The number of migrants entering New Zealand is set to decline as economic activity slows and the Government tightens visa rules for low income workers.
Net migration hit a record 140,000 in the year ended November 2023, up dramatically from a long-term average of less than 30,000 annually.
A sharp uptick in departures has brought down the net number, likely as the wave of migrants who arrived after the pandemic begin to leave, but arrivals remain strong.
During the pandemic, there were few arrivals or departures and net migration turned negative. But the economy was heating up and employers were calling out for workers.
When borders fully reopened in 2022, migrant arrivals climbed from about 3,000 each month to a peak of 24,700 in May 2023. As of January, arrivals had plateaued at just above 20,000
Unsustainable
Last Saturday, Minister of Immigration Erica Stanford announced she would tighten some work visa rules in response to this “unsustainable net migration”.
She has put forward a suite of changes to the Accredited Employer Worker Visa including introducing a language requirement and making employers advertise with Work and Income.
These changes were the start of a “more comprehensive work programme” which would create a smarter and more sustainable immigration system.
She has also signaled she will look to create a kind of long-term population plan that matches future growth with sufficient infrastructure investment.
On Wednesday, the Minister said she wasn’t able to estimate what impact the tighter work visa rules would have on the number of migrants entering New Zealand.
The primary goal of the policy was to shift the makeup of migrants to higher skill levels but it would have an impact on the total number as well.
“The number of low skilled migrants that have flooded into the country in the last year and a half has been significant, and I expect that that number will drop,” she said.
But it was too hard for her to even put a ballpark estimate on the magnitude of that drop.
Stanford said she asked the Ministry of Business, Innovation and Employment for some modeling but the advice she received back was that it was “very, very difficult to determine”.
Policy choices were designed only to “knock off the peaks and troughs” as it was hard to control exact flows.
Migration flows tend to follow economic activity. The record net numbers coincided with both the border reopening and also the overheated domestic economy.
Stanford said migration numbers were tracking down with the wider slowdown and the rule changes would also help to knock off the peak.
Visa changes
The broad changes to the Accredited Employer Worker Visa are targeted at either lifting the skill level of migrants, or closing pathways that were opened for specific shortages.
For example, a long list of construction related roles are not being added to a green list as demand in that sector has slackened.
Workers in jobs such as earthmoving laborers, road traffic controllers, welders, fitter and turners, and linemarkers will no longer be put on a fast-track to residency.
Applications in low skill categories would need a certain level of English language and prospective employers would have to first look to Work and Income for a candidate.
The maximum stay would drop from five years to three and general skill level thresholds would be lifted for most roles.
Stanford said having an English language requirement would help migrants be able to understand their rights and more easily raise concerns about abusive employers.
A work to residency pathway for bus and truck drivers has been closed to new applicants as the shortage has now been filled, according to the Minister.
Transporting New Zealand, the lobby group for road freight transport companies, criticized this decision, saying the industry was still in a “fierce international competition for migrant drivers”.
"Keeping the pathway open for at least 12 months rather than closing it after only seven months of operation would have allowed the sector a more adequate time period to address long-term skills shortages," interim chief executive Dom Kalasih said.
But Kirk Hope, chief executive of business lobby group BusinessNZ, endorsed the changes, saying it was sensible to ensure immigration settings were aligned with current economic conditions.
"The immigration system needs to recognise international skills are needed at all levels and be responsive to labour market conditions. Companies are reporting more local people are applying to take up the jobs available,” he said.
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