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Skilled Migrant Time Bomb

June 11, 2016
Iain MacLeod

As a little boy I had an intense interest in politics.

My favourite Uncle who had himself run for Parliament was, I suspect, partly responsible for that interest and we had many a conversation where he pitted his mid-40 year old conservative wisdom with my ten year old love for communism.

I will never forget a piece of advice he gave me if I ever ran for elected office. “Remember Iain, there are two Governments. The elected Government and the permanent Government.” Permanent Government being the bureaucracy.

I never imagined that I’d end up by making my living helping people to fight their way past this permanent Government. And observing up close the relationship between them and the elected Government.

To some extent he was quite right but in other respects he was wrong.

Right now a potential crisis is unfolding in New Zealand’s Skilled Migrant Programme and the (elected) Government is refusing to listen to the permanent one.

Within two years this crisis is going to hit the Government hard, yet they refuse to acknowledge they have a looming issue despite the obvious staring them in the face in the form of research carried out by the immigration bureaucrats. To that you can now add Treasury.

I have read a number of papers released under the Official Information Act which clearly demonstrate that there is real concern within the bureaucracy that Government policies in the area of export education is dumbing down the skilled migrant category. This is because there is a massive marketing machine (both public and private sector) encouraging international students to invest tens of thousands of dollars in low level, low grade New Zealand qualifications because they have the promise of a work visa at the end and a pathway (in theory) to a Skilled Migrant Resident Visa.

There are several big problems with this.

The sorts of jobs many of these students are likely to get once they complete their very expensive qualifications are not skilled because they tend to be entry level, do not attract points toward residence and they have not been warned by either the Government, the tertiary Instructions peddling these products or their agents (unlicensed) representing them in markets such as India. They will only find out once they have completed these very expensive local courses and I suspect they will leave New Zealand justifiably bitter at having been sold a lemon.

Those that succeed are, most of the time, getting marginally skilled jobs of questionable value to New Zealand. The two occupations that top the list for the number of skilled migration approvals today are Retail Managers and Chefs. In both these areas the risk of fraudulent job offers grows and an entire industry where big money will change hands as desperate foreign graduates realise their predicament try and buy jobs will emerge. Anecdotally it already has.

There are literally tens of thousands of such students in New Zealand today. I understand more than 40,000 in Auckland alone.

Immigration statistics show that these students are consuming an ever greater percentage of the finite and capped skilled migrant places available each year.

What’s the problem with that you might ask (I understand senior Ministers are asking the same thing)?

Right now policy settings demand the significant majority of skilled migrants possess skilled job offers.

Each year there are 27,000 resident visas (with a 10% variance) available to Principal Applicants, their partners and children. That translates into around 10,000 Principal Applicants and 10,000 skilled jobs up for grabs.

Right now if you have a skilled job you will be approved residence all other things being equal.

So what happens in two years when we might have 20,000 Expressions of Interest for people with job offers sitting in the pool? Right now they are all selected.

Which ones do we grant residence to? Right now it has to be all of them.

If we decide to only select half (so we don’t double migrant numbers from current levels) should it be those that have got jobs as Retail Managers, the Chefs and the Secretaries or the experienced Engineers, IT workers, Trades people that New Zealand is so desperate for?

Right now there is no distinction – 100 points equal selection irrespective of the job offered.

What about all those with false job offers?

The Government could turn around and double the annual intake and issue twice as many visas.

The Prime Minister said this week (as he always does) that current migrant numbers are about right. That suggests no appetite for doubling the numbers.

Auckland has a housing crisis. Too many people arriving and not enough houses being built. Much of this is being blamed on foreigners even though the cause is largely more New Zealanders staying put in NZ and more New Zealanders coming home, particularly from Australia. This has become a real political problem and there are politicians calling for a cut in migrant numbers (there are those that never let a few facts get in the way of a few votes).

This volume will be dialled up next year during the election cycle.

So Prime Minister, what is your plan when in two years the demand for the current number of places doubles or triples and many of those applying are Retail Managers and Chefs rather than Engineers and Builders and Software Developers with ten years of practical experience?

How do you choose between them all when you only have 27,000 places up for grabs?

Senior immigration industry leaders, including me, have been warning that changes have to be made now especially to what is being offered to international students. Export education is worth as much to NZ as an export each year as IT is in terms of exports at close to $3 billion a year. Clearly it is worth preserving and developing but not at the cost of either New Zealand’s reputation or if it starts excluding better quality skilled migrants.

I have no issue with offering students a study to work to residence pathway but we need them to be studying the occupations we are critically short of in Engineering, IT and potentially, Trades.

Equally the question has to be answered which migrant adds more value to New Zealand; the 23 year old with a one year Diploma in Business who gets a job as the Manager of a Retail Outlet or the 35 year old Quantity Surveyor with ten years of industry experience?

When places are rationed the Government has to decide.

If that means we incentivise international students to study what New Zealand employers really need rather than what turns into a quick short term buck for NZ then for me there is no contest. The market will respond by offering students who want residence a course that offers the greatest chance of securing that outcome by offering such courses. Everyone wins.

It is a potential time bomb. When the Government has been warned it will explode within the next two years you’d you think they might sit up and listen to those of us who are right there looking at it and providing the evidence that it is real.

While in my experience of politicians and bureaucrats the bureaucrats often do get their own way there is scant evidence the current crop are.

It does not bode well for the Skilled Migrant Category.



Iain MacLeod

Iain has been working as an Immigration Adviser since 1988 and has been running his own practice since 1990. In 1998 he merged his practice with Myer Lipschitz leading to the creation of Protea Pacific Limited which was rebranded in 2008 to IMMagine New Zealand Limited...

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