Key Points:

Chefs, cafe and restaurant managers, and retail managers are the three occupational groups that will be most affected by raising the bar on immigration applications, Immigration Minister Michael Woodhouse told the Cabinet before it approved changes to the points system. The points for approval for residency for skilled migrants has risen from 140 to 160 points, the first rise in 14 years. But Woodhouse also said the points system for skilled migrants was not delivering what was intended and the criteria needed to be revised. The changes to the points system announced last week are designed to reduce the number approvals for permanent residence, especially of low-skilled applicants. The Cabinet paper produced a table of the top 10 occupation of approvals in the past year with 140 points but who would not be approved at 160 points.

Chefs highest

Numerically chefs were highest, followed by retail managers, then cafe or restaurant managers. Percentage-wise, carpenters and bakers would be seriously affected with almost all of those approved at 140 failing approval at 160. Nursing is a different story. The data suggests that half of those approved last year would still be approved with the higher test, and half would fail. But Woodhouse signalled bigger changes were needed. He paints a picture of a points system that is no longer delivering the sort of skilled immigrant it was designed to attract and he said some could be competing with Kiwis for jobs in some sectors. "The current points system, developed in 2003 when the category opened, appears to no longer be effectively prioritising the highest value migrants," he wrote.
The current points system, developed in 2003 when the category opened, appears to no longer be effectively prioritising the highest value migrants.
Michael Woodhouse
"The current skill composition of the Skilled Migrant Category (SMC) migrants does not fully reflect the Government's wider objectives to lift skills levels and incomes. "There is a risk that lower-earning SMC migrants may be competing with New Zealand workers, including recent graduates, for lower-level supervisory and managerial roles in some industries." Woodhouse, who has spent much of the year defending the Government's immigration policy, proposed not only immediate changes, which were announced last week, but future ones to reduce the number of low-skilled workers. In the paper he proposed introducing a salary test for applicants in the skilled migrant category.

Salary test proposed

A high salary threshold could be used to recognise migrant workers whose skill level was reflected more by their income than by their job description, he said. And a minimum salary threshold would exclude applicants whose low-pay rate indicated their job was not skilled. Changes announced last week, as well as raising the points, included freezing new applicants in the Parent category, and changing rules around the English language test that make it more likely an applicant will have to sit a test as opposed to providing alternative evidence he or she is proficient enough in English. The paper reveals that the option taken was the more moderate of two proposed changes and is aimed at reducing the total approval target for permanent residency from between 90,000 and 100,000 for the two years 2014 - 16 currently to between 85,000 and 95,000 over two years. Cabinet considered an option of a more drastic cut, to between 80,000 and 90,000 over two years. But Woodhouse said to achieve that, the whole skilled migrant category would have to have been closed until mid 2017.

Permanent residency vs net migration

Permanent residence approvals reached 52,000 in the year to June, the highest in 20 years. The paper suggests that approvals in the current year could reach 54,000. Net migration has been at record highs, 69,100 in the year to August. But unlike permanent residency, much of it includes temporary visitors. Net migration, as measured by Statistics NZ through arrival and departure cards, includes visitors on working holidays and temporary work or study visas who arrive for more than a year as well as the number of New Zealanders who intend staying away for more than a year. A reduction in permanent residency approvals will not affect net migration figures in the short term but in the longer term it might reduce permanent long-term arrivals if they think their chance of getting residency has been reduced.