New Zealand tightening up on work visas.

Over the past 12 months, New Zealand has seen a net gain of over 126,000 ‘migrants’ (a ‘migrant’ being anyone who has entered and remained in the country on any type of visa for 12 months or longer). The number of people in the country with a right to be here for 12 months or more on any given day sits around 5.2 million.

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Recently, the Minister of Immigration, Erica Stanford, said ‘these numbers are not sustainable’.

?At a time when New Zealand continues to have a housing supply issue and shortages of skills that will be needed to cope with a growing population, those calling for fewer people being allowed in, is growing.

?There is clearly a limit on the number of people we can ‘absorb’ even though it possibly says more about our lack of population planning than anything else.

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In the 12 months ending June 30, 2019, around 242,000 work visas of all types were granted.

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In the 12 months ending June 30, 2023, around 226,000 work visas of all types were approved.

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That suggests a return to ‘pre-Covid’ numbers, not a surge or human tsunami.

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In the seven months from 1 July 2023 to 31 January 2024, the trend has been down, with 121,000 granted in the seven months statistics are available.

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These numbers support the view that since the border reopened, there’s been an element of catch-up, and that ‘surge is seemingly behind us.

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To those who believe all these people are here for good, many, if not most of the people cannot stay long term – most work visa holders can only remain for a maximum period of 5 years at the higher skill levels or 3 years at the lower before they must leave for at least 12 months. I’d wager many won’t return for a myriad of reasons.

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A breakdown of the numbers of people who arrived on some form of work visas in the seven months to the end of January 2024 shows:

Holiday Work Visa holders can generally stay for 12 months (Brits being the exception). It is reasonable to assume most are here for a good time, not a long time, and are not interested in or won’t qualify for residence.

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Seasonal workers are the same – they are here for a season, then they return home.

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It is reasonable to assume relationship-based work visa holders are either here because they are in a relationship with a Kiwi or they are partners of Accredited Employer Work Visa holders.

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If Accredited Employer Work Visa holders don’t qualify for or are not interested in residence, they must leave and stay away for at least 12 months, taking their partners and children with them.

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So, how many of those who have arrived since July 2023 will qualify to stay permanently?

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It’s impossible to say but we can draw some inferences.

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INZ’s own statistics (where they have recorded the skill level) reveal that approximately 50% (23,820) of migrants currently holding Accredited Employer Work Visas are working in what INZ defines as skill level 4 or 5 (1 being the most highly skilled, 5 the least). Around half of them work in construction as labourers. They can stay a maximum of three years before having to leave for at least 12 months.

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That suggests many will start leaving these shores from the middle of 2025.

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The reality is that very few of these people have a pathway to permanent residence. Many of them will have partners currently on their own Work Visas and children on Student or Visitor Visas. When the migrant with the job has to leave, a good number of partners and children will go with them.?

With the unemployment rate ticking up to 4% the heat has clearly come out of the labour market and the heat comes out first at the lower skill levels. If unemployment peaks somewhere around 5% by the end of this year, fewer employers will be needing lower-skilled immigrants to fill vacancies. Even fewer if the government can get some of the 168,000 local registered ‘job seekers’ to actually apply for and fill such roles (good luck with that).

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This suggests to me that we have passed ‘peak’ work visas.

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At the same time, record numbers of New Zealand citizens have been leaving for Australia.

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The net migration rate will remain strongly positive but will fall from mid-2025, and all other things being equal, it will reach some sort of equilibrium.

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Erica Stanford has now clearly signaled that employers are likely to find it much harder to secure Work Visas for those in Level 4 or 5 occupations. Some would argue that with so many unemployed, that’s exactly the way it should be. It is definitely going to become much harder to bring in such workers from overseas, particularly to fill jobs that, frankly, our own unemployed should be filling. The Government has come out swinging on getting tough with some of the unemployed who are capable of work but who aren’t. That, coupled with a greater unwillingness to allow lower-skilled people into the country, will force employers into some very tough choices if the government is not effective at getting the unemployed into local jobs. We are already seeing this tightening up with INZ taking a much stricter line on approving labour market tests.

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And it is only going to get tougher.

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Until next week

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Iain MacLeod

Southern Man.