A ‘KiwiBuild Skill Shortage’ list is being created, after a Minister’s warning to Cabinet that NZ simply does not have the labour force to deal with the pipeline of construction projects

A ‘KiwiBuild Skill Shortage’ list is being created, after a Minister’s warning to Cabinet that NZ simply does not have the labour force to deal with the pipeline of construction projects

The Government will make it easier for construction companies to hire migrant workers, after admitting there is a risk of KiwiBuild cost blowouts if nothing changes.  

Immigration Minister Iain Lees-Galloway on Wednesday announced the Government will create a “temporary KiwiBuild Skills Shortage” list to address this issue.

This means construction firms will be able to go through a quicker process to get the skilled workers they need when they can’t recruit locally.

In a Cabinet Paper, Building and Construction Minister Jenny Salesa says unless action is taken to improve construction workforce development, “these issues will further increase the costs of, and risk the ability to deliver on, the Government’s construction and infrastructure projects.”

She told Cabinet that the construction industry does not have the “size and skills to deliver New Zealand’s growing pipeline of construction projects.”

This includes KiwiBuild, which Lees-Galloway says is being held up by the skills shortage.

“It’s estimated we are some 30,000 workers short, particularly plumbers, electricians, engineers, builders and project managers so we need to make changes,” Lees-Galloway said in a statement.

New Zealand’s unemployment rate is 4.4% and for months, firms have been complaining about a skills shortage – particularly in the construction sector.

Before the election, Labour promised to introduce a “KiwiBuild visa” to address the skills gap in the market.

“The number of places will be limited to 1,000 to 1,500 at a given time, which we expect will be additional to the construction work visas issued under the existing rules,” its policy says.

Lees-Galloway says the skills shortage list is a “broader, more comprehensive and quicker approach” than the KiwiBuild visa policy.

“It’s clear we need workers to be available more quickly; these proposals aim to speed up the process and circumvent the need to create a new visa category.”

National claims ‘xenophobic hypocrisy’

National’s Housing Spokeswoman Judith Collins saying Labours policy to “slash migration” before the election has been exposed as “a cynical attempt to win votes from NZ First.”

“The announcement comes after Housing Minister Phil Twyford yesterday told Parliament there were no plans to bring foreign tradespeople into New Zealand to work on KiwiBuild houses,” Collins says.

In the House on Tuesday, Collins asked Twyford: “If the [KiwiBuild] funding will come from overseas, the flat packs will come from overseas, and even the workers now look like they're going to be coming from overseas, what part of KiwiBuild is Kiwi?”

In response, he said: “We are not planning on bringing workers in from overseas. The Kiwi element in KiwiBuild is young Kiwi families getting the opportunity to own their own home, after a decade of denial.”

Collins says this indicates either an unwillingness to tell the truth or that Twyford didn’t know his own policy or what his colleagues were doing.

Speaking to media before going into the House on Wednesday, Twyford said his comments were ins response to Collins’ “absurd suggestion” that all the workers for KiwiBuild would be coming from overseas.

“It’s always been our policy that we would be bringing in skilled workers from overseas because we have inherited a situation where the former Government didn’t invest in the workforce.”

Accreditation will be needed

Any company wishing to look overseas for workers will have to be accredited. This will reduce the risk of worker exploitation, Lees-Galloway says.

As well as the skills shortage list, the Government will also introduce a streamlined process so firms with good employment practices can be pre-approved to bring in workers from overseas.

Any changes would be time-limited, so the sector does not become permanently dependent on migrant workers, he says.

A “Construction Skills Action Plan” is being developed to address the long-term labour market needs, the Minister says.

In her Cabinet report, Salesa says despite the number of programmes focusing on training workers, employers often report that they are not getting the skills they need.

Lees-Galloway expects the skills shortages List could be in place in around six months, subject to final decisions following consultation.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Right hand needs to talk to Left Hand here - a perennial Gubmint silo problem. If Prefabs are to be the mainstay of KB, then we certainly don't need 'migrant construction workers' along the lines of 'what we got now, just mo' warm bodies'.

What we want in Prefab/Modularised World is:

  • Factory workers (but these will be - cue the scratched old record and spin 'er again - planners, brown cardies, architects and consultants, displaced from their cushy positions in the Dismal Swamps of TLA's, Gubmint and navigators of Impenetrable District Plans.)
  • CNC programmers to make sure the Clevver Machines in them Factories do what they are s'posed to
  • Truck, Crane and Hiab operators to transport the Hooses to, and to place the finished Hooses upon, the on-site stumps.
  • Sparkies, plumbers and other tradies to couple up all of them modular bathrooms, kitchens and switchboard (factory pre-wired...) to services

Seems ter me that we won't need Yet Mo' Immigrants to handle this.......just a Gentle Re-distributive Effort amongst the Existing Woikers. And our current Gubmint is nothing if not Redistributive, so they should rilly, rilly Go fer This.....

Remember the govt want's KiwiBuild housing to be additional to that which would otherwise be built. So we can't just redistribute existing workers, we need additional workers to build the additional houses.

Existing housing companies aren't all going to suddenly go Prefab, so it will be a long time before the extra productivity of PreFab reduces the labour needs.

So you think we'll need "Sparkies, plumbers and other tradies to couple up all of them modular" bits. Fortunately the govt has just announced it will make it easier to hire constructions workers "particularly plumbers, electricians, engineers, builders and project managers "

Time will tell if it will work.

The lack of skilled tradespeople has gone on ever since the Lange-Douglas govt ended the traditional way apprenticeship system . Went downhill from there and will continue that way as long as the current apprenticeship system continues. I bet you’ll see robots doing the work before traditional type apprenticeships are ever brought back. So suck it up NZ & face the fact yet again you are all paying for government blunders made in the 1980s

The traditional apprenticeships in carpentry were restored in the early 2000's although they were still operating in a more campus focussed form right through the nineties, the output of qualified tradesmen was pityful. The deregulation was centred around who exactly could undertake work that was formerly only able to be done by an hours served qualified carpenter or builder. This was simply an attempt to undermine the market power of the trade guilds and it backfired spectacularly delivering the leaky home fiasco. Slowly but surely the trades have failed to pay it forward by training enough new blood, not that succesive governments have helped much. After the gfc gutted the NZ construction sector every tradesman I know moved to Aussie and have never returned, at that point the National govt ought to have launched kiwi build to keep the talent in Country, but they were too busy selling everything to Chinese buyers to care.

Surely there must be a better way. Er, weren't they elected to do things differently, to find a better way?

The fastest way is leave NZ like I have & get on with your life before its over

The country's gotta get younger or I won't get a pension!!!!!

The response to a potential labour shortage is to increase immigration??? I would have thought that the appropriate response for the CoL would be to increase wages to entice more prople to enter the labour market. This results in a win-win, incomes going up, and domestic employment increasing. What happened to reducing immigration numbers? Isn't this just a continuation of previous policies, and adding new paths for immigration?

You should try reading the article, this is a targetted programme limited to , "The number of places will be limited to 1,000 to 1,500 at a given time". It's not the open door to all and sundry policy we have seen previously.

Wages are already going up, have you tried getting an affordable plumber lately?

From article

“It’s estimated we are some 30,000 workers short, particularly plumbers, electricians, engineers, builders and project managers so we need to make changes,” Lees-Galloway said in a statement.

“The number of places will be limited to 1,000 to 1,500 at a given time, which we expect will be additional to the construction work visas issued under the existing rules,” its policy says.

I'd be interested in the definition of "at a given time" and to understand the current construction work related visa numbers. The continuing population increase has significant negative infrastructure effects, along with quality of life effects. Adding to this population increase is not helping

Some of the more pertinent costs that need to be contained are materials costs, permit, and council costs. The materials duopoly has NZ materials costs outrageously higher than other countries. To be successful in containing costs, they need to be working towards more than just minimizing labour costs/wages.

We didn't have an "open door to all and sundry policy" previously.

Did you not read about the large-scale immigration fraud that was closed down a year or so ago?

So the governments plan for Kiwibuild is:
1. Getting most of the Kiwibuild houses from private builders (PPP)
2. Underwriting private construction projects (subsidies)
3. Removing barriers for companies to hire tradies from overseas (thus, providing power to negotiate lower wages)

I guess this can be classified as a "right" move from the traditionally centre-left party.
CoL is doing with the construction industry what National did with dairy and export education.

Hey, why leave non Kiwi Build with the expensive local labour? I'd happily contract a foreign firm to provide all of the goods from offshore and fly the workers in. Maybe get some of those sexy builds in from Europe that they feature on Grand Designs and get their workers to come in for our Summer when their building sites have less productivity in their Winter.

I made the point along time ago regarding where the workers for Kiwibuild would come from. It's not like there are 1000s of builders out of work. I can't believe that it took almost 9 months for this government to figure that out.

9 months to work it out?

As per the article "Before the election, Labour promised to introduce a “KiwiBuild visa” to address the skills gap in the market."

holiday workers? Between jobs will they be?

It shows that the government is making policy on the hoof.

So you would prefer they took longer than 9 months now? Perhaps convene another working group first?

They should have worked out their policy before they were government. However, I would favour a working group or an enquiry and bring in all parties to come up with a coherent plan to handle the housing crises. My concern is that in a few more months they will realise another flaw in their plan and have to amend it again.

Flaws are the nature of government. At least they are doing something. Can always tweak it later

They had their policy before the election, which was to allow construction workers in. Things take time to implement, the Civil Service has this funny tendency to ignore instructions from the opposition benches.

Have National developed any legislation in opposition to address this issues that is ready to pass on day 1 should the government fall? Or do you think they will wait till they have the resources of government?

Has Mr Lees-Galloway ever asked himself why we are short of skilled builders? The couple I know left Auckland for Oz a couple of years ago because wages far better and rents lower. He says "there is a risk of KiwiBuild cost blowouts if nothing changes" - so that means he wants lower wages in NZ. The result will be more will leave.
What fraction of the cost of a new house is builder labour costs - my guess under 10% with the big costs being land, council consenting, materials and interest costs for financing. If that analysis is correct the builders could work for nothing and prices would drop just a smidgen.

I'll admit a personal interest: my son is an apprentice builder and as a Kiwi I want (a) my son to get well trained (b) receive a decent salary when qualified (c) stay in NZ.

Solution to keeping both KiwiBuild and me happy: a fast approval of immigrant builders who pay a substantial annual fee for their work permit. That not only means building companies will train my son and KiwiBuild will progress but also the government gets more money! Fast approval possible because the fee will not be refunded if it is discovered they told any lies on their work visa applications. Work visa for principal applicant builder only not his/her family.

We could always get all those polish worker who want leave the UK on Brexit? Who are these workers who want to pay a fee to come here for a short time?

When I worked abroad my employer paid for my work visa - the cost about double the annual wage for a teacher - my employer sure made training locals a high priority. If you only need your polish worker for six months then half the annual fee??

Why would immigrant builders be willing to pay a substantial annual fee for their work permit?

My bosses did because they could not find locals with the skills they needed. Paid a lot. That made them commit to training locals. If as you suggest the immigrant builders are self-employed then they would only arrive if very well paid - i.e. far more than Kiwis.
Actually paying substantial amounts for a work visa is a common feature in most countries; it is NZ that is unusual.

if the herald has got an accurate figure for lack of construction industry of" It is estimated New Zealand is short of about 30,000 workers in the building and construction industry, particularly plumbers, electricians, engineers, builders and project managers."

then the VISA program will not do anything to solve what is a problem created by global events.

The world is no longer a place where governments can control the impacts of global events on there economies.

Your all dreaming and living in the past.

Twyford told parliament that there wouldn’t be imported workers recently, everything about KiwiBuild was Kiwi!
Blatant BS!

Can you reference that? He would be going against the Labour manifesto so interested to see the context.

It was in Parliament in reply to a question from Ms. Collins!

Strange how we've let hundreds-of-thousands of people into New Zealand and yet we still have a skills gap in construction.

They've all opened up "Dollar or Less" stores in all the shopping malls.

Thats not fair - most are students/graduates of "business and commerce" - no shortage there; in fact Kiwis with those degrees have a big problem finding a job.

No action yet or to be expected from the government to align the talent mix and course specialisation of international students with our long term skill shortages. The export education industry is supposed to create skilled resources for our economy, not add to the skill gap.

Despite record international student enrolments in NZ, most vacancies in areas of shortage are being filled with non-student migrants. Wages in entry and mid-level business/finance/accounting jobs have been stagnant for a few years due to the sheer competition from thousands of international students.

Dont forget the massage places and nail salons.

I'm happy to have overseas workers building our houses, but they should do it from an offshore factory so as to not overburden our schools, roads, HOUSING etc.

This will not benefit the tax average payer. But it will benefit the owners of rentals, fuel stations, airlines and supermarkets.

Good things take time ...including communication between ministries and noob ministers and a CoL Government ... So nine months to figure that out huh? .. not bad really , better late than never !!

so the news reads like this:

GOVT BACKTRACKS ON PLAN TO FORCE APPRENTICES ON CONSTRUCTION FIRMS WANTING MIGRANT LABOUR
http://www.sharechat.co.nz/article/1d79abf5/govt-backtracks-on-plan-to-f...

Meanwhile on the other side of town you get this:NZ BUSINESS CONFIDENCE DROPS AGAIN IN JUNE, FALLING TO 7-MONTH LOW
http://www.sharechat.co.nz/article/22a1c033/nz-business-confidence-drops...

The melodrama continues ... and the spectators are getting nauseous.

Oh, Mr Doomy Gloomy.....you never let us down!

A typical visitors visa for a melanesian tourist takes over a month to start processing. So make it a work visa and add police clearance and health checks and language tests and validation of qualifications and other mysterious inactions by INZ and these builders will be brick laying about this time next year.

I am a 2nd year adult apprentice builder and it seems clear why there is a shortage of kiwi builders stepping up to fill the void when most Employer building companies employs workers on contract terms.
You are not an employee like allot of other professions; there by missing out on:

- employer KiwiSaver contributions
- holiday pay - sick leave.
- can be fired at any time for any minor mistake.

Then you are expected to:
- buy, service and replace all tools.

And:
- pay your own accounting fees, ACC.

Understand that this is just a product of the industry working contract to contract. Be great if the GOV could support small employer builders who could then pass those onto the kiwi apprentices in the form of KiwiSaver and holiday pay sick leave support. This would attract more kiwis to enter the building trade and not increase the exploitation of immigrant workers.

A mechanic told me that his boss charged him out at $65 + GST, but only paid him $23 per hour. I knew his boss so asked him why. He said that he couldn't make a profit paying him anymore. Fair enough, but it would be interesting to understand where the $42 goes. Is building similar?

Would you work full time as an employee after you qualify for $25 an hour? or you prefer to be a contractor charging $60+ an hour ??

Yes its a rather lopsided arrangement isn't it? I think the contract to contract model is in place to manage risk but it actually prohibits growth in that it knocks many embryonic carpenters out of the business due to those costs you mentioned. Kiwibuild has the potential to become a training pipeline as well as a housing pipeline. Hopefully we see some results soon. 6:1 in the mixer!

I feel your pain. My 19 year old is in the same position.

I wrote to parliament and got a waffling excuse. I wrote to BCITO and got a phone call. They are very aware of this situation and would love to see it change, IRD, MBA the government are all aware of this, it's in the to big to deal with basket.
I wrote to a reporter on this site and it went no further.

My lad started when he was 17 and has been invoicing employers for his work. He gets paid under the minimum wage at 18 an hour, less 17% allowance for holiday pay etc. If he gets less than 36 hours work in a week he is even worse off.
Someone needs to take the stakeholders in this to task. It is a rort.

It might be worth your son moving to another company to finish his training and get better conditions, they do exist. Being on a self employed basis at $18p/h is ridiculous and should be pretty easy to improve on, he may even find someone who will take him on as an employee instead.

Sorry to say this but ........I told you so

When this 100,000 additional affordable Kiwibuild /rent / buy/ buy offplan / thing to house everyone in a 3 bed house on a quarter acre section, was first mooted prior to the election, I was at pains to point out we simply did not have the human resources to undertake a major public works program of this nature .

Nothing has changed , except I told you so

Clearly the Govt hasnt read that survey that was recently done that showed almost all the developments using imported labour had major defects and weren't code compliant. Thats the future of Kiwibuild houses. Not to mention when you subcontract it out to overseas companies, they also swap out materials so you end up with faulty steel and counterfeit cladding products.

Even contracting out teachers payroll to Aussies was a major mistake. If they had been Kiwis (a) problem far less likely and (b) the people involved would have died of shame. Building is worse.

Even worse - the incumbent payroll system was provided by Kiwis, and had been for a long time. To this day I'm still not sure why the Ministry felt it had to move that offshore.

30,000 new workers to be imported, presumably with their families plus children in many cases.
That's the first 100,000 houses taken up just to accommodate them.

Ask families to live together in one house - only first 30,000 houses needed.

Better yet get them to take up current Auckland accommodation practice and then we'll only need 10k. Three families is normal now isn't it?

Your math sucks. 30k is less than 100K.

LOL and what if each family gets a cat. That’s an extra 30,000 houses needed.

Theres no way the NZ construction industry can cope with all this work...what a success story! Oh am I sounding a little bit like Bill English there?

Actually the GDP data showed a drop-off in construction related activity due toany of the last earthquake projects nearing completion if I recall correctly. Should be a good time to hire right now if companies are looking to build capacity for larger projects.

If they wait a year or two you'll likely have a right job finding good staff at anything near market rates.

Too much immigration created a housing shortage which will be fixed by even more immigration.

Define: Irony

If you want a cushy job, with all the perks including a huge 'entertainment expenses' tab, then become a project manager.