Migration slide continues

I was not surprised to see an article in the Press on the 21st July entitled Migration slide continues which announced:

Net migration has hit its lowest monthly level since late 2008, contining a steady decline since the start of the year

On a seasonally adjusted basis, net permanent and long-term migration (arrivals minus departures) was 100 (rounded figure) in June 2010, the lowest monthly figure since the series briefly went below zero in November 2008, Statistics NZ said.

EOI selections 2008/09 - 2009/10
(Click for enlargement)

The article failed to suggest a reason for this, but a quick look at the numbers of EOI selections (the first stage of a Residency application) – see my graph aside – cleary shows the downward trend.
 

 

No Official Reduction

Officially the Immigration Minister has stated he will not cap migration and Cabinet has agreed to maintain the current level of Residence places at 45,000 – 50,000 for the 2010/2011 year.

This doesn’t explain why the selections through the first half of 2010 have been so low. Only 81.6 percent of the numbers needed to meet the minimum requirement of the New Zealand Residence Programme have been selected since the start of 2010, a shortfall of over 5,500 people in the last six months.

EOI two year trend
(Click for enlargement)

This appears to be because the department is simply not taking into consideration the rate of applications under this category being declined.

During 2010 this stands at 14.17 percent which (from memory) is nearly 50 percent higher than in 2008 despite only the highest points scores now being selected.

Comparing to previous years we can see that the numbers selected this year between January and June are 28 percent lower than 2009 and 29 percent lower than 2008.

The Skilled/Business category makes up 60 percent of Permanent Migration and provides arguably the majority of indirect income from Residents to New Zealand – income that goes directly into local kiwi businesses as migrants set up permanent homes.

These rock bottom selection figures are all the more difficult to explain following Immigration Minister Dr. Coleman’s remarks in April confirming the major role migrants play in the New Zealand economy, and in November 2009 presenting the important economic contribution newcomers make.

Fears are now rising that low migration could actually destabilise the housing market.

Highlighting skill gaps

No one wants to disadvantage New Zealanders looking for work, but without an idea of where the skill gaps are opportunities for NZ business and jobs are being lost.

Having a clear idea of what skills are in need and communicating this to potential migrants is vital for a smooth and successful immigration policy. We have been calling for clarity on this for 18 months, but the Minister has ignored every contact and refers to the inadequate Essential Skills in Demand Lists which appear to be being ignored during the market testing applied to applications anyway.

Unfortunately neither the Immigration department nor the individual in the Ministry of Social Development (who applies this market testing to all applications) has the foggiest idea of what the position is on skill shortages because the data isn’t being collected.

A perfect example was reported earlier this month when a company was blocked from keeping a skilled migrant worker (yes, he had been working there for two years) because data suggested there were NZ plumbers who could do the job. The fact that there is not does not appear to matter to the government and the worker is being kicked out of the country like so many others.

As I mentioned last year, I believe that Dr. Coleman’s poor handling of migration may cost New Zealand billions in lost income, productivity, unemployment and a whole host of knock-on effects.

This loss is largely hidden and delayed until kiwi employers need skilled staff as part of their recovery, but New Zealand may soon wake up to begin asking questions about why this important area is being so badly mismanaged.

PS:
I was very pleased to see this story was picked up in the Herald today: Shortfall in migrants could cost NZ economy over ‘over $1b’.

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