Should New Zealand rethink the immigration reset?

By Alison Brook*

Two years after closing its borders, New Zealand has slowly begun the process of opening up to skilled migrants and international students. This comes as competition intensifies for skilled migrant labor in an extremely tight post-COVID global job market.

Net migration to New Zealand fell to negative in 2021 for the first time in eight years due to border closures. Our rate of population growth has now slowed to a level not seen in 30 years. There are fears that reopening the borders will exacerbate matters, at least initially, by causing an exodus of young Kiwis and non-New Zealand citizens to Australia and elsewhere.

Reduced immigration and a declining working-age population could have serious implications for the country’s post-COVID reconstruction. In the long term, the effects would be slower economic growth and lower productivity. It will also be more difficult to reduce the high levels of net public debt relative to GDP.

Net migration reverses historical patterns

The latest figures from January 2022 showed migrant arrivals down 59%, giving an annual net migration loss of 7,500.

This loss is compared with a net gain of 91,900 in the year to March 2020. Reversing historical trends, most of the annual net migration loss was among non-New Zealand citizens.

Source: Statistics NZ

Resetting or “rebalancing” immigration to New Zealand

The immigration reset that was announced in mid-2021 but put on hold has now been renamed as “a rebalancing”. Details have yet to be announced, but the objective is to reduce New Zealand’s reliance on low-skilled labor and force firms to “improve working conditions, improve skills training and career paths for workers”. However, while many would agree that the apparent decline in its focus on highly skilled immigrants has not been good for the country, it is also becoming clear that New Zealand businesses need workers now – at the both low-skilled and more-skilled varieties.


Global skills shortage

According to a report by Deloittethe pandemic has only worsened a widespread labor shortage in the United States, United Kingdom, Canada, Australia and parts of the European Union.

Parag Khanna written in the Australian Financial Reviewthat the UK and the US reacted by “reverting to the expansionary migration policies that predated former US President Donald Trump and Brexit”.

US President Joe Biden has reversed the previous administration’s ban on H1B visas (allowing US employers to hire highly skilled foreign workers) and is allowing dependents of those visa holders to get work. They are also taking steps to facilitate the immigration of foreign graduates to the country.

The UK, which lost 4% of its workforce as a direct result of Brexit, recently introduced a new “high potential individual” visa. This program is designed to address their skills shortage and ‘boost’ economic growth by allowing foreigners who have graduated from an internationally recognized university to work in the UK without the need for a prior job offer.

On the other side of Tasmania, the Australian Immigration Office has make a call skilled migrants in 44 priority professions to apply to migrate to the “lucky country”, making it clear that the right candidates will be welcome. Like New Zealand, Australia is experiencing a shortage of temporary workers in many sectors such as construction, engineering, nursing and ICT. Unlike New Zealand, Australia has also welcomed fully vaccinated returns international students from 1 December 2021 when New Zealand will only allow students to return for a ‘fresh start’ in the year 2023. There is a danger that this delay will lead to William Kerr, professor at Harvard calls a “missed moment” – a window of time to catch someone when they were excited about an education or work opportunity abroad.

New Zealand now has to wait until April before the government’s ‘immigration rebalancing’ plans are announced. First indications are that in addition to limiting the number of less skilled migrants, it may also be more difficult for skilled migrants wishing to move to New Zealand to bring their partners and family members with them. The government has so far done no decision on when they will restart the kin category, which is a big plus for many potential and recent migrants.

Some positive signs are emerging, for example, applications for certain working holiday plans opened this month for the first time since the start of the pandemic. However, Hospitality NZ chief executive Julie White wondered if the scheme would do anything to solve the shortage of hospitality workers when visas only last three to six months and workers are limited to work in the same place.

As the world opens up, it is clear that many countries are also targeting the key group of highly skilled migrants. New Zealand can’t assume they’ll be first in line to attract this prized group – in fact, timing-wise, we’re behind much of the rest of the advanced world. As Parag Khanna writes in the Australian Financial Review, we are now in an “all out war for young talent. The only question is which countries realize this first.

*Alison Brook is from the Knowledge Exchange Hub at Massey University campus in Albany, Auckland. She is on the GDPLive team. This article is a GDPLive blog post, and is here with permission. New Zealand’s GDPLive resource can also be accessed here.

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