A looming Skill Shortage epidemic for New Zealand

Why New Zealand is losing the international battle for skills

According to Wikipedia “Immigration” is the act of passing or coming into a country for the purpose of Permanent Residence.

It’s a pretty popular idea! According to a Gallup poll run in 2009 roughly 700 million adults would migrate to another country if they had the chance.

Favourite dream destinations were Europe (30%); the USA (24%); Canada (6.5%); UK and France (6.5%); Spain (5%). Interestingly just as any people (25 million or 3.6%) wanted to move to Germany as Australia. New Zealand is not mentioned.

I guess it depends on who you ask, but most of the 500+ people I met at the 2008 Opportunities Expos in the UK were interested in what they call the ‘Big Three’: Australia, Canada and New Zealand.

The Big Three
Migration is split into two main groups: skilled (workers and entrepreneurs) and family reunification. What we have seen in the past couple of years has been some pretty big changes with the Big Three:

  • Australia: Increasing their ‘Skill Stream’ by 11 percent, from 113,850 last year to 125,850.
  • Canada: Increasing their ‘Skilled Migrant’ stream by 22 person, from 153,491 last year to 186,881.
  • New Zealand: Decreasing the ‘Skilled Migrant Category’ by 13 percent, from 31137 last year to a capped 27,000 this year.

Skilled Migration ComparisonAustralia, Canada and New Zealand

Bucking the Trend

So New Zealand is busy heading in the opposite direction to Australia and Canada, but why?

Um, actually I have no idea, I was hoping someone could tell me.

Since 2001 the New Zealand Immigration Programme has had a target quota for Residence Approvals of between 45,000 and 50,000 and that hasn’t changed. Ministers have constantly spoken about the benefits and need of migration, but keep on cutting numbers.

Residency applications are split into four groups: Skilled/Business (61%); Humanitarian (9%); Parent/Sibling(12%); and Family Sponsored categories (18%) (percentages are averages since 2001). The Skilled Migrant Category, part of the Skilled/Business group, is the single largest sector making up over 55 percent of all Residency Approvals.

Residency Approvals

(Click for enlargement))

The immigration department’s year runs from July to June so we don’t have a full year to look at, however figures are available to May 2011.

Comparing the 11 months from July 2010 to May 2011 against the same period in the previous year we see some interesting differences.

#1 difference is an overall drop of 4,721 approvals.

#2 difference is that the group most affected is the Skilled/Business stream.

An uneven drop

As you can see from the previous graph, the drop in numbers has not been even, in fact numbers for the Humanitarian and Parent/Sibling groups have increased slightly. Both the Skilled/Business stream and Uncapped Family streams however have fallen.

Looking a little deeper at the Skilled/Business stream (which includes the

Skilled Migrant Category, Work to Residence, Entrepreneurs and Investors) the real drop has come from the Skilled Migrant Category. Through this period there have been 5,150 less applications approved in this stream, an actual drop so far this year of over 21 percent.

So while Australia and Canda are increasing their Skilled Migrant streams, New Zealand has cut the capped amount by 13 percent and actual numbers by over 21 percent over the past 11 months. This is not a blip or mistake, this is a policy being implemented. From January 2010 applications being accepted under the Skilled Migrant Category were cut by 30 percent and this is the result.

It takes time for changes like that to filter through the system with the effect first showing in July 2010. This means that numbers will continue to fall over the coming months no matter what changes might be belatedly made to increase the count.

Temporary Approvals

(Click for enlargement))

Temporary Work Visas

So is the New Zealand government leaning towards temporary visas rather than permanent? In a recession this can be a useful strategy to get industry moving.

Comparing the same eleven month period of June 2010 to May 2011 to the same period in the previous year we can see that this is not the case. Overall approvals for temporary work permits have dropped by 15,822 (10.3%) to 137,890.

Some areas such as the working holiday schemes are fixed, meaning that this shortfall also comes from the 'Skilled' areas:

  • Graduate jobsearch: down 2,765 to 8,727, a drop of 25%
  • Long Term Skills Shortage: down 154 to 386, a drop of 28.5%
  • Essential Skills: down 7,201 to 20,701, a drop of 25.9%
  • Skilled Migrant: down 308 to 892, a drop of 25.7%

So New Zealand has also cut temporary skilled migration by over a quarter.

New Zealand is losing the international battle for skills

While Australia and Canada are attracting the most desireable globally mobile skilled workers New Zealand has implemented a policy to cut these numbers.

As a result skill shortages in New Zealand are reaching a critical boiling point.

While training programmes are planned to provide semi-skilled workers and graduates New Zealand business has been starved of skilled, qualified and experienced staff. Also contributing to this problem has been a drop in wages and conditions over the past two years causing an increase in numbers of the mostly highly skilled staff heading to Australia. Record numbers are now leaving New Zealand for Australia.

A looming disaster

I believe a disaster in New Zealand employment is coming, a disaster which move2nz predicted and warned the Immigration Minister Dr. Jonathan Coleman of in March 2009, soon after he took office. Sadly this feedback has been completely ignored and as a result New Zealand business will soon be in serious difficulties.

While immigration could be used to help the position bureaucracy has massively increased leading to long delays for processing. Any changes to migration numbers to correct this situation will take months to actually filter through because of this and it is my strong belief that New Zealand jobs and businesses will suffer as a result.

So where does this leave you, the migrant?
Some time soon either the current Immigration Minister, or if the government changes in November the next Minister, will need to make swift changes to correct this catastrophic imbalance. Initially this will likely only be aimed at temporary workers, for example with the rebuild of Christchurch, but that will lead to opportunities for Residency.

Migrants with skills and experience who are prepared and ready may very soon have excellent opportunities to find work in New Zealand, helping to grow our economy, create jobs and finally push New Zealand's economy out of the doldrums. So have your application ready, the next six months may be very interesting!

Statistics taken from the Immigration New Zealand website.

Please note that I am not a licensed immigration adviser and this article is not intended in any way as individually tailored immigration advice.


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One Response to “A looming Skill Shortage epidemic for New Zealand”

  1. New Zealand sinks into negative migration « move2nz: the blog Says:

    […] government is forcing globally mobile migrants to take their skills elsewhere as I mentioned in June with New Zealand cutting its skilled immigration programme while Australia and Canada have […]

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