Holding Back The Student Tide

October 14, 2016
Iain MacLeod

After the upheaval of this week with the changes to the skilled migrant landscape and a few days to take it all in and digest the changes, you might be interested in my thoughts on it.

The changes appear to have been made in a big hurry. I have written several blogs in recent months and have been telling any potential client that might listen that I believed that change was going to be forced upon the Government in the skilled migrant ‘space’.


In two words – international students.

Tens of thousands have flocked to New Zealand in recent years to study, I suspect, only because the Government offered them an open work visa when they finished their course and through that, a pathway to residence under the skilled migrant category once they had secured a skilled job offer.

I have spoken of the ‘tsunami’ of Expressions of Interest that would start to wash upon the skilled migrant shores expected in late 2016 and through 2017 at every seminar I have delivered in recent times. Given there is a fixed number of skilled migrant visas available each year this massive increase in demand represented a clear threat to the entire skilled migrant programme. It was in danger of collapsing under the weight of applications.

When you operate a fixed pass mark of 100 points for those with skilled job offers and you have a finite number of resident visas to dish out, what do you do when the numbers being selected every two weeks from the pool who have claimed 100 points goes through the roof?

How does the system respond when, if they were all to be granted a resident visa, your annual target of 27,000 migrants would be filled within, say, six months? Would INZ just close the pool to further selection for another six months?

That is exactly what the Government was facing, yet until relatively recently I am reliably informed they did not accept.

The evidence was right in front of their faces.

In the past three pool draws alone the ‘normal’ 700 EOIs selected each fortnight for those claiming 140 points or 100 or more including a skilled job offer jumped from 700 to almost 1000. A 50% increase.

We know that close to 40% of all skilled migrant approvals of late have come from former international students who studied in New Zealand and decided to stay. That percentage has been growing steadily in recent years.

I’d wager a close examination of those selected of late would reveal a significant percentage would be single young males, predominantly from India, with little to no work experience but an NZ qualification claiming points for job offers as Chefs or Retail Managers.

So the question confronting the Government (and the question some of us have been asking of them for a long time now) was – which skill sets does New Zealand need more of? The 24 year old international student who has studied in NZ but has little work experience and a job offer as a ‘Retail Manager’ or the 35 year old Software Developer with 15 years of work experience whose skills are desperately needed?

They can say whatever they like in terms of why they made the changes they just did but that was the dilemma facing the Government.

The solution?

Put the pass mark up to 160 points. Who does that knock out?

Young inexperienced applicants with qualifications but with little to no work experience. Who dominates that demographic? International students, predominantly from India. To be clear this is not an anti-Indian move it is jut they are the ones disproportionally impacted by the change as they make up the bulk of international students.

If I were a young international student who came to study in New Zealand having been, at worst, encouraged through the marketing carrot of the work visa and the residence, I might be more than a little miffed right about now. Their residence dreams will pretty much be in tatters.

Having worked through the options available to our many clients we are currently supporting with their applications, the fallout has by and large been minimal. At worst some are going to have to secure jobs outside of Auckland and some might have to delay filing their applications for a year or so while they accumulate additional points through New Zealand work experience. We have managed to give almost all of them a revised strategy to get them through this minefield.

The Government’s changes have however created another very real problem yet to be addressed.

There are tens of thousands of highly skilled jobs being created each year in Auckland. The mismatch between local skill sets among the unemployed and those jobs means these employers are not going to be able to fill many roles with migrants because those migrants now know they won’t have enough points if they accept the jobs.

Auckland is the nation’s jobs machine and many of the new jobs being created are in IT and trades related roles yet many of these applicants do not have qualifications that are now critical to securing the 160 points.

These people have to look at going south or not coming at all (or appreciate their stay will be short term and on a work visa which most won’t tolerate; they simply won’t come).

So having dealt with the issue of the ‘tsunami’ the Government now has to come up with a solution that keeps intact Auckland as a migrant destination for the highly skilled without bursting the dam that is holding back the international students.

The simple solution would be a minimum salary threshold for jobs in Auckland that attracts additional bonus points. It would be an elegant solution (so long as you are not an international student) because it would reward the more experienced and the more highly paid; both of which tend to indicate a higher value skill set and greater value to the country.

My feeling is more changes will be announced soon because they need to be.

You cannot have a skilled migrant policy that now starves thousands of Auckland employers of desperately needed skills. The Government is smart enough to know it. They will come up with a solution packaged as ‘we only want highly skilled and high value migrants’.

This is simply code for ‘We blew it offering all those international students a pathway to residence but hey, we never promised them a resident visa…’

It isn’t pretty and there’ll be several thousand international students about to feel horribly let down.

It could have been avoided if the Government hadn’t been blind to the real reason the bulk of the students were coming to New Zealand – the study was just a part of their plan to secure residence.

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