A policy banning part-time work for English-language student-visa holders until they pass their language test is likely to be scrapped, said Immigration Minister Jonathan Coleman.
Mr Coleman said he had asked for the policy - introduced by the previous Labour-led Government - to be reviewed after the issue was brought to his attention by the English language education industry.
But the suggestion has been attacked as "senseless" by union chief and Labour Party president Andrew Little, who said it would create "real employment issues", especially in the current tight labour market.
One of the reasons for the ban was a concern that language students - who did not come here solely with an educational objective - could be competing for jobs that New Zealanders could fill.
The ban did not apply to high school or university-student visa holders.
Mr Coleman said giving English language students work rights would put New Zealand's export education sector on a "level playing field with Australia" - where they had similar rights - in a bid to attract more language students here.
"If we can't match the benefits students get in Australia in terms of their ability to work, then the sector's going to lose out and the New Zealand economy is going to lose out."
English language students paid $121 million in fees, and each spent about $40,000 annually.
"There is a lot of potential in our export education sector, and we need to make our policies more student friendly so that students would want to come here."
The Government saw immigration and tourism as "important sectors" which could help to lift the country's economy. The English language education industry played an important part in feeding both sectors, Mr Coleman said.
Rob McKay, chairman of English New Zealand, said giving English language students work rights was a "sensible removal" of an "anomalous regulation", and it would make New Zealand seem more welcoming to international students.
"I think we will find that most students will actually not take up their work rights, but what they want is the option and the perception that we are user-friendly, and that we're welcoming."
Mr McKay said the recent cuts to Australia's immigration numbers could see more language students heading this way, leading to a significant number of jobs being created.
"English language school staff ratio is one to every 10 students, and for every job created in the school, there is a flow-on of three jobs being created in the industry."
A Ministry of Education-commissioned report had found that 25 per cent of students seeking to study English here had gone to either Australia or other countries, resulting in a loss of 870 jobs in schools and 3700 full time jobs in the community, Mr McKay said.
But Mr Little, national secretary of the country's largest trade union, said that in the current tough times, lifting the ban would make it harder for locals to find part-time work.
"People who have lost their jobs in these tough economic times will be looking for casual and part-time work, and this would be just the type of work the students will be interested in."
Work ban on English students likely to go
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