Finance Minister Grant Robertson talks to Liam Dann about New Zealand’s skills and labour shortages and immigration settings. Video / NZ Herald
Finance Minister Grant Robertson says he understands businesses’ frustrations over labour shortages, but is confident pressures will start abating as immigration policy tweaks take effect.
New Zealand’s skills and labour shortages and immigration settings topped
chief executives’ list of concerns aired in the Herald’s 2022 Mood of the Boardroom survey.
Responding to the results at an event for business leaders hosted by the Herald, Robertson said it would take some time for changes to New Zealand’s immigration settings to kick in, following two years of very tight border restrictions.
He recognised the lack of “bodies on the ground” was challenging.
“I get that, but I do believe in summer we’ll see those workers there,” Robertson said.
He said survey results suggested most of the 25,000 people granted Working Holiday visas would arrive over summer. This would be good news for those in the tourism and hospitality sectors.
Visa applications under the Accredited Employer Scheme are also expected to be processed within 40 days. Meanwhile, the Immigration Minister’s office confirmed changes to Skilled Migrant and Parent visa categories are expected to be made within the next month or so.
However, National’s finance spokesperson Nicola Willis told business leaders at the event the Government was late to the border reopening party.
“The workers are still not coming in the numbers we need,” Willis said.
Asked whether he was frustrated by Immigration New Zealand’s slow visa processing times, Robertson responded: “Oh, god yeah!…
“We have had, until very recently, a paper-based system for immigration. We brought back onshore a part of Immigration New Zealand because we just weren’t satisfied we were getting the processing that we needed.”
The number of people who left New Zealand (with the intention of being away for more than a year) has surpassed the number of people who arrived (with the intention of staying for more than a year) nearly every month since November 2020.
However, net losses have been relatively low since March. In July, there were only 376 more long-term departures than arrivals.
These movements are starkly different to pre-Covid. In the 2019 calendar year, there were nearly 73,000 more long-term arrivals than departures.
The drop-off in immigration, coupled with large amounts of government support aimed at keeping people employed, and a prolonged period of low interest rates until recently, contributed towards the unemployment rate remaining rock bottom at 3.3 per cent in the June quarter. The underutilisation rate was also very low at 9.2 per cent.
However, the Reserve Bank expects thousands of people to lose their jobs, as its aggressive interest rate hikes, aimed at reducing inflation, are due to cool the economy. It forecasts the unemployment rate progressively rising to 5 per cent by 2025.
While gross domestic product (GDP) growth is expected to slow, the Reserve Bank sees New Zealand narrowly side-stepping a recession next year.
Robertson acknowledged the economic waters were choppy – here and abroad.
As soon as he took to the stage to respond to Mood of the Boardroom survey results, he joked: “You know 2022 is a tough year when NZME doesn’t even give you breakfast.”
He reminded the business audience, equally unhappy about the level and quality of government spending, that the additional staff hired in the public sector helped ensure they received the wage subsidy.
Support for businesses (including the wage subsidy) made up about a third of the Government’s Covid-19 support package.
“As we move forward, we return to a more consolidated fiscal position,” Robertson said.
“We’re spending about 35 per cent of GDP at the moment. When National came out of the back of the  global financial crisis, they picked up at about 34 [per cent of GDP].”
Willis questioned what was coming of all the government expenditure, including the burgeoning public sector.
She reaffirmed National’s commitment to delivering income tax cuts.
While she said National wouldn’t have spent money on the likes of Three Waters and the TVNZ/RNZ merger, she didn’t identify savings that would come close to offsetting the cost of tax cuts.
Robertson said the Government needed to keep investing to improve infrastructure and the health system, and address climate change. He also remained committed to large reform programmes, including in the health sector, in relation to the Resource Management Act and Three Waters.