Skilled Migrant Pass Mark Analysis (Continued…)
Posted by Iain on Aug. 31, 2011, 6 a.m. in Immigration
In the latest pool draw on 24 August the Government selected the fewest Expressions of Interest in the past 12 months – a record low of only 501.
I sometimes feel like a very frustrated Sherlock Holmes, and in the absence of any public statements or explanations as to what they are doing, it is left to industry experts, such as myself, to analyse and speculate. I do however believe that the time for speculation is now well over and it is abundantly clear what the Government is doing. I wasn’t going to write about this again, until I heard the Minister of Immigration on the radio a few days ago talking about something unrelated but which makes quite clear the Government’s attitude towards migrant numbers.
Those of you that read my blog (apparently there are still a few!) will understand that historically to meet the annual quota of 27,000 skilled migrants each year, approximately 750 EOIs need to be selected every fortnight from the Skilled Migrant pool. This works out to be around 1575 people a fortnight (each EOI comprising around 2.1 people). A quick calculation reveals that if they were all approved that would mean over the 25 pool draws that take place each year, 38,750 people should get their Residence Visas. Given however, at least one in three fail to be granted permanent residence for various reasons then the Government ends up approving (in theory) around 27,000 plus or minus 10%.
Point being they need to select far more people than there are places available.
Around eighteen months ago the number of EOIs being selected fell to around 550 a fortnight (1150 people), which resulted in significantly higher pass marks from the beginning of 2010 through to the current time.
A few weeks ago the Deputy Chief Executive of the Immigration Department effectively told me in writing that my public musings on whether the Government had cut numbers was effectively correct; they had, they just hadn’t told anyone. And clearly had no intention to.
The Deputy Chief Executive also confirmed that as the economy improves he expects to start selecting more skilled migrants from of the pool.
Well the economy is improving; in fact it is improving fairly rapidly. New Zealand’s largest online jobs portal,www.seek.co.nz, has confirmed that job vacancies listed on their website are up 15% over a year earlier and have increased a highly significant 4.2% in the last month alone. Other job portals, such as Trademe.co.nz, report similar increases.
This is being borne out of what we are seeing in the market place with clients arriving from overseas who need to find jobs in order to gain points to obtain their Permanent Residence. Most of our IT and Engineering clients are finding work within three to five weeks and we have even had two Personal Assistants who have taken four weeks to find jobs from the time they stepped off the plane. Nothing provides stronger evidence of robust employment growth than PA’s and Secretaries finding work when they don’t have work visas first!! Twelve to fifteen months ago my advice to people who worked in this space was not to bother coming to New Zealand, because to find a job would be extremely difficult. What a difference a year can make.
Over 80% of those being selected from the pool have job offers and as I have noted previously, the actual numbers (forgetting percentages) of migrants finding work and then filing EOIs, has exploded in the last two months. In terms of principal applicants it is around 300 per week. That’s 300 migrant families that arrive, find at least one skilled job and file EOIs. Annualise that and you get around 15,000.
That makes it even harder to understand then why the number of Expressions of Interest being selected are down nearly 35% on what we know is required to meet the (now) three year rolling target of 85,000 skilled migrants or roughly 27,000 a year.
I believe however that the explanation lies in a comment the Minister made at a meeting last week with business people in Queenstown. That meeting had clearly been called in response to frustrations being expressed by employers in that city who get special treatment on Work Visas because it is a region which appears hard to attract locals to work in (goodness only knows why, probably the cost of accommodation). The usual labour market testing that applies to Work Visa applicants everywhere else in New Zealand, has not applied for some years in Queenstown. That city is deemed to be a special immigration zone and is somewhat unique. As a consequence of the Immigration Department effectively dishing out Work Visas to all and sundry in that city, processing times have historically taken from 24 to 48 hours. The disgruntled employers were now complaining they now take at least four weeks (welcome to my world!).
Employers have been asking why it should take so long when restaurants are having to close their doors through lack of staff. The Minister commented that the priority of the Government was putting New Zealanders into work.
And there in lies the truth of all of this.
It is perhaps a little understood fact that the foundation of all Work Visa policy is to 'protect employment opportunities for New Zealanders' and this is the reason why Work Visas can (if you are not using someone like us who knows what they are doing), be very hard to obtain even if you have secured a job.
It is certainly my view that this Government is determined, as it should be, to reduce the numbers of New Zealanders unemployed in the shortest possible time. Unfortunately, migrants to some extent are bearing the brunt of that when there is scant evidence that migrants “take jobs” from locals in the first place. Demonstrably migrants do not compete with locals simply because if locals are available no employer in their right mind would employ them. Who would want to deal with the Immigration Department if they did not have to? There is plenty of evidence to demonstrate that employers will always employ a New Zealander first, by preference, and only migrants if they cannot fill the vacancy.
It is therefore extremely difficult to understand why cutting skilled migrant numbers is going to positively impact on the employment of New Zealanders and lower the unemployment rate.
The New Zealand economy certainly has a problem with youth unemployment, i.e. those under the age of 25. Depending on which statistics you believe, the unemployment rate amongst this age group is up to five times that of the general population. For people aged over 25, however (the ones migrants ‘compete’ with, if you might think they do) the unemployment rate is 4.5% and falling fairly quickly. It is accepted wisdom that in New Zealand unemployment rates of 5% or less, rapidly leads to skill shortages and it is quite clear we are seeing that, at least in Auckland if not elsewhere.
The Government is without a doubt signalling to those people who enjoy the unemployment benefit that their days might be a little numbered. The Government is quite determined to get people off their backsides and into work but unfortunately they are guilty of attempting to force New Zealand employers to perhaps employ people who are unprepared, unmotivated, unskilled and very often invisible, i.e. they don’t apply for the jobs in the first place.
Last week we managed to secure a work visa for a Nanny – minimum wage and not a single New Zealander applied for the job. Not one.
The risk for New Zealand then, is that if the migrant markets conclude that an offer of skilled employment offers the only certainty to secure Permanent Residency, many will look to countries where they don’t need to take that (perceived) risk.
The disappointing thing for me is that this is a Government that fully understands that almost every report ever done, anywhere on the planet regarding migrants taking jobs, accepts that to be an absolute fallacy.
Ultimately, I think the Government is simply playing politics. While I am sure they have a heartfelt desire to see more New Zealanders in work, a scaling back of the welfare state (something I am a staunch supporter of) and the fact that we have an election in three months time, means the acid is on them to increase employment. No argument there but in cutting migrant numbers, they are without doubt, barking up the wrong tree.
At a time when net migration to New Zealand has been only 2,900 people in the last 12 months and skill shortages here are going to become acute within 12 months this makes little to no economic sense. But since when has good economics made easy bedfellows with good politics?
The number of people being selected from the pool needs to increase and increase in the not too distant future.
Seminars – South Africa – I am back in SA on 6 September and this might well be my last trip to the Republic for the year. If you have friends or family that might like to attend one of my (apparently witty and informative) evenings tell them to register on our website. They will find it very valuable in terms of making some decisions about whether to apply for PR of NZ or not.
Until next week,
Southern Man - Iain MacLeod
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