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Migration Trends & Outlook 2008/09

6 SKILLED/BUSINESS STREAM

Highlights

  • Skilled Migrant Category (SMC) approvals accounted for 59 percent of all residence approvals in 2008/09 (27,011 people).
  • The United Kingdom remains the largest source country of SMC approvals (22 percent), although the actual number of approvals has been decreasing over the past 2 years.
  • Approvals from South Africa increased substantially in 2008/09 (by 40 percent) and it is now the second-largest source country, with 18 percent of SMC approvals.
  • In the SMC in 2008/09, the overall average age of principal applicants was 34 years. However, principal applicants from China were much younger, with an average age of 26 years.

6.1 Introduction

Although New Zealand's economy has been affected by the global economic recession in 2008/09, skilled migrants are still an important part of New Zealand's overall development. New Zealand needs skilled migrants to contribute to growth in professional skills and growth in a range of industries.

In 2008/09, 28,547 people (62 percent of residence approvals through the New Zealand Residence Programme or NZRP) were approved for residence through the Skilled/Business Stream.[78] Of these people, 27,011 (95 percent) were approved through the SMC, 1,097 (4 percent) through the Residence from Work Category, and 413 (1 percent) through the Business Immigration Policy.[79]

This chapter provides a high-level analysis of residence approvals through the Skilled/Business Stream in 2008/09.

6.2 Skilled Migrant Category approvals

The SMC is the main category in the Skilled/Business Stream. It is a points-based system designed to ensure that people migrating to New Zealand have the skills, qualifications, and work experience that New Zealand needs.

A person who is interested in applying for residence through the SMC must first submit an expression of interest. An expression of interest is entered into a points-based pool if the applicant:

Points are awarded for employability and capacity-building factors, including skilled employment, relevant work experience, qualifications, and age. In addition, applicants can claim bonus points for other factors, including having work experience or qualifications in an area of absolute skill shortage, having employment outside of Auckland, or having a New Zealand qualification.

People whose expressions of interest have been selected from the pool may be issued with an invitation to apply for residence under the SMC. Figure 6.1 shows the number of selected expressions of interest (EOIs) by selection date in 2008/09, with an average of two migrants per selected EOI. The highest proportion of EOIs, with 140 points or more on a given selection date, was 84 percent for the selection on 14 January 2009. There was also an average of 110 selected EOIs with a job or job offer in New Zealand. Further details are given in Appendix M.

Figure 6. 1 Number of selected expressions of interest by selection date, 2008/09

Figure 6. 1	Number of selected expressions of interest by selection date, 2008/09.

Source: Department of Labour

Data table for Figure 6.1

In July 2007, the SMC was changed to improve its competitiveness and to align the characteristics of migrants more closely with New Zealand's skill needs. Minor changes to the SMC policy in 2008/09 included:

6.2.1 Source country of Skilled Migrant Category approvals

In 2008/09, 27,011 people were approved for residence through the SMC policy. SMC approvals accounted for 59 percent of all residence approvals in 2008/09, up from 55 percent in 2007/08.

Figure 6.2 shows that the United Kingdom remains the largest source country of skilled migrants (22 percent), despite the proportion from the United Kingdom declining in recent years. Approvals from South Africa increased substantially in 2008/09 (40 percent), and it is now the second-largest source country, with 18 percent of SMC approvals. China and Fiji also recorded steady increases in SMC approvals over the past 2 years.

Figure 6. 2 Skilled Migrant Category approvals by source country, 2006/07–2008/09

Figure 6. 2	Skilled Migrant Category approvals by source country, 2006/07–2008/09.

Source: Department of Labour

Data table for Figure 6.2

6.2.2 Age and gender of Skilled Migrant Category approvals

Less than half of the SMC approvals (44 percent) in 2008/09 were for principal applicants. Principal applicants aged 20-29 years gain the maximum points (30 points) for age. This is reflected in Figure 6.3 with 41 percent of principal applicants aged 20-29 years and 35 percent aged 30-39 years in 2008/09. The small proportion of principal applicants aged more than 50 years (4 percent) reflects the maximum age limit of 55 years under the SMC. The majority of secondary applicants under the SMC policy are dependants of the principal applicants. This is shown in Figure 6.3, with 51 percent of secondary applicants younger than 20 years. The SMC policy targets principal applicants in the 20-29-year age group, which explains why, in Figure 6.3, two-thirds (67 percent) of SMC approvals in this age group are principal applicants.

Figure 6. 3 Age of approved Skilled Migrant Category principal and secondary applicants, 2008/09

Figure 6. 3	Age of approved Skilled Migrant Category principal and secondary applicants, 2008/09.

Source: Department of Labour

Data table for Figure 6.3

The average age of all principal applicants through the SMC was 34 years in 2008/09. The United Kingdom and South Africa have the highest average age at 38 years, while principal applicants from China are much younger, with an average age of 26 years. Furthermore, almost all principal applicants from China over the past 3 years were in the 20-29-year age group (at least 90 percent). This is mainly because of the large number of young Chinese migrants who initially come into New Zealand as international students and, over time, become permanent residents.

In 2008/09, 14,076 males (52 percent) and 12,935 females (48 percent) were approved under the SMC. Almost two-thirds (65 percent) of approved principal applicants were male, compared with 42 percent of approved secondary applicants (see Figure 6.4).

Figure 6. 4 Gender of Skilled Migrant Category approvals by applicant type, 2008/09

Figure 6. 4	Gender of Skilled Migrant Category approvals by applicant type, 2008/09 .

Source: Department of Labour

Data table for Figure 6.4

6.2.3 Points claimed by Skilled Migrant Category principal applicants

Table 6.1 shows the points that SMC principal applicants were awarded in 2008/09. Different criteria operate within each factor. For more information about the SMC policy, see the Immigration New Zealand website, www.immigration.govt.nz/skilledmigrant .

In total, 9,518 SMC principal applicants (79 percent) were awarded points for a job or job offer in New Zealand. This proportion is lower than the 84 percent who were awarded points for a job or job offer in New Zealand in 2007/08. In 2008/09:

Of these principal applicants, 8,527 also specified a region of employment. More than half (55 percent) of the principal applicants who specified a region of employment claimed bonus points for a job or job offer outside the Auckland region. This is slightly lower than the 57 percent in 2007/08. The main regions of employment for SMC principal applicants in 2008/09 were still Auckland (45 percent), Wellington (16 percent), and Canterbury (12 percent) (see Figure 6.5).

Appendix N compares the points claimed by SMC principal applicants between 2007/08 and 2008/09.

Table 6. 1 Points claimed by Skilled Migrant Category principal applicants, 2008/09
Factor Percent gaining points (%)
Total number of principal applicants 11,973
Skilled employment  
Current skilled employment in New Zealand for 12 months or longer 28
Current skilled employment in New Zealand for fewer than 12 months 39
Offer of skilled employment in New Zealand 12
Bonus points for employment or an offer of employment  
Identified future growth area 6
Area of absolute skills shortage 13
Region outside Auckland[81] 55
Partner employment or offer of employment 2
Relevant work experience  
2 years 12
4 years 10
6 years 9
8 years 7
10 years 27
Bonus points for New Zealand work experience  
2 years 21
4 years 8
6 years or more 4
Additional bonus points for work experience  
Identified future growth area 4
Area of absolute skills shortage 14
Qualifications  
Recognised basic qualification 65
Recognised postgraduate qualification 9
Bonus points for qualifications  
Recognised New Zealand qualification 30
Recognised qualification in an identified future growth area 3
Recognised qualification in an area of absolute skills shortage 31
Partner qualifications 18
Close family support in New Zealand 7
Age (20-55 years)  
20-29 years 43
30-39 years 34
40-44 years 12
45-49 years 6
50-55 years 4

Source: Department of Labour

Figure 6. 5 Region of skilled employment for Skilled Migrant Category principal applicants, 2006/07–2008/09

Figure 6. 5	Region of skilled employment for Skilled Migrant Category principal applicants, 2006/07–2008/09.

Source: Department of Labour

Data table for Figure 6.5

Most principal applicants (66 percent) gained points in 2008/09 for relevant work experience. About one-third gained bonus points for New Zealand work experience. Eighteen percent gained additional bonus points for work experience in an identified future growth area or an area of absolute skills shortage.

In recent years, New Zealand has strengthened the SMC policy to encourage international students to stay and work in New Zealand. Students who gain a New Zealand qualification can be awarded bonus points through the SMC policy. In 2008/09, 74 percent of SMC principal applicants gained points for their qualifications (65 percent with a basic qualification and 9 percent with a postgraduate qualification). In addition, 30 percent gained bonus points for a recognised New Zealand qualification (up from 25 percent in 2007/08). Eighty-four percent of those with recognised New Zealand qualifications were aged 20-29 years and more than two-thirds (68 percent) were from China. The proportion of principal applicants claiming bonus points for qualifications in an identified future growth area or an area of absolute skills shortage was 34 percent in 2008/09, which was very similar to 2007/08, with 35 percent.

In 2008/09, 9,917 principal applicants (83 percent) were approved onshore. Of the onshore applicants, 84 percent had a job offer or current skilled employment in New Zealand. The remaining 2,056 principal applicants were approved offshore (17 percent), and 59 percent had a job offer or current skilled employment in New Zealand (see Figure 6.6).

Figure 6. 6 Skilled job or job offer by approval location, 2008/09

Figure 6. 6	Skilled job or job offer by approval location, 2008/09.

Source: Department of Labour

Data table for Figure 6.6

6.2.4 Occupation of Skilled Migrant Category principal applicants

The major occupational group Professionals continued to be the most common occupation group of SMC principal applicants (45 percent). This was followed by the Technicians and Trades Workers group and Managers, as shown in Table 6.2. Among SMC principal applicants, the proportion of Professionals approved offshore (62 percent) was much higher than the proportion approved onshore (41 percent).

Table 6. 2 Main occupation(1) of Skilled Migrant Category principal applicants, 2008/09
Major group(2) Number Percent (%)
Onshore Offshore Total Onshore Offshore Total
Total(3) 7,499 1,891 9,390 100 100 100
Professionals 3,057 1,171 4,228 41 62 45
Technicians and Trades Workers 2,542 286 2,828 34 15 30
Managers 1,325 293 1,618 18 15 17
Community and Personal Service Workers 232 116 348 3 6 4
Clerical and Administrative Workers 281 19 300 4 1 3
Other 62 6 68 1 <1 1

Notes:

(1) Main occupation is the job the applicant spent the most hours doing in the past 12 months.

(2) Major group is coded to the Australia and New Zealand Standard Classification of Occupations (ANZSCO).

(3) This table includes all principal applicants. Applicants whose occupation was either not coded to ANZSCO or was classified as 'Responses outside of the current definition of the labour force' were excluded from the total.

Source: Department of Labour

The SMC attracted skilled migrants in a broad range of sectors in 2008/09. Some of the most common occupations were in health (nurses, physiotherapists), hospitality (chefs, restaurant managers), and education (primary and secondary school teachers).

6.3 Residence from Work Category

For migrants, working temporarily in New Zealand can be a step towards gaining residence and settling in New Zealand permanently. Principal applicants who are qualified in occupations that are in demand in New Zealand or who have exceptional talent in the arts, sports, or culture may gain a temporary work permit that enables them to transition to permanent residence.[82] The associated Residence from Work Category includes the Talent (Accredited Employers),[83] Talent (Arts, Culture and Sports)[84] work policies, as well as the Long Term Skill Shortage List Policy.[85]

Since April 2002, 11,179 principal applicants have been issued a work to residence permit through the Talent work policies and the Long Term Skill Shortage List Policy. Of these principal applicants, 5,381 (48 percent) transitioned to permanent residence (see Table 6.3) and a large proportion (65 percent) gained permanent residence through the SMC policy. However, the transition rates vary depending on the policy under which the work to residence permit was issued:

Thirty percent of the 5,381 principal applicants who transitioned to permanent residence gained residence through the associated Residence from Work Category.

Table 6. 3 Residence categories through which Talent Work Policies and Long Term Skill Shortage List Policy permit holders were granted residence, as at 30 June 2009
Residence category Type of work to residence permit Total
Talent (Accredited Employers) Long Term Skill Shortage List Talent (Arts, Culture and Sports) Number Percent (%)
Total who gained residence 3,724 1,539 118 5,381 100
Total work to residence permits issued 7,729 3,202 248 11,179  
Percentage transitioned to residence through the SMC Policy (%) 30 37 9 31  
Talent (Accredited Employers) Work Policy 1,287 14 3 1,304 24
Long Term Skill Shortage List Policy ... 261 ... 270 5
Talent (Arts, Culture and Sports) Work Policy     75 75 1
Skilled Migrant Category 2,290 1,180 22 3,492 65
General Skills Category* 41 48   89 2
Partnership Category 64 24 9 97 2
Other 34 12 8 54 1

* The General Skills Category is now closed.

... very small numbers have been suppressed.

Source: Department of Labour

Table 6.4 shows the number of residence approvals through the Residence from Work Category in 2007/08 and 2008/09. The number of people who gained residence through the Residence from Work Category in 2008/09 (1,097) was lower than in 2007/08 (1,163). Most were approved through the Talent (Accredited Employers) Work Policy (82 percent of principal applicants).

Table 6. 4 Number of residence approvals through the Residence from Work Category, 2007/08 and 2008/09
Residence from Work Category 2007/08 2008/09
Principal Secondary Principal Secondary
Total who gained residence 475 688 465 632
Talent (Accredited Employers) Work Policy 367 536 383 526
Long Term Skill Shortage List Policy 87 125 72 92
Talent (Arts, Culture and Sports) Work Policy 21 27 10 14

Source: Department of Labour

In 2008/09, the 1,097 people approved through the Residence from Work Category came from more than 60 countries. The main source countries of the 465 principal applicants were the United Kingdom (54 percent), South Africa (7 percent), and Canada (5 percent), as shown in Figure 6.7.

Figure 6. 7 Source countries of approved Residence from Work principal applicants, 2006/07–2008/09

Figure 6. 7	Source countries of approved Residence from Work principal applicants, 2006/07–2008/09.

Source: Department of Labour

Data table for Figure 6.7

6.4 Business Immigration Policy

The Business Immigration Policy aims to contribute to New Zealand's economic growth by increasing New Zealand's levels of human and investment capital, encouraging enterprise and innovation, and fostering international links.

The Business Immigration Policy comprises three categories: The Entrepreneur Category; the Employees of Relocating Business Category;[86] and the Active Investor Migrant Policy.[87] The Active Investor Migrant Policy was replaced by the Migrant Investment Policy on 27 July 2009. The objective of the Migrant Investment Policy is to attract financial capital to local firms or government by providing residence to those who wish to make a significant contribution to New Zealand's economy.

From 2002/03 to 2008/09, 16,743 people (5,102 principal applicants) were approved for residence through the Business Immigration Policy. The main source countries were China (5,707), South Korea (4,243), and the United Kingdom (2,156). Over the past 3 years, the number of business migrants dropped from 1,257 in 2006/07 to 413 in 2008/09. However, the number of business migrants from the United Kingdom has remained relatively steady, with 166 (40 percent) in 2008/09.

Figure 6. 8 Business Immigration Policy approvals, 2002/03–2008/09

Figure 6. 8	Business Immigration Policy approvals, 2002/03–2008/09.

Source: Department of Labour

Data table for Figure 6.8

The number of Investor Category approvals decreased steadily from 2002/03, but until 2005/06 this decrease was offset by the growth in Entrepreneur Category approvals. Since 2005/06, the overall number of approvals through the Business Immigration Policy has dropped substantially, from 3,440 to 413 in 2008/09. The drop in Investor Category approvals in 2006/07 can be attributed to the requirements that principal applicants have to retain investment funds in New Zealand government bonds for a 5-year period. Furthermore, principal applicants and their families have to make New Zealand their main home during the 5-year investment period.

The drop in Entrepreneur Category approvals in 2006/07 is mainly because of English-language requirements introduced in 2002. These requirements reduced the number of applicants on long-term business visas ready to transfer to permanent residence.

In 2008/09, only 33 people were approved for residence through the Investor Category. Table 6.5 compares the nationalities of Investor Category approvals from 2002/03 to 2008/09. In 2008/09, the United Kingdom was still the largest source country, with 12 approvals (36 percent), although this number was only one-quarter of the 48 approvals in 2007/08. The United States had 9 approvals, followed by China with 6 approvals.

Table 6. 5a Source country of Investor Category approvals, 2002/03-2008/09
Source country 2002/03 2003/04 2004/05 2005/06
Total number who gained residence 3,494 2,101 1,361 538
United Kingdom 225 412 383 196
United States 75 104 95 56
China 1,958 715 545 44
Other 1,236 870 338 242
Table 6. 5b Source country of Investor Category approvals, 2002/03-2008/09
Source country 2006/07 2007/08 2008/09
Total number who gained residence 129 87 33
United Kingdom 25 48 12
United States 13 9 9
China 43 12 6
Other 48 18 6

 

Source: Department of Labour

The Long Term Business Visas Policy is a temporary immigration policy that caters for people who are interested in establishing a business in New Zealand, and may subsequently apply for residence through the Entrepreneur Category. People can also use the Long Term Business Visas Policy if they are interested in establishing a business in New Zealand, but are not living permanently in New Zealand.

In 2008/09, 187 principal applicants were granted a long-term business visa, a decrease from 202 in 2007/08. Since the Long Term Business Visa Policy was introduced in March 1999, 5,336 principal applicants have been granted a long-term business visa. The number of long-term business visas granted has decreased considerably since the peak of 1,807 principal applicants in 2001/02.

Table 6.6 details the residence categories through which long-term business visa holders converted to residence. By 30 June 2009, 61 percent (3,265 principal applicants) had converted to residence. Of these conversions, 2,712 principal applicants (83 percent) converted through the Entrepreneur Category.

Table 6. 6 Residence categories through which long-term business visa holders were granted residence, as at 30 June 2009
Residence category Number of principal applicants Proportion of conversions (%) Proportion of long-term business visa principal applicants (%)
Total conversions to residence 3,265 100 61
Total long-term business visa principal applicants 5,336   100
Entrepreneur Category 2,712 83 51
General Skills Category* 119 4 2
Partnership Category 126 4 2
Skilled Migrant Category 94 3 2
Investor Category 74 2 1
Other 140 4 3

* The General Skills Category is now closed.

Source: Department of Labour

The rates of conversion to residence differ across the main source countries for long-term business visa holders. Figure 6.9 shows conversion rates to residence for the top seven countries, with South Korea, China, and the United Kingdom the top three source countries. However, Fiji had the highest conversion rate (82 percent), followed by South Korea (66 percent), and China (64 percent).

Figure 6. 9 Rates of conversion to residence by source country for long-term business visa holders, as at 30 June 2009

Figure 6. 9	Rates of conversion to residence by source country for long-term business visa holders, as at 30 June 2009.

Source: Department of Labour

Data table for Figure 6.9

In 2008/09, 380 principal applicants were granted residence through the Entrepreneur Category. Figure 6.10 compares the source countries of principal applicants approved through the Entrepreneur Category in the seven financial years to 2008/09. Approvals from the United Kingdom have remained relatively steady over the past 4 years, while approvals from South Korea and China have decreased considerably. For this reason, in the Entrepreneur Category in 2008/09, there were more approvals from the United Kingdom (41 percent of the total 380 approvals) than there were from South Korea and China combined (26 percent).

Figure 6. 10 Source country of Entrepreneur Category approvals, 2002/03–2008/09

Figure 6. 10	Source country of Entrepreneur Category approvals, 2002/03–2008/09.

Source: Department of Labour

Data table for Figure 6.10


[78] The Skilled/Business Stream categories are described in Table C2 of Appendix C.

[79] These numbers exclude a small number of migrants who gained residence through the General Skills Policy (now replaced by the Skilled Migrant Category Policy) and the Employees of Relocating Business Policy.

[80] Expressions of interest that have 140 or more points are selected automatically from the pool. Expressions of interest that have 100 or more points but less than 140 points, and include points for offers of skilled employment or current skilled employment in New Zealand, are selected in sufficient numbers to meet the requirements of the Skilled/Business Stream.

[81] The percentage is calculated from the 8,527 Skilled Migrant Category principal applicants who were awarded points for a job or job offer and specified a region of employment.

[82] The Residence from Work Category is for applicants who are already in New Zealand on a work to residence permit and want to apply for residence.

[83] To qualify for residence through the Talent (Accredited Employers) Work Policy, principal applicants must have held a work visa or permit for at least 24 months with an accredited employer and received a minimum base salary of NZ$55,000 per year (the salary threshold is lower for those issued the work to residence permit before 28 July 2008).

[84] To qualify for residence through the Talent (Arts, Culture and Sports) Work Policy, principal applicants must have held a work visa or permit granted for at least 24 months; have been actively engaged in their declared field of art, culture, or sport during the currency of that visa or permit period in New Zealand; be prominent in that field of art, culture, or sport; and be sponsored by a New Zealand organisation of national repute in their declared field.

[85] To qualify through the Long Term Skill Shortage List, a suitably qualified applicant must have an offer of at least 2 years employment in New Zealand in an occupation on the list with a minimum base salary of NZ$45,000 per year. After 2 years, the permit holder may apply for residence if they continue to meet the policy's requirements.

[86] Numbers in this category were too small to report and have been excluded from the analysis.

[87] The Active Investor Migrant Policy comprised three subcategories: General (Active) Investor; Professional Investor; and Global Investor.