Kirk Hope. Photo / Michael Craig
New Zealand is falling behind in the chase for skilled workers and it's time to reset immigration and investment policies, says BusinessNZ chief executive Kirk Hope.
"Australia, UK and Canada have moved faster in opening up their immigration policies — they are our biggest competitors for skilled migrants and we have to shift modes quite quickly," Hope says.
Australia, for instance, has increased the number of permanent resident visas from 160,000 to 195,000 a year.
"The reality is that we are not only competing with countries but also we have been operating in a constrained environment with a strange traffic light system that has been an impediment to making decisions."
Hope says the Covid and immigration settings have been tight, and the border only fully opened in July.
"We've had a traffic light system in orange that no one understood — it could have gone to green sooner and we could have been more pragmatic around Covid. We could have used the test to work regime for everyone and not just for critical workers — meaning people could go back to work as soon as they tested negative. We do need to be consistent with other countries over managing Covid and helping the economy."
Hope says in Australia there is one job vacancy for every unemployed person — 500,000 vacancies — and in New Zealand two job vacancies for every unemployed person.
"We have operated an ad hoc immigration policy and it needs to be linked to a clear overarching economic plan and population strategy.
"We do have (a lot of) people in training which is good but as people leave the country we will need more mid and low-skilled workers to replace them. The two vacancies for every unemployed person is challenging for New Zealand.
"We have to be more strategic about a range of policy areas. If you have a strategy around population — we have haphazardly stumbled to five million — then you can plan for infrastructure and maintenance and not play catch-up all the time. The Infrastructure Commission has done work on this.
"What does a strong domestic market look like? What is the population mark? Of course, a bigger domestic market enables companies to grow and operate internationally."
Hope says the foreign direct investment rules are very tight and as more technology and automation is deployed the rules should be directed towards attracting capital and skilled migrants into New Zealand.
"There is plenty of automation work going on but we need a regime that welcomes investment and capital as businesses grapple with skills shortages. We also need people and their relationships to expand the capital intensity in New Zealand."
Hope says business confidence is low and the policy environment is quite volatile.
Businesses aren't sure what comes next.
"Before and during the first stages of Covid we were an attractive place to live and work; that has changed over the course of the pandemic. We have some catching up to do.
"We have to normalise our Covid settings and shift our immigration settings to align with the rest of the world," says Hope.
Kirk Hope's top issues
• Skills shortages — align training (needs to happen faster) and improve immigration settings to ensure New Zealand is attractive and welcoming to migrants
• Attract capital by changing settings on foreign direct investment
• Remove uncertainty from policy settings