6 Point System – Immigration NZ Rule Changes

As we power into 2023, the more urgent unanswered questions become about the ‘proposed’ new skilled migrant points system that government tells us will be deployed in ‘mid 2023’. Still no indication of when ‘mid 2023’ is but it seems reasonable to assume July. But with this Government it could be October or next year. All our advice to clients is based on the reasonable assumption that mid 2023 is July 1.

I think the Government releasing the ‘proposed’ policy late last year was a masterclass in political maneuvering. They sought and closed down public submissions on what they have ‘proposed’ in a very short space of time before most industry veterans like us or employers could really get their heads around the implications of the changes. Almost overnight all the negativity surrounding the hotbed that is the mismanagement of the immigration and visa system disappeared from the media. Despite the frustrations with service delivery not changing. Sometimes it seems appearing to do something will keep many of the people happy for much of the time.

For those of us working at the front line, we know it takes our clients a good six months to lay the groundwork and secure temporary visas to get to NZ for the job search that has been and will remain central to a successful move to New Zealand under the proposed Skilled Migrant Category.

That means for most aspiring migrants the current 180-point system is a door rapidly closing if it hasn’t slammed firmly shut already. Unless you are very advanced with your plans, have a job offer on the table, or are in NZ within the next couple of months, your attention should be turning to the proposed new system.

I have a lot of unanswered questions that are critical so clients can weigh up the risks attached to what looks like a risky policy.

We know the broad outline of the proposed new policy which I have written about in previous blogs but since the announcement we have carried out literally hundreds of (free) preliminary evaluations which suggests there are many people who would have qualified last year or even today under the points system who will have little to no chance after the middle of 2023.

The preliminary evaluations we do, provide a no obligation, no cost service where we gather the information we need to decide whether it is worthwhile moving forward with the assessment process. If we genuinely believe we can give someone a credible plan with a high chance of success we will agree to a paid, private consultation – where we discuss strategies, timelines, costs and so on.

This reduces the risk to potential clients that they will spend money for nothing.

The proposed new policy seems to significantly increase the risks for many of they are not careful and well researched.

We know the significant majority of skilled migrants with nothing more than a University degree will have to work for three years before they are eligible to apply for residence under what is proposed. That means three years on a temporary work visa.  A Work Visa is not a ‘work to residence’ visa, it simply provides temporary work rights for a finite period of time. There is nothing from the government that suggests any sort of grandfather clause attached to that temporary work visa that guarantees that if the migrant stays working for three years from the date of issue of the work visa then they are protected from any changes in legislation, regulation or immigration rules during it.

A second concern has not yet been addressed. The only way non-degree (or higher) holders to get into New Zealand will be by securing a job that pays 1.5 times the annual gross median salary (currently a pinch under $93,000).  Will this be indexed to inflation meaning pay rises each year? We don’t know.

If we look at another current pathway to residence anyone earning twice the national gross annual median salary (currently sitting just under $116,000) is eligible for residence following two years of work in NZ but the rules are clear – they must be earning twice the annual median salary at the time they file their resident visa – meaning pay rises each year for two years or a rather big fat one just before filing their resident visa.

With inflation currently running at 7%, twice the national median annual salary will shortly become around $123,000 from the current $116,000 odd. And this time next year, if inflation has fallen to, say 5%, it becomes $130,000 and then by February 2025 if inflation was down to say, 3%, it becomes closer to $135,000.

It is reasonable to assume then the Government plans to do the same for those earning 1.5 times the annual median salary under the proposed points system – meaning at the end of three years what is currently $93,000 will by then be pushing $112,000 using the same possible inflation rates as above.

Will employers be willing to pay that sort of money for hairdressers, Chefs, welders, boilermakers, fitters and others who don’t have university degrees or have statutory NZ registration? I have my doubts.

With the economy expected to slow and unemployment predicted to start rising (it has recently gone from 3.2% to 3.4%) will employers even need to think about pay rises for temporary work visa holders or will they tell them to take or leave what they have been being paid irrespective of whether that puts the kibosh on their residence aspirations?

Clients will have to get a really good handle on what they are likely to earn in New Zealand and that isn’t always easy when you are sitting half a world away and employers traditionally don’t advertise salaries in online job adverts. While at times it is obvious they will easily meet the 1.5 times annual median threshold there’s going to be a whole lot more that won’t know until they are in NZ looking for work and neck deep in the process.

In order to continue providing the best possible advice that mitigates risk to potential migrants we cannot wait until July to find out if the Government is going to modify the proposed criteria or not. If they don’t, New Zealand is going to be a hard sell for any adviser honest enough to tell potential clients the hard truths about how risky the NZ process looks like becoming.

I’d hazard a guess that what has been proposed is pretty much what we are going to get.

Why?

The plan is to have all resident visas filed online. That means the legions of in-house software developers at INZ will already be building the platform that allows that to happen and for such a complex piece of work, months are required to develop, test and roll out.

In the meantime, New Zealand will continue to lose out to Australia and Canada. Migrans cannot be expected to sign up for a policy that is simply ‘proposed’ and where they wear all the risk. The Aussies have not only hit the turbo charge button (tripling the number of residence visas up for grabs this year and next) they are rapidly dealing with their processing backlogs. The majority of our clients going to Australia are now receiving their permanent residence visas within 6 to 12 months of filing. New Zealand is still sitting at two years for most. And the Aussies aren’t worried about people having jobs as part of their permanent residence requirements. And they aren’t going to make anyone work for one, two or three years before even being able to think about being able to apply for permanent residence.

I said at the time it was released, that the proposed policy was rushed, poorly thought through and a reaction to two years of building pressure to open up the borders and get bodies across the border to fill the jobs being created simply to try and neutralise the opposition political parties dining out on the border and visa processing fiasco.

The Government has bought itself some time but I have real concerns that with so many unanswered questions the new policy may well be an absolute flop because it will be unmarketable.

Until next week

Iain MacLeod

Southern Man