Does NZ need to rethink the immigration reset?
Two years after shutting its borders, New Zealand has slowly begun the process of opening up to skilled migrants and international students. This comes as competition intensifies for skilled migrant labour in an extremely tight post-COVID global jobs market.
Net migration in New Zealand dropped to negative in 2021 for the first time in eight years due to the closed borders. Our rate of population growth has now slowed to a level not seen in 30 years. There are concerns the border reopening could exacerbate matters, at least initially, by leading to an outflow of younger Kiwis and non-NZ citizens to Australia and elsewhere.
Reduced immigration and a declining working-age population could have severe implications for rebuilding the country post-COVID. Over the long term, the effects would be slower economic growth and lower productivity. It will also make it harder to reduce the high levels of net government debt to GDP.
Net migration reverses historical patterns
The latest figures from January 2022 showed migrant arrivals down 59 percent giving an annual net migration loss of 7,500.
This loss compared with a net gain of 91,900 in the year to March 2020. Reversing historical patterns, most of the annual net migration loss was non-NZ citizens.
New Zealand’s immigration reset or “rebalance”
The immigration reset which was announced in mid-2021 but put on hold has now been rebranded as “a rebalance”. The details have yet to be announced but the stated aim is to reduce New Zealand’s reliance on low-skilled labour and force businesses to “lift working conditions, improve the skills training and career pathways for workers”. However, while many would agree the apparent declining focus on high-skilled immigrant has not been a good thing for the country, it is also becoming clear New Zealand businesses needs workers now — both low and higher skilled varieties.
Worldwide skills shortage
According to a report from Deloitte, the pandemic has only worsened a widespread labour shortage across the United States, the United Kingdom, Canada, Australia, and parts of the European Union.
Parag Khanna writes in the Australian Financial Review, that the UK and US have responded by “returning to the expansionist migration policies that pre-date former US President Donald Trump and Brexit.”
US President Joe Biden has reversed the previous administration’s ban on H1B visas (allowing US employers to hire highly skilled foreign workers) and is allowing dependents of those visa holders to obtain work. They are also moving to make it easier for foreign graduates to immigrate to the country.
The UK, which lost 4 percent of its workforce as a direct result of Brexit recently introduced a new “high potential individual” visa. This scheme is designed to address their skills shortage and “supercharge” economic growth by allowing foreigners who graduate from an internationally recognised university to work in the UK without needing a prior job offer.
Across the Tasman, the Australian Office of Immigration has put a call out for skilled migrants in 44 priority occupations to apply to migrate to the “lucky country” making it clear that the right candidates will be welcomed. Like New Zealand, Australia has has a shortage of temporary workers across many industries such as construction, engineering, nursing and ICT. Unlike New Zealand, Australia also welcomed back fully vaccinated international students from 1 December 2021 whereas New Zealand will only allow students back for a “new start” in the 2023 year. There is a danger this delay will lead to what Harvard Professor William Kerr calls a “missed moment” — a window of time to catch someone when they were excited about an educational or work opportunity abroad.
New Zealand must now wait until April before the Government’s plans for the “immigration rebalance” is announced. Early indications are that as well as limiting the number of less-skilled migrants, it may also be harder for skilled migrants wanting to move to NZ to bring their partners and family members with them. The government has so far made no decision on when they will restart the parent category, which is an important drawcard for many potential and recent migrants.
There are some positive signs emerging, for instance, applications for some working holiday schemes opened this month for the first time since the pandemic began. However, Hospitality NZ Chief executive Julie White has questioned whether the scheme would do anything to fix the hospitality worker shortage when the visas are just for three to six months, and the workers are limited to work in one place.
As the world opens up it’s clear that a lot of countries are also targeting the key highly skilled migrant group. New Zealand cannot assume that it will be first in line for attracting this prized group — in fact from a timing perspective we are running behind much of the rest of the advanced world. As Parag Khanna writes in the Australian Financial Review, we are now in “an all-out war for young talent. The only question is which countries realise it first.”