The Government’s Immigration Rebalance, announced in May, is a welcome reset of New Zealand’s immigration settings.
It is encouraging to see work already underway on an infrastructure and construction sector agreement which recognises the continued importance of low-wage migrants as we seek to close our skills gap.
As global competition for suitable workers ramps up, further work to remove barriers for migrants will be critical to ensuring that we can deliver on the pipeline of work needed to meet our infrastructure deficit.
Changes to immigration settings aim to reduce the flow of low-wage migrants into New Zealand following an increased concentration of migration at lower skill levels in the years before the pandemic. Businesses will be encouraged to instead recruit and train New Zealanders, improve business practices and increase automation.
The Rebalance includes the creation of a ‘Green List’ of hard-to-fill roles which are eligible for fast-tracked residency. Many of these roles are relevant to the infrastructure sector, including:
- A wide range of engineering roles
- Quantity surveyors
- Project builders
- Registered plumbers
- Registered electricians.
In 2020 the construction industry had the fourth largest share of migrants as a percentage of its workforce. The Productivity Commission has identified that the influx of migrant workers to the sector had not significantly discouraged training but had instead served as a source of flexibility in times of increased demand in the sector.
It is also encouraging that the Infrastructure Commission – Te Waihanga, the Construction Sector Accord, and the Ministry of Businesses Innovation and Employment are supporting work to consult on an infrastructure and construction sector agreement. Sector agreements are exceptions to the rules that prohibit migrant recruitment below the median wage ($27.76/hour).
Once agreed, the sector agreement will come into effect towards the end of 2022. Ahead of the agreement being finalised, the Government has agreed to an interim wage threshold of at least $25/hour for the following roles:
- Metal fabricators
- Fitters (general)
- Wall and floor tilers
- Fibrous and solid plasterers
- Painting trades workers.
The construction skills shortage has been estimated to reach 118,500 workers by 2024. We are encouraged by the recognition of the place of low-wage migrants in meeting this need – alongside further funding in Budget 2022 for training and development of New Zealanders to support the long-term capacity of our sector.
Global competition for labour
There is, however, a broader context to New Zealand’s immigration story. We are up against a worldwide ramp-up in infrastructure spending, with many countries having already developed robust pipelines of work. This, combined with the effects of two years of border closures and the rising cost of living, is likely to contribute to many of our construction and infrastructure staff moving offshore. More construction firms are reporting skills shortages than ever before, and with $64 billion in projects planned or in the pipeline over the next three years, and an additional $140 billion expected over the next thirty, demand for talent will remain high.
We can no longer rely only on our reputation as a clean, green and principled country to attract and retain both higher and lower paid workers to our sector’s workforce.
Productivity Commission report
The Productivity Commission’s Immigration – Fit for the future final report was commissioned by the Government a year ago and released after the rebalance announcement. The Commission recommends an Immigration Government Policy Statement to set the long-term direction for immigration policy, and to encourage accountability.
The report points to the need to plan for the long term, whilst allowing flexibility to meet short-term demand for skills. It highlights the key issue of inadequate cross-government collaboration and coordination on immigration.
It also underlines the need for greater accountability and transparency in the setting of immigration instructions and emphasises that the Skills Shortages Lists – now replaced by the Green List – should be used to inform education and training priorities.
It is clear that New Zealand needs to streamline immigration processes to better serve migrants and fill critical skills shortages. We also need to better support our migrants onshore. It is critical that we have the right skills mix to deliver on the work needed to address our infrastructure deficit. To achieve that we must address the rising cost of living, develop certainty for businesses via a national infrastructure priority list, and prioritise a national skills plan. INZ will continue to advocate in this area to ensure New Zealand has the right skills mix to deliver our much needed infrastructure projects.