The regions have flexed their muscles and forced the Government to row back on its immigration policy. But how hard will it row, and who will be the winners and losers?
Sometimes, things don’t go quite as you expected.
That’s been the case for the Government’s immigration policy, which was announced in April.
The aim was to tweak the rules to ease both infrastructure pressures and address criticism the Government was ignoring record high migration, while still keeping those employers that were desperate for workers happy.
But since making its announcement, the Government has found itself under siege from all sides.
The dairy, aged care, and hospitality industries have all been lobbying intensively, while the region’s mayors have also been voicing their displeasure.
The changes, planned to come into effect on 14 August, would see the introduction of salary bands for both skilled migrants applying for residency and people applying for a temporary essential skills visas.
That would mean anyone earning less than $48,859 would have their path to residency blocked and instead be restricted to a three-year visa, followed by a stand-down period of one year outside New Zealand before applying again.
Partners and children of lower-skilled workers would also no longer be able to work and study in New Zealand.
That upset the regions and industries reliant on migrant labour and now the Government has been forced into a handbrake-turn, announcing it will tweak the tweaks following the backlash.
What exactly that means remains to be seen.
Newshub’s Patrick Gower speculated that the Government would use the U-turn to appeal to regional voters.
It’s possible the changes could be targeted to certain regions, lowering the income threshold in areas where wages are lower and demand high.
There could also be a loosening on the year stand-down period, something many industries complained would make it difficult to keep good workers.
On Monday Prime Minister Bill English told breakfast TV there would be some adjustments to the policy, but remained tight-lipped when questioned later that day at his post-Cabinet press conference.
“There’s been a response to that, which we’re listening to, and it’s come from across the board from employers and business…and migrants so we’ll be taking that into account but you wouldn’t be looking at wholesale change, we’d just look at changing some of the parameters,” English said.
English appeared to ease up on the rowing back, however, stressing the changes would not be wholesale and seeming to dismiss targeting measures at the regions, giving Auckland as an example of an area that also required workers.
“In an economy that’s producing 10,000 new jobs a month that demand for skills applies right across the country, Auckland and in the regions, and I think the extent of it in the regions, the strength of that demand in the regions is surprising some people.”
Dairy leading the charge
Without doubt, it would have been pressure from the powerful dairy lobby that was felt the most.
National’s traditional voter base and groups such as Federated Farmers are usually supportive of the Government, but the immigration tweaks did not go down well.
In their tweaks the Government allowed a one-off pathway to residency for about 4000 South Island migrant workers, mostly Filipino dairy workers, who had lived in the area for more than five years.
But this was not enough to satisfy the dairy industry, who are struggling to find New Zealand workers and rely on migrants to keep the farms running.
Farmers want to attract good migrants and keep them, but removing the ability to bring their families and making the pathway to residency more difficult meant that task was going to get a lot harder after August.
There is also another blunt truth: farmers do not want to pay their workers high wages and it’s tough to entice New Zealanders to do the tough, physical work for the salaries on offer.
When questioned about why the market was not left alone to lift wages and attract and upskill workers, English said some industries, such as construction, were doing just that.
Dr Tim Mackle, DairyNZ chief executive, said about 10 percent of on-farm jobs were filled by people from overseas.
Under the new policy, because the majority of migrant staff on dairy farms are classified at ‘skill level 5’ by MBIE, they would have to be paid as much as $35.24 per hour before they were allowed to bring their family and stay longer than three years. (Migrants in occupations with a higher skill level classification get some relief from the salary capping).
“For other sectors that remuneration threshold to escape those stringent visa conditions is only $23.49. The dairy sector’s submissions look for dairy migrant staff to be treated on par with other sectors, such as hospitality,” Mackle said.
Hospitality demands nationwide
Tourism is booming, and that means hospitality is too.
But the industry has been struggling to find enough staff and, alongside dairy, was one of the most vocal in voicing displeasure to the Government.
In its submission on the proposed changes, Hospitality New Zealand warned of a likely “detrimental impact” to businesses and their ability to continue operating.
“We were very, very vocal in what we had to say and I think we made a lot of strongly worded points.”
Hospitality NZ said roughly 20 percent of people employed in the accommodation and food sector were migrants, with many employers still struggling to find enough staff.
As an example, there were 1134 essential skills visas issued for chefs in July to November 2016 alone.
“The industry has a priority to employ New Zealanders, but they are simply not available in the numbers required,” the submission said.
Dylan Firth, Hospitality NZ advocacy and policy manager, told Newsroom the industry had been lobbying hard.
There had been sit-down meetings with immigration officials where Hospitality NZ had laid out what the issues were and where the policy failed.
“We were very, very vocal in what we had to say and I think we made a lot of strongly worded points,” Firth said.
While addressing the region’s concerns would assist businesses in areas of high tourism but low rating bases, it didn’t help those struggling in Auckland.
Firth said the $48,000 threshold basically cut-out jobs such as chef de partie, which remained on the skills shortage list despite its median wage being lower.
Sous chefs were also hard to find, yet the average wage was only slightly above the proposed threshold despite taking up to four years’ training and the equivalent again of work experience to reach that level.
“We talk about the regions a lot but the other side of the coin is the industry specific skill shortages and there needs to be better investigation there, rather than saying ‘we’re just going to make it a wage threshold’.
“We should be allowing these people to get visas to stay here, whether it’s until a pathway to residency or whether it’s until we can get Kiwis into the roles.”
All the rest
Alongside the big hitters, lobbying was coming from multiple other directions.
In its submission, the New Zealand Aged Care Association said it was unnecessary to change the essential skills visa settings as it was not hindering employment opportunities for New Zealanders.
With an aging population there was an increasing shortage of caregivers, with a projected 12,000 to 20,000 extra residents requiring care by 2026.
These extra jobs were unlikely to be met from within New Zealand.
“Many New Zealanders applying for the role do not have high enough literacy levels to be able to carry out the job competently. Another reason many New Zealanders are not accepted into these roles is that they fail drug and alcohol tests,” the Association said.
“For a variety of reasons, New Zealanders are unable to or do not want to work as caregivers in [aged residential care] facilities. This means that the facilities have no choice but to recruit migrant workers.”
Local government has also been actively lobbying, with several regional mayors confirming they had pushed the Government hard on the issue.
Southland District Mayor Gary Tong said the council had been lobbying Immigration New Zealand and the Minister every chance they could since the changes were announced earlier in the year.
The “one size fits all” approach would not work and would have a detrimental impact on the region’s economy, which relied heavily on migrant labour, Tong said.
Filipino workers and their families were especially important and had become a valued part of the community, he said.
“Dare I say it (but) a number of Kiwis just aren’t in the running…I heard an example the other day where someone got their first pay check and put up pictures of all the drugs they’d bought with it.”
Mike Chapman, chief executive of Horticulture New Zealand, said the organisation had refrained from hard lobbying but had made a submission based on permanent workers.
A large portion of the industry’s work was seasonal with migrant workers returning home, so the tweaks would not have as large an effect as on other industries.
But it was important to retain the flexibility to hire fulltime workers when needed and pay them according to their skills, rather than a “line in the sand” income threshold, Chapman said.