Immigration changes could lead to exploitation

The Government has tweaked immigration rules regarding low-skilled workers. Photo: Air New Zealand

New Zealand’s great immigration debate has taken another turn, with the Government announcing changes aimed at culling low-skilled migrants. But the move could have a drastic impact on some migrants living in New Zealand long-term, who may soon find themselves facing the choice of leaving the country between visas or returning home.

It has also raised concerns that migrant exploitation could increase as employees desperately try to stay in the country.

Immigration Minister Michael Woodhouse fittingly made the announcement in the tourist mecca of Queenstown, an area reliant on foreign workers.

The biggest change was the introduction of salary bands for both skilled migrants applying for residency and people applying for a temporary essential skills visa.

The lower band, set at $48,859 (the median New Zealand income) will see those working for less than that amount unable to claim points towards their residency.

Temporary visitors would also need to earn more than the threshold to be classified as highly-skilled.

Those that don’t will still be able to get visas, but they will be for a maximum of three years and will be subject to a stand-down period of one year outside of New Zealand after they expire before they can apply again.

A higher threshold of $73,299 will also be introduced and anyone who earns more than that will automatically qualify as highly skilled.

Woodhouse also announced that lower-skilled workers' partners and children would no longer be able to work and study in New Zealand, unless they themselves met the requirements.

Other changes include tweaks to the residency points system including more points for work experience, holding a Master’s or Doctorate degree, and for people aged 30-39.

A one-off pathway to residency was also announced for about 4,000 South Island migrant workers, mostly Filipino dairy workers, who have lived in the area for more than five years but had no clear path to residency.

Woodhouse told the Queenstown Chamber of Commerce there was “a lot more to the immigration story than what you see or hear in the media”.

“A material number of visa holders have been here for many years, despite having little or no chance of gaining residence," Woodhouse said.

“It is important that we continue to allow access to overseas labour where necessary, but to ensure that those workers are clear about their prospects.”

The changes, particularly the remuneration bands and restricting the families of lower-skilled migrants to visitor visas, are an attempt to cut back on people moving to New Zealand with the intention of residency without upskilling themselves first.

A bonus could be employers instead filling those low-skill jobs by training local workers or investing in improved productivity.

But will it work and what will the real impacts be?

Why have changes been announced?

Essentially, because net migration is very high.

For the year ended in February, there was a gain of 71,300 people. That's up from a gain of only 4700 in the year ended June 2008.

High migration means people want to move to a country where times are good, but the key question is whether New Zealand is recruiting the right people to the right places.

In its paper outlining the proposed changes to temporary visas, the Ministry of Business, Innovation and Employment notes New Zealand has one of the highest per capital inflows of migrants in the OECD.

In the past few years the number of people granted work visas has increased, with the essential skills visa rising by 11 percent between 2015/15 and 2015/16.

“There is evidence that the numbers of temporary migrants are increasing in industries with lower-skilled jobs, lower wages and lower productivity,” the paper says.

“In light of this trend, it is important to make adjustments now to maintain the Government’s long-term labour market objectives."

While net migration is high, work visas are one of the only areas that can easily be cut.

More New Zealanders are returning home than normal, the international student market is a big earner for the country, and any changes to working holiday visa programmes would lead to a loss of similar privileges for Kiwis.

What will happen to migrants when their current visas expire?

Unless they are one of the lucky group living in the South Island, lower-skilled migrants already in New Zealand will have until their current visa expires before having to apply for the new three-year maximum version.

Their families will also be able to remain in the country for up to three years, but will then be faced with having to apply for a temporary visitor visa to remain.

Once the old visas expire migrants and/or their families will face a choice of either upskilling themselves to get over the remuneration threshold, or leaving the country.

Many migrants apply for residency as soon as they are eligible, but others working in certain industries never qualify and instead repeatedly roll-over on temporary visas.

Immigration New Zealand says it’s impossible to accurately state how many people will be affected, but in 2015/16 there were 1,700 lower-skilled workers that had been on an essential skills visa for three years or more.

This number will likely increase under the proposed remuneration bands as more people are classified as lower skilled.

Could small businesses suffer?

While many migrant dairy workers in the South Island will be saved by the one-off pathway to residency clause, other industries may not fare so well.

Small businesses such as service stations, fast-food outlets, and dairies are often staffed by low-paid migrant workers.

Immigration NZ says businesses will still be able to recruit temporary migrant labour, if they can demonstrate there are no New Zealanders available.

There will also still be plenty of international students available, who are allowed work up to 20 hours a week while studying.

Many then move to graduate visas and onto residency from there, gaining bonus points for both their New Zealand qualifications and work experience.

Immigration lawyer Alastair McClymont believes some industries that rely heavily on migrant workers, such as aged care, dairy farms in the North Island, and ethnic restaurants could feel the pinch.

“Indian restaurants, Chinese, Thai, especially in Auckland, they’ll struggle to keep chefs. I just can’t see how they’re going to manage,” McClymont said.

BusinessNZ was positive about the changes, however, believing they would help encourage more higher-skilled migrants while reducing the potential for New Zealand workers’ pay being undercut.

Their view is that companies who rely on low-skilled migrant workers do so because they can pay them less, which makes the positions less attractive to local workers.

Could migrants be exploited?

McClymont certainly thinks so.

One side-effect of the changes could be migrant workers essentially topping up their own salary to reach the remuneration threshold, giving money to the employer who would bank it, take out taxes then pay it back to the worker.

“In my view that’s simply going to open it up to exploitation where you’re going to have a lot of employers who are going to demand that desperate migrant employees contribute towards their salaries - which is something that has already been happening as a general wider fraud situation, but I think this is really going to widen it up,” he said.

“There’s going to be a lot of employers of liquor stores, dairies, and superettes who are rubbing their hands with glee at the moment.”

Another possibility, McClymont warns, would be an increase in migrants working huge hours for under the minimum wage.

This could mean an employer telling a worker they will pay them $48,000 to get them over the threshold, but demanding an 80-hour work week.

McClymont also believes introducing a higher salary band, which essentially guaranteed a path to residency, could lead to richer migrants paying the money directly to an employer for use as their salary.

What the politicians say

Woodhouse told Newsroom that exploitation was an increased risk under the changes, but was confident the Government would be able to stamp out such practices.

“We’re aware of some anecdotes that that’s occurring now. I think incidents of it are low. We have acknowledged that the risk of that behaviour goes up with these changes and we’ll be working harder to check after visas are granted that the conditions are met," Woodhouse said.

It was a delicate balance between managing and controlling migration, and filling the labour needs of a growing economy, he said, adding that some long-term residents would have to leave under the changes, but they were on temporary visas.

"I think we need to send a very clear signal to that group that the conditions under which they came were to fill a temporary gap in our labour market, and that’s the key word – it’s temporary," he said.

“The simple arithmetic is it doesn’t matter what qualifications or job you have, if you don’t earn $47,000 you won’t have a pathway to skilled residency.”

There has been some criticism of the ease that students could progress to residency, but Woodhouse said the new policy would mean that unless they earned over the remuneration threshold, they were out of luck.

This could lead to some students planning to study at sub-degree institutions who decide against doing so, or studying at a higher level, he said.

“If you want to come here and get a good, world class education absolutely you can still do that but the question is to what degree will a narrower path to residence or no path to residence, depending on what you’re studying, influence the decisions some international students are making. I can’t quantify that, but I suspect it will have some impact."

NZ First leader Winston Peters was quick off the mark, calling the announcement a dog whistle.

“They are fiddling with the issue while the plain fact is foreign workers will still be able to come here when employers claim they can’t get Kiwis,” Peters said.

Peters again reiterated his aim to reduce net migration to about 10,000 and bond skilled workers to the regions for five years, without saying how New Zealand First would do that.

Labour have yet to release their immigration policy, but released a statement claiming it would reduce numbers and stop low-skilled people getting residency.

Labour Leader Andrew Little said he was confused by the Government’s announcement, claiming it did not stop the large number of people arriving to study low-level qualifications and using the route as a stepping stone to residency.

“New Zealand does need skilled migrants to help our economy grow and contribute to fixing the housing crisis," Little said.

“National’s move to make it harder to bring in people to fill jobs in areas of absolute skill shortages and in future growth areas is bizarre," he said.