Industry prepares for immigration concessions

New Zealand First is in the box seat to help form the next Government - and, in exchange, will be looking to exact key policy concessions. Shane Cowlishaw explores how one of their pillars, cutting immigration, could affect industries reliant on foreign labour and what businesses are doing to prepare for any changes.

As the nation waits to see who will form the next Government, industries are holding their breath about the potential effects of resulting changes to migration settings.

There has been plenty of crystal ball gazing from the media about which way New Zealand First leader Winston Peters may swing, and plenty about his many “bottom line” policy demands.

The reality is no one is any the wiser about whether he will side with National or Labour (or sit on the cross benches) or what particular policies he will demand.

However, the bread-and-butter of New Zealand First has always been immigration, so there is a good chance that reducing net immigration (currently at 72,000) will be high on that list.

Chopping down the number of people entering the country sits easier with Labour, whose own policy is to reduce immigration through tweaks to student and work visas, but National is also likely to make concessions in the area if it means remaining in Government.

Industry lobby groups spoken to said they had already started, or were about to start, planning for the changes and sending their message through to Wellington.

“We do rely on migrants and the Government would probably say we’re over-reliant on migrants, Michael Woodhouse has told us that, but we just can’t find them.”

The groups said they were not opposed to a reduction of low-skilled migrants in exchange for high-skilled, but were worried about how certain occupations were classified and greatly concerned that immediately turning off the tap would damage the economy.

Employing New Zealanders before migrants is one of New Zealand First’s rallying cries, but with unemployment at a low 4.8 percent many businesses say it’s simply impossible to find locals to do the work.

Peters has said he would like to see net migration fall to around 10,000 to 15,000, a drastic cut that would have serious impacts for industries that are heavily reliant on migrant labour.

How drastic those impacts would be, and how to prepare for those changes, are questions being asked as the country prepares for political change.

An industry in crisis

The aged care sector is facing trying times.

With a swelling older population the industry is growing, but finding it increasingly difficult to find staff.

About 30 percent of the 22,000 people employed in aged care are migrants, some on longer-term visas but many on short-term work visas.

Aged Care Association chief executive Simon Wallace said after the equal pay settlement that raised wage bills across the board, migration was the biggest issue facing the industry.

There had been ongoing, fierce lobbying on behalf of their members but changes earlier this year by the Government to migration settings had been a setback.

In April, Immigration Minister Michael Woodhouse revealed the introduction of salary bands for both skilled migrants applying for residency and people applying for temporary essential skills visas.

People who did not meet the threshold could still get a visa, but could only stay for a maximum of three years before being subject to a one year stand-down period outside the country.

For caregivers the salary threshold was moot, as under the Australian and New Zealand standard classification of occupations (ANZCO) they were classified as low-skilled.

Wallace said the reality was most workers would head somewhere else rather than return to New Zealand after being forced to leave.

“It’s a big issue for us because we are facing over the next 10 years a real spike in the ageing demographic and estimations from the work that we’ve done ... is that we’ll need 1000 extra workers a year between now and 2027.”

Regarding any changes that may be demanded by New Zealand First, Wallace said he had spoken to several party members about the issue but had not come away any clearer on what their policies were.

The notion that the industry could just hire New Zealanders to fill the positions was unrealistic, as caregiving was now a much more highly-skilled position and there were simply not enough locals willing to do the work.

“[Winston Peters] says that but we just can’t get the Kiwis to do the jobs, you only have to talk to our members and we just can’t find 1000 right Kiwis.

“We do rely on migrants and the Government would probably say we’re overreliant on migrants, Michael Woodhouse has told us that, but we just can’t find them.”

A review of the ANZCO system was a priority, something that the current Government has already indicated it is looking to do, but regardless of who is in power there would be some hard lobbying ahead, Wallace said.

Confidence in the vineyards

Out of the major industries that rely heavily on migrant labour, horticulture may be breathing the easiest about any potential immigration changes.

For its seasonal work, growers employ backpackers alongside locals to pick kiwifruit, grapes, and fruit.

They are also reliant on the Regional Seasonal Employer (RSE) scheme, a 10-year-old initiative that provides 10,500 temporary work visas to people from the Pacific to work in the industry during the busy season.

Horticulture New Zealand chief executive Mike Chapman said that after discussions with New Zealand First he understood they were supportive of the RSE scheme and its importance to both New Zealand businesses and the islands.

One of the main staffing problems facing the horticulture industry was getting people in high-skilled positions to work in the regions, something that New Zealand First had indicated was a priority.

“I’m not picking the New Zealand First policies will be particularly difficult for us in that area, we do have some growing around cities but we’d say to them we’re focusing on skilled immigrants where we haven’t got enough and we are trying to train Kiwis up.”

Horticulture NZ had been planning for the change in government and would be lobbying for enhancements to the RSE scheme, alongside attracting more skilled immigration.

But Chapman said the notion of simply hiring more local workers to fill the gaps filled by migrants was not possible.

In many parts of the country such as Central Otago there was basically no one to hire, apart from those who had valid reasons for not being able to work, he said.

“The reality is we need to import people, but we need to import the right people that will fit in well ... and to its credit some of what New Zealand First saying is about that and I don’t think they want to shoot New Zealand in the foot.”

“I know down there there are growers that have land available, water available, and if they had certainty of labour they would be expanding.”

Reliability was also a big issue, he said, with RSE workers boasting participation rates in the high 90 percent while local workers hovered at about 50 percent.

While the horticulture industry says migrant workers are essential, they may have some explaining to do to Peters around concerns regarding exploitation.

Peters has been vocal in his criticism of employers caught ripping off workers by underpaying or forcing them to work long hours, stating they should face deportation and New Zealand was becoming a country with Third World workplaces.

Restaurant owners have often grabbed the headlines in this area, but media reports about widespread exploitation in the kiwifruit industry have been raising eyebrows, with a Ministry of Business, Innovation and Employment sting finding more than half of the targeted employers in the Bay of Plenty did not meet minimum standards.

Will students face the chop?

In Peters’ many speeches on migration, reducing the number of students is often mentioned.

He has argued that in the quest for the international student dollar, New Zealand has allowed sub-par institutions to flourish and made it too easy for those studying to stay on in New Zealand after they finish.

“When our export education and our education system began to falter against international competition, we offered the incentivisation to try and keep it going of being allowed to stay,” he told the AM Show in April.

“That wasn’t to help our economy; that was to help what you might call appallingly second-rate, third-rate education institutions to carry on their business so people are coming out with a diploma and can’t fry an egg.”

The international education market has exploded in New Zealand, with a report by Education New Zealand estimating the total contribution to GDP in 2014/15 at $4 billion.

Excluding primary and secondary pupils, almost 100,000 students were paying a total of $886m in fees, with the bulk of students living in Auckland.

Many of those students go onto work visas when their studying finishes, while one in five go on to acquire residency.

But many end up working in low-income jobs, while even skilled migrants earn less than their New Zealand counterparts.

With the international education sector becoming such a cash cow, issues of exploitation and sub-par teaching have also become a problem.

In September NZQA shut down a Christchurch business school after repeated infringements regarding over-enrolment.

Concerns have also been raised about immigration fraud, particularly in the Indian student market where commissions are paid to recruiters.

Terry McGrath, acting president of the International Education Association of New Zealand, said there was already a move away from low-level courses which had been associated with fraud.

With so much money involved there would always be people trying to take advantage and it was important both the authorities and the industry were vigilant, he said.

“At the end of the day if people want to make money they will do anything they can to make money if that’s their primary reason for being in business.”

The education industry would be watching closely to see what changes might be made, but McGrath was confident any new Government would not hamstring the growing sector.

“The reality is we need to import people, but we need to import the right people that will fit in well ... and to its credit some of what New Zealand First saying is about that and I don’t think they want to shoot New Zealand in the foot.”

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