Q+A: Immigration Minister Michael Woodhouse interviewed by Corin Dann

Minister Michael Woodhouse told TV One’s Q+A programme that foreign students shouldn’t expect that study in New Zealand is a pathway to citizenship.

‘there are some expectations from students that they will be able to stay and gain residence. Overwhelmingly, though, it’s important to keep in mind that they will not gain residence; they will get a really good education, and they’ll go back to their home countries, where they’ll put those skills to good use.’

Minister Woodhouse admits there is a problem and is trying to work with Indian agencies.

“Well, I reject the inference that the government is somehow exploiting that, but I am concerned that education agents, particularly in the subcontinent in India, are selling students a story of a pathway to
residence that simply doesn’t exist for many of them. And it’s been a challenge for Education New Zealand and Immigration New Zealand to make sure that the visa applicants from India in particular are aware of
what they need to do to qualify for a student visa and also what might happen on their graduation day.”

CORIN So are you clamping down on that? Are you sending a strong message to these guys that you can’t go telling people that it’s going to guarantee them residency?

MICHAEL Yes, we are, but it is difficult to get behind the agency that exists in India. It is a quite difficult market. It’s also one of our strongly growing ones. And India is a very very youthful country, so they’re looking to send their young people out to gain good education right across the world. But this is a challenge that not only New Zealand faces but many other countries that also have international education from India.

‘What is occurring in some places is there are forms of exploitation that are going on that Immigration New Zealand and the labour inspectorate are working very hard to flush out, and I encourage
anybody who might be subject to that to speak to Immigration New Zealand, because we will take that seriously.’

Minister Woodhouse also told Corin Dann that Cabinet is reviewing the immigration planning range over the next month.

‘Yeah. The planning range will be reviewed by Cabinet over the next month or so. At the moment, as I say, it’s a two-year moving planning range of between 45,000 and 50,000.’

Minister Woodhouse says he can’t see any evidence yet to suggest that immigration is putting downward pressure on wages.

‘No, I don’t think there’s evidence to suggest that. It’s certainly something we need to be mindful of, and we’re keeping a very close eye on it.’

Here is the link to the interview.

Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1. Repeated Sunday evening at 11:35pm. Streamed live atwww.tvnz.co.nz





Q + A
Episode 26
MICHAEL WOODHOUSE
Interviewed by CORIN DANN

GREG Net migration has continued to set new records this year, although economists believe it may be close to a peak. Even so, there's some debate about the impact of immigration and whether we are seeing the benefits the politicans promise. And it's not just Winston Peters raising that flag. There's been concern from Labour, economists, business leaders and even Treasury and the Reserve Bank. So Corin Dann asked Immigration Minister Michael Woodhouse whether he believed it was time for a debate.

MICHAEL Absolutely. It’s a really important debate to have about who comes, why they’re coming, how long they stay, what skills we need. I’ve been constantly engaging with stakeholders for the nearly four years that I’ve been minister, and I encourage that debate. What I have less time for is that xenophobic streak that underpins a small cohort of New Zealanders who don’t want people who look like them to come in.

CORIN Is it not time to cut our immigration levels?

MICHAEL Well, the data that informs that conversation is the monthly Statistics New Zealand release of the permanent and long-term migration statistics. Now, in the last four years that’s gone from a net zero or small outflow to a quite strongly positive number – around 69,000 or 70,000. It’s really important that we understand what that number means, and we’ve said on a number of occasions it’s largely influenced by what New Zealanders are choosing to do, by coming home and staying home. But those who are coming in from overseas are overwhelmingly temporary. They’re here on working holiday visas, they’re here to study, they’re here to help us with things like the Christchurch rebuild, and they will go home again. So I think it’s really important that we look through those numbers and have some balance about what they mean.

CORIN Okay, let’s look through those numbers. Let’s assume, then, as you say, there is a large chunk who are coming and going and moving around; they’re temporary. There is, though, your 45,000 target of new residents each year, isn’t it, and you’ve been hitting that. Are you looking at changing that part of it?

MICHAEL Well, it’s not a target, it’s a planning range, and it’s important to understand the difference. We haven’t been hitting it, actually, over the last eight or nine years. We’ve pretty much undershot the 45,000 to 50,000 annual planning range that we have. It peaked in around 2006-7 at about 52,000. It dropped as low as 43,000 during the recession, and it’s certainly coming back strongly now. It’s subject to review. I don’t think it will change materially, and the reasons for that are to do with who is coming and gaining residence. But, yeah, we are reviewing it right now.

CORIN So what does that mean when you say you are reviewing it? What would happen? That you either change the target up or down?
MICHAEL Yeah. The planning range will be reviewed by Cabinet over the next month or so. At the moment, as I say, it’s a two-year moving planning range of between 45,000 and 50,000. It has three main categories – our humanitarian obligations, which are our commitment to Samoa and the Pacific; our refugee quota; and then the family and partnership visas that are arranged, because many New Zealanders who are coming home are bringing non-New Zealanders with them as partners; and, of course, it’s our skills programme, and about half of the people are coming with the skills that we have in short supply right now.

CORIN I wonder if you’ve got a problem building, though, and that is those temporary migrants that you’ve talked about, a large chunk of them being students.

MICHAEL Yes.

CORIN There is a view that a lot of those students have come here to study because they see it as a pathway to getting that residency, and there are some who suggest you’re going to see quite a bubble of people pushing for residency over the next couple of years. Are you worried about that?

MICHAEL Well, I think that trend is certainly observable now, and there are some expectations from students that they will be able to stay and gain residence. Overwhelmingly, though, it’s important to keep in mind that they will not gain residence; they will get a really good education, and they’ll go back to their home countries, where they’ll put those skills to good use. Over the last five years about 19% of the students who graduate from our universities, polytechs and PTEs have gone on to gain residence, and they’re part of that planning range. If the planning range doesn’t go up, then clearly the expectations of all of those students are not going to be met.

CORIN Yeah, but that’s interesting, because we’ve got this new New Zealand People’s Party that’s forming based around Asian and Indian migrants. They feel that the government is exploiting the student visa category because, I guess, people are selling it to people on the basis that they are more likely to get residency. Is there a problem here?

MICHAEL Well, I reject the inference that the government is somehow exploiting that, but I am concerned that education agents, particularly in the subcontinent in India, are selling students a story of a pathway to residence that simply doesn’t exist for many of them. And it’s been a challenge for Education New Zealand and Immigration New Zealand to make sure that the visa applicants from India in particular are aware of what they need to do to qualify for a student visa and also what might happen on their graduation day.

CORIN So are you clamping down on that? Are you sending a strong message to these guys that you can’t go telling people that it’s going to guarantee them residency?

MICHAEL Yes, we are, but it is difficult to get behind the agency that exists in India. It is a quite difficult market. It’s also one of our strongly growing ones. And India is a very very youthful country, so they’re looking to send their young people out to gain good education right across the world. But this is a challenge that not only New Zealand faces but many other countries that also have international education from India.

CORIN But why let these students come here and work 20 hours a week in low-skilled work that arguably is suppressing wages in low-skilled jobs?

MICHAEL Well, look, let’s firstly agree that when we were students, we probably did the same thing. It’s not unusual for a university student to augment their income with a bit of part-time work around their studies, and I think it’s not unreasonable for international students to be able to do the same. As far as the suppression of wages is concerned, I’m aware that there is a risk that this could occur, but I’m looking very closely, and I haven’t seen any evidence that that is actually occurring. What is occurring in some places is there are forms of exploitation that are going on that Immigration New Zealand and the labour inspectorate are working very hard to flush out, and I encourage anybody who might be subject to that to speak to Immigration New Zealand, because we will take that seriously.

CORIN The facts are that wage growth in New Zealand is pretty sluggish. We’ve had the Reserve Bank questioning whether it’s causing suppression of wages, the Treasury raising risks that it is suppressing wages. Surely for that New Zealand student who’s looking for the part-time job as well is now competing with the foreign students, for the employer, well, they can charge whatever they want now, can’t they?

MICHAEL Well, I’m not sure I’d agree that wage growth has been sluggish. Certainly, inflation has been extremely benign, so when you compare the, I think, about the 25% or 26% wage increases under this government against the 11% or 12% inflation, I think you’d see that real wage growth is occurring. The question is whether it’s occurring in those occupations.

CORIN Well, you could also compare it with Australia, Minister, and how are we looking when wages compare with Australia?

MICHAEL Well, I don’t have the numbers for Australia, so it’s a little difficult for me.

CORIN We’re a lot way behind still, aren’t we?

MICHAEL Well, what I know is Australia has got the yips. A lot of people are coming back from Australia to take advantage of the strong economic growth that’s occurring here in New Zealand.

CORIN So you are convinced that there’s no evidence yet to suggest that that immigration is putting downward pressure on wages?

MICHAEL No, I don’t think there’s evidence to suggest that. It’s certainly something we need to be mindful of, and we’re keeping a very close eye on it.

CORIN How, then, can we have a situation where there are 15,000 unemployed labourers in New Zealand, yet 6500 labourers were given work visas. How can that be?

MICHAEL Yeah, look, very good question, and I constantly check to make sure that our skills shortage lists are regionally targeted. Look, we’ve got a rebuild in Canterbury. I don’t know where exactly those people are, but I can tell you that Immigration New Zealand and Work and Income work very hard to make sure that employers do test the local labour market before they go to the international market. But when we’re talking about labourers, we’re talking generally about Canterbury. When we’re talking about retail, we’re talking about places like Queenstown, Wanaka and Rotorua.

CORIN Okay, so there’s a regional element to this.

MICHAEL Absolutely.

CORIN You’re part of a government that believes in market economics here. Why can’t you let the market do its job? So if there’s a shortage in labourers, a low-skilled job, employers will have to pay more and New Zealanders in other parts of the country will move to where the work is. Isn’t that how the market works?

MICHAEL Well, it can. I think what you’ve done is presuppose that money is the only barrier to people moving to work. Now, what we know and what we’ve said and listened to employers about is that that is one of many barriers. Geography is definitely one. Skills, attitude, recreational drug and alcohol all prevents some of our young New Zealanders from gaining work. Now, the Minister of Economic Development, Minister of Social Development and I are working really hard with industry in occupations like truck driving, horticulture, construction, all to make sure that New Zealanders are as ready and able as they can be.

CORIN So give me some examples of what you can do here. Is it a case of ‘work for the dole’ type programmes or is it more incentives? What are some new things you’re actually doing here to get New Zealanders into those jobs?

MICHAEL Well, it’s certainly incentive-based, so we’ve got worker-engagement programmes in the horticulture industry in the Hawke’s Bay, Marlborough, Central Otago. We’ve got in the dairy industry in Ashburton and now in increasing places around the country identification of young jobseekers who are looking for work and need to be made ready to go, and I’ve been very encouraged by that. But those are also areas and industries where there is significant growth in demand for labour, and it’s inevitable that at least in the short term we’re going to need to go to the international labour market with things like the seasonal employer scheme that we have with the Pacific and with some labour-market-tested work visas.

CORIN I’ve got to come back. Why can’t you take some of those people, the hundred or so thousand unemployed, why can’t you get some of those people to move and work? Why not say work for the dole?

MICHAEL Oh, look, we’re certainly incentivising it. I think work for a dole is a bigger step. If we want to have a conversation as a country, let’s do that, but I’m convinced—

CORIN Have you considered it? Have you looked at options like that?

MICHAEL Well, that’s a question better put to Minister Joyce and Minister Tolley. What I know is that they’re working extremely hard with employers to make sure that young New Zealanders are at the front of the queue for those jobs. But, look, we have to have an honest conversation. When we have 5.1% unemployment, and in some parts of the country significantly lower than that, we are really starting to get to full employment, and for those who are ready, willing and able to find a job and if they want to move to a job, they can definitely find one.

CORIN Full employment – that’s an interesting question because I think you’ll find the Treasury has said full employment’s more like 4%.

MICHAEL Well, and we’re heading in that direction in many parts of the country, so look at—

CORIN There’s still a wee way to go.

MICHAEL We have a wee way to go, and we’re working very hard to make sure that every New Zealander who wants to work, is able to work can do so. But as I say, we are a strongly growing economy in places like Marlborough with the vineyards, Te Puke with kiwifruit. The farming community, aged care, fishing all have serious labour shortages, and at this time, it’s still going to be necessary to go to the international labour market to meet that need.

CORIN Given the pressures that immigration put on housing, put on infrastructure, put on hospitals, put on schools, can you point to any evidence that shows long-term migration lifts our productivity rate or lifts the amount of exports we export or makes us richer as a country?

MICHAEL Yeah, absolutely, and there was a recent BERL report that came out last month which showed that there is a very strong positive contribution being made by migrants, both temporary and permanent, and that includes taking into account pressure on things like health, education and other social services. So it’s pretty unequivocal. It’s important to keep in mind that we do have a ‘New Zealanders first’ policy, and where it comes to things like housing supply, it’s important that we get that right. But the contribution by migration to our economy is overwhelmingly positive.