Another 15,120 people arrived in New Zealand on work visas in March, just in time to learn that Immigration Minister Erica Stanford is revamping the Accredited Employer Work Visa Scheme, in response to what the Government is calling "unsustainable net migration."
According to migration figures from the Ministry of Business Innovation and Employment (which incorporates Immigration NZ), the 15,120 foreign workers who arrived in March took the total number of people who arrived in NZ on work visas in the first quarter of this year to 51,336.
In total there were 199,434 people in NZ on work visas at the end of March.
Among the changes announced by Stanford were introducing an English language requirement for low skilled workers, and minimum skills and work experience thresholds for most roles.
It would also become more difficult for workers such as welders, drivers and fitters & turners to obtain work visas.
"The Government is focused on attracting and retaining the highly skilled migrants such as secondary teachers, where there is a skill shortage," Stanford said in a statement when announcing the changes.
"At the same time we need to ensure that New Zealanders are put to the front of the line for jobs where there are no skill shortages," she said.
However it appears the number of people coming to NZ on work visas may already be in decline.
March was the second consecutive month that work visa arrivals had declined, after they hit 20,199 in January, the highest number in 12 months.
That decline in itself does not necessarily mean the numbers are trending down, because work visa migration figures usually follow a regular seasonal pattern of highs and lows.
So a better comparison comes from the March figures of previous years, and the 15,120 arrivals in March were down 26% compared to March last year, and down 21% compared to pre-pandemic lockdowns in March 2019.
Work visa approvals also appear to be on the wane, with the 17,969 approved in March this year which was the lowest number for the month of March, excluding pandemic lockdown months, since 2014.
The comment stream on this story is now closed.
•You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
59 Comments
My experience with several small-town businesses: They say they can't get kiwis to do the work they want so they have to advertise for a time, then bring in overseas workers after the advert expires and nobody applies. Some however will actively put the requirements for the jobs above what is required so they discourage kiwis to apply, then get the overseas workers in. Interesting times.
Only because those businesses pay nothing. My father and his partner have relocated to a small town and she does semi skilled work for $2 an hour over minimum wage. You wont get kiwis working for that but third world labour will do it for next to nothing. Suppressing wages to the benefit of industry is not in the country's collective interest.
Suppressing wages is often not in the business community's best interests either as it serves to destroy the consumer purchasing power.
Think hospitality for example. Suppressed wages = less people that can afford to eat out. Eateries respond by raising prices so their margins cover their fixed overheads, resulting in even less people that can afford to eat out. Rinse and repeat.
This could also be said for our very high house prices - they simply destroy available discretionary spend for economic activity - especially in retail, hospitality, leisure, internal tourism etc.
And rents. Would be interesting to see how much tax the Landlording sector pays as a portion of total revenue.
How many landlords are negatively geared? How much tax does a negatively geared landlord pay?
"How much tax does a negatively geared landlord pay?"
Zero.
But it gets much worse. The LL can carry over the losses to be offset against future taxable rental income ... So they'll still pay ZERO until all those losses are used up.
Can owner occupiers do this after accounting for the economic benefit of not having to pay rent? No. They. Can. NOT!
And yet both the LL and the owner occupier get to pocket the tax free capital gain on disposal! Is that fair? I think not!
(discl: I am a LL and I still think that sucks!)
I was meant to finish off my comment: Every $100 of rent going to a negatively geared landlord is $100 taken out of the economy that could've been discretionarily spent at a real business paying income tax, GST etc.
The great thing about property investment, is one can choose to overleverage and run at a loss playing the long game (tax free gains) because many are not relying on the rental to survive. The more who choose to do this, the bigger the cancerous "black hole" in our economy/tax revenue, all while "masquerading" as providing something much needed (shelter that already existed).
If you take away the ability for speculative capital growth, then the negative gearing doesn't work.
The key will be if the Govt. can truly open up a competitive land supply.
So we've been told. But their current action in making the MDRS optional - doesn't suggest they are at all interested in that.
Densification in the locations people want to live/rent in was the answer - not expansion into the wops wops.
I thought negative gearing was no longer permitted under IRD rules a few years back i.e. you cannot deduct rental property losses from other taxable income, it is ring-fenced?
Negative gearing is the act of running at a loss. Not to be confused with the deductions one can use to minimize their losses.
Ring fencing rental losses does not mean you cannot claim losses, it just means any excess deductions (above your gross rental revenue) cannot be offset against other taxable income. The excess rental deductions are carried forward/deferred and then used to offset against any tax owing in future years.
And then we also subsidise their rental yields, prices and values on top of that, with taxpayer money.
The House price ponzie scheme has warped and destroyed both our whole economy and society. It has been steadfastly promoted by all political parties. These continuing astronomical immigration figures confirm the present government is continuing this at pace.
The only hope is to get out of NZ.
Exactly, it's always an issue of pay, not that people don't want to do the work. That's never been an issue.
And Kiwis can find better pay in Australia so they go there for better conditions. So we bring in people who for them is an upgrade in their conditions, though it allows us to lower conditions.
In many cases if we don't bring them in then the work won't be done an we'll all be worse off.
They advertise a job wanting a University degree, 5 years of experience, and a minimum wage pay rate. Then when nobody applies, they import a worker from the third world to do the job who will put up with those conditions in return for a pathway to residency visa.
Kinda like 'some' women on dating apps..
Must love cats, tennis, camping, romantic movies, long walks on the beach, be financially secure, etc, etc, and then wonder why they're still single.
Just saying!
Solely because of pay. Money talks.
Employer: Makes low-ball pay offer to the market for skilled work.
Market: Yeah, nah, literally can't afford to take that work and house/feed my family
Employer: Well, Kiwis don't want to work, I demand South East Asians, South Americans, Islanders or Russians.
Ocelot, how many employees do you have and how do you source them and pay them ?
I usually work for an employer that has to pay properly. But I also run my own business doing trade work and when I employ contractors I use good quality NZ talent, and I pay them every penny that I charge for them as they are contractors. I only make overheads/margin on top and I keep all the material mark-ups.
I'm sensing I've struck a chord with a 3rd world exploiter/ NZ labour-market underminer?
Good on you Ocelot, well done !
Privatise the benefits and socialise the costs. I can only assume everyone voted for this.
This is good news. People that want to be here working rather than the kiwis picking up enormous benefits etc etc
You do know that the bulk of the welfare budget goes to people over 65, right?
Which is a good thing.
Who the bulk vote in the status quo - rinse and repeat
Fair enough, what do you expect them to do ? Start robbing banks ?
We could start by making sure benefits don't go to pensioners that don't need it, either due to high incomes or significant assets. Paying benefits to someone who owns a multimillion dollar home is crazy.
We could pay more if we could break the low-productivity negative feedback loop that seeks cheapest possible labour because there's no incentives and capital available for productivity investment in our small scale economy. So we keep importing low paid hands rather than investing in productivity tools and training people.
I had the conversation with friends about their kids, about to leave high school: what to do and where to go. The kids are academically good, but not drawn to anything in particular, the way you need to be for a vocation like medicine or engineering. And when senior academics overseas have noticed that New Zealand science is in trouble - circling the drain! - a good general BSc as a starting point doesn't look a great idea. A BA? Unless you love what you want to do, and don't object to penury, a road to what...?
The kids themselves are wondering if the best option might well be a trade (like electricians or plumbers) where you can get paid while you train and that can't be automated out of existence in 20 years (where professions like law or accountancy may well be) - and head to Australia or points North where there's opportunity.
It's hard to argue.
Increased productivity doesn't come from people working harder and longer, it comes from investment in research and development and harnessing the power of technology. One lazy fat bugger driving a digger is more productive than 100 keen, fit young men armed with shovels.
Having ready access to cheap, exploitable labour disincentives productivity increases.
Well said. And likely to be 100% true.
We have management problem in NZ. Not a worker problem.
Sparrow, agree and especially so when the digger is combined with BIM (Building Information Modelling) technology. Great vid here from KiwiRail. https://youtu.be/MIiwzdZ0KgI
So ..we agree to abolish the working for families scheme and that will force employers to invest in technology and innovation isn't it? Denmark, Sweden, The Netherlands, Switzerland, Sout Korea, Taiwan have all shown how to do it! And do they have low wages????
I paid 7% income tax when I worked in Korea in 2003-2005. It made the low pay rate acceptable.
This is definitely true, I remember my in laws bemoaning the fact that their friends couldn’t get poorly paid labour for their orchards during covid and ended up having to spend money ripping out existing trees and replanting, and then get in machines capable of picking these. I was like, “but… that’s productivity!”
Our terrible productivity is mostly at the hands of our terrible incentives around landholding. Bring back land tax and we'd see massive efficiency and productivity gains by our landholders. You need to provide pressure to landholders to get them up off their assets and actually being productive and working. Inability to access space due to exhorbitant rents and limited tenancy space supply scuppers most business possibilities before they get off the ground. NZers are as good as anyone. We're just not as easy to exploit as 3rd worlders because we know what it costs to survive in NZ.
The blight of stagnant landholders being our largest beneficiaries is a burden that we can no longer afford to bear, weighing down on our cost of living and dragging down our productivity numbers.
There's never a labour shortage, only a pay shortage. There is always a price at which you will get exactly the kind of labour you want. Most complainers simply don't want to meet the market.
Well said.
We desperately need a significant tax overhaul in NZ to re-focus 'investment' into far more productive areas than 'buy and hold for the untaxed capital gain''.
(Sorry for harping on about the need for a tax overhaul. But it is really, really important before we slip so far down the hole that climbing back out will take generations, i.e. each year we slip back will take 3+ years to rebuild. We need to stop this slippage now.)
Gotta love the old “I can’t afford to pay my workers a penny more than the minimum” often followed in the same breath by “my kids are moving overseas for better pay and opportunities- this country is a disgrace!”
(As it is the RBNZ's day in the spotlight, and as we're talking about productivity and our use of Labor, here's comment on all three that I wrote somewhat belatedly on another article.)
Finally got round to reading the RBNZ analysis...
Link: https://www.rbnz.govt.nz/-/media/project/sites/rbnz/files/research/asse…
The fact that the RBNZ is placing weight on the NZEIR Quarterly Survey of Business Opinion (QSBO) for "labour as a limiting factor" is greatly concerning.
Consider that Production = Land + Labor + Capital + Entrepreneurship.
Note: if Production is constrained, Prices can rise, i.e. inflation.
Thus for the same output (Production), one factor, say Labor, may reduce if one (or more) of the other factors increases, say Capital.
NZ Inc has a very real problem with productivity - it is way lower than our peers.
And one observation - confirmed by empirical studies - is that NZ Inc. has a lower employment of Capital than our peers. I.e. we instead increase one of the other three factors to increase production. And in NZ this is most usually Labor. i.e. "throw another body at the job".
Thus when the NZIER asks whether the supply of labor is "limiting production", it isn't getting much of an answer to anything as the other 3 factors need to be weighed at the same time.
But what is incredibly interesting is that is that when labor is in a sustained period of short supply, businesses in NZ tend to invest more Capital into production. Simple example: It would take six men three days to dig a ditch, but a digger and driver could do the same job in less than a day.
Thus - when labor is being reported as a ""limiting factor" it becomes a far less useful figure without knowing whether the use of Capital (e.g. buying a digger and training a driver) couldn't be used instead.
A further issue in NZ is that we need sustained periods of Labor being in short supply before NZ business managers (Entrepreneurship) get around to investing more Capital into the production process. One suggested reason for this is the boom/bust business cycle in NZ. (Looking at you RBNZ!)
Going back to our low productivity - a suggested reason - and one I believe is significant in NZ's economy - is that by raising the OCR the RBNZ creates a double whammy by:
1) driving people out of work which make Labor more abundant and constrains the price of Labor, while at the same time,
2) raising the cost of Capital (and the risk of using it when the RBNZ wants to create a Recession!) meaning it becomes more expensive (and risky) for businesses to adjust the parameters of Production equation by using more Capital.
At times when Business Opinion is reporting Labor is becoming a "limiting factor", the RBNZ should instead be looking at encouraging the use of Capital to increase Production to starve off Inflation. Do they do this? I've seen ZERO evidence!
So once again we can see that the OCR is a pretty hopeless tool as it simply embeds low productivity through low capital investment into NZ Inc. every time the RBNZ uses the OCR to lower inflation.
There is a lot of unemployable people in this country. They have a poor attitude towards working in general which often reflects their poor attitude to life in general really. It's a shame that after 90 years of welfare, all it's doing is encouraging people at the bottom of the food chain to drop out of work altogether. All the welfare is really doing is locking them down into a beneficiary mindset, with no effort to improve oneself at all - but hey...
''They're paying me for doing nothing bro. All good''
It's too easy to fail.
"There is a lot of unemployable people in this country"
Do you have a percentage handy for how many there are?
I mean, if you're going to make claims like, that then I expect you'll be able to back them up in no time.
Reported in February:
More than half of 189,000 New Zealanders on the Jobseeker benefit have received it for at least a year, data from the Ministry of Social Development (MSD) shows.
https://www.nzherald.co.nz/nz/jobseeker-benefit-more-than-half-of-18900…
If that's less than 5%, we're doing pretty damn good. About 10% of people have an IQ too low to be productive even in the army. It's time to start focussing on the real issue in our economy, the biggest beneficiaries of our economic productivity are the landholders. Time they started carrying their share of the load. Bring back land tax, to apply pressure to them, which would result in, reduced land values, increased development, increased tenancy space, reduced rents and increased productive potential to our economy. If we used the proceeds to reduce GST and income tax we'd be incentivising trade and work respectively.
If you want workers but think good ones don't exist, you're simply not paying enough for what you want. I went to a skin specialist last week and paid $200 for 20 minutes. If you want quality labour, you have to pay for it.
More than half of 189,000 New Zealanders on the Jobseeker benefit have received it for at least a year
According to Newshub only 110,000 of the 190,000 on Jobseeker benefit in December were "work ready". Just over 80,000 had an illness or disability that prevented them working, so it wouldn't be surprising if they were on it long-term, even if they were capable of working employers tend to discriminate against the disabled and chronically unwell.
Those on the JobSeeker Heath Condition and Disability benefit have temporary conditions preventing them from working, or from working full time. They may also be completely capable of working but as they have current health care costs to pay they get paid more than a normal JobSeeker beneficiary while they look for work. Those who have long term conditions or disabilities who cannot work are on the Supported Living benefit not JobSeeker. Many of those on JobSeeker simply claim they are suffering from stress, depression, anxiety etc in order to not have to return to work, or the latest fad "long covid". Its way too easy to rort the benefit system these days.
Pay peanuts, get monkeys. There is a price point at which you would find exactly the kind of labour you demand. You're simply not willing to meet the market.
It also pays to have invested in a digger and then invest in training one worker to use it.
Or the employer will be looking for 100 workers with shovels. Obviously a big ask finding that many Kiwis with shovels. But they're a dime a dozen overseas.
Having tried to help a few of these people in previous and now my own business, I can tell you it is a very hard cycle to break. Not many escape the poverty cycle. Even people I thought were home and hosed have fallen from grace, shitty partner choices, alcohol, drugs and violence are the great opressors.
I work in a highly skilled and qualified industry and it happens here too. Wont pay market rates, management jump up and down they cant hire anyone, even after I bring candidates from other kiwi businesses willing to work here for the right wages. Then they hire people in from South Asia, Europe, and South America. Foreign workers coming in with 10years experience being paid what a Kiwi with 3 years would be on. They get annoyed after about 3 years realising they are being shafted + they have residency usually by then, so they leave and the cycle repeats its self.
We need some sort of union movement to sort this wage surpression out. Its not the migrants fault at all, its NZ government and industry repressing wages.
No we most definitely don't need some sort of union movement to sort wage suppression out.
So how do we do it then?
The cynical, yet unfortunately most likely true answer is, we don't.
Don't forget these are all new work visas, you have to add them to the 210,000 of those already in the country who got gifted Permanent Residency by Ardern. So there really are at least 410,000 people on work visas in the country (plus god knows how many others have also entered the country on permanent residency visas). Thats around 14% of the workforce at a minimum.
Meanwhile the numbers of able bodied people on JobSeeker and the Single Parents benefits continues to explode, while there has been an increase of 25,000 people on benefits since March last year.
Good.
If you can't turn up to work on time, remember all your gear, keep a clean driving license and pass a random drug and alcohol test on demand, why should anyone pay you any money whether it is minimum wage or $30/hour?
But enough about Winston
To be honest I don't know how exactly NZ will be look like 10y from now, but it doesn't look good.
The hardworking kiwis are moving to Australia, the lazy ones don't want to work, more and more of the IT projects move to India.
What will be left here?! GOD KNOWS..
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.