Hon Paul Swain
27 October 2004

Changes to the Skilled Migrant Category

Speech by Immigration Minister Paul Swain to New Zealand Immigration Institute and New Zealand Association for Migration and Investment.
Auckland

27 October 2004 Speech notes

Thank you for the opportunity to come here and give you some detail on the enhancements we are making to the Skilled Migrant Category.

Today I'll start off by talking a little about the economy in general and the labour market in particular before going over in detail the enhancements to the Skilled Migrant Category to make it more flexible and responsive to labour market needs.

Economic growth under Labour has been high – an average 3.5 per cent a year since 2000 and 4.4 per cent to the year to June. New Zealand is booming.

The labour market has just about surpassed all expectations during the last 3 years. We now have one of the highest job growth rates and one of the lowest unemployment rates in the OECD. More New Zealanders than ever before – over two million – are now in work and the unemployment rate at 4 per cent is the lowest since the mid-1980s. Even more startling is the drop in Maori unemployment from 18.25 per cent in 1999 to 8.8 per cent.

But strong economic and employment growth has raised an issue that we have not experienced for decades: too many jobs and not enough people. Labour market policy is now a critical government focus. If the economic growth is to be sustainable, we mustn't allow labour and skills issues to strangle the growth we are enjoying.

A labour shortage is now the main constraint on output for 34 per cent of firms and a net 29 per cent of firms reported in the Household Labour Force Survey an increased difficulty finding unskilled labour in the June 2004 quarter – an all-time high.

As Labour and Immigration Minister, my key focus is to ensure that our labour market continues to support our economic growth.

Upskilling New Zealanders to allow them to fill the labour and skills gaps will always be the top priority.

The government is putting a huge effort into this area including the Tertiary Education Strategy, Industry Training Organisations (ITOs) and modern apprenticeships. For example, we have more than 125,000 people in industry-based training, with a target of 250,000 by 2007. As for apprenticeships you will remember that it was a dirty word in the 1990s. The government has recognised that apprenticeships are critical to our economy and has established the modern apprenticeship scheme. We now have more than 6,800 modern apprenticeships and are well on the way to the target of 8,000 by 2006.

Our immigration policy also provides us with some of the workers and skills that the economy needs. Skilled migrants have always had a positive impact on the economy.

Let me make this clear, immigration will not be at the cost of jobs for New Zealanders and cannot be used as a cheap training policy. However at times like this, when there are skills gaps, we are putting in a lot of effort overseas to target people we need here.

Immigration also has a role to play where gaps are short-term (for example, temporary work visas) and longer-term, where our new skilled migrant policy will take effect. This new policy is already lifting the quality of people wanting to come to New Zealand to live and work, not the quantity.

The Skilled Migrant Category (SMC), which was introduced in December, targets skilled migrants who can meet identified labour market needs and growth opportunities in New Zealand. The SMC shifts New Zealand’s skilled immigration policy from the passive acceptance of residence applications to one that promotes the active recruitment of the skilled migrants that New Zealand needs.

Under the SMC, prospective migrants submit an Expression of Interest (EOI) which includes information on points factors such as offers of skilled employment, relevant work experience, qualifications and age. Bonus points are given for factors such as job offers in areas of current shortage and/or from areas outside of Auckland.

EOIs submitted into a pool are ranked from highest to lowest points claimed. Selections of the highest ranked EOIs are made approximately every two weeks. Potential migrants are selected from the pool, strictly according to their points ranking which must be above a pre-determined ‘selection point’. The selection point stands at 100 and I have already said we will be not be dropping it below this. Potential applicants can self-assess how many points they are likely to be able to obtain through an on-line facility and information about the selection point for previous draws is also available through the Immigration website.

Applicants must also meet certain prerequisites including health, character and English language ability. Highly ranked EOIs are invited to apply for residence in sufficient numbers to meet the annual New Zealand Immigration Programme.

The number of EOI's selected since February 2004 total 11,387 and represent a total of 28,337 people.

In this financial year the Department has accepted 1638 applications for residence under the skilled migrant category and has approved 1216 applications consisting of a total of 3055 people.

The SMC is starting to deliver results but the government recognises that more needs to be done. That is why we are announcing enhancements to the SMC, which will make immigration more responsive to our changing labour market. These enhancements, which come into effect in December, include:
Increasing the level of points allocated to qualifications, work experience and skilled employment, in the areas of absolute skill shortages, which are set out in the Priority Occupation List. The points for each of these will increase by 5 points. This Priority occupation list is compiled in consultation with a wide range of industry groups on a 6 monthly basis. Occupations on the list at present include automotive mechanics, Radiologists, Electricians, and speech therapists. Importantly, the December review of the Priority Occupation list and the Occupational Shortages List will provide an opportunity for employers to put forward a case for inclusion on these lists and this will have added weight where supported by the other industry players.
Clarifying the definition of skilled employment to provide greater recognition of the expertise individuals have obtained through relevant qualifications or previous skilled work experience. Clarification also recognises a wider range of skills and occupations and expands the current list to include skills such as electroplaters, drainlayers and police and corrections officers)
Clarifying the ability to grant permanent residence upfront where an applicant has high potential to contribute and settle (rather than the present “exceptional circumstances”). Operational policy will be amended to make it clearer that skilled applicants without a job offer can, if they are assessed as being highly employable, be granted permanent residence without a job offer. This will include people with qualifications and work experience in areas of absolute skill shortage or future growth. Examples include nurses, teachers, ICT and the creative industries.
Recognising a broader range of qualifications in the trade area where they meet industry needs. The Department of Labour has been working with various Industry Training Organisations to identify those level three qualifications that meet New Zealand industry standards. These are being compiled based on an individual’s ability to work autonomously in that industry while holding a level three qualification and include such trades as roofers, power boat technicians and electrical service technicians. The list of acceptable trades is also being expanded to recognise a broader range of level four qualifications where they also meet industry requirements and the individual is able to work autonomously. These include plastics engineers, small goods (meat) manufacturing and petrochemical industry workers.
Amending the policy to clarify that applicants can be part way through a series of contracts (rather than having 12 months of upcoming work). This change is expected to encourage more self-employed people to apply under the SMC and would therefore facilitate the entry of people with a wide range of skills and innovative experience.
Providing points for having close family support in New Zealand. This enhances prospects for employability and settlement. Close family is adult siblings and adult children (17 years and over) and parents of either the principal applicant or their partner.
In addition to these policy changes, I am also announcing today operational initiatives that will support our efforts to attract skilled migrants and improve the delivery of this policy.

The first is in the area of marketing. In addition to the overseas marketing campaigns aimed at the UK and the US, we will shortly target those with the skills New Zealand needs who are already in New Zealand on work permits or have recently graduated after studying in New Zealand.

This will involve writing to those in New Zealand and for those interested in residence the Department will then run seminars or provide additional information that will help them put in an expression of interest.

Further training will also be provided to all staff onshore and offshore who are involved in the Skilled Migrant Category. This will build on the skilled migrant training already received. And will focus specifically on the intent of policy and the approach needed to ensure the changes announced today are successfully implemented.

Overall, the changes will enable our immigration policy to work alongside other initiatives - to be more responsive to New Zealand’s labour market needs.

A more skilled workforce will also contribute to New Zealand’s skill base, improve productivity and promote continued economic growth. New Zealand’s future depends on a high-skilled, high-waged economy. It is important that New Zealand gets back into the top half of the OECD. The enhancements I have announced today will help achieve that objective.

Thank you.

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