Setting the right standards
Setting the right standards
Speech to the New Zealand Association for Migration Investment
Sorrento Park, Auckland
My thanks for the opportunity to spend time with you today. It's much appreciated. Can I also congratulate your association on its work this past year.
Your input into the significant changes heralded by the Immigration Bill, the work of your Ethics Committee, and your work with Immigration New Zealand policy teams on family and skilled migrant category policy issues, mean we all gain the benefit of your wide practical experience in handling the diversity of potential immigrants seeking to come to New Zealand.
Today, I particularly want to focus on those same policy issues surrounding skilled migrants and the business/investor categories, as well as family policy.
But first, I want to make clear National's position on the Immigration Bill. I believe that's important because the bill establishes the framework within which policy operates.
While policy will always be political to a greater or lesser extent, it's highly desirable that the immigration framework for New Zealand has bipartisan support. A sound, stable framework is in everyone's best interests.
I couldn't summarise the key elements of the Immigration Bill better than Bernard Walsh has done in his Chairman's Report. And the National Party supports the simplified visa system, the single Appeals Tribunal, the streamlined, fact-based, deportation system, as well as the provision enabling the Minister of Immigration to delegate positive discretion in residence decision making to appropriate officials.
There will undoubtedly be discussion at the select committee over some of the biometric information requirements, the use of classified information and the appropriate balance between the rights of the government to use and protect classified information, where it's in the best interests of New Zealand, and the rights of an applicant for a visa or residence.
There will probably also be some debate about the changes to the "reasonable excuse" for employers who take on someone not legally entitled to be employed in New Zealand. Relying on a completed IR330 will no longer be considered a reasonable excuse. The department will, therefore, need to make sure relevant information is readily available to employers if that greater onus in compliance is to be enforced.
I think we all want to see the bill introduced and I certainly look forward to your association's submissions on it.
Your annual report contains a foreword by the current Minister of Immigration. In it, he states "immigration not only fills the skills shortage in our workplaces, it helps boost New Zealand's productivity and contributes to moving our economy to a high skills, high income, knowledge-based environment". He concludes that "immigration contributes significantly to the transformation of our economy".
It's interesting to compare that assertion with recently published work by Dr Greg Clydesdale, an industrial economist in the Department of Management and International Business at Massey University with expertise in economic development and growth.
No one could disagree with the ambition in the Minister's rhetoric, but what of the reality?
Dr Clydesdale has analysed data on outcomes for new immigrants arriving in both New Zealand and Canada under reasonably similar business/investor immigration policies.
In Canada, a study in 2003 showed a large number of business migrants could not actually be located even though a Canada-wide search of credit records had been conducted.
The Canadian programme required a business immigrant to be involved in active business management, and the employment of at least one Canadian. Less than a quarter of the business migrants entering Canada could be shown to be meeting those conditions of the programme.
The income figures for the migrants located in fact suggested they were having a poor economic impact. What's more, tax files reviewed in the study confirmed the poor outcomes.
The Canadian Government had actually sought immigrants to achieve growth in technological innovation and manufacturing, yet only 6% of the immigrant businesses were established in manufacturing. The other 94% took over already-started businesses in the service sector.
Even immigrants who used sophisticated technologies in their homelands ended up buying convenience stores. It was found that although migrants may have come with high skill levels, the transfer of technology and human capital simply didn't occur to anywhere the extent expected.
Interestingly, Government reports were upbeat on the achievements of the policy, with statements similar to those by our own Minister of Immigration in your annual report.
So what of the New Zealand experience? What has been the success of immigrants chosen for their entrepreneurial qualities?
Analysis using the Labour Department's own data has shown interesting trends. The long-term business visa has been quite an important immigration path for New Zealand. Those successfully establishing a business can apply for permanent residence under the entrepreneur category.
Despite some thousands of new immigrants arriving in the country via the long-term business visa scheme between 1999 and 2002, the period of the particular analysis in New Zealand, only 56 applied for residence under the entrepreneur category.
Of those business applicants seeking residence, most were involved in cafes and restaurants, property and business services. There was little evidence of technology transfer. Hardly a recipe for economic transformation.
In a recent publication of Massey News, Dr Clydesdale claimed the Department of Labour figures showed only 2% of business immigrants introduced new technology here. He said many bought existing businesses such as restaurants, cafes and takeaways, with little new activity. He said there was no added value, just a change of ownership.
In a more comprehensive research paper, he said that in both New Zealand and Canada there appeared to be a strong reluctance to recognise the extent of policy failings. He went on to suggest that the missing element in policy may be a failure to better match the entrepreneur's skills and experience to the business environment to which they were migrating.
Citing comprehensive international research, Dr Clydesdale argued that the match or mismatch between market requirements, or the market environment, and the individual resources, skills, or experience of the migrant entrepreneur can have a significant impact on the success or otherwise of the outcome for the migrant.
While there are clear signs of some improved outcomes in recent years, the analysis should give policymakers food for thought. High-sounding rhetoric from politicians is one thing; calmer, more careful analysis of the realities should not be ignored.
Future thinking around business/investor immigration policy should clearly give appropriate weight to that issue of matching skills and experiences to the particular market conditions the prospective immigrant seeks to enter.
As one looks at the applications approved under the long-term business category, it's fairly clear that not just poor outcomes are limiting the economic potential of business migrants. The severe decline in the number of applications decided will hardly boost economic transformation.
From the 515 applications approved in the 2001/02 year there has been an 80% decline in numbers approved, with an average of only 106 in the past two years.
So, if the outcomes for our business/investor category migrants pre-2003 show they aren't exactly boosting New Zealand's productivity and transforming our economy, and the numbers post-2003 have dwindled alarmingly, what of the skills contribution of migrants coming in under the Skilled Migrant Category?
Again, Dr Clydesdale has used departmental data in some interesting analysis. He argues that the accepted breakdown of migrants – 60% coming in through the skilled/business stream, 30% through the family-sponsored stream, and 9% through the international/humanitarian stream, does not present a true picture the proportion of immigrants bringing in needed skills.
Department of Labour data, according to Dr Clydesdale, reveals that only 15% of the total number of immigrants currently arriving in New Zealand bring in needed skills. He points out that though 60% of the applicants may be in the skilled/business category, if the applicant has a partner and two children, for example, only one of the four immigrants arriving may be bringing in needed skills, yet the other three are not included in family sponsorship data.
I'm sure many will debate his figures. However, combined with his analysis of the outcomes for business/investor category migrants, and the recent trends in numbers, there is clearly a need to set aside the political rhetoric and do some careful policy work on how New Zealand can raise both the percentage of migrants bringing in needed skills, and the business successes of those coming in through the business/investor categories.
That shouldn't be beyond our wit. It's not that the current policies are all wrong. Just as better matching the skills and business experience of the investor migrant with the relevant market conditions could make a difference to successful outcomes, so tweaking the emphasis on skills could have a significant impact on the proportion of immigrants bringing into New Zealand the skills so desperately needed to meet shortages in our workplaces.
The key to achieving that latter outcome would be policy less based on 'government knows best' and more supportive of meeting employer recruitment needs.
To be fair, policy has already moved somewhat in that direction, with the Talented (Accredited Employers) Work Policy. The problem is that policy still retains a significant element of 'government knows best'. The potential accredited employer has to jump through hoops that can take several months of administrative time. The hassles include the provision of commercially sensitive financial information to Immigration New Zealand, which is then sought under the Official Information Act by trade unions.
Employers are finding Immigration NZ is putting significant pressure on them to have that confidential financial information released to the unions. For example, in a letter from Immigration New Zealand I tabled in Parliament yesterday, Immigration New Zealand stated – "INZ needs to clarify exactly how the release of the letter (the financial information) itself would be likely unreasonably to prejudice your commercial position. Specifically, INZ seeks your comments on the following:
· The exact nature of the prejudice to the commercial position if the letter (information) was disclosed.
· How likely would the disclosure of the letter (information) cause the predicted prejudice?
· Why would that prejudice be unreasonable?
I am stunned by the compromising position that Immigration NZ has placed applicants in. When confidential financial information is provided to a government department in the course of administering specific government policy, the law should protect that private information. The situation is totally unacceptable, and I call on the Minister to ensure that applicants under the Accredited Employer Scheme are not compromised in this way by the threat of release of their private financial information.
The unions are also making mischief in other ways. Some, such as the Northern Distribution Union, are openly telling applicants under the Accredited Employer Scheme that the union has a significant say in the ultimate tick-off for accredited employer status.
Recently, the Northern Distribution Union has boasted it is currently sitting on nine applications – that prospects for their tick-off for the applicant can be enhanced by arranging union meetings with employees, facilitating collective coverage, and encouraging the sign-up of employees to the union.
Further, it is unacceptable that administrative procedure for any government policy should enable a union delegate to tell an applicant for accredited employer status, during collective employment negotiations, that the union has the power to tick off or not tick off the employer's application.
In doing this, the Northern Distribution Union was undoubtedly overstepping the mark, but it is incumbent on the Government to ensure that the law surrounding important immigration policy such as this does not permit such Union intimidation. Crucially important policy to facilitate the acquisition of skills genuinely needed to make New Zealand a more successful place for all Kiwis should not be held hostage to such administrative and bureaucratic stupidity.
Prior to the next election, National will be detailing policies to ensure a higher proportion of immigrants do add to our skill base, and that employers are better supported in acquiring the skills they need. A measure of commonsense will drive those policies, rather than the philosophic compromises imposed by Labour.
Excessive union involvement in immigration policy is not helpful, and neither is confusing policies to meet the labour needs of vital seasonal industries in New Zealand.
Common sense suggests the seasonal work permit – that has for years provided much of the seasonal labour required for our vital horticulture industries, and enabled backpackers to work their way around New Zealand during the fruit-picking season, having a great holiday and leaving New Zealand singing the praises of our lovely place – should not be scrapped. That the Labour Government is scrapping it in September suggests they've really lost the plot.
Significant concern is growing right now around New Zealand's fruit-growing regions at this latest immigration policy adventure by the Labour Government. At least as an interim move, the Seasonal Work Permit should not be scrapped, and I call on the Immigration Minister to face up to that issue today, as well.
It's time for pragmatic common sense to drive immigration policy. It's time for pragmatic common sense to drive political prejudice out the immigration policy door. Bring on 2008.
Setting the right standards
Speech to the New Zealand Association for Migration Investment
Sorrento Park, Auckland
My thanks for the opportunity to spend time with you today. It's much appreciated. Can I also congratulate your association on its work this past year.
Your input into the significant changes heralded by the Immigration Bill, the work of your Ethics Committee, and your work with Immigration New Zealand policy teams on family and skilled migrant category policy issues, mean we all gain the benefit of your wide practical experience in handling the diversity of potential immigrants seeking to come to New Zealand.
Today, I particularly want to focus on those same policy issues surrounding skilled migrants and the business/investor categories, as well as family policy.
But first, I want to make clear National's position on the Immigration Bill. I believe that's important because the bill establishes the framework within which policy operates.
While policy will always be political to a greater or lesser extent, it's highly desirable that the immigration framework for New Zealand has bipartisan support. A sound, stable framework is in everyone's best interests.
I couldn't summarise the key elements of the Immigration Bill better than Bernard Walsh has done in his Chairman's Report. And the National Party supports the simplified visa system, the single Appeals Tribunal, the streamlined, fact-based, deportation system, as well as the provision enabling the Minister of Immigration to delegate positive discretion in residence decision making to appropriate officials.
There will undoubtedly be discussion at the select committee over some of the biometric information requirements, the use of classified information and the appropriate balance between the rights of the government to use and protect classified information, where it's in the best interests of New Zealand, and the rights of an applicant for a visa or residence.
There will probably also be some debate about the changes to the "reasonable excuse" for employers who take on someone not legally entitled to be employed in New Zealand. Relying on a completed IR330 will no longer be considered a reasonable excuse. The department will, therefore, need to make sure relevant information is readily available to employers if that greater onus in compliance is to be enforced.
I think we all want to see the bill introduced and I certainly look forward to your association's submissions on it.
Your annual report contains a foreword by the current Minister of Immigration. In it, he states "immigration not only fills the skills shortage in our workplaces, it helps boost New Zealand's productivity and contributes to moving our economy to a high skills, high income, knowledge-based environment". He concludes that "immigration contributes significantly to the transformation of our economy".
It's interesting to compare that assertion with recently published work by Dr Greg Clydesdale, an industrial economist in the Department of Management and International Business at Massey University with expertise in economic development and growth.
No one could disagree with the ambition in the Minister's rhetoric, but what of the reality?
Dr Clydesdale has analysed data on outcomes for new immigrants arriving in both New Zealand and Canada under reasonably similar business/investor immigration policies.
In Canada, a study in 2003 showed a large number of business migrants could not actually be located even though a Canada-wide search of credit records had been conducted.
The Canadian programme required a business immigrant to be involved in active business management, and the employment of at least one Canadian. Less than a quarter of the business migrants entering Canada could be shown to be meeting those conditions of the programme.
The income figures for the migrants located in fact suggested they were having a poor economic impact. What's more, tax files reviewed in the study confirmed the poor outcomes.
The Canadian Government had actually sought immigrants to achieve growth in technological innovation and manufacturing, yet only 6% of the immigrant businesses were established in manufacturing. The other 94% took over already-started businesses in the service sector.
Even immigrants who used sophisticated technologies in their homelands ended up buying convenience stores. It was found that although migrants may have come with high skill levels, the transfer of technology and human capital simply didn't occur to anywhere the extent expected.
Interestingly, Government reports were upbeat on the achievements of the policy, with statements similar to those by our own Minister of Immigration in your annual report.
So what of the New Zealand experience? What has been the success of immigrants chosen for their entrepreneurial qualities?
Analysis using the Labour Department's own data has shown interesting trends. The long-term business visa has been quite an important immigration path for New Zealand. Those successfully establishing a business can apply for permanent residence under the entrepreneur category.
Despite some thousands of new immigrants arriving in the country via the long-term business visa scheme between 1999 and 2002, the period of the particular analysis in New Zealand, only 56 applied for residence under the entrepreneur category.
Of those business applicants seeking residence, most were involved in cafes and restaurants, property and business services. There was little evidence of technology transfer. Hardly a recipe for economic transformation.
In a recent publication of Massey News, Dr Clydesdale claimed the Department of Labour figures showed only 2% of business immigrants introduced new technology here. He said many bought existing businesses such as restaurants, cafes and takeaways, with little new activity. He said there was no added value, just a change of ownership.
In a more comprehensive research paper, he said that in both New Zealand and Canada there appeared to be a strong reluctance to recognise the extent of policy failings. He went on to suggest that the missing element in policy may be a failure to better match the entrepreneur's skills and experience to the business environment to which they were migrating.
Citing comprehensive international research, Dr Clydesdale argued that the match or mismatch between market requirements, or the market environment, and the individual resources, skills, or experience of the migrant entrepreneur can have a significant impact on the success or otherwise of the outcome for the migrant.
While there are clear signs of some improved outcomes in recent years, the analysis should give policymakers food for thought. High-sounding rhetoric from politicians is one thing; calmer, more careful analysis of the realities should not be ignored.
Future thinking around business/investor immigration policy should clearly give appropriate weight to that issue of matching skills and experiences to the particular market conditions the prospective immigrant seeks to enter.
As one looks at the applications approved under the long-term business category, it's fairly clear that not just poor outcomes are limiting the economic potential of business migrants. The severe decline in the number of applications decided will hardly boost economic transformation.
From the 515 applications approved in the 2001/02 year there has been an 80% decline in numbers approved, with an average of only 106 in the past two years.
So, if the outcomes for our business/investor category migrants pre-2003 show they aren't exactly boosting New Zealand's productivity and transforming our economy, and the numbers post-2003 have dwindled alarmingly, what of the skills contribution of migrants coming in under the Skilled Migrant Category?
Again, Dr Clydesdale has used departmental data in some interesting analysis. He argues that the accepted breakdown of migrants – 60% coming in through the skilled/business stream, 30% through the family-sponsored stream, and 9% through the international/humanitarian stream, does not present a true picture the proportion of immigrants bringing in needed skills.
Department of Labour data, according to Dr Clydesdale, reveals that only 15% of the total number of immigrants currently arriving in New Zealand bring in needed skills. He points out that though 60% of the applicants may be in the skilled/business category, if the applicant has a partner and two children, for example, only one of the four immigrants arriving may be bringing in needed skills, yet the other three are not included in family sponsorship data.
I'm sure many will debate his figures. However, combined with his analysis of the outcomes for business/investor category migrants, and the recent trends in numbers, there is clearly a need to set aside the political rhetoric and do some careful policy work on how New Zealand can raise both the percentage of migrants bringing in needed skills, and the business successes of those coming in through the business/investor categories.
That shouldn't be beyond our wit. It's not that the current policies are all wrong. Just as better matching the skills and business experience of the investor migrant with the relevant market conditions could make a difference to successful outcomes, so tweaking the emphasis on skills could have a significant impact on the proportion of immigrants bringing into New Zealand the skills so desperately needed to meet shortages in our workplaces.
The key to achieving that latter outcome would be policy less based on 'government knows best' and more supportive of meeting employer recruitment needs.
To be fair, policy has already moved somewhat in that direction, with the Talented (Accredited Employers) Work Policy. The problem is that policy still retains a significant element of 'government knows best'. The potential accredited employer has to jump through hoops that can take several months of administrative time. The hassles include the provision of commercially sensitive financial information to Immigration New Zealand, which is then sought under the Official Information Act by trade unions.
Employers are finding Immigration NZ is putting significant pressure on them to have that confidential financial information released to the unions. For example, in a letter from Immigration New Zealand I tabled in Parliament yesterday, Immigration New Zealand stated – "INZ needs to clarify exactly how the release of the letter (the financial information) itself would be likely unreasonably to prejudice your commercial position. Specifically, INZ seeks your comments on the following:
· The exact nature of the prejudice to the commercial position if the letter (information) was disclosed.
· How likely would the disclosure of the letter (information) cause the predicted prejudice?
· Why would that prejudice be unreasonable?
I am stunned by the compromising position that Immigration NZ has placed applicants in. When confidential financial information is provided to a government department in the course of administering specific government policy, the law should protect that private information. The situation is totally unacceptable, and I call on the Minister to ensure that applicants under the Accredited Employer Scheme are not compromised in this way by the threat of release of their private financial information.
The unions are also making mischief in other ways. Some, such as the Northern Distribution Union, are openly telling applicants under the Accredited Employer Scheme that the union has a significant say in the ultimate tick-off for accredited employer status.
Recently, the Northern Distribution Union has boasted it is currently sitting on nine applications – that prospects for their tick-off for the applicant can be enhanced by arranging union meetings with employees, facilitating collective coverage, and encouraging the sign-up of employees to the union.
Further, it is unacceptable that administrative procedure for any government policy should enable a union delegate to tell an applicant for accredited employer status, during collective employment negotiations, that the union has the power to tick off or not tick off the employer's application.
In doing this, the Northern Distribution Union was undoubtedly overstepping the mark, but it is incumbent on the Government to ensure that the law surrounding important immigration policy such as this does not permit such Union intimidation. Crucially important policy to facilitate the acquisition of skills genuinely needed to make New Zealand a more successful place for all Kiwis should not be held hostage to such administrative and bureaucratic stupidity.
Prior to the next election, National will be detailing policies to ensure a higher proportion of immigrants do add to our skill base, and that employers are better supported in acquiring the skills they need. A measure of commonsense will drive those policies, rather than the philosophic compromises imposed by Labour.
Excessive union involvement in immigration policy is not helpful, and neither is confusing policies to meet the labour needs of vital seasonal industries in New Zealand.
Common sense suggests the seasonal work permit – that has for years provided much of the seasonal labour required for our vital horticulture industries, and enabled backpackers to work their way around New Zealand during the fruit-picking season, having a great holiday and leaving New Zealand singing the praises of our lovely place – should not be scrapped. That the Labour Government is scrapping it in September suggests they've really lost the plot.
Significant concern is growing right now around New Zealand's fruit-growing regions at this latest immigration policy adventure by the Labour Government. At least as an interim move, the Seasonal Work Permit should not be scrapped, and I call on the Immigration Minister to face up to that issue today, as well.
It's time for pragmatic common sense to drive immigration policy. It's time for pragmatic common sense to drive political prejudice out the immigration policy door. Bring on 2008.
