January Newsletter

In this edition:

Game Changer – Major Amendments Proposed for Employer Assisted Temporary Work Visas

In late December 2018 the Government announced its decision to invite feedback on their proposal to radically change the employer-assisted work visa policies. These changes are aimed at improving the current temporary work visa outcomes by ensuring that visas are granted for roles where there are genuine skills shortages, and to shift the focus from a migrant-led process, to more of an employer-centred scheme.

The proposed changes are substantial and will affect every New Zealand employer who employs migrants on work visas. In fact, they are so wide reaching we cannot outline them in detail in one (readable) article. We will distribute more in depth thought pieces in due course on the separate parts.  In the interim we set out a summary of the main proposed changes to give you a general understanding of what is being proposed.

Which Visa Policies will be Impacted?

The proposals will have an impact on the following six temporary work visas:

  • Talent (Accredited Employer)
  • Essential Skills (including the Essential Skills in Demand Lists)
  • Approval-in-Principle
  • Work to Residence – Long-term Skill Shortage List Occupations
  • Silver Fern (Practical Experience)
  • Silver Fern (Job Search)

The Proposals

The current proposals, which have been released for consultation, include the following recommendations:

  1. Removal of all employer-specific work visa categories and introducing a new streamlined framework which will be led by employers, rather than the current migrant-led system.The new framework is proposed to involve three separate and distinct stages:
    • Gate 1: Assessing the Employer
      • All employers wishing to hire migrants will need to apply for accreditation status with INZ; being Standard Accreditation (recruiting 5 or less migrants in a 12 month period), Premium Accreditation (recruiting 6 or more migrants in a 12 month period), and Labour Hire Company Accreditation (that already exists).
      • All three will have an initial validity period of 12 months, with Premium Accredited Employers able to extend after that initial term for periods of up to 24 months.
      • Standard Accreditation will cost approximately $600, Premium and Labour Hire Accreditation will cost approximately $2,000.
    • Gate 2 : Assessing the Position
      • There will be four visa options available for employers to employ migrants. Three of the four options are based on what is currently available (with amendments), and one of them (Sector Agreements) is a new development.  They are as follows:
        • Any role that meets the threshold of being higher-paid ($78,000 p.a. for Premium Accredited Employers [yes, an increase from current level of $55,000 p.a.] and $101,046 p.a. for Standard Accredited Employers); will not require a labour market test.
        • Any role that is listed on the new Regional Skills Shortage List (ANZSCO Level 1-3, refer below) will also not require a labour market test.
        • Any role (but predominantly low-to-mid skilled ANZSCO Level 4-5, refer below) which involves a Sector Agreement – will require a labour market test dictated by the applicable Sector Agreement; and
        • Regional labour market tests for all other positions where the bar can be raised or lowered by INZ as needed, to reflect regional and industry labour demands.
      • Gate 3 : Assessing the Migrant
        • This stage is likely to remain similar or identical to the current requirements that applicants need to satisfy for the grant of the applicable work visas.
        • These include meeting the requirements regarding identity, health and character.
        • Applicants must also demonstrate that they have the qualifications, skills and/or experience necessary to undertake the role.

In addition, the remuneration rate for mid-skilled visa holders (who can currently secure three year work visas) is proposed to be increased from a minimum of $21.25 per hour to $24.29 per hour, meaning that approximately 10,000 current work visa holders in this mid-skilled tier (ANZSCO Levels 1-3) will be classed as lower-skilled. Therefore, they will only be able to secure visas for a maximum period of 12 months for three years in a row before being stood down (offshore) for 12 months.  Note however the consultation also seeks feedback on whether this stand down policy should remain in its current form.

The above change will also mean that there will also be approximately 3,000 less Skilled Migrant Category resident visa applications submitted from visa holders getting paid less than $24.29 per hour.

  1. Replacing the current Essential Skills in Demand Lists with Regional Skills Shortage Lists

The Government is of the view that the Immediate Skills Shortage List and the Long Term Skills Shortage List do not necessarily provide the most accurate reflection of occupational shortages as the focus remains on the roles, rather than the regions.

The proposed change to use Regional Skills Shortage Lists to replace the current system is aimed at not only improving the assessment of genuine need as part of the labour market test, but also as a directory in equipping migrants with greater insight into regional employment opportunities.

  1. Introducing Sector Agreements, which aim to address structural issues to avoid over reliance on migrant labour

Sector agreements are proposed to provide greater certainty to businesses which rely more heavily on migrant labour – in terms of their ability to access temporary migrant workers.  However, in return for that certainty, those employers impacted by the Sector Agreements will be required to increase their level of commitment to furthering pathways for recruiting and training New Zealand citizens and residents, with a view that over time their reliance on offshore labour will be reduced.

These negotiable agreements are primarily targeted at industries which have a large migrant workforce in mainly mid to lower skilled positions where the Government believe these industries need to do more to employ and train young New Zealanders, such as the tourism and hospitality, residential aged care, dairy farming and transportation industries.

Have Your Say

Consultations currently remain open to all individuals and organisations who wish to make a submission on the proposal.  The deadline for submissions is 5pm on Monday, 18 March 2019.

We encourage all employers and other interested parties to make sure you have your say by responding to the consultation.  As with previous consultations, our firm is able to assist employers and industry bodies with formulating submissions on the consultation.

Stay Informed

The outcome of the consultation process is expected to be finalised in mid-2019, and the staged roll out of these new policies will then follow over the following 12-18 months with the first changes likely to come into force as early as August 2019.

Despite the consultation process, we anticipate the majority of these recommendations will be implemented in some form or another as they have already been signed off by Cabinet.  For the majority of New Zealand employers there is likely to be a significant level of investment required in order to maintain business continuity as the changes are implemented and take effect.

Lane Neave will be providing more detailed articles on all the changes as announcements are made, in addition to undertaking a series of national seminars to explain these changes on the following dates/locations:

Auckland
Date: Thursday 14 February 2019
Time: 8.30am-10.00am
Location: The Green Room, Level 4, Seafarers Building, 52 Tyler St, Britomart, Auckland

Christchurch
Date: Monday 18 February 2019
Time: 8.30am-10.00am
Location: Lane Neave, Level 5, 141 Cambridge Tce, Christchurch

Wellington
Date: Tuesday 26 February 2019
Time: 10.30am-12.00pm
Location: TBC (Central Wellington)

Queenstown
Date: Thursday 28 February 2019
Time: 10.30am-12.00pm
Location: The Rees, 377 Frankton Rd, Queenstown

Email communications@laneneave.co.nz to register for the seminars.

These articles and seminars will allow informed views to be formulated and for those employers who stand to be affected by the proposal time to reflect and draft a submission for consideration.

To stay on top of current developments, sign up for our free regular briefings and articles on the changes click here.

For further information or assistance with emigration please contact Lane Neave Lawyers on + 64 3 379 3720 or email liveinnewzealand@laneneave.co.nz.


Education in New Zealand

After a long summer break, school starts back in New Zealand from late January / early February. For new migrant parents, this can be an anxious time, as they’re keen to ensure their children settle as quickly and as smoothly as possible. It pays, therefore, to do some research into the education system before sending the children off on the first day of school. The good news is that from early childhood to tertiary level, New Zealand has an enviably high standard of education. Most migrant parents find the quality of New Zealand education is very high, and many say that their children are more confident and well-rounded from their time spent living and studying in New Zealand.

Early Childhood Education (ECE) is considered by the government as an important stepping stone to school and most children in New Zealand receive some form of ECE. Three and four year olds have the first 20 hours of care fully funded by the government.  This is available to children of all parents, regardless of income or visa type.

Primary and secondary schools in New Zealand fall into three main ‘types’:

  • state schools – government-funded,
  • state-integrated schools – government-funded but have a ‘special character’; usually a religious or philosophical belief, and
  • independent (private) schools which charge fees.

Although not compulsory until the age of 6, most children enter primary school soon after their fifth birthday, rather than from a fixed starting time at the beginning of the school year. Primary schools comprise either Year 0/1 – Year 6 (ages 5-10) or up to Year 8 (age 12). Separate intermediate schools for Years 7 and 8 are another popular option. Secondary school in New Zealand encompasses Year 9 to Year 13 (although some secondary schools incorporate the Intermediate years). Most New Zealand cities offer the full range of school types, and coeducational or single-sex options.

Fees range from school donations at state schools, to around $1,500 at state-integrated, and up to $22,000 at independent schools per year. Donations, although technically voluntary, carry with them a strong expectation of payment. Additional costs that parents and caregivers should allow for include: school uniforms (worn at the majority of schools), school camps and other out-of-school activities, classwork-related costs, and technology devices.

The selection of state-run schools and childcare facilities in New Zealand is based on geographical location, with a zoning system offering those living closest to the schools the first option of attending. Those living out of zone have to enter their child’s name in a ballot system, where out-of-zone students are invited to enrol based on certain characteristics, such as whether a sibling or parent attended the school. This can be an important consideration for new migrants when choosing where to live. Another important factor can be which ‘year level’ a child should be placed in if they arrive part-way through the school year. This can be done in consultation with the school, or by approaching Citizens Advice Bureau for advice.

For a small country, New Zealand boasts a large number of tertiary institutions throughout the country, catering to a wide range of interests and abilities. Flexible learning options are increasingly popular and online tertiary courses carry high enrolments. More information about tertiary options, and the whole Kiwi education experience, can be found on the New Zealand Now website.

Article provided by Lisa Burdes – SkillsConnect Canterbury Business Advisor at the Canterbury Employers’ Chamber of Commerce.

The Chamber offers migrant employment assistance, and support to employers of migrants in Canterbury. This service is fully funded by Immigration New Zealand (INZ). If you have questions about living and working in New Zealand, you can visit http://www.newzealandnow.govt.nz, email your query to newmigrantinfo@mbie.govt.nz or ring the INZ Contact Centre on +64 9 914 4100.


No substantial weakness in NZ house prices

Early this year the Financial Times newspaper ran an article discussing the shortage of construction workers in Ireland. This has been caused by the current building boom coming after an exceptionally weak period when few young people entered the sector. The writer noted that companies have been attracting Irish emigrants back from countries such as Australia and the Middle East and are also seeking out their people and others in New Zealand, Malaysia and the Philippines.

Around the world there is a shortage of the sort of skilled people building firms need – not just those who wield a hammer but quantity surveyors, architects and project managers. The relevance of this in New Zealand is that the government’s desire to facilitate a surge in the construction of affordable housing through their KiwiBuild programme is likely to fail.

This expectation is one reason why even with a ban on foreign buying of houses introduced last October and plans afoot to impose extra costs on landlords, there is not any substantial weakness in New Zealand house prices. In the main city of Auckland prices are admittedly flat to down 1% or so from a year ago. But in the regions price gains continue apace with some internal migration away from Auckland and a simple cyclical catch-up to Auckland’s surge which started earlier and ended almost two and a half years ago.

The interesting thing about Auckland is that housing demand pressures continue to grow very strongly. Over the past four years while total employment outside of Auckland has grown by 13%, in our biggest city the gain was 21%. And even though much has been made recently of dwelling consent numbers hitting their highest annual total since 2004, Auckland’s [population has actually grown by 34% since then. So construction is still not at what one could call unusually high levels.

The relevance of this is that people freshly arriving into New Zealand need to be careful when thinking about how the cost of a house in Auckland might change in the near future. For the moment and even perhaps for another couple of years prices are likely to remain flat while price gains in regional markets slow down as the cycle suggests usually happens.

But much as housing in New Zealand and in our major cities of Auckland and Wellington already is highly unaffordable, just because something is expensive does not mean it will fall in price or not become even more expensive. Housing supply growth in Auckland is failing to keep up with demand growth and eventually that imbalance will produce another period of price adjustment.

One mistake migrants might make looking at Auckland or even New Zealand generally, is to think that the falling house prices this past year and perhaps coming year in Australia will be replicated here. This is very unlikely. In Australia almost half the dwellings built now are apartments versus less than 11% in New Zealand. There has been a surge in apartment construction in Australia and because foreign buyers tend to favour low maintenance new apartments the new difficulties which Chinese have been having getting funds out of their country has hit Australian apartment prices.

In addition there has been a sharp tightening of credit availability to property investors in Australia versus only a slight tightening in New Zealand. In fact over the past 13 months the minimum deposit requirement for NZ property investors has been cut from 40% to 30%.

So if you are shifting to Auckland then there is a certain amount of time on your side with regard to making a house purchase. But watch for the upward leg of the price cycle to kick in again eventually, and give thought to how much rents may rise before then as landlords adjust to a higher cost environment being imposed upon them by the new centre-left government.

Article provided by Tony Alexander – Chief Economist, Strategy & Business Performance, BNZ. 

www.tonyalexander.co.nz 


Migration slow despite opportunities

Statistics show that migration continues to slow, and maybe hasn’t been quite as strong as we thought. Statistics NZ has estimated that a net 2,480 people entered NZ on a permanent or long-term basis in November 2018, down from 3,500 in October. Annual net migration was estimated to be 43,400, down from 44,860 a month earlier and a peak of around 65,000 in mid-2016.

This being said, New Zealand still has major skill shortages in most sectors and regions. The government is exploring a new approach to employer assisted work visas and a regional workforce plan to assist employers and regional New Zealand in this regard.

Enterprise Recruitment cover most sectors throughout New Zealand and offer an obligation free CV / employability appraisal.

Article provided by Steve Baker – Enterprise Recruitment and People.

Enterprise Recruitment and People has a national presence. We remain interested in providing obligation free advice to offshore candidate’s about their chances of securing employment in New Zealand. Steve can be contacted on steve.baker@enterprise.co.nz or 00 64 3 3530680.

www.enterprise.co.nz/ 


 

 

contact

Mark Williams
Partner, Lane Neave

t +64 3 353 1063
m +64 21 222 2363
e mark.williams@laneneave.co.nz

 

Rachael MasonRachael Mason
Partner, Lane Neave

t +64 3 372 6323
m +64 21 1306 540
e rachael.mason@laneneave.co.nz