New Zealand has gone to the polls and voted for change. What will this swing to the right mean for New Zealand’s immigration settings?
As at 17 October, National and ACT’s combined take results in 61 out of 122 seats, just enough to govern together (which they have already agreed to do). However, the final outcome of the election won’t be known until early November when all approximately 500,000 special votes have been counted.
This article examines what New Zealand’s immigration landscape may look like if National and ACT are able to govern together and if they are required to enter into a coalition with New Zealand First. Both options are likely to produce different outcomes; however, in short, we expect that either will be better than the status quo for both migrants and employers who have a migrant workforce.
Immigration under a National-ACT coalition
Ideologically, a centre-right government is more likely to be open to immigration as a way to drive economic growth. This approach can only be good news for employers and migrants alike – with both parties indicating pre-election that they would aim to adjust immigration settings to make it easier to secure work and residence visas.
Reducing ‘red tape’
Both National and ACT have been highly critical of the ‘hoops’ migrants and employers need to jump through in New Zealand’s immigration system at present. ACT’s immigration manifesto is conceptual rather than policy-specific; however, its focus largely aligns with National’s – streamlining visa products, reducing application timeframes and requiring Regulatory Impact Analysis to be undertaken prior to any new major policy change are proposed to make it “easier to do business” in New Zealand.
Relaxation of the hourly wage
We expect a National-ACT coalition will relax work visa settings to make it easier to obtain Accredited Employer Work Visas (AEWV) where there are no suitable New Zealanders available. In particular, National has indicated that it will relax the current stringent hourly rate required for a work visa. Unless there is a specific exception, for the majority of jobs there is currently a “no median wage = no work visa” approach. With the current median wage set at $29.66 per hour and due to increase to $31.61 in February 2024, this pay rate has proved a significant barrier to many employers who would previously have relied on migrant workers to plug gaps in their workforce.
While typically centre-left governments side with migrants in terms of welfare and treatment while they are in New Zealand, in reality we have seen their policies have the opposite effect on our migrant population. Over the past six years we have seen aggressive hikes to our minimum wage, as a way to encourage business to boost wages and at the same time create a financial incentive to take on more New Zealanders and train them, rather than relying on foreign applicants with prerequisite skill levels to plug the gap instead. While this is noble and has certainly resulted in upwards pressure on wages, it has resulted in a sharp increase to the median wage, the marker by which our recent Labour-led government has determined applicants to be eligible (or not) for a work visa. At present, our median wage is $29.66 per hour – a very tall ask for many migrants searching for employment in New Zealand. Anecdotally, what we have seen in the industry is a rise in cases of migrant exploitation – where migrants who initially arrive as visitors in the hope of securing work are unable to find a role that pays $29.66 or more per hour and take low paying roles illegally to support themselves during their stay.
Our expectation is that the coalition government may look to revisit the application of the median wage rate and may re-set the rate at a lower level to enable a greater variety of job roles to access work visas. This would help to alleviate the shortage of skilled workers in an environment of relatively low unemployment, which suggests that the New Zealand workforce is already “tapped out”. It also suggests that holding the median rate will not actually result in increased employment opportunities for New Zealanders, at least to a material extent. Exactly what the level may be set at is unknown, but at the very least we expect that the proposed hike to $31.61 per hour in February 2024 may not go ahead, with a balanced approach here where the rate will not fall as low as minimum wage, to protect workforce entry levels for young New Zealanders first and foremost, to allow their uncontested entry into the workforce.
Greater options for trade-qualified candidates
Pre-election National was also critical that the recent residence settings announced by the Labour government that did not provide residence pathways for trade-qualified candidates in many instances. Labour’s residence policies were heavily focused on candidates with academic qualifications and/or highly paid roles. While these are generally good indicators of skilled migrants, they excluded highly skilled migrants from trades backgrounds, who may not possess formal qualifications, but are nonetheless highly skilled and in demand in New Zealand. Changes to these settings may not be introduced until the medium term, but we do expect to see accommodation of these migrants in future policy changes.
Attracting investors and entrepreneurs
One of the biggest changes we expect to see is around our visa products that attract investment to New Zealand. National has signalled a potential return to the previous investor visa settings, where applicants invest in relatively low-risk, low-yield financial products to secure residence. We agree with this approach, although do see value in the current Active Investor Plus (AIP) settings that cater for more meaningful and beneficial investment into the country, for investors with certain acumen, who are experienced/comfortable with investing in higher risk asset classes from the outset. However, our view here is that tweaks are required to the AIP to improve that investment option (such as expanding the permissible investment classes – allowing investment into affordable housing developments is an obvious one), as well as a new visa product to expand our reach (internationally) that will allow more cautious investors to “dip their toe” into a new market before taking on more risky investments.
A lower risk investor visa product allows New Zealand to attract such migrants, giving them the right conditions to learn about our market, and then actively invest once they have settled and feel comfortable. As a market leader in New Zealand investor visa work, we have seen many initial “passive” investors over time diversify to take on higher risk investments and bring significantly more money into the country than was required under the initial visa. Unfortunately, in the lead up to the AIP, the Labour government refused to undertake due diligence on such investors under the exiting programme at the time, perhaps driven on an ideology based foundation and incorrect assumptions supporting that ideology based approach to wealthy foreign investors. Based on what National have advised, its approach will be one that is based on sound research and private sector engagement before implementing such new polices, and if this is the case, that would be a breath of fresh air.
In line with this is National’s focus on making it easier for skilled professionals to live and work in New Zealand. Under its plan, employees of Tech Giants earning an equivalent salary of at least NZD$400k a year will automatically secure residence. Graduates from the world’s top 100 universities will be able to secure a three-year open-work visa and ‘Digital Nomads’ will find it easier to work and settle in New Zealand.
Flexible visa options for parents
Finally, one of National’s more interesting policies is, in effect, a ‘long-term’ visitor visa that allows parents to live in New Zealand for five years, with the option to extend this out for a further five years but doesn’t give a right to publicly funded healthcare or superannuation in the way residence does. The visa holder would need to show they hold private health insurance for the duration of their visa.
We expect that this policy has been developed in response to the many grandparents who are unable to live in New Zealand with their children and grandchildren due to not meeting stringent health requirements for residence. In some instances, this tough stance has discouraged skilled migrants from entering New Zealand without any consideration of their parents, who, from a family perspective are materially important when considering long-term permanent moves. This option gives them the ability to live out their “final years” with their loved ones in New Zealand without the wider economy shouldering the cost of public healthcare for them. A policy that we believe is both humane, practical and rightly recognises that potential benefit that parents of skilled migrants can offer, in terms of long-term successful settlement outcomes.
Immigration under a National-ACT-NZ First coalition
The inclusion of NZ First into any centre-right government is likely to result in some compromise when it comes to immigration, but this may be less dramatic than many expect. While NZ First has been known to have very conservative immigration policies, during the election campaign immigration was not a ‘hot’ issue that NZ First campaigned on.
In addition, NZ First’s economic policies reflect a ‘post-pandemic environment’, where there is a global war for talent, with which we must keep pace. Its immigration policies largely centre on the need to use immigration to fill critical skills gaps as well as promoting an even spread of migrants around the country, particularly encouraging settlement in rural areas. While any policy settings that result in migrants being employed over New Zealanders are likely to be met with resistance, we expect that there will be enough alignment between the three parties (particularly around the need for economic stimulus) that our immigration settings (and employers and migrant communities) will benefit.
We are certainly in a “watch this space” environment right now, but we are optimistic that the new right-centred government will be very positive for both individuals looking to emigrate to New Zealand and employers who cannot source sufficient talent from the domestic market.