating our immediate and long-term skill shortage lists. As well as responding to the shortages that industry have directly notified us about, we are now utilising labour market data we hold on immediate and longer-term shortages to identify opportunities for action.
- I will soon announce the recent biannual review of the two lists. I wish to signal today some likely additions to the immediate skill shortage list including plasterers, painters, and small engine mechanics. They will be added to the existing list which includes over 130 occupations including builders, dentists, electrical engineering technicians, foremen for roading infrastructure, heavy vehicle drivers, ICT specialists and many more.
- For the long term skill shortage list (which provides a pathway to residence), hot spots include health professionals, a number of trades such as electricians, ICT professionals and secondary teachers. New additions are likely to include environmental scientists and civil engineering technicians, urban and regional planners, and line mechanics.
- I have asked DoL officials to undertake a review of both high-skilled and lower-skilled temporary work policy. It is important to take a strategic view across the skills spectrum so that we can clearly identify where immigration responses are appropriate. I am expecting to take proposals to Cabinet shortly that outline initial findings and a pathway for future policy development.
- Talent review. My colleague the Hon David Benson-Pope will be taking a paper to Cabinet shortly on a number of talent initiatives, including possible immigration initiatives. This is a medium-term package aimed at developing and sustaining a system that focuses on the talented and skilled people we need, where such people are and how we can compete to attract and retain them.
- The New Zealand Residence Programme paper that will be going to Cabinet in the next few weeks includes consideration of how we can work more closely with industry and economic development agencies to assist employers with filling their skill shortages.
Conclusion
To sum up, New Zealand must transform its economy to sustain the living standards and opportunities that we seek for our kids. Further increases in economic growth rates are unlikely to come from already high labour participation – it must come from enhanced productivity.
Smart, strategic immigration will increasingly make a vital contribution to our economic transformation by focusing on the key drivers of productivity: not only skills, but also capital, technology, and international connections. In doing so, immigration can enhance the capacity of our economy to grow, without raising aggregate demand at inflationary rates.
This strategic framework underlies a range of key policies I have announced today:
• a new Active Investor Migrant policy that targets real, high-spillover quality investment that will drive productivity growth, and stay here
• a fine-tuned Skilled Migrant category with more competitive bonus points and work to residence features
• new employment assistance facilities for migrants, including a new website based service – NZRecruitme – to be run jointly by the Auckland Chamber of Commerce.
At the same time that we are driving for productivity growth we must ensure that favourable macroeconomic balance, high quality long-term migration, and short-term relief for acute skills shortage. Accordingly I have announced:
• a re-balanced forecast NZ residence programme for 2006/07 of around 47,000 people likely to carry forward into the 2007/08 band
• further work on skills shortages, including liberisation to both the Long Term and Immediate Skill Shortage lists, and further policy work on temporary and skilled migration.
If that all seems like a lot to chew on for one afternoon, I make no apologies for that. The link between immigration and economic policy is as vital as it is generally misunderstood.
New Zealand is poised on the brink of a brighter future. A 21st century, Asia pacific future where we further raise our living standards, the quality of our environment and our sense of national identity.
Labour has always been a party of change. This Labour-led government is leading New Zealand with a clear vision to a better future. Immigration is but one small part of that, but with the new policies announced today, it can more proudly claim its place.
Jun
06
06/06/07 - Rules for wealthy migrants relaxed
Wednesday June 06, 2007
New rules allowing wealthy investors into the country will be announced today in an attempt to reverse a collapse in numbers applying to enter.
Immigration Minister David Cunliffe will outline changes to the investor migrants category after the numbers of migrants applying to enter New Zealand in this category fell from more than 1000 a year to fewer than 20 after tighter rules were introduced.
Since July 2005, anyone applying for residency as an investor has had to have at least $2 million, which the Government holds for five years. The investor can withdraw up to $1 million after two years to invest in a business that will benefit New Zealand.
Previously, investor migrants had to bring $1 million which the Government held for two years. The policy was tightened to prevent rorts such as people borrowing the money required and repaying it as soon as they had residency, or gaining residency and sending the money to others to enter as "investors". The category was created to attract migrants who would use their money to invest in New Zealand, boost the economy and create jobs.
In recent years, Britain has accounted for most approvals under the investor category - in 2005-06 36 per cent of all those approved were British. However, there has been a big drop in applications from northeast Asian countries - China had previously accounted for 40 per cent of approvals but dropped to just 8 per cent in 2005-06.
The changes are part of an overhaul of immigration laws and policies aimed at attracting people the economy needs. Mr Cunliffe will also announce changes to the skilled migrants category, which targets those jobs for which New Zealand has a shortage of workers.
(Source NZ Herald Claire Trevett)
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