11/10/16 - NZRP changes to strike the right balance

• Email a Friend

Immigration Minister Michael Woodhouse today announced changes to the Government’s New Zealand Residence Programme (NZRP) for the next two years.

“Migrants make a valuable contribution to New Zealand both culturally and economically, and the Government periodically reviews all our immigration settings to make sure they are working as intended,” Mr Woodhouse says.

“While we are confident our immigration settings are working well, the NZRP is reviewed every couple of years to ensure we have the right number and skill mix of people gaining residence.

“As part of that review, today I am announcing a small change to the total number of people gaining residence.

“We will also be making some changes to better manage the Skilled Migrant and Family Categories at a time when demand for gaining residence under these categories continues to grow.”

The changes include:

• Changing the planning range for residence approvals for the next two years to 85,000 – 95,000 (down from 90,000 – 100,000)
• Raising the number of points required for residence from 140 to 160 points under the Skilled Migrant Category (SMC)
• Reducing the number of places for the capped family categories to 2,000 per year (down from 5,500)

“Increasing the points required to gain residence from 140 to 160 will moderate the growth in applications in the Skilled Migrant Category and enable us to lower the overall number of migrants gaining residence.

“Changes to the Family Category, including temporarily closing the Parent Category to new applications, will also reduce the total number of migrants being granted residence.

“Raising the points will also prioritise access for higher-skilled SMC migrants, ensuring we strike the right balance between attracting skilled workers that allow companies to grow and managing demand in a period of strong growth.

“Today’s announcement demonstrates the Government is taking a responsible, pragmatic approach to managing immigration.”

Note to Editors:

The New Zealand Residence Programme (NZRP) sets a planning range for the total number of people approved residence over a multi-year period, and determines the proportion of residence places allocated to the different residence streams in order to balance economic and social benefits.

The NZRP is not a hard cap as within each stream there are both capped and uncapped categories. The three residence streams under the NZRP are Skilled/Business, Family, and International/Humanitarian.

The largest single category is the Skilled Migrant Category (SMC) within the Skilled/Business stream, which makes up around half of the entire residence programme.

(Source: Beehive, Michael Woodhouse)

28/09/16 - Edmund Hillary Fellowship to help deliver new Global Impact Visa

• Email a Friend

Immigration New Zealand (INZ) will partner with the Edmund Hillary Fellowship to bring innovation-based ventures to New Zealand, announced Immigration Minister Michael Woodhouse.

“In April, the Government agreed to pilot a new Global Impact Visa (GIVs) in partnership with the private sector, to enable high-impact entrepreneurs, investors and start-up teams to launch global ventures from New Zealand,” Mr Woodhouse says.

“Today, I am pleased to announce that The Edmund Hillary Fellowship (EHF) has been selected as the private sector provider to deliver the attraction, selection and integration programme for GIVs.

“EHF will identify potential applicants and build a regional network which will support participants across the country, while INZ will be responsible for processing and making decisions on visas.”

The EHF is a collaboration between the Hillary Institute for International Leadership, a not-for-profit organisation that identifies and celebrates mid-career leaders from around the world and Kiwi Connect, an organisation promoting and connecting high impact entrepreneurship in New Zealand.

“These partners have an exceptional combined record of recognising, rewarding and nurturing emerging entrepreneurs and leaders.

“By drawing on private sector strengths and knowledge in this space, the government is better positioned to accelerate innovation and continue to grow the contribution migrants make to the economy.”

The visa will run as a four-year pilot, and be limited to 400 visas over the duration of the pilot.  In addition, up to 80 New Zealand entrepreneurs and investors will be accepted into EHF over the four years, providing the opportunity for collaboration between GIVs migrants and New Zealand entrepreneurs and investors.

The Programme opens for applications in early 2017 with the first GIVs migrants to arrive later in the year.

Source; Beehive, Michael Woodhouse

23/08/16 - Why we're wrong to blame immigrants for our sputtering economies

• Email a Friend

Immigrants have become a major scapegoat in recent years for sputtering Western economies.

From the U.K.’s jarring “Brexit” from the European Union to Donald Trump’s infamous wall and more recent proposal to apply “extreme vetting” to those wishing to enter the U.S., many politicians have found success by casting immigrants as a threat to the physical, social and economic welfare of natives.

In short, Americans (and our European brethren) are unhappy, and many are convinced immigration brings harm. A recent poll found that almost two-thirds of Americans think immigration, including the legal kind, “jeopardizes the United States.”

While it has become a popular notion in the West that immigrants jeopardize the job prospects of natives, over 30 years of economic research (including my own) gives strong reason to believe otherwise.

And in fact, the opposite may be more likely: There’s evidence immigrants actually promote more economic growth.

Why we blame immigrants for our troubles

Extensive reviews of research on the topic (like this one) show that most studies of how immigration affects native wages and employment found very little effect.

Although economists have yet to arrive at a complete consensus, decades of studies generally do not support the notion that immigration harms the economy, market wages or native employment. So why do so many believe it when research suggests otherwise?

Recent media coverage can be partly to blame, for promoting more negative images of immigrants than positive ones. One example is how there’s been a lot of coverage of fraud in the H-1B visa program but relatively little of testimony by Bill Gates and others about its important benefits. And nationalistic politicians frequently drum up support by claiming immigrants are stealing our jobs.

But a deeper issue is that it is easy to think that the labor market is a zero-sum game. If everyone is competing over a finite number of jobs, more immigrants mean fewer opportunities for natives. However, the reality is much more complex, and the labor market is far from a zero-sum game.

A new migrant interested in the same job as you may diminish your odds a little, but a single immigrant with a good idea might end up creating hundreds or thousands of jobs that wouldn’t have existed had he or she not crossed an ocean or border (the impact of son-of-a-migrant Steve Jobs or South African tech entrepreneur Elon Musk comes to mind).

The labor market is dynamic, and both individual workers and employers constantly readjust to changing conditions. In fact, many economists have found evidence that natives quickly adjust to the labor market forces of immigration and in a way that often yields positive benefits.

Adjusting to immigration

Immigration flows into the U.S. do not affect all sectors equally. Immigrants are highly overrepresented in either very low-skilled manual and labor-intensive jobs or very high-skilled science and engineering occupations.

The types of immigrants who arrive and the areas in which they work are crucial for understanding the impact, and this concentration makes it possible to adjust to it.

In a 2010 study, Dartmouth economist Ethan Lewis found that companies in regions that saw inflows of less-skilled immigrants in recent decades adopted capital machinery at a lower rate.

In other words, because businesses substituted capital for less-skilled immigrant workers, they didn’t suffer harmful effects on productivity or value added per worker. This substitution lowers the pressure to reduce wages.

Economists Giovanni Peri and Chad Sparber found that inflows of immigrants – whether low- or high-skilled – induced native workers to shift to jobs that are more complementary in nature and where they have a comparative advantage. And that limited the impact on wages and employment.

For example, natives working in fields receiving large inflows of low-skilled immigrants – who had a comparative advantage in manual and physical labor – moved toward occupations requiring more communication-intensive tasks. They observed a similar phenomenon when high-skilled immigrants with comparative advantages in fields like science and mathematics enter the U.S. labor force. Rather than being laid off, native skilled workers moved to occupations that required more managerial and communication skills.

Economists George Borjas and Kirk Doran also found convincing evidence of this mobility in very high-skilled academic research positions, where native mathematicians altered their research away from topics dominated by new immigrant academics.

Just as natives move toward occupations in which they possess a comparative advantage relative to immigrants, they can also move across skill groups by acquiring education. Several economic papers, like ones by Jennifer Hunt and Will Olney and Dan Hickman, found that natives tend to acquire more education following the arrival of less-skilled immigrants. Increases in education benefit the long-term prospects of natives, and means they are no longer competing in the less-skilled labor market.

Growing the economic pie

But beyond simply doing no or little harm to natives, there’s evidence immigrants actually benefit the overall economy – which helps everyone.

Recall that immigrants in the U.S. are highly represented in high-skill science and engineering occupations.

Economists have long understood that economic growth is generated by innovation, which in turn comes from research and development. A study by Stanford economist Charles Jones found that nearly half of U.S. economic growth since the 1950s is attributable to the increase in the number of scientists and engineers engaged in research and development.

Combine this with the fact that about half of the growth in the number of scientists and engineers in the U.S. since the 1980s was due to immigrants and it is not difficult to understand the connection between skilled immigration and economic prosperity.

In a recent paper, coauthored with Giovanni Peri and Chad Sparber, I formally tested this idea. We examined whether increases in skilled foreign-born scientists and engineers in the U.S. from 1980 to 2010 improved productivity. We found modest gains in real wages for native skilled workers. And no negative impacts on native employment.

Complementing our finding is research by economists William Kerr and William Lincoln, who found that skilled immigrants increase innovation, thereby generating productivity gains for native workers most ready to take advantage of such technological advances.

As long as immigrants continue to innovate and invent, they can continue to boost economic growth.

Who is actually most hurt by immigration

Although most studies don’t find adverse impacts on natives, that does not mean they have not found adverse impacts at all. In fact, the group that most commonly appears to be negatively affected by new immigrants are other recent immigrants.

Recent immigrants are the most easily substituted with new immigrants, tend to live and work in the same labor markets that new immigrants enter, often do not have the skills to move toward communication-intensive jobs and face restrictive policies that limit access to higher education. As such, their labor market prospects appear to deteriorate when new immigrants arrive.

Research suggests natives' productivity in certain occupations – ones that truly appear to be zero-sum – is also somewhat affected by immigration. For example, economists George Borjas and Kirk Doran found that the publishing rates of American math professors were negatively affected by inflows of Soviet mathematicians in the 1990s after the Soviet Union’s collapse. Since the amount of papers an academic journal can publish is fixed, more quality papers from immigrants will crowd out those written by natives.

Other studies that take a general focus on the labor market and find negative effects have been debated from time to time among academics, however, with little consensus.

A new paper, however, calls into question many of these negative findings, showing researchers have been using measures of immigration that carry an inherent negative bias. Using correct measures eliminates the negative impact.

Facts are facts

All in all, most of the research suggests that the fear that immigration will drastically harm native wages and job prospects is by and large unsubstantiated. In fact, much work has shown the labor market is dynamic, and that native workers and employers take measures to evade any competitive forces from immigration.

While some pundits and presidential candidates will likely continue to claim immigration is harming our economy, that won’t alter the evidence economists have uncovered in study after study. By the same token, claims that immigrants are flooding across our southern border (so we need a giant wall to keep them out) doesn’t change the fact that illegal immigration to the U.S. has actually been falling for the past nine years.

Though it is easy to believe that foreigners will overcrowd a frail, zero-sum labor market, decades of research has shown the only thing that sums to zero are the estimated effects of immigration.

Source: Kevin Shih, Assistant Professor of Economics, Rensselaer Polytechnic Institute

This article was originally published on The Conversation. 

16/08/16 - Q&A with Reserve Bank Governor Graeme Wheeler

• Email a Friend

Regional business writer David Porter interviewed Reserve Bank Governor Graeme Wheeler following his briefing for BOP businesspeople in Tauranga on Tuesday. Excerpts from the interview follow.

•What are the key highlights of the BOP economy, compared to the rest of NZ?
• Particularly over the past year, the BOP economy has been growing very strongly. Retail sales have been running at 5.5 per cent, building permits are now running at close to 52 per cent whereas they are around 20 per cent in the rest of the country. Employment is very strong and it's been growing at around five per cent compared with two per cent in the rest of the country. You've got an economy that's growing pretty strongly in terms of consumption, building activity, and employment growth. You are seeing rapid house price inflation, at around 24 per cent over the past year. But in many respects the economy is doing well.

•What were BOP exporters' concerns about the strong NZ dollar?
• We talked about the NZ exchange rate. We would like to see the currency weaker, as we've been saying for some time. We have cut the Official Cash Rate (OCR) six times since June last year and the Trade Weighted Index is higher than when we started. In an environment where you've got slow growth globally, trade protectionist measures are rising, and the volume of world trade is falling, then lots of governments would like to see their exchange rate lower. The situation we've faced with is that the US dollar has been weakening by about five per cent this year. You've seen sterling weaken after Brexit, you've seen the Chinese weaken the reminbi. In that environment it's not easy to get the NZ dollar down when NZ is seen as such an attractive growth story and interest rates are higher here.

•You recently referred to the global economic scenario as a "phenomenal situation". Does traditional central bank monetary policy work anymore?
• Monetary policy works fine in NZ in the sense that we can have quite a considerable influence on non-tradeables inflation, which accounts for a bit more than half of the CPI. We still have room for cutting rates if we need to and we've indicated on our projections that we've built in 60 basis points of OCR cuts. We used 25 basis points in August [bringing the OCR down to two per cent]. If you ask what degree of freedom does a central bank have, which now has negative interest rates and large programmes of quantitative easing, the answer is not much at all. They don't have much more gas in the tank. If those economies get into trouble, then monetary policy isn't going to help out much more and they're going to have to rely on fiscal policy and structural reforms. We've got plenty of room to lower interest rates if we need to. Time will tell whether we need more than the 60 basis points or not.

•You are seeking ministerial approval to get debt-to-income (DTI) ratios as a macro-prudential instrument. Can you provide a bit more detail on that?
• We've got an MOU between the central bank and the finance minister about what are the objectives of macro-prudential economic policy, and what are the tools that could be applied. They don't include DTI ratios. We've had discussions with the minister about some of the benefits of introducing that instrument. We will report to him probably later this week, seeking his approval to introduce DTI ratios as a tool for possible future use. We've been doing work on it, and we've talked to the banks about it. [If approved] we'll probably set up a working group with the banks to discuss some of the issues. But we're not expecting to introduce anything this year.

•You've said the Reserve Bank can't fix the housing problem, but you have acted on loan to value ratios. Do you see housing price rises as essentially a supply problem?
• It's a supply and a demand-side problem, [but] it's a supply response that's needed to fix it. If you look at the demand pressures, immigration is a significant one, credit growth has been accelerating, interest rates are low. That's all adding to housing demand. You've got housing shortfalls in many parts of the country, but particularly in Auckland where you've got issues around densification and inner city building standards. You've got a lot of issues around planning approvals, delays and what sort of standards need to be met. You've got issues around the productivity of the building sector. In the end, what will fix [rising housing prices] is supply. You've seen that in Canterbury, where as supply has come on, those inflationary pressures have come off.

(Source Bay of Plenty Times , David Porter)

20/07/16 - Loan restrictions just 'speed bump' for investors

• Email a Friend

Property experts are criticising the Reserve Bank's latest attempts to cool the housing market.

From September, investors around the country would need to have a 40 percent deposit to qualify for a bank loan, under a proposal from the central bank.

The Reserve Bank said a severe downturn in house prices could have major implications for the banking system, which had 55 percent of its assets secured by residential property.

But Property Institute chief executive Ashley Church said tightening loan-to-value restrictions (LVRs) would barely make a difference.

"Most investors, particularly in the Auckland market who've been involved in the market for any period of time during this boom, will already be sitting at, or approaching, 40 percent equity anyway," he said.

"So it's not going to have the drop dead effect the Reserve Bank might have expected of it. If anything it's going to be a slight speed bump."

Mr Church said the policy's objectives were not clear.

"It's the incremental nature of these changes that gives us reason to believe they're simply not clear on what it is that they want to achieve," he said. "If they were clear back then (in 2013) they would have taken drastic measures."

"Even now, you could argue that if they really believed the rhetoric around this they would have moved to 50 or 60 percent LVRs. The fact they haven't done so indicates they're not entirely sure what the impact of those measures is going to be."

The claim that it protected the banks did not make sense, he said.

He pointed to a recent stress test by the Reserve Bank which showed the banking system could withstand a 55 percent fall in house prices.

Other investors agree.

Shane Allen has more than 30 investment properties and mentors others starting out.

He said it was those people, the first-time property investors, who would bear the brunt of this.

"They're going to make it harder for your general Joe Bloggs who owns their own home and wants to buy one or two investment properties," he said. "It's obviously going to make that a bit more difficult.
On a $500,000 property they're going to have to stump up with a $200,000 deposit now."

Mr Allen said it would not have much of an effect on established investors.

Mortgage broker Sue Tierney agreed the loan-to-value restrictions were particularly harsh on first home buyers.

"First home buyers are still out there, but the policies have definitely hurt them, and it's hurt them in a way I'm not so sure the Reserve Bank predicted," she said. "The goal was to dampen the market, and all it did is played into the hands of the foreign buyers by making it easier for foreign buyers because we had [fewer] locals buying properties."

Ms Tierney said restricting foreign investment in residential property would be a simpler way to slow down rapidly rising prices.

(Source - RNZ, Michael Cropp)

19/06/16 - Message of his Holiness Pope Francis for the Work Day of Migrants and Refugees 2016

• Email a Friend

This message from the Pope was written in September 2015 as in Europe this World Day of Migrants and Refugees is in January. During that time most people in New Zealand and Australia are on their annual holidays, and for that reason we have this special day in June.

Please click here for the Message from Pope Francis

15/06/16 - New tool to tackle fraud at the border

• Email a Friend

Immigration Minister Michael Woodhouse is welcoming the launch of Immigration New Zealand’s (INZ) new identity management system.

The system, known as IDme, enables face photos and fingerprint information from applicants to be captured online and automatically matched against personal data already held by INZ.

“IDme is a major step change in our ability to protect against identity fraud by non-New Zealanders. It gives greater assurance that the visa system detects and prevents identity fraud,” Mr Woodhouse says.

“The move to online visa applications means we need to balance the increased convenience that brings with extra risk mitigation”.

IDme is being released in two stages - the first release, today, enables automated matching of all biographic details (personal data), fingerprints and a small volume of facial photos. The second release, in the last quarter of this year, will allow full matching of all applicant photos.

The new identity management system is the latest in a series of customer-focused business improvements in INZ. Customers can now apply online for student, work and visitor visas, and INZ’s third party partners such as immigration advisers and lawyers can lodge visa applications online on behalf of their clients. Passport-free applications and label-less visas (eVisas) have been extended to many countries, and a new, more user-friendly website is now up and running.

“Collectively, the changes will standardise best practice and consistent, measurable quality standards across INZ. The aim is that customers enjoy the same high-quality experience whenever and wherever they engage with INZ,” Mr Woodhouse says

(Source: Beehive, Michael Woodhouse)

13/06/16 - Government announces increase to Refugee Quota

• Email a Friend

Today the Government announced that it will increase the size of the Refugee Quota from 750 to 1000 places per year from 2018,” says Immigration Minister Michael Woodhouse.

“We take our international humanitarian obligations and responsibilities seriously, the increase today demonstrates our commitment to meet the needs of some of the world’s most vulnerable people,” says Mr Woodhouse.

“New Zealand has a strong record in the resettlement of refugees. Last year we committed to resettling 500 Syrians over two years on top of our annual quota of 750.  This means for the next two years we are taking 1000 refugees.

“Today’s announcement to increase the annual quota to 1000 from 2018/2019 is an appropriate response. We want to ensure the refugees we take settle well and contribute meaningfully to life in New Zealand, while not putting unreasonable strains on social services.

“We want to be sure people have the appropriate support and services they need to resettle in New Zealand like housing, health, education and translation services,” says Mr Woodhouse.

“The new quota of 1,000 will cost an extra $25 million a year. This is on top of the $75 million a year we currently spend on quota refugees”.

The Government has also agreed to pilot a new community sponsorship category in 2017/2018. The details of the pilot are still being worked through and will be announced next year.

“The offers of support from the New Zealand public in the wake of publicity around the significant displacement of people globally is commendable and the Government is keen to explore how that support might be used to the benefit of refugees,” Mr Woodhouse says.

Immigration New Zealand will also start a process to select a further refugee settlement location to assist the accommodation of the extra intake.

“There are currently six locations where refugees are settled once they have completed their reception at the Mangere Refugee Resettlement Centre, with Dunedin the most recent settlement city. I expect another location will be announced sometime in 2017,” says Mr Woodhouse.

The annual refugee quota is just one part of New Zealand’s total refugee and humanitarian programme. There are also 300 places available each year for family reunification and an additional 125-175 asylum seekers have their claims approved each year.

“The new Refugee Quota Programme represents an increased contribution from New Zealand to the resettlement of refugees and highlights our commitment to help address the ongoing global refugee crisis,” Mr Woodhouse says.

(Source: Beehive)

08/06/16 - The migrant debate by the numbers: Who's really coming to New Zealand?

• Email a Friend

Watch out for unsubstantiated slurs and hysterical hyperbole in the migration debate, the race relations commissioner says.

So, we asked who's really coming to New Zealand?

It's mostly under-35s with work visas, including working holidays, international students and returning Kiwis and Australians.

Migration is at an all-time high but the real story behind the rhetoric and "concerns" about migrants is a spike across the three main categories of work visa, mostly Europeans, and more students from India and China.

NZ First leader Winston Peters has suggested annual immigration should be capped between 7000 and 15,000 "seriously qualified" migrants and Labour has called for a cut in work visas.

Race Relations Commissioner Dame Susan Devoy said immigration was a policy issue all New Zealanders had a right to discuss, but facts, not hysterical hyperbole, were needed.

"Winston's platform is about giving people a fair go but he needs to walk his own talk: he implies that migrants coming to live here do not obey New Zealand laws but where is his evidence to support these claims?

"We are 18 months out from a general election and we are hopeful that Kiwis will demand accuracy from our politicians, and not be satisfied with unsubstantiated, sweeping slurs."

WORK, STUDY, SETTLE

The widely quoted figure of 124,000 migrants is not the number of people newly arriving in New Zealand to work. 

Net gain, the figure roughly representing the number of people here to study and work, is the sum of arrivals and departures minus the number of departing residents and overseas visitors leaving after staying for 12 months or longer.

That figure is 68,100 for 2015/16.

To put this in perspective, the number of short-term visitors, including tourists, in the year to April was 3.2 million.

Of the 68,100 migrants, 42,220 arrived in the North Island in 2015/16, 10,336 went to the South Island while another 15,524 were not identified by region.

In 2015/16, there were 38,825 people issued work visas, 36,475 Kiwis and Australians arrived and 27,645 people arrived to study.

The majority of migrant students, who can work part-time, are Indian and Chinese while most working holiday visitors hail from the United Kingdom, France and Germany.

Work visas were mainly issued to people from the United Kingdom, France, Germany and Australia, while student visas were issued to citizens of India, China and the Philippines. Most new residents hailed from China, the United Kingdom and Samoa.

The most common jobs for those issued work visas, which include working holiday visas, are in hospitality, the food trade and engineering and the regions with the highest gains in populations were Auckland, with 26,800, and Canterbury, with an increase of 6400.

NO 'WAVE OF MIGRANTS'

Immigration Minister Michael Woodhouse said it was a popular myth that migrants went to Auckland to work when the jobs were in places like Nelson, Marlborough and Canterbury.

Skill shortages and labour shortages were regionally specific. A decline in skill level cited by the Treasury related to increasing numbers of people in the essential skills category with diploma-level qualifications rather than, for example, degrees or postgraduate qualification.

Interviewing people at the border or capping numbers in certain classes was nonsense, he said.

"The jobs are in Southland, in horticulture, the fishing industry. It's true the numbers have grown. The economy has grown.

"The skill movements are quite understandable in the context of the way in which our visa policies work to meet demand, to meet shortages.

"If I wanted to turn the tap off we could kick 20,000 working holiday people out but do you really think our burgeoning tourism industry would be better off?

"This stuff is complex.

"Kiwis need to be at the front of the queue. To suggest there's a wave of migrants taking our jobs and buying our houses, it's just nonsense."

POPULATION FLUCTUATES

University of Waikato professor of population economics Jacques Poot said net inward migration was at a record level but this needed to be considered relative to the country's population.

Migration was a "cyclical rollercoaster" in terms of pinpointing figures, although the level was likely to fall in the next few years.

The number of people who are in New Zealand constantly fluctuates with births, deaths, arrivals and departures.

"Although it varies strongly seasonally, we have an upward trend in the number of visitors...so the "de facto" population goes up even without more long-term migration.

"In terms of migration, we have seen a sharp drop in New Zealanders leaving for Australia, an increase in New Zealanders returning from Australia, an increase in people on work visas of 12 months or more and an increase in the number of foreign students.

"All these things combined have led to the currently high population growth rate."

The rate of population growth - 2.5 per cent - was high for a developed country and similar to growth around 2003 and in the 1950s and 1960s, another period when there was an increase in migration

In the year to March, 5.88 million people arrived in New Zealand and 5.78m left. This left an extra 95,129 people on the ground, Poot said.

"The volatility is not surprising when you think that the total number of arrivals in and departures from New Zealand run at roughly 5.8 million per year each, so that the difference between these two large numbers easily jumps up and down."

Migration was better measured over a long time and previous data show net migration contributed to a quarter of population growth between 1951 and 1976 and half of population growth since 2001.
 
(Source Stuff, John Edens)

01/06/16 - Immigration changes unlikely to have "a very consequential impact"

• Email a Friend

A Treasury note to Finance Minister Bill English on July 16 last year, said the policy changes were unlikely to have "a very consequential impact".

Immigration changes to entice migrants to settle in the regions are unlikely to make any real difference.

That was Treasury's message to the Government shortly before it announced increasing bonus points for skilled and entrepreneur migrants settling outside of Auckland, at National's annual conference last July.

Skilled workers who take jobs in the regions now get more bonus points - used to calculate whether residency requests should be approved.

A Treasury note to Finance Minister Bill English on July 16 last year, said the policy changes were unlikely to have "a very consequential impact", because the bonus points were unlikely to make the crucial difference for many migrants.

"These proposals have been developed quickly in the last two weeks," the briefing states. "As a consequence, officials from Mbie haven't been able to explain many of the details."

Immigration Minister Michael Woodhouse said National had been "very careful" not to oversell the policy: "we never said that it would set the world on fire in the short term".

The policy was showing early promise, he said, with a small but measurable improvement in skilled migrants settling outside Auckland.

Immigration risks highlighted

The Treasury also warned that record levels of immigration could push New Zealanders out of low-skilled jobs, depress wages and increase housing pressures.

Its views were contained in advice it gave to ministers.

In December, Treasury advised Finance Minister Bill English to discuss "trade-offs" in immigration policy changes with ministerial colleagues.

Migrants were increasingly working in low-wage industries where there is no strong evidence of a skills shortage, Treasury noted in a briefing, released under the Official Information Act.

"There is a concern that recently there has been a relative decline in the skill level of our labour migration. The increasing flows of younger and lower-skilled migrants may be contributing to a lack of employment opportunities for local workers with whom they compete."

The current approach "may have encouraged reliance over time on lower-skilled labour in some parts of the economy", and that could discourage increased wages or training.

Treasury stressed the size of these possible effects was not large when viewed over the entire economy, "but at the margin, we believe that there are benefits to making changes to immigration policy".

The documents, published on Treasury's website, also reveal officials' caution about how its analysis could fuel debate on the topic.

"The political economy of migration policy can be fraught, but NZ actually has had a relatively calm public debate. But there is always latent risk of this turning on a dime."

Mr Woodhouse said measures were in place to ensure Kiwis were "front of the queue" for jobs, but locals simply didn't want some. Officials also had advised there was no evidence that New Zealanders were missing out on jobs.

NZ First leader Winston Peters did not agree that potential downsides were at the margins of the economy, or that there wasn't evidence they were occurring.

"It has been a plain fact for a great number of years now, but much exacerbated by greater numbers in recent times, and the last 21 months in particular," Mr Peters said.

Last week's Budget forecasts show net long term migration peaking at a net 70,700 inflow in the year to June 2016, dropping back to the long term average of 12,000 by 2019.

Mr Woodhouse said it was important to note that migration was not residency, and included working holidaymakers, international students, and temporary workers.

(Source NZ Herald, Nicholas Jones)