Rationale for making changes to the Skilled Migrant Category

How the Skilled Migrant Category currently works

The Skilled Migrant Category is currently a 2-stage process:

1. Potential applicants submit an Expression of Interest (EOI) into the EOI pool indicating the points they are claiming, and
2. Immigration New Zealand periodically draws all applications in the pool that have claimed sufficient points to meet the current threshold (160 points). Following an initial assessment, Immigration New Zealand sends submitters an invitation to apply for residence under the Skilled Migrant Category. Pre-COVID, applications were drawn every 2 weeks.

Under the current points system, people can claim points for:

• formal skills, assessed using skilled work experience and qualifications as proxies
• a job or a job offer at median wage or above that meets the definition of ‘skilled’
• bonus points for a range of factors relating to the ability to settle well or to contribute to other policy objectives, e.g. points for working outside Auckland, studying in New Zealand, or having a skilled partner
• age, with fewer points able to be claimed the older the applicant is, and an upper limit of 55 years.

Historically, most applicants for the Skilled Migrant Category have been people already onshore on temporary work visas (94% in 2019).

The points threshold was intended to be adjusted regularly to manage the skill level and volume of applications. In practice, changes were rarely made. A 2015/16 review of the Skilled Migrant Category resulted in some changes to the balance of points and an increase from 140 to 160 points.

Annex 1: Current skilled migrant category points

Why are changes proposed?

Before the borders closed, we were seeing the following issues under the Skilled Migrant Category:

• Large numbers of migrants with limited training or experience becoming eligible for the Skilled Migrant Category. This is not consistent with the objective of granting residence to people who can fill long-term skill needs.
• A significant backlog of eligible applications and long wait times for decisions, because the number of eligible applicants significantly exceeded the places available, and many applications were complex to process under current settings. For example, in 2019 only around 40% (8,150 out of 19,750 applications) of all eligible applications were processed and approved. This was becasue of the planning range. This created significant uncertainty for migrants about when and if they would be granted residence.
• A population of migrants who had become well-settled in New Zealand, but did not have a realistic pathway to residence, by repeatedly renewing temporary work visas. Settling without the rights and protections of residence creates a range of risks for the migrant.

It’s a good time to make changes, because:

• most people already in the queue for the Skilled Migrant Category, as well as those who would have become eligible over the next few years, will gain residence through the one-off 2021 Resident Visa (given historically most people apply from onshore); and
• the one-off 2021 Resident Visa also means the population of migrants who would otherwise not be eligible for residence has also drastically reduced.

The proposed changes to are designed to:

1. Align with the Immigration Rebalance

The proposed changes aim to set a clear skills threshold, to align with key principles of the Immigration Rebalance of training and employing New Zealanders in the first instance; reducing reliance on lower-skilled migrant labour; and incentivising employers to improve wages and conditions, and to lift productivity. The focus of the proposed changes is therefore on granting residence to people who can fill medium- to long-term skill needs that would be hard, or take time, to fill from the domestic labour market, even under the right conditions.

The current labour market is tight. Residence can be an important mechanism to attract migrant workers to New Zealand. However, the permanent nature of residence means it’s appropriate to focus the settings for the Skilled Migrant Category on medium- to long-term skill needs.

In general, temporary work visas should be used to address immediate labour market needs. Giving residence to everyone eligible for a temporary work visa could lead to potentially unmanageably high immigration flows; or a need to increase the threshold for temporary work visas. Focusing on our medium- to long-term skill needs over immediate labour shortages will be particularly important if there is an economic downturn or the labour market changes, e.g. if unemployment rates were to increase again.

2. Give more certainty to migrants and employers

Certainty is a key part of both attracting migrants to New Zealand and treating them well. The proposed changes aim to create clear pathways to residence to support employers to attract skilled migrants, and to give more certainty to migrants and their families.

Treating migrants well includes being clear about who is unlikely to be eligible for residence, to enable potential migrants to make informed decisions about their immigration options from the beginning. At the same time as providing clear residence pathways, we want to avoid people becoming well-settled in New Zealand without a realistic pathway to residence, and the rights and protections that residence provides.

3. Improve processing times

The current points system is complex to administer. The proposed changes aim to simplify processes where possible, to support faster decision-making and reduce the time required to process each application. The goal is shorter wait times for migrants and no long queues. This will contribute to improving certainty and the attractiveness of New Zealand to skilled migrants.

4. Reduce immigration and labour market risks

The proposed changes also aim to close off access to roles shown to be prone to misuse of visas and supplier-induced demand (i.e. where jobs are available primarily to support migrants to gain residence, rather than because of actual labour market needs). They also aim to appropriately manage risks of immigration gaming and/or fraud, which are drivers of exploitation and poor conditions for both migrants and domestic workers.