Posts with tag: government
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Letters from the Southern Man
Migrating is more than just filling in forms and submitting paperwork, its a complex process that will test even the most resilient of people.
Understanding New Zealand is paramount to your immigration survival and to give you a realistic view of the country, its people and how we see the world, read our weekly Southern Man blogs. Often humorous, sometimes challenging, but always food for thought.
New Zealand has once again been ranked in the top three most prosperous countries in the world for 2014.
Topping the annual list this year is Norway followed by Switzerland in second place.
For what it is worth Australia came in seventh so a tidy little double for the Immagine Immigration countries of destination……
The least prosperous country this year was the Central African Republic. The United States came in 10th.
The 2014 Legatum Prosperity Index ranks 140 countries on their health and well being and so assesses factors including education, safety and security, health, economy, entrepreneurship, governance, personal freedom and social capital.
New Zealand ranked first for personal freedom, second for social capital and governance, seventh for education, tenth for safety and security, 15th for economy, 18th for entrepreneurship and 20th for health.
Not a bad effort when you are ranking 140 countries.
Translating this into the sort of lives we lead here I can explain it as reflecting our being a capitalist, socialist democracy which in other words means you have to play your part in paying your way pay but if you cannot, as my neighbour we will not leave you behind.
That philosophy runs very deep in the DNA of virtually every New Zealander and probably explains why Australia ranks in the top ten as well given their similar (if not louder) worldview and the Scandinavian countries also rank so high.
In new Zealand this mix of free market capitalism with a dose of redistribution of wealth all happens within bounds that the vast majority of New Zealanders are comfortable with.
There is a constant tension (relaxed and good natured if it needs to be said) between the philosophies of those that want untrammelled free markets and no regulation and those that want more centralised planning and Government involvement in our lives.
When it comes to heath, education and pensions for example we are all firmly in the camp of socialising risk i.e. spreading across all taxpayers, the cost of caring and educating all.
It does solve all problems however.
If you look at youth unemployment statistics in New Zealand they can be very high and 18-24 years olds runs as high as 20% in some parts of New Zealand.
Yet only this week the Tourism sector was bemoaning the fact that they cannot get enough young people into changing beds in hotels, bar work, café waiting and the like – there is a labour shortage. They were calling on the government to allow greater numbers of under 31 year olds here on open holiday working visas (meaning they can do whatever they wish without their employers having to prove they cannot find a local to fill the vacancy). Government responded that there are currently 62,000 young people from all over the world filling these sorts of jobs when the annual target was for only 50,000 to be here.
What this demonstrates is that the alternatives to what is often lower paid work in New Zealand are simply too attractive to many young New Zealanders.
It is hard to fathom how in a country which has strong economic growth, 1600 people a week coming off welfare, over 100,000 jobs created in the past 3 years, strong growth in tourist numbers that there is not a bit more ‘stick’ with regards unemployed young people. At this point in time for example the state agencies that are tasked with assisting young people into work do not say – well you can either go to, say Queenstown or Auckland and find work or you can lose your unemployment payments. They are generally allowed to stay living where they are with no incentive built in to getting off their chuffs and working. We do have cars, trains, buses and planes here I often reflect…
In what was an extraordinary first when the NZ government recently offered up to 1000 long term unemployed a one off payment of NZ$3000 (about US$2500) to go to Christchurch where unemployment hovers around 3% and find a job they filled the places. But seriously? We have to pay people who are being paid to do nothing to get off their backsides move to a city to find work?
It is just as well we are a prosperous first world economy and a nation of very tolerant tax payers. If we weren’t things here could get quite ugly quite quickly for a lot of people, particularly the young, who may well have squandered one of the worlds best education systems but who have a mentality of the world owing them a living.
Overall we get the balance pretty much right as is reflected in this survey and once again reinforces the view of many migrants and locals alike that this really is a very special little country. Possibly the best kept secret in the world.
Speaking of which the final seminars for the year in South Africa are underway and I will be travelling to Hong Kong and Singapore in about ten days. If you know anyone that might wish to attend they can click here for details.
Until next week
Iain MacLeod - Southern Man
It is high time New Zealand had a population policy.
As touched on last week immigration policy seems to reflect political cycles – short term thinking and no long term plan. Say what you like about China and Singapore but at least they have long term plans even if you don’t agree with them. They do have population policies and yes Singapore’s is daft given the size of the place but all credit to them for trying to address low population growth and a rapidly ageing population.
In New Zealand our thinking on population is limited to immigration policy and filling immediate skills gaps in the labour market which is a partial solution but the bigger story is surely what sort of future do we want? What sort of country do we want to live in? How many people do we want to share this beautiful land with?
Why do we not have a population policy?
Let’s not kid ourselves – even in tolerant, welcoming New Zealand there still lies in many hearts a fear of being ‘overun’ by this bunch or that if we increase migration levels.
The stark reality is New Zealanders are getting older and relatively quickly. Like all developed (and many developing) nations our low birth rate has created this rapidly ageing population. The overall population is growing through migration and natural increase. Net migration this year is running at a ten year high yet still only represents an overall gain of 0.7% of the population. Around 38,000 more people have moved here in the past 12 months than left. An important sidebar is this has NOT been caused by more foreigners being allowed in through the permanent residence programme but through fewer New Zealanders leaving, more New Zealanders returning from Australia and elsewhere and more Australians (they can just walk in….) moving to New Zealand. This can just as easily turn into a net migration loss as this number is dictated not by population policy but by the fickle winds of local, Australian (common labour market border) and global economic conditions.
One thing is certain - New Zealand will look quite different in 50 years than it does today. What we have is no national plan to control how.
It is quite incredible to me that we have no population policy in New Zealand. We seem to have a policy on everything else.
After my recent trip to France and Spain and my regular trips to South East Asia I realise that one thing we have no shortage of in New Zealand is space. And no shortage of highly skilled, financially secure and motivated migrants who would like to share it with us.
I suggest a New Zealand where we double the population to perhaps 10 million people over a twenty year period.
Imagine the challenge. Imagine the planning – infrastructure, schools, hospitals, houses, public transport, roads and so on. Imagine the immigration policy we would have to have – the skills mix would be radically different to what we have now and would change over time. Imagine the communities and economic opportunities we would create for locals and new arrivals.
Where would the people come from? I fear this would spark the biggest debate.
I touched on the rapidly changing face of Auckland last week and there is little doubt that Auckland leads on social and racial tolerance and integration of migrants. Not that the other major cities are too far behind but they have some way to go to become as international, outward looking and welcoming as my home town if my clients are to be believed. In two generations Auckland has gone from being mono-cultural with few migrants to a city where today over 600,000 of our 1.5 million were not born in New Zealand and we are far culturally and economically richer for it in my view.
Locals are not being displaced from jobs despite what some might try and argue. I am not eating dog with chopsticks. I am not learning to speak Russian. I do however work in a city where when I step outside my office I hear a multitude of languages around me and can eat at different restaurant every night serving food from virtually every corner of the planet. My children have grown up with a circle of friends whose parents come from many different countries but who all think Richie McCaw is a living God, there is no sport but rugby, cricket is king in summer, who speak English like they do and who are connected to the world through social media.
New Zealand is many things but one thing it is not is crowded. We have a country that is the size of Great Britain (which has 63 million people), Italy (60 million) and Japan (128 million – gulp…) yet we have only 4.5 million people.
That surely has its advantages that I would be the first to want to protect.
Our air is clear, the streets are clean, our beaches, once out of the city, tend to be lonely private places where you and the family have plenty of room to spread out and kick a football, where the fish are plentiful, the sea free of rubbish and pollution and within our cities we have, and could retain or even grow, plenty of open spaces - city parks, playgrounds for our children, skate parks and the like. Within thirty minutes drive of most cities we are blessed with islands, regional and national parks with pristine beaches, mountain ranges, rivers, forests and virtual deserts and of course farmlands. In the middle of Paris I saw few children outside playing and those I did I wondered how often their feet ever actually touched grass. It is the same in places like Singapore, Jakarta, London and Hong Kong and mega city after mega city. I pity them.
We could so easily fit in, if we thought it through, another 500,000 people a year for twenty years if we planned for it and built the infrastructure.
Our cities need not grow out and take up valuable farmland.
I loved Paris for its seven stories policy on so much of their central city buildings. How inspired of the town planners of three centuries ago to lay out a city where no building could be higher than seven stories and contain a mix of residential and commercial activities (pity they couldn’t inculcate a feeling of responsibility to clean up after one’s dog has poohed on the footpath). It means communities support local business and local businesses serve these residential communities. One feels part of a community, not trapped or isolated in dark urban canyons as in so many large cities. It is embracing and welcoming.
Likewise Barcelona (what a city) with its five stories building policy, its wide boulevards, tree lined streets, mad but cheap taxis and excellent public transport. And their population is virtually the same as Auckland’s – which sprawls endlessly and is generally poorly served by public transport (lack of population density to make it worthwhile). Spain might be broke but you cannot knock the vision of their town planners of two hundred years ago. If I could offer the Spaniards a wee bit of advice - get up a bit earlier and work a bit harder (the Spanish seem to have an even more laid back attitude to life than New Zealanders…) in order to keep paying for it all.
In Auckland we are still bickering about whether to keep our (already huge in area) city growing out or up.
I go home more convinced than ever that medium density along the height lines of Paris and Barcelona are the perfect urban design. Not too tall but tall enough to increase density without really compromising communities. Auckland’s plan to grow these medium density apartment blocks along main transport routes is a no brainer. It will enhance the city, not detract from it. It is interesting this is the approach being taken by those rebuilding downtown Christchurch.
All we need now is more people.
Ten thousand a week is a big number but if you could encourage these to be spread across Auckland, Hamilton, Tauranga, Wellington, Christchurch and Dunedin you’d be talking about, in rough terms 2000 people a week in each city and that suggests, if we selected migrants as we do now who tend to only have 2 children, about 500 families a week into each of these cities (and that is assuming they’d all want to live in one of those cities which many of course wouldn’t). I am not quite sure how you’d be able to force people to settle in particular cities – housing and tax incentives to businesses and home owners to settle outside of Auckland?
Break down the numbers and suddenly it is far easier to imagine doing.
I’d suggest that we decide how many people we want and work back from there. It would be the greatest undertaking in the history of New Zealand. It would be a chance to create within our major cities what the great European cities created two hundred years ago. A country that would eliminate once and for all the tyranny of being so far away from so many major export markets. A bigger and stronger domestic market would be created in a generation. Think of the opportunities without needing to compromise the lifestyle.
I don’t believe we would need significantly more land to be taken up to do it – the cities just need to be built a bit higher. Not high rise. Not ghettos in the sky. Modern. Mixed use. Medium density.
Already my suburban Mount Eden Street is being flagged for this sort of building density in the Unitary Plan. What I understand but disappoints me is how so many in the neighbourhood are against it. It will destroy the social fabric they cry (even though they probably don’t know more than two of their neighbours). You can’t tear down those beautiful old Victorian villas (they don’t seem to mind cross leasing their back yards and plonking some architecturally bereft modern three bedroom house on the back lawn – so much for quarter acre paradise and preserving a way of life…). I cannot wait. I’ll be the first to want to develop our property into a four storied apartment complex.
I confess it has taken me many years to reach this conclusion about what sort of New Zealand I want and strangely it is not because of the day job. For those who think you cannot have medium density housing but feel like you are still part of a community go and visit Barcelona. Cafes, bars, dry cleaning businesses, florists, schools and kindergartens all sit comfortably alongside one another. If anything it creates community.
We can preserve our parks and playgrounds – these can all be planned for. In fact we can learn from the mistakes of the European cities I have seen and expand on our open, public spaces.
We are not short of land. We are perhaps short on energy, enthusiasm, vision and political will. We are short of a population plan. Nothing can happen in a vacuum and we need politicians who recognise the importance of a long term plan in a country where the population is greying but we have so much to offer so many and the chance to build a truly international and integrated society.
Until next week
Iain MacLeod - Southern Man
New Zealand owes much of its history to migrants; in fact the country was settled, developed and created for the most part by people from foreign shores.
It started with Polynesian settlers sometime in the year 1280 and then later when Captain Cook claimed New Zealand in 1879. 40 years later missionaries and traders seeking out new lands formed the backbone of New Zealand’s migrant population. By 1830 there was a pool of approximately 800 non-Maori people residing in New Zealand of which roughly 25% were runaway convicts who had managed to secure passage from Europe (slightly less than the number of convicts in Australia).
Structured and controlled migration only really began after 1840 following the formalising of sovereignty and for the most part relied on migrants being shipped in from Europe. There were a handful of Asian and Indian migrants that made it over, however, until the 1960’s when New Zealand decided to officially diversify its migrant workforce, the bulk of new settlers to New Zealand were still European. From the 1960’s a large number of migrants were bought in from the Pacific Islands to meet the growing demands of the country’s manufacturing sector.
It wasn’t until 1987 that New Zealand decided to build a points based system that would remove the preference for migrants based on ethnicity to targeting specific skills based on economic demand. The system was loosely based on Canada’s migration scheme and officially came into being in 1991.
That system despite being altered, reinvented and tweaked is still largely the same system we use today. The only difference is that where previously the majority of people qualified sitting in their countries of origin, the focus now has shifted to being in New Zealand and employed. Whilst a number of popular migrant destinations (Australia and Canada to name just two) prefer to rely on qualifications and so on, New Zealand over the last few years has swung quite clearly in the direction of people securing job offers to meet the qualification criteria.
As bizarre as it sounds, it does make some sense.
Often when I tell people that in order to secure Residence they need to travel here to find an offer of skilled employment first, they look at me as if I have just told them the sky is green and clouds are made of candy floss. The reality is, however, that for the vast majority of applicants under the Skilled Migrant Category (the points system) securing a job offer is the only way to achieve the end goal.
It wasn’t always like this however. In fact, prior to 2010 there were a large number of applicants who secured enough points to qualify without a job offer even if they weren’t able to claim many of the ‘bonus’ points we have now for those in specific occupations.
Let me give you an example.
Up until late 2009 someone who was no older than 40, held a recognised qualification (in anything), with ten years of work experience and either a family member in NZ or a partner with a recognised qualification (in anything) stood a reasonable, but slowly dwindling, chance of securing Residence whilst sitting overseas.
Today that person’s chances would be right next to zero. However, if that person was skilled and willing to travel to New Zealand to secure a job offer then they would definitely qualify. In fact, they wouldn’t need half of the points and could rely purely on their age, work experience and a job offer to get them across the line.
The signal is clear come over, secure a job offer and Residence awaits you. The Government, however, doesn’t make that clear to all those that would like to apply. For the four years that job offers have ruled the roost, the Government has continued to allow people to file EOI’s despite the fact that without a job offer they will almost certainly never be selected. Those whose points scores do not include the required bonus points or are too low to reach the automatic selection pass mark. They will always argue that the pass mark might change and so they allow people to pay the NZD$510.00 anyway, but we know (and they know) that for four years those people have been wasting their money (and hopes) whilst the Government has been collecting the fee. That is, however, another story for another blog.
There is some logic to the current trend to push people towards a job offer and whilst many migrants may find it a bitter pill to swallow it can, with very careful planning and strategy, be a successful pathway to follow.
Think about it. If you were given a Resident Visa right now, stamped into your passport, your ticket to the land of the long white cloud…what would be the next thing to cross your mind? For most it should be “I need to get a job”. Of course there will be a few who can afford to live without one but they would be in the minority.
The system that this Government has ‘slipped under the door’ simply puts the job at the front of the process and the Residence at the back. The bigger issue is that they don’t really make it that easy to navigate the process, which is why having good advice along the way is now far more important than ever before. It is no longer a case of just filling in a form, get your papers and send the courier to INZ. There is a lot more to it.
You need to be prepared for what lies ahead. Careful and strategic planning is required to make sure that when you do get here you a) know how the process works and how to secure that job offer and b) you have everything you need in terms of evidence and proof to make each application efficient and painless. Many a migrant has come unstuck being ill advised or ill prepared for the process that awaits them in New Zealand.
You also need to appreciate the bigger picture. You need to understand the market for your skills and how to tackle the job search process. You can read our other posts on this for more information, however if you have a skill, particularly in engineering, construction and ICT (but not exclusively just those areas) then you stand a very good chance of staking your family flag in our soil.
We have counselled and hand-held thousands of migrants through that very process. Understanding the timing and the logistics involved is something we are very good at and why despite rising pass marks and a recession we have continued to bring in successful, happy and settled families.
And to some degree getting the job offer first and then getting Residence makes for a more settled/successful migrant. Not that those who get Residence first don’t also settle, but having travelled here to secure the job, bringing the family over who can also start working and studying and then becoming accustomed to the routine of life in NZ, almost makes the Residence approval an anti-climax. It’s still a big deal of course but those with job offers first have already crossed the larger barriers in terms of employment and are pretty much established New Zealanders.
We also suspect that the current system of jobs up front is here to stay for a while at least. It allows the labour market to drive the demand and ensures that those people making New Zealand home are employed and contributing.
So if you have ever considered making the move, but have been put off by the prospect of having to secure the job offer first, perhaps you need to take another look. The most important step, however, is to first work out which pathway exists for you and then finding someone that can assist you in walking down that road.
We do it all the time and we do it very successfully.
On a separate but related note, don’t forget our upcoming seminars in South Africa, Singapore, Hong Kong, Malaysia and Indonesia. They might just give you the answers you need to take that first step.
Also congratulations to James Turner, one of the team here who has recently passed his IAA Licensing course, with exemplary marks (some of the highest in the course).
Until next week – Paul Janssen, standing in for the Southern Man.
It’s that time of year again when politicians dust off their banners, cajole the media and take to the streets in an effort to secure votes in the upcoming 2014 general election.
One of the topics most widely contested and often used as a ‘political football’ in the run up to the election is immigration. If there is one issue that is normally sure to spur debate and get people moving alliances it’s the flow of people in and out of this country. The two parties particularly strong in this arena are the Labour and New Zealand First camps. Yet whilst the politicians from both of these parties have in recent months been bandying about rumours of cutting numbers, changing policies and ‘reinventing the wheel’ it would seem that the New Zealand public aren’t overly fussed about it.
The Labour party are in desperate need of a campaign rocket and in the past few months have raised the spectre of coming down hard on immigration, cutting overall numbers and imposing potential restrictions on foreigners buying property here. The fingers of New Zealand First have been pointed at migrants for rising house prices, potential increases in inflation and an untenable superannuation scheme, however in most cases these fires have been doused by a relatively cool headed public perception of the overall trends of migration.
Labour has all but back tracked on their promises to cut migrant numbers as recent polls have poured water on what they were hoping would be a raging fire. New Zealand First although still slightly warm on the topic have moved on to other issues with more fervour, leaving the immigration debate on the side-lines.
The New Zealand Herald very recently reported on their own poll which showed only one third of New Zealanders surveyed felt that migration levels were too high, ergo two thirds of people were either relatively comfortable or non-committal with where things were at. In fact the vast majority of people appreciated that migrants were an important part of economic growth, fuelling both productivity and creating further employment opportunities. More surprisingly for the first time in years, there was a much greater public awareness of migration trends, with a large majority of the people being polled, relatively aware of migration patterns over the last few years.
In another similar review on www.stuff.co.nz, it appears that both Labour and NZ First, who have always used immigration as one of their key policy platforms, are wasting their time. Only four percent of respondents cited immigration as the big ticket item on the agenda and almost all were more concerned with day to day issues such as healthcare, education and the overall state of the economy. This is despite the last year seeing a rise in temporary migration numbers (owing mostly to the Christchurch rebuild).
In previous years the public have been swayed by pre-election stories of ‘soaring’ immigration numbers and this so called ‘foreign invasion’ yet this time it appears as though the majority of New Zealanders see other things as being more important.
It makes sense.
The country is well into recovery mode and continues to hold the title of the ‘rock star economy’. Growth in most sectors continues, whilst unemployment slowly falls. The recruiting firm Hudson recently confirmed that the number of employers seeking to hire within the next quarter had increased 4.5% to a total of 31.8% nationwide. Whilst there is still an air of caution out there, many employers are feeling confident with recent economic conditions and this then leads to a stronger commitment to grow their workforce. All signs point to this continuing.
Christchurch is one of the major contributors to this and they still need skills down there – a lot of them. Further spending has been earmarked for the rebuild and although hiring intentions slowed very slightly in the last quarter that looks likely to swing back to the previous high demand as the rebuild money continues to flow.
So for the potential migrant, concerned about what politicians are saying in the run up to the election, don’t be. Even the political parties normally keen to throw the immigration football are heading for the benches on this one.
It appears that public opinion on this one has already ruled. We understand that migrants are important; more people now understand that and are happy with the current flow of talent into New Zealand. I suspect that you will see discussions on migration lessen as the election draws nearer, with the parties at the bottom of the polls scrambling to find other fuel to throw on the fire.
So if you have hesitated in making the move because of political uncertainty, I wouldn’t be worried. New Zealand isn’t going to close its doors. Instead the signs of economic growth, increasing business confidence and a relatively buoyant economic outlook are all signs that we will continue to welcome those with skills to add to the mix.
To find out more or to explore the possibility of making New Zealand home, why not register for one of our upcoming seminars:
Until next week – Paul Janssen (standing in for the Southern Man).
I don’t often get excited by surveys but when one appears that affirms the message we give potential clients, I do get excited. Few have excited me as much as one released this week from the Washington based Social Imperative Forum that ranks countries by social progress.
It’s not as dull as it sounds as it goes to the heart of what our society is about, how we got here and what challenges remain.
The survey asks three essential questions:
- Does a country provide for its people’s most essential needs?
- Are the building blocks in place for individuals and communities to enhance and sustain wellbeing?
- Is there opportunity for all individuals to reach their full potential?
It ranks New Zealand top out of over 130 countries for social progress. While historically Gross Domestic Product has been the indicator of choice as a measure of the ‘success’ of an economy and a country, what I like about this report is that it looks beyond that purely economic measure and looks at overall wellbeing.
It paints a picture of an egalitarian society that is cohesive, relatively prosperous with real opportunities for all, irrespective of background, but which also confirms what we always advise people – it ain’t paradise and it does have problems. But as a client from South Africa once told me the big difference between countries like mine and his (that he was leaving) is having lived in New Zealand for a while this little country of ours has no problems it cannot solve.
What is interesting is that we have achieved this top ranked status through a mix of open economy, strong and transparent democracy along with the socialising of three sacred pillars of our society – tax payer funded education, healthcare and social security.
What struck me is that we rank 25th in the world for per capita GDP proving there are 24 countries where people are wealthier but none are better off.
It also fidentified some things which at first glance appear at odds with a county where everyone looks out for everyone else – we have a relatively high rate of death through pregnancy, we come mid-table for suicide and we are getting very fat…
A closer examination of this explains these apparent anomalies.
With 15 deaths of pregnant women per 100,000 we rank 76th yet experts in New Zealand explain that this is because New Zealand captures the deaths of all pregnant women for many reasons other than death during childbirth (a rate which is actually extremely small) and captures those that die of pre-existing conditions and heart failure for example.
On suicides New Zealand is known for examining all ‘suspicious’ deaths through referral to the Coroner and where most countries will not call the death a suicide, New Zealand does. So it is not so much that New Zealanders are jumping off buildings in greater numbers, so much as we investigate deaths and if the conclusion is suicide we call it as it is. Most countries, including highly developed ones, do not. We are statistics and accuracy freaks.
There is no denying New Zealand has an obesity epidemic and that is very real, dragging us down the ‘progress’ ladder. I have to say given what you put in your mouth is individual choice there is possibly not a whole lot that can be done about it. Except educate and try and change behaviour.
So why are we doing so well?
I am convinced it is our history. The early settlers in New Zealand were determined to establish a (relatively) classless society where ‘Jack is as good as his Master’. I often speak to this at seminars and how deeply this egalitarian ideology runs in our DNA.
Simply put, we give a damn about one another and look after each other. It serves us all very well.
How did we achieve this?
- A progressive but fair taxation system.
- Tax payer funded healthcare, education and pensions for retirees.
The report in many ways explains our success but equally points out fairly where we can do better and where challenges remain (Maori, for example, make up 15% of the population yet represent over 50% of all prison inmates).
New Zealand is not perfect but we seem to be doing an awful lot right.
This helps to explain why I wouldn’t want to raise a family or live anywhere else. I urge you to read it (click here to download the report) if you are thinking of joining us in New Zealand (particularly pages 47-49). I could not sum up the essence of New Zealand better.
Until next week
Iain MacLeod - Southern Man
Happy New Year to all our regular Southern Man Letters from New Zealand readers.
The team is back in the office, tanned and relaxed (that lasted about two days!) and looking forward to an extra busy year. For us it is going to be a year of firsts – we are now dipping our toes in the Hong Kong and Indonesian markets. Across the Tasman Sea our Australian colleagues are heading to Botswana, Greece and Turkey to test the migrant waters there.
And what of New Zealand in 2014? How are the tea leaves looking?
If you can believe the various surveyors and economic forecasters we are in for a very good year and several beyond this. A few key points in recently released surveys show:
- Business confidence is at a 20 year high
- All sectors of the economy are growing – manufacturing, agriculture, services and tourism are all showing strong growth
- All regions of New Zealand are in positive growth and confidence territory (spreading out from Auckland and Christchurch which dominated 2013)
- ‘Own business’ confidence is running at multi year highs and this suggests GDP growth of at least 3.5% this year
- Retail sales through Christmas were up 7% on the year before and have continued through the early part of January
- Skills shortages are starting to bite (told you!!!!) - especially in the construction and IT sectors – everyone from Architects, Civil Engineers, Quantity Surveyors and Planners through to related trades workers. In ICT some are now calling the shortages ‘dire’ which might be a slight exaggeration but these shortages are going to be biting across most sectors within the next six months in my view .
- Unemployment which currently stands at 6.2% is predicted to fall to 5.5% by years end and 4.5% by the end of 2015. It is worth noting that once unemployment gets down to 5% in New Zealand you’ll not be able to find a Secretary to do your word processing……or find someone to make you a cup of coffee. It is also worth reminding readers that skilled migrants seldom compete with the unemployed 6.2% - they tend to be un-skilled or semi-skilled.
- Inflation is expected to remain subdued overall at around 1% but dog with rabies crazy in housing. There continues to be a chronic shortage of new housing supply meaning house values are expected to continue their seemingly relentless increase by around 10% this year (higher in Auckland and Christchurch). This is feeding through into higher rental prices also.
- Interest rates are predicted to increase by 25 base points each quarter for the next 5 quarters (starting March). The word is the economy is robust enough with exports booming even with a high exchange rate to offset any inflationary build up. I’d be expecting floating mortgage rates to be around 6.5% - 7% by years end.
Short of any major external shocks things are looking overwhelmingly positive. No one is talking about an overheating economy or boom times but there is a real and broad based momentum that has been building across all sectors and all regions.
This, I suspect, will embolden the New Zealand Government to continue with high skilled migrant pass marks and forcing a majority (note, not all….) of would be migrants to come and find jobs in order to have certainty of residency approval.
Those employers unwilling to recruit form the ranks of those offshore or who refuse to travel overseas to interview and recruit are within the next few months going to be staring into a very shallow pool of local talent. This will have an upward movement on incomes (we are already seeing it in construction and IT in particular).
While no one who reads this who thinks they may make a move this year should take getting work for granted, there is no doubt that 2014 for the vast majority of you will be a year of greater employment opportunities. Through 2013 we saw average times for most clients to find jobs here get down to a few weeks rather than a few months as it was through 2011-2012. If you are fluent in English, skilled, do your research on demand in the labour market for your skills set and are willing to get on a plane and get here, chances are you’ll find work within 4-6 weeks.
As we reported in December the Government has closed the Long Term Business Visa or self-employed pathway to residence while they think about a new ‘improved’ visa class for Entrepreneurs which they hope to launch in April. We have been offered an outline of the new criteria which we have agreed will remain confidential but what we can say without breaking those confidences is that the new criteria is less a pathway for the self-employed to demonstrate financial self-sufficiency to a move to focus on greater job creation and export related businesses as priority for approval. For the first time the amount of funds invested comes with a minimum and the more invested the higher the chances of success. In essence what we will gain is effectively a new sub-class of Investor – lower investment thresholds than those who apply to many looking to secure residence under the Investor Categories but a much higher threshold than historically in place for the self-employed. As always there will be winners and there will be losers.
Skilled Migrant Category also underwent its standard three year review during 2013 and I expect we may see changes this year. My own view is the changes will be minor (why change a formula that appears to be working?). My only two suggestions to Government were that we should be more prescriptive in regard to English language as the Australians are (better your English the higher your points) and I would also be re-instating points for those with capital they can transfer to New Zealand. Although it is proven that those with more money find it easier to settle I cannot see the Government taking me up on this suggestion; they might on the English language however. We shall see.
My colleague Paul will also be in South Africa in early February kicking for our first round of seminars there.
It is going to be a big, exciting and nerve wracking year for some of you as you pack up and join us here in New Zealand. For some 2013 was the moving year and 2014 will become the year of return to some sort of normality. For others 2014 will be the year of the ‘big decision’ to migrate or not. Wherever you are on that spectrum the Immagine team and I wish you every happiness and success for the year.
Until next week
Southern Man – Letter from New Zealand
When all through the house, not a creature was stirring..., except for a Government policy maker who decided that changing the rules at the end of the year would make a lovely Christmas present.
Late last week the Minister of Immigration released a statement relating to proposed changes to the Long Term Business Visa (LTBV) Category. Whilst the announcement didn’t reveal specifics over what the new policy would look like, it made a few references to the ideas being batted around inside the immigration halls of power.
Originally established as a pathway to residency for those who wished to come to New Zealand and become financially self sustaining, applicants were required to have a well researched business plan that met a fairly clear benefit test to the country. In hindsight that benefit test was set too low in the eyes of the Departmental officials who implement the policy.
When it was released it was a case of ‘anything goes’ and applications from Bed and Breakfasts to one man band lawn-mowing franchises were being approved in a matter of weeks. Then with a change in leadership came a change in interpretation (although the policy didn’t) and applications were declined en masse. This Category has always been subject to the ever changing mood of INZ, although none of those changes was ever set down in the rules. It was a case of getting to understand each new Branch Manager’s feelings on the benefit to New Zealand before advising your client on whether to proceed or not.
This has led to a policy that is both poorly understood by applicants and immigration officers alike and open to widespread abuse by both applicants and the Department. Often seen as the ‘application of last resort’, INZ struggled with the ebb and flow of applications of questionable benefit to New Zealand, leading to very few residence approvals.
The current (to be no longer as of the end of today) policy sees around 500 applications annually which is quite a few considering the intent of the policy is for people to establish or purchase businesses in New Zealand.
Application volumes have been steadily increasing over the last three immigration years (2010 to 2013), although approval rates have been falling from 89% at the beginning of that period down to 71% in the current year to date. There are various reasons INZ attribute to this trend, some of which don’t appear to hold a lot of water, given they created and administer the policy; but the main thrust of the changes relates to what we have always argued is a clear lack of defined aim of the policy.
Let me give you a few examples.
Part of the existing policy requires an applicant to have sufficient funds for maintenance and accommodation – and that’s about as far as the rule book goes in terms of specifying what that figure might be. It doesn’t give a guide as to the amount of money required and so its left up to an immigration officer to decide on what they believe is appropriate. The problem with that is each officer will have a different view on what is ‘sufficient’. Some might drive a BMW and scoff at the idea on living on anything less than $100,000.00 per year (or perhaps $150,000 a year which was a figure quoted to us by INZ recently). Other officers will live with more modest means and believe that a third of that is required.
Then there is the definition of ‘benefit to New Zealand’ which is another criteria that INZ uses to determine if a proposed business is worthy of approval. There is a list of criteria within the rule book; however it was arguably poorly written and therefore open to various interpretations. Also where policy says ‘benefit’ can be satisfied by meeting one of the criteria (such as employing a single New Zealander), INZ recently decided what the policy actually meant was if only one person is being employed they will do a ‘measuring’ exercise to determine whether there is enough weight in the other elements of ‘benefit’ to grant an approval.
That of course is not that the policy suggests at all but this was the Department’s way of dealing to what they considered ‘low quality’ applications – even those that demonstrably met their own single benefit criteria.
So, out with the old and in with the new – but what is ‘the new’?
Before we dive into this, it is important to note that anyone who has a current LTBV in process will be covered by the existing rules and so the proposed changes only impact on those who have yet to lodge a formal application. That does mean ongoing uncertainty as we doubt INZ will be able to resist trying to implement a higher bar test of benefit to LTBV renewals at nine months and the Resident Visa that follows.
In terms of the new policy - put simply INZ is returning to form, trying to cut out as much thinking as they can and putting in place a points system which measures various criteria. The Government has decided to close the current policy down today, release the details of the new policy in February 2014 (date to be determined) and then actually make it effective from March 2014. This then gives INZ and, in particular the Business Migration Branch, a chance to play catch up.
What little we do know is that the policy will utilise a points system to allow applicants to gauge for themselves the likelihood of success and hopefully provide some clarity around the actual criteria.
Points will very likely be allocated based on age, capital investment, level of turnover, business experience, job creation and the level of innovation (not sure how you measure that). There will be a total point’s score of 120 (proposed) and INZ will obviously be balancing age, investment capital and the kind of business to approve the most desirable applications. The focus has very much gone on targeting enterprises that will provide export opportunities and/or technological innovation. Essentially what they don’t want are B&B’s and corner dairies.
There will also be a focus on pushing businesses out to the regions and awarding additional “bonus” points to applicants who propose to establish a business anywhere outside of Auckland. Similar to the Skilled Migrant Category, INZ has always endeavoured to move migrants out of Auckland and in to the smaller parts of the country to stimulate growth.
The Minister sums up his intention of the new policy in the press release as follows:
“The Entrepreneur Work Visa will operate under a new points-based system that will result in higher quality, more productive businesses.
“It will also encourage business-savvy migrants to invest, settle, and create jobs across the country, by offering extra points for expanding or starting businesses outside of the Auckland region.”
But (and there always is a whole lot of these) INZ will also have the discretion to waive certain requirements for funds where the proposed business can ‘excel’ in other areas. So basically you have a set of rules and then another rule which allows an officer to do whatever he/she likes. Let’s hope it isn’t quite as subjective as that.
We support any move to greater transparency that leads to both a higher success rate and a better outcome for New Zealand. Based on the information publicly released so far we question why it has taken INZ so long to work this out and whether or not they have done enough to fix the issues. Time will tell of course.
For anyone who is considering a Long Term Business Visa application stay tuned. We will be sending out the details as we receive them along with our interpretation of what they mean in the real world.
And with that the Southern Man and the IMMagine New Zealand team sign off for another year. It has been an interesting one to say the least as the New Zealand economy continues to outperform its developed country peers and surges into 2014, the Auckland Council debates whether to kick out the current Mayor who has a penchant for extra marital activities and the folks in Christchurch continue to restack the bricks and mortar.
We will be back in January (officially open on the 13th) with a new round of seminars kicking off in the same month – this time featuring for the first time Jakarta followed later by Hong Kong.
To all of our clients and those who have read and enjoyed our blogs in 2013 we wish you a very Merry Christmas and a Happy New Year. We look forward to working with you again in 2014 and hope you all enjoy the festive season (no matter where in the world you are).
For now we are off to the beach as summer settles into a warm dry pattern.
Adieu, Arrivederci, Totsiens, Salamat Jalan and Hasta La Vista…
Paul Janssen, Iain MacLeod and the Team at IMMagine New Zealand
If there was a way for the officials that run the immigration system in this country to ‘walk a mile in my shoes’, I would gladly hand over my size 11’s.
In this business we have learned that you can never underestimate what it means for someone to pack their lives into a box, burn bridges in their homeland and head for New Zealand in the hope that they will be able to establish a new life here. For some it’s a choice but for many it’s the only option.
And for all their talk about ‘customers not numbers’, ‘positive settlement outcomes’ and ‘trusted partnerships’ I doubt that there are many people within the immigration machine that truly understand (as we do) what it means to migrate. There are some officers out there who do get it and these are the ones we try to work most closely with, but unfortunately for the majority, it’s a system of numbers and forms, KPI’s and targets with little in between.
I recently came to the end of what was one of the most complex cases I have ever handled, the kind of stuff that gives a Licensed Adviser insomnia and cold sweats. The kind of case that also makes you realise just how much is involved in a person’s decision to migrate.
This particular client had, through a series of unfortunate circumstances, ended up being deported from Australia back to a country he had fled over a decade earlier. He had for a large part of his life been living under the immigration radar without a Visa and without being able to truly settle anywhere. In the midst of all of this he had met a girl and that girl, although she happened to live in Australia (where they met), was New Zealand born. So not only was this particular client abruptly removed from a life that he had built over many years to one that was completely foreign; but he was also torn away from the love of his life.
They had been through the immigration process in two countries and failed. Their attempts to tell their story were never really heard and they felt like their options had been exhausted. I recall the first conversation I had with the New Zealand partner and it sounded like the wind had been knocked clean out of her. Put simply they were just another number in a statistic on someone’s spread sheet.
As an Adviser taking on a case like this you need all the facts. We need to know pretty much everything there is to know about the history and anything less just won’t cut it. I listened to this couple and the story they told made sense. In this particular case, as it is with anyone that has been anywhere unlawfully for that long and then deported, it was always going to be 50/50 and I had no reservations in telling them that we were in for a lengthy battle. My role in all of this was to simultaneously minimize the risk of failure whilst maximising the chances of success. There was a lot at stake here and this was a couple that were prepared to go to hell and back to make it work.
After 20 months, 520 emails and numerous lengthy discussions with Senior Immigration Officers that, to their credit, also listened; the outcome was successful. What this means for this couple is best left to the partner to say. Here is what she emailed me when she was given the good news:
“…he hasn't felt like he has belonged anywhere ever, he has never felt comfortable to call a place home and actually make solid decisions about how he wants to spend his future - he can now do that...”
Are we proud of this? Yes. Did we pull off a miracle? Well not quite. In reality we simply knew how to navigate this process, who in the system to talk to and how to talk to them. We listened to the client, understood the situation and then set about minimising failure and maximising success.
As Advisers we constantly advocate that the machine should deliver consistent and fair outcomes. Sometimes, as was the case in the scenario above, we have to fight a little harder to secure those outcomes particularly when you have a round peg and a square hole. However, there are occasions when even though the system shouldn’t be a lottery, it can feel like you are rolling dice.
Take last week for example. INZ decided it would be a good idea to change the security settings on their online Expression of Interest (EOI) login system. As a result the system didn’t work for a few days and for anyone using Google Chrome there was not much hope of filing an EOI (there is probably a good blog in that). A week later INZ conducts their regularly scheduled EOI selection process and for the first time in seven months, the pass mark fell (ever so slightly).
It wouldnt be silly to conclude that the drop in the pass mark was because fewer people were able to file EOI’s, meaning INZ had less 'customers' to choose from and therefore to get their regular number of plus/minus 600, they needed to select those with a slightly lower score. Or it could be just the computer system making up numbers because demand was lower. Either way the thinking isn't necessarily being done by a person.
For the number crunchers and budget balancers within INZ this would simply have been an ‘anomaly’, possibly a ‘glitch’ or perhaps just 'statistics'. For a few would-be migrants out there who have filed EOI’s in the hope that somewhere, somehow they might get selected, this would have been the very first step in that new life.
No matter how hard you try to understand this process it can sometimes (thankfully rarely) come down to whether the guy manning the IT desk, put a semi-colon in the right place or which way the number crunchers lean.
I know that Iain (the actual Southern Man) has four golden rules when it comes to this process and one of them rings true here – “Just when you think you have the system figured out, they change it”. We know this and it’s probably why we have the success rates we do. Prepare for all situations and never underestimate the system’s ability to get it wrong.
Above all, however, a good Adviser will go further than forms, paperwork and process to understand what’s involved with your situation, to navigate you through the system successfully and remove as much of the randomness and inconsistency as is possible. You should never just be a number.
For my client and his partner, I wish them all the very best. Having not only listened to their story but also being a part of it, I am privileged (and somewhat humbled) to know that New Zealand now feels like home for him, in the truest sense of the word.
For everyone else reading this blog who has thought about making the move but would like someone to walk the journey with them, drop us a line, or if you are in South Africa, Singapore or Malaysia (click on the links to register) we have our last seminars for 2013 in November and December coming up, so why not come and listen to what we have to say and perhaps share your story with us.
I don’t pretend to understand what goes through New Zealand politicians’ heads but “How do I get re-elected next time round” is probably right up there.
Only that thought can explain to me why we are not seeing Government increasing now, with a degree of urgency for next year and beyond, the numbers of well targeted skilled migrants allowed into New Zealand without job offers.
In the past three weeks media headlines have screamed:
- Business Confidence remains at 5 year high (31 October)
- Building consents at record levels (31 October)
- Booming NZ game industry facing skills shortage (30 October)
- Skills Shortage hamper rebuild (26 October)
- Are you ready for the economic boom? (21 October)
- Skills crisis needs fixing (8 October)
Recent statistics suggest that around 90% of all skilled migrants still require skilled employment before they can get enough ‘points’ to qualify for residence. Understandably, given the potentially real or perceived risks associated with getting those jobs, many choose not to join us in New Zealand for fear they will not be successful in their hunt (or as per last week’s Southern Man Letter from New Zealand they will be denied visas to come and look for work or be stopped at the border).
For every ten families we consult with that would have an excellent chance of both securing employment and gaining enough points for residence, probably two actually go through with it.
New Zealand and in particular Immigration New Zealand doesn't make it easy, so understandably many potential migrants don’t take up the challenge. Of course for those that secure the right advice and guidance, the process is overwhelmingly successful.
On the one hand with local unemployment sitting stubbornly around the 6.5% mark it must be tempting for Government not to be seen increasing the numbers of skilled migrants allowed in without needing jobs. As recently as two years ago they did when around 50% of skilled migrants gained Resident Visas that way.
On the other hand there are very real, concerning and increasing levels of skills shortages across many sectors. Not a day goes by when the headlines don’t scream we are short of architects, quantity surveyors, CAD experts, construction related trades workers, IT professionals and many many more. The Government risks losing the support of some of its traditional business power base at next year’s election if companies feel constrained by a lack of available labour to fill roles vital to their businesses.
Of course politicians the world over know that standing on a platform of increasing immigration wins no one any votes anywhere. This, despite the reality that skilled migrants do not compete with the locally unemployed in this country and skilled locals will always be ahead of migrants in the job queue. So the skills difference between these two sets of people mean their paths will seldom, if ever, cross and politically our Government should be confident enough to call it how it is.
Oh that they were so brave.
In the past two years the Government has issued 18,000 fewer skilled migrant visas than their own programme demands. So far they don’t seem bothered about it but when the good people of Christchurch continue to step over the rubble of their humbled city in a few years or Aucklanders face building costs going through the roof because of a lack of skilled workers it might have some political fallout.
If skills shortages start filtering through into wage/price inflation and all home owners watch their mortgage interest rates increase it won’t do anything for the Government’s popularity.
As the construction boom has moved to Auckland this powerful bloc of voters could easily be turned off the Government if they see their ability to maximise their commercial opportunities impeded by lack of skilled workers or it feeding through into cost of living increases that have largely been absent these past few years with inflation well under control and under 1%.
The New Zealand economy is on a roll – growth is forecast at between 3 and 4% over the next year. Every sector of the economy is expanding. Thousands of jobs are being created and hiring intentions are high and climbing. The country’s terms of trade are the strongest in years.
In recent months net migration has turned positive but not thanks to new residents being granted visas – instead largely by New Zealanders returning home from Australia as their economy cools following the end of the mining boom. This is adding several thousand skilled and semi-skilled workers to the local pool which is a good thing but Government cannot target the specific skills sets we require – we might just be getting back many low to semi skilled workers chucked out of manual work in and around the mines. Again the skills mix might not be what the businesses of New Zealand need.
So there needs to be a sensible balance struck. Right now the Government is on auto pilot when it comes to migration and it would be nice, if only once, a New Zealand Government was proactive and ahead of the game rather than reactive and two years behind.
A skilled migrant who has the points to qualify for residence without needing a job is at least 12 months away and probably closer to two years away from being able to deliver these skills to the labour market of New Zealand.
A sensible approach would be to slowly ramp up the numbers of migrants approved who don’t have jobs but who have excellent English (given linguistic compatibility more than anything drives employment outcomes) and who have the skills sorely needed in New Zealand – Engineering, construction and IT being at the forefront.
A real problem for the skills strapped employers of New Zealand in 2014 is an election year and I cannot see the Government changing its current insistence on the majority of migrants burning bridges at home, travelling to New Zealand, running the airport gauntlet, trying to find work and taking the risk they will be successful.
Perhaps it is time for the politicians to look beyond next year’s election and get bold about migration.
Until next week
Iain MacLeod - Southern Man
We have just ended the second year of the Government's three year residence Programme.
They are woefully short of their targeted Visa issuance at the 2/3rd stage of 54,000 skilled migrants and this has serious implications on the labour market, available skills and honesty about its intentions.
According to its own public statements the Government plans (and planned) on issuing 85,000 Skilled migrant Resident Visas by the end of June 2014.
That's 27,000 plus or minus 10% every 12 months.
They issued 18,000 in the first year.
Here we are shortly after the end of year two. How many Resident Visas have been granted this year?
So whereas the Government stated it wanted to issue 54,000 Resident Visas (plus or minus 10%) they have granted just over 36,000.
Now you might think 'who cares?'
Well I do. All those thousands of people every year who file Expressions of Interest with a view to obtaining residence because they have 100 points or more are never told that the Government has absolutely no intention of selecting them, inviting them to apply for residence or granting them residence.
Each Expression of Interest costs NZ$510 (that's about US$460) and there is no warning by INZ that to be selected applicants really need to meet one of the following points profiles
- 100 points or more including an offer of skilled employment
- 140 points (which usually includes an offer of employment but doesn't always)
- 135 points with at least 15 bonus points for six years or more of work experience in an area of absolute skills shortage.
All those people with 100 points or more who do not meet one of the profiles above are, without doubt, wasting their money - the Government of New Zealand has no intention whatsoever of selecting them from the Pool.
I have no doubt that they will stick to the same level of approval in this the third year of the Residence programme. That will, by June next year, mean New Zealand has missed out on around 25,000 people the Government has included in its target.
A great many of those 25,000 did try, they did file Expressions of Interest - the Government simply never told them that in doing so, they were wasting their money.
Is that fraudulent? Taking money off someone who has no chance of getting what they are told they are paying for?
If it isn't fraud it is certainly less than honest.
I am convinced the Government moved from a 12 month target of skilled migrant visas they wished to issue to a thirty six month one in order to deflect accusations that they were cutting the numbers. There is no other explanation for it.
They can publicly deny cutting but when you have lost (at the end of three years) 25,000 people those are serious numbers indeed.
There is no doubt that as a Licensed Adviser if we take money off a client who has no chance of getting what they think they are paying for we can lose our licences. As we should.
So how does the Government get away with it?
Because they are the Government I guess. This makes our input so much more valuable as we are able to guide those who have enough points to file Expressions of interest but who will never be successful, not to bother or to find an alternative strategy.
I am about to board a plane to Malaysia to give a seminar tomorrow in Kuala Lumpur and then in Singapore next weekend.
One of my key messages will be to ensure that there is a strategy in place that should work to gain the Resident Visa clients seek with a high degree of probability.
Our philosophy has always been that morally we owe this to our potential clients given the enormous emotional, logistical and financial investment that is migration, and to ensure that people are not wasting their time, energy and investment.
Pity the New Zealand Government isn't as honest.
Until next week
Iain MacLeod - Southern Man