A new “global talent” visa is essential for securing the top talent New Zealand needs, says the Productivity Commission in its final report on immigration settings.

Released on Tuesday, the report says the country needs to be much smarter in ensuring we have the right skills to support economic growth but it also said skill shortage lists should be used to guide industry training rather than as a free pass to hire more migrants.

The report’s 24 recommendations include stopping any more permanent residence visas from being issued to address concerns residents can re-migrate while holding unlimited rights to return.

Instead, residents would have to renew their visas at least every six years, if they haven't obtained citizenship.

The commission also wants a fourfold increase in the number of labour inspectors to ensure migrant workers are treated fairly by employers.

As in its preliminary report, the commission continued to advocate for a law requiring the government to issue a policy statement that reconciles expected immigration flows with the country’s “absorptive capacity” in terms of housing and infrastructure.

New recommendations revealed in the final report include:

  • Making it easier for top talent to enter NZ, such as Australia’s global talent visa which grants immediate permanent residency to up to 15,000 people a year.
  • Speeding up visa processing for highly skilled workers and making recognition of their qualifications more certain.
  • Allowing wages to rise in the face of scarcity rather than simply adding affected occupations to a skills shortage list for determining temporary work visas.
  • Looking at alternatives to the new wage thresholds for temporary work visas.
  • Requiring future new residents to spend at least two years out of every six onshore or demonstrate some other ongoing commitment to NZ.
  • Assessing proposals to expand working holiday visas more rigorously before they are included in international trade agreements.
  • Investing in more up-to-date data to better identify the supply and demand for skills.
  • Increasing the number of labour inspectors by 400% to bring NZ in line with international benchmarks.

Not keen

Commission chair, Ganesh Nana, told BusinessDesk it wasn’t keen on skill shortage lists being used for immigration policy, preferring to see wages responding in the first instance, which would provide more objective data on whether a shortage actually existed.

He said using the lists in isolation encouraged lobbying for special cases and short-term thinking that undermined all of the influences businesses should be exposed to.

“They don't encourage businesses to actually look at their skill needs and change business practices towards higher productivity, innovation, maybe new technology type ways of doing things that we’ve made points on in previous inquiries, like the frontier firms inquiry,” said Nana.

BusinessNZ immigration spokesperson Rachel Simpson said the report confirmed immigration was good for the country and did not displace local workers or impact wages.

She told BusinessDesk that employers didn't necessarily go to immigration as the first port of call as it was an expensive and time-consuming process.

“Over the last couple of years, with borders closed, employers have done everything they possibly can to tap into that local labour market and there's just simply not enough people there. 

She said this has resulted in some really significant skill shortages, but the lists needed to be brought up to date with better data.

“I'm not a big fan of the skills shortage list because it's based on an occupational classification from 2006.

“I think most people agree that it's not fit for purpose in terms of reflecting the modern jobs that we have in our economy.”

Simpson also said BusinessNZ would prefer the government to increase the number of labour inspectors rather than having policies that needed to focus on the lowest common denominator of employment standards.

“Nobody wants those kinds of people operating because that undercuts legitimate businesses,” said Simpson.

Cheap labour

NZ Council of Trade Unions spokesperson Craig Renney told BusinessDesk that while the aggregate picture might show immigration having a net positive effect on the economy, he believed there were industries and regions where current settings have led to a lack of investment in new technology.

“In low skilled migrant occupations where you've got working holiday visas and other types of seasonal workers, essentially that's been used as a substitute for employing more capital or employing different forms of production.

“So if you took the Hawke's Bay, for example, which has horticulture, agriculture, viticulture, it means that the industrial structure tends to rely upon the sources of cheap labour being available.”

Renney also said moving to the International Labour Organisation mandated level of one inspector per 10,000 workers, from the current one per 40,000, “should be the absolute minimum that we are aiming for”.

Kris Faafoi, the immigration minister, told BusinessDesk the report “raised some interesting points”, some of which had been addressed in the recent immigration rebalance announcement.

He said the government will be taking time to carefully consider the commission’s findings and recommendations before responding further.