More evidence New Zealand’s ‘skills-based’ visa system is failing

Much like Australia, New Zealand purports to run a ‘skills-based’ visa system that plugs critical skills shortages across the nation. However, new data from Statistics New Zealand actually shows that fewer of those migrating to New Zealand are of working-age. From Interest.co.nz:

The Government’s decision to open the door to the parents of migrants to settle in New Zealand comes as the number of migrants aged 60 or over coming to NZ hits a high.

Statistics NZ figures show 8923 migrants aged 60 or over arrived in this country in the 12 months to the end of July. That was the highest number since Statistics NZ began compiling the information in 2015.

However the number of migrants aged 60 and over who departed this country long term has been growing at an even faster rate, with a record 7036 leaving in the 12 months to July.

That reduced the net gain of migrants aged 60 and over to 1887 in the 12 months to July, which was 3.6% of the total net gain of 52,722 over the same period, down from 4.5% in the 12 months to July 2015 (see table below).

The figures also show that the children of migrants are making up a bigger share of total migration.

In the 12 months to the end of July there was net gain of 14,805 migrants aged under 18, which was 28% of the total, up from 20.3% five years ago.

When migrant numbers for those aged 60 and above are added to those aged under 18, they now total almost a third (31.6%) of total net migration, up from just under a quarter (24.7%) five years ago.

So while the changes to the eligibility criteria for older migrants have been presented as a move to help employers attract younger migrants with skills for positions they are having trouble filling with local candidates, it seems that fewer of those migrating to this country are actually of working age.

The Labour Government’s recently announced immigration reforms are likely to make the situation even worse.

First, Labour will now allow families of lower paid temporary workers to come to New Zealand for the length of their visa, with these dependent children also allowed to access taxpayer-funded primary and secondary education.

Second, Labour will now allow 1,000 skilled migrants to bring their elderly parents into New Zealand.

Together, both policies will very likely decrease the proportion of migrants participating in the workforce and paying taxes, while also raising costs for New Zealand taxpayers, who will be forced to subsidise the additional public services and infrastructure consumed by these migrants.

Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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