In this edition:
- Major changes to employer-sponsored work visas on the way
- Net migration down but labour demand and housing market strong
- How to invest in 2019
- Demand remains strong for quality staff across most sectors
Major changes to employer-sponsored work visas on the way
The upcoming changes to the New Zealand immigration system will affect almost every person who holds or intends to apply for an employer-sponsored work visa. If you currently hold an employer-sponsored work visa, or envisage applying for one (including renewals) in future, it is important that you are aware of these developments, and how they may impact you and your family.
The new system that is proposed will replace the following visa categories:
- Essential Skills
- Talent (Accredited Employer)
- Work to Residence (Long Term Skills Shortage Lists)
- Silver Fern (Practical Experience)
- Silver Fern (Job Search)
These changes are likely to be effective from August 2019 onwards.
Summary of key changes
- Compulsory Employer Accreditation
Once these changes “go live” every employer who wishes to employ a migrant worker will need to first gain “accreditation” status with Immigration New Zealand. This requirement is likely to include employers with existing employees on a work visa that require a visa extension.
- Talent (Accredited Employer) – Minimum Salary Increase
Currently, the salary requirement for a Talent visa is $55,000 p.a. (or $26.45 p/hr) based on a 40 hour working week. It is proposed that this salary requirement will increase as high as $78,000 p.a. ($37.50 p/hr), based on a 40 hour working week.
It is expected that individuals already on a Talent visa will not be impacted by these changes.
If, however, you are employed by an accredited employer, and earn more than $55,000 (or could soon be at that salary level), we recommend applying for a Talent visa as soon as possible.
- Reclassification of Mid and Low Skilled Visa Holders
It is proposed that the minimum pay rate for classification as a mid-skilled visa holder be increased from $21.25 p/hr to $25.00 p/hr.
For those who are currently on a mid-skilled visa, but paid less than $25.00 p/hr, this is likely to mean that your visa will be reclassified as lower-skilled at the next application. The conditions of lower-skilled visas will apply at that time, as follows:
- Maximum 12-month visa;
- Maximum of three consecutive 12 month visas, then subject to a mandatory offshore stand-down period of 12 months.
This change is likely to impact approximately 10,000 people who are currently mid-skilled visa holders.
Questions or concerns
If you have any questions or concerns regarding the upcoming changes and how they may impact you and your family, please get in touch with us.
For further information or assistance with emigration please contact Lane Neave Lawyers on + 64 3 379 3720 or email liveinnewzealand@laneneave.co.nz.
Net migration down but labour demand and housing market strong
We economists love numbers and without them all we have is theory we learned at university, ideas we have developed in our careers, and interpretation of potential impacts of government policy changes and whatever else happens around the world. One of the important sets of numbers for New Zealand is net migration flows.
These data are important because on average over the past two decades, each year roughly 1.5% of our population has shifted overseas and 2.5% equivalent has come in. This is a very high rate of churn compared with other countries and in some regards is quite positive.
One of the reasons for lack of income per capita growth in New Zealand is believed to be not just our long physical distance from our major export markets, but the lack of connectivity between our society and economy with those overseas. The more we go overseas and come back and vice versa, hopefully the better this connectivity will be and the greater will be the positive impact on our economic development.
Recently Statistics NZ have been forced to change the way they estimate our permanent inflows and outflows. They could gauge intentions to stay long-term in NZ by what all visitors ticked on their arrival cards. And they could gauge long-term outflows through the same process using departure cards. But since November last year the departure cards have no longer been required for people leaving NZ.
Statistics NZ therefore have had to shift from an “intentions” measure of net flows to an “outcomes” measure. This outcomes measure basically gives full insight into whether or not someone left or stayed for longer than one year 16 months after their travel date as SNZ like to allow for spending a little bit of time back where they came from within a 16 month period when assessing their status.
So we have to wait 16 months for full, and ultimately more, accurate data. But in the meantime SNZ can supply estimates of flows using a mathematical model which they have developed. About two months ago that model told us that whereas under the old system the net gain to NZ’s population from migration flows was 62,000 in the year to October, the new system showed a lesser 45,000 which fell then to 43,000 in November.
But data recently released have revised the November flow up to 49,000 and calendar year 2018 now reads as a net gain of 48,000. We have learned two things. First that the new data are subject to big revisions. So if you are reading articles regarding NZ migration flows be aware that data for the most recent months are just guesses which will change.
Second however, it looks like the easing off of the net inflow into NZ from a peak of 64,000 in mid-2016 is slower than even the old numbers were showing. Less than 8,000 each year rather than 10,000. This is important. It means that projections of the housing shortages in our major cities will remain high and that hopes some migrants may have had of the new data suggesting cheaper housing markets this year or next would have been misplaced.
NZ’s housing market remains quite strong and anyone coming to NZ needs to realise that you are in for a shock with no obvious relief in prospect regarding what you will have to pay to buy or increasingly rent a place to live. The positive side however is that labour demand remains massive and employers are still crying out for people from offshore.
Article provided by Tony Alexander – Chief Economist, Strategy & Business Performance, BNZ.
How to invest in 2019
The turbulent ride of 2018, particularly after the clear skies 2017, has left investors contemplating their strategy for 2019. Slowing global growth – led by China, a trade war, Brexit, the Italian crisis, and now the US government shutdown provided plenty of reasons for the increase in market volatility. Ten years after the Global Financial Crisis, investors are questioning whether the US market and others are overvalued as many economists believe that we are entering the latter stages of the global economic cycle.
What investors often ask:
Will there be a recession in the next 12 months?
Recessions rarely appear without warning and are usually precipitated by imbalances building up in the global economy in the preceding years. This is not something we are seeing to any meaningful degree and I believe we are in a multi-decade economic growth cycle that will see the occasional correction. The global economy and corporate earnings are still expected to grow in 2019, just at a slower pace. Combined with a lack of imbalances in the global economy, the risk of a recession over the next 12 months is low.
Should I transition into cash and bonds?
Although increased volatility in equity markets is likely to continue, portfolio diversification is essential. Equity exposure remains justified – the markets, while slowing, remain broadly supportive. Bonds and cash also play an important role – offering stability against elevated volatility in equities. Interest rates are still relatively low historically.
Should I invest in gold?
While the allure of physical gold products can provide ownership satisfaction, it does not pay any dividend or interest to individual investors but requires storage and management costs. In the long-term, return from equity markets has far outpaced gold. When the market is volatile, some investors may turn to gold on a short-term basis, as gold prices are generally show low correlation to equity market performance, but this tactic comes with its own risks, timing is everything.
Which investments deliver positive returns in declining markets?
Alternative assets aim to provide low correlation performance to equity markets. For example, long-short funds, commonly referred to as absolute return funds, can short overvalued stocks. Various derivatives, which can be complicated concepts for most investors, can serve the same purpose as well. Bear funds aim to provide inverse performance to the markets. Individual investors should have a proper understanding of the risks before using any of the tools above.
How do you invest in 2019?
Each investor should have a proper investment strategy set to their own investment objectives. Market volatility shouldn’t compel investors to make changes to their portfolio in reaction to short-term movements, especially if long-term goals and time-frames remain constant. First-hand experience of bumpy markets in 2018, as painful as it was, can act as a trial to demonstrate your portfolio’s resilience. We encourage investors to reflect upon recent volatility while it’s fresh in their mind. If you find yourself losing sleep at night, you might need to review your long-term strategic allocation accordingly, bearing in mind that this level of volatility is likely to continue.
Article provided by Ally Cui – Director, Private Wealth Adviser, JBWere
Ally Cui can be contacted on Ally.Cui@jbwere.co.nz or +64 (9) 365 0888.
Demand remains strong for quality staff across most sectors
There remains a growing gap between the skills New Zealand employers are looking for and those the workforce can offer. The other issue is that there is a real barrier to mobility of labour within New Zealand.
A recent slowdown in GDP growth has started to weigh on labour demand, albeit minimally in our opinion. The labour market is now tighter than we anticipated and generally more aligned with shortages noted by firms and in recent business surveys.
Employment growth has tended to be disproportionately stronger in the Auckland region than nationwide. Enterprise Recruitment has evidenced an economic slowdown throughout the country, however, ironically there remains strong demand for quality staff across most sectors. This reinforces the opinion that that human resource remains the greatest constraint of New Zealand economic development.
Upcoming changes to the “employer assisted work visa policy” will also be a serious game changer for employers looking to recruit from offshore. These changes can further constrain the country’s economic development if not carefully implemented.
Article provided by Steve Baker – Enterprise Recruitment and People.
Enterprise Recruitment and People has a national presence. We remain interested in providing obligation free advice to offshore candidate’s about their chances of securing employment in New Zealand. Steve can be contacted on steve.baker@enterprise.co.nz or 00 64 3 3530680.
