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The migration gap

By Frances Morton

Thursday 13th April 2006

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When Maria Rodrigues immigrated to New Zealand from Goa, India, in January 2003, the number of non-New Zealand citizens coming here to live had just peaked. Overall, the 38,200 net migration gap between those arriving and those leaving in 2002 was also looking extremely healthy for the New Zealand economy. We were an attractive place to be.

But that trend is slowly reversing. Last year the number of non-New Zealand citizens coming here to live had dropped and, worryingly, the overall permanent and long-term arrivals decreased by 1,500 to 79,000 when compared to 2004. At the same time, the number of people leaving increased by 6,600 to reach 72,000. The end result is a halving in net migration, from 15,100 in 2004 to 7,000 people in 2005. At this rate, the figures will this year return to the negative numbers experienced during the 1990s.

What's driving the trend, and does it matter? Some of it is of our own making as a result of tighter immigration rules. Rodrigues, who has a university degree in commerce and ran a catering business in Goa, entered the country with her husband and two teenage children by qualifying under the general skills category. This has since been changed to a skilled migrant category and the level of points needed for automatic entry raised from 100 to 140. A university-level English language test for skills and business categories was introduced in 2002.

And the experience of migrants here has not always been a happy one. At first the only employment Rodrigues could find was housekeeping at a hostel, while her husband worked night shifts at a supermarket. After determinedly seeking unpaid New Zealand work experience and upskilling, Rodrigues now works as a legal receptionist in downtown Auckland.

But she was shocked at the hassle she had finding a job, especially since getting a work permit was so straightforward. "If you find work then everything else falls into place. Because you get rejected your self-esteem, your confidence is at an absolute low."

The sort of reception Rodrigues had is meant to have been improved by the government's introduction of the skilled migrant category in February 2004. "More emphasis has been placed on the employability of migrants. Applicants with a New Zealand job offer are prioritised over other migrants," says the Department of Labour's Workforce deputy secretary Mary Anne Thompson.

Leaving aside how migrants fare once they're here, why does a country with the lowest unemployment rate in the OECD, a safe and secure environment to raise families and stable democracy have a problem attracting and retaining the skilled people needed to fulfil demand for labour?

Immigration Minister David Cunliffe says he's unconcerned about the latest numbers because although there was a decrease in incoming migrant numbers in 2005 the number of skilled and business migrants arriving rose by 9,000. "It's nothing we are alarmed about. It's a natural cycle."

But not everyone agrees. The question is whether we're holding our own in the worldwide competition for skilled labour. Dr David Crawford of international corporate immigration services provider, Fragomen, says while migration trends are cyclical, countries cannot afford to be complacent in today's competitive global market. "Government and business need to be actively maximising the opportunity to attract people as well. If there is going to be continuing demand for certain skill sets then it would be dangerous to have the assumption that things will bounce back."

Cunliffe may say all is rosy but the government must have some concerns over the tussle for skilled New Zealanders because it has launched an advertising campaign to attract expat Kiwis back home, and a website, New Zealand Now, with the same aim. "Half of New Zealanders who go away come back. One--quarter is not sure, and one-quarter plans to stay away. We're targeting the quarter who have not yet made up their minds," says Cunliffe.

And a review of the Immigration Act 1987 is also underway. A discussion paper outlining proposed changes will be made public in April. Cunliffe says the review is aimed at reducing the Act's "contradictory and confusing" nature and "to simplify it to make fair, firm and fast decisions."

The biggest concern for immigration policy, according to National's immigration spokesman, Lockwood Smith, is what he calls the Kiwi "exodus". "While we're replacing the New Zealanders going with immigrants from elsewhere, the problem is hidden under that net increase of 7,000. We've lost 25,000 New Zealanders and replaced them with 32,000 foreigners. Now, some of those foreigners will be very good residents, undoubtedly, but no one can convince me they are going to be better on average than our good New Zealanders going."

And the increasing number of Kiwis relocating to Australia has Smith really alarmed. New Zealanders have always drifted across the Tasman but it's fast turning into a flood. Last year 22,500 more citizens left New Zealand for Australia than returned - up almost 34% on 2004. Smith blames Labour's tax rates, saying Kiwis are sick of working hard and not reaping the same rewards as Australians. "New Zealanders' after-tax incomes are now 33% lower than in Australia. That gap is up from 20% six years ago."

What all this means for New Zealand is a worsening skilled labour shortage and a weakening economy. Business New Zealand chief executive Phil O'Reilly says for New Zealand to prosper, the country needs hundreds more companies exporting and that requires more skilled workers across the board. "The challenge we face is to get national coherence and consensus that skilled migration is a good thing. Then we need to go and actively market it out there to the world and we need to do things back in the country to make sure what we say we do for migrants is what we do."

Two recent skilled migrants agree the country needs to market itself more effectively to offshore talent. South African IT specialist Chris Nell had never been to New Zealand before he landed at Auckland airport in January. He had followed the example of a friend who had recently immigrated here and left behind his crime-plagued home country. Despite having no job or work permit, the 36-year-old's software development skills were quickly in high demand. Within a day he had a full schedule of job interviews. Within six weeks he had employment as a software development manager, held a work permit, rented a house and was preparing for the arrival of his partner and two children. "The [visa] process was really easy," says Nell. "I think advertising could have been better. If in South Africa I had driven past a billboard that said 'Hey, why don't you come on out here. Your skills are valued here', that would have made me start thinking about this some time before I did."

Likewise, 37-year-old Mike Bickerdike, who moved from the UK in January last year to take up a position as head of pre-clinical development at Neuren Pharmaceuticals, thinks Kiwi businesses should advertise for skilled staff more overtly internationally. "They'd do well by putting some quite directed advertising for the positions with agents in London. I know from conversations I had with colleagues before I came out here that a lot of English people would be quite excited with the idea of coming and working in New Zealand."

Part of the fall in net migration in the past two-and-a-half years is due to improved economic growth offshore and a big drop in the number of overseas students, says the Labour Department's Thompson. Foreign students fell from 110,072 in 2004 to 73,719 in 2005, mainly due to a 25,000 reduction in the number of Chinese students. Thompson says continued labour market strength and New Zealand's relative safety is keeping net migration positive. In a recent Department of Labour survey of migrants, job opportunities ranked sixth among reasons for migrating to New Zealand behind a clean, green environment, lifestyle and leisure activities.

But O'Reilly argues New Zealand's clean, green image isn't sufficient bait and it comes down to an economic argument: can New Zealand stack up globally as an economically attractive place to work? "Immigration policy is only one part of this game. Even if you have the best immigration policy on earth, if you don't have a highly productive environment that's paying highly skilled people high wages and giving great opportunities in terms of your career, you still won't get them."

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