Visa tweaks 'won't hurt growth'

Finance Minister Steven Joyce. Photo / Nick Reed

New Zealand's strong economic growth won't be hit by changes to immigration, Finance Minister Steven Joyce says.

The Government's immigration policies - in tandem with higher rates of Kiwis returning home and choosing to stay home - have lifted the population, the employment rate and top line GDP growth.

Net migration in 2016 was 70,600 and continued to hit new highs in January and February of this year. GDP growth over 2016 came in at 3.1 per cent.

While immigration has done some of the heavy lifting for the Government in what has been a tough time for most developed economies around the world, it has also put pressure on housing and other infrastructure.

Speaking shortly after the Government announced changes to who can and can't move here, Joyce accepted New Zealand had reached a point where the rate of immigration can't grow much further.

However, he said the Government remains committed to a balanced policy and didn't think these moves will dampen economic growth.

"If we do it just right then it's more of a series of moderate adjustments rather than a big change," he says.

"If we were too restrictive on skilled migrants coming in then there is no doubt that our companies would not be able to grow at the rate they have been."

Executive director of the New Zealand Initiative, Oliver Hartwich, agreed that the measure shouldn't harm growth.

"The changes announced sound sensible and should not negatively affect our growth prospects," he said.

Under new rules announced yesterday, migrants will need to earn more than $49,000 to qualify for a skilled worker visa.

Immigration Minister Michael Woodhouse said the changes are aimed at increasing the quality of people coming to New Zealand, rather than reducing the number.

Hartwich said the changes were largely good but low-skilled migrants' contribution to sectors such as tourism should not be overlooked.

"A common misconception is that New Zealand only benefits from highly skilled migrants, when in actual fact our economy needs a diverse mixture of skills," he said.

Hartwich said non-highly skilled migrants make an overall contribution to the New Zealand economy and praised the one-off pathway to residency for 4000 workers in the South Island.

"This policy recognises the important contribution these workers have made to exporters in the South Island and helps bolster businesses struggling with a tight labour market," Hartwich said.

BusinessNZ chief executive Kirk Hope said that the pay threshold will reduce "the potential for migrants undercutting Kiwi workers' pay".

"Employers have faced real difficulties in getting higher-skilled workers and today's changes will help get more focus on actively sought skills," Hope said.

"At the same time, proposed stand-down rules for lower-skilled migrants will also reduce the potential for residence applications to be dominated by lower-skilled workers.

"No immigration system is perfect, but the proposed changes should help get migrants who are better suited to our employment needs, while at the same time valuing the skill levels of New Zealand workers."

New thresholds

• One will be set at the New Zealand median income, about $49,000 per year. Anyone earning less will no longer be classified as highly-skilled, and permanent residence applications will no longer be able to claim points for jobs that are paid below the median income.

• The other threshold will be set at 1.5 times the New Zealand median income of $73,299 a year for jobs that are not currently considered skilled but are well paid.