1493093735847 - Government changes will have “almost no impact” on medium term immigration: ASB

Government changes will have “almost no impact” on medium term immigration: ASB

Rule changes aiming to give the government greater control over migration will have little or no impact on arrivals, economists at one of New Zealand major banks warn.

On Wednesday Statistics New Zealand will release the number of long term arrivals and departures for the year to March 31.

The figures are expected to show net migration stayed near or above the record 71,300 recorded in the year to February 28.

A long run of record met migration gains – which has New Zealand’s population growing at the fastest pace in 40 years – have led to warnings that New Zealand’s infrastructure is struggling to cope.

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While much of the boost comes as a result of the large number of New Zealand’s returning home, immigration is likely to feature as an issue in the September 23 election, with Labour, the Green Party and NZ First also signalling changes to curb arrivals.

On April 19 Immigration Minister Michael Woodhouse announced a series of changes to work visa settings, including new pay band components for skilled migrant visas.

Woodhouse said the changes would “further control the number” of net migrants coming to New Zealand.

After consultation, the new rules were set to come into effect later in 2017, Woodhouse said.

But ASB, which has forecast that net migration will stay strong for at least the next three years, has made no changes to its predictions as a result of the announcement.

It recently forecast that net migration would stay above 70,000 well into 2018 and stay at around 55,000 by the end of 2019, sending New Zealand’s population to 5 million.

ASB economist Daniel Snowden said the changes would make no difference to those coming in to New Zealand in the short term and in the medium and long term the change would be “at the margin.”

“We’re getting 128,000-ish arrivals in a 12 month period. Of those, only about a third are coming in on the visas the government is targeting,” Snowden said.

“And of those…a good proportion are not going to be affected anyway, and some [who are affected] would have left anyway.”

Longer term – in around three years – it was possible that there would be some impact but the degree of change would only be able to be assessed once the changes were in force, Snowden said.

“There’s even a possibility that people will be looking at this and speeding up their applications to get in before [the changes],” Snowden said.

“It’s not going to change the current picture.”

Although the recent surge in net migration confounded bank economists and the Treasury, most now expect the recent trend will continue near the current level for months to come.

Kiwibank chief economist Zoe Wallis said the gains were expected to remain strong given New Zealand’s “relatively strong labour market” compared to other countries.

“However, as we saw last week with the announcement by the Government, migration policy looks set to tighten as we head closer to a general election. As a result, there is a downside risk to net migration numbers post-election,” Wallis said.