Department of Labour Annual Report 2006

Report on the Department's Activities in 2005/06

What the Department achieved

Long-term goal 3: People’s skills match the current needs, and respond to the future needs, of the labour market

A skilled workforce supports the country’s growth and prosperity. As the economy grows and transforms, New Zealand needs to continue training and attracting skilled and talented people. We work with industries, educators and training providers to improve skill development and utilisation. We also promote changes to industry and workplace practices that improve the recruitment and retention of skilled people. And when the right skills can’t be found in New Zealand, we attract skilled people from overseas and facilitate their participation in productive work.

New Business Model for Immigration

The Department is currently developing new ways of working, so we can more effectively attract skilled migrants and encourage short-term workers and visitors. We are working on improved and faster facilitation of visas and permits for the people we want to visit New Zealand or move here permanently, and smarter border processes to avoid potential risk. We are also working to enable new migrants to settle well, ensuring better social cohesion, productivity and economic development.

The Cabinet has agreed to the development of a new business model and has directed the Department to report back on progress. The new business model will be consistent with both the Department’s goals and wider Government immigration goals and will include:

• a comprehensive risk assessment system
• updated and integrated immigration IT systems
• centralised key decision making
• enhanced online services
• improved border security measures, including in the Pacific
• improved customer service
• an appropriate marketing strategy.

This work by the Department also contributes to long-term goals 1 and 5 – improved labour market outcomes through effective partnerships and strategies, and our voice on labour market, migration and humanitarian issues being effectively heard abroad while our security and prosperity interests are advanced and protected.

Immigration Act Review 2005

In March 2005 Cabinet directed the Department to start work on a fundamental review of the Immigration Act. The Government sought a careful and substantial review in one coherent package. The terms of reference for the review were approved in May 2005.

The objective of the review is to ensure that New Zealand’s interests are protected and advanced, while also ensuring compliance with international obligations. The review will develop proposals for new legislation. Policy development has been focussed on seven areas:

1. Purpose and principles of immigration legislation
2. Entry into New Zealand and obligations
3. Grant of protection in New Zealand
4. Enforcement
5. Expulsion
6. Review and appeal
7. Inter-related issues (such as levels of decision making).

Public consultation began in April 2006, when a discussion paper was issued. The Department established a dedicated email address for inquiries and a website to lodge online submissions. Organisations and individuals around the country were contacted, including:

• immigration consultants and lawyers
• Pacific, migrant, refugee and ethnic groups
• community groups working with migrants and refugees
• business and employer groups
• education providers.

These organisations and individuals were sent discussion papers and provided with advice about how to make submissions. They were also asked to distribute invitations to public meetings. More than 1,500 copies of the discussion paper and 3,000 copies of the overview paper were distributed. Translations of the presentation were produced in Samoan, Tongan, Tuvaluan, and i-Kiribati, with one page translations of the key information and the submission process in Korean, Chinese, Hindi and Arabic.

More than 650 people attended 19 public meetings in Auckland, Wellington, Christchurch, Dunedin, Nelson, Hamilton and Napier during May and June 2006. In addition, 13 one-on-one meetings were held with key stakeholders. Public submissions closed on 1 July 2006, with the Department receiving a total of 1,578 written submissions. A number of these were identical submissions from different people. Of the total received, there were 344 unique submissions.

The next stage of the review is a thorough analysis of the submissions and further development of options before drafting and introduction of a new Immigration Bill, scheduled for April 2007.

This work by the Department also contributes to long-term goals 1 and 5 – improved labour market outcomes through effective partnerships and strategies, and our voice on labour market, migration and humanitarian issues being effectively heard abroad while our security and prosperity interests are advanced and protected.

New Zealand Residence Programme

There were 51,236 people approved for permanent residence under the New Zealand Residence Programme, achieving the targeted numbers for the year. The Cabinet sets the number of places available to immigrants based on meeting our international obligations, the needs of New Zealand’s labour market and our ability to absorb new migrants. People who want to migrate to New Zealand can apply for permanent residence under three broad categories:

1. Skilled/Business
2. Family Sponsored
3. International/Humanitarian.

Approvals for people in the Skilled/Business migrant category increased by more than 2,000 people, compared with the previous year. Seventy seven per cent of the people approved under the Skilled/Business migrant category had jobs or job offers and 39% of them worked in an occupation where New Zealand has long-term skill shortages.

Value of Temporary Work Permits

A total of 139,445 work permit applications were decided for 2005/06. These figures show a trend of increasing numbers of work permit applications, which have risen from 101,503 in 2004 to 113,719 in 2005 and to 139,445 in the past year. The most recent figures include 28,500 holiday makers working under the Working Holiday Scheme.

This trend shows the importance of work permits, as these people help New Zealand address skill and labour market shortages and contribute to the country’s ongoing economic growth.

There were an estimated 62,308 people with work permits working in New Zealand at 4 June 2006. We estimate that the number of people working in New Zealand on work permits ranged from 57,290 to 80,943 over the year, with an average of 64,000 for the year.

Labour Market analysis, monitoring and reporting

To achieve its goals the Department needs good information about the labour market, so we are involved in regular labour market analysis and reporting, including:

• Employment reports that analyse the Household Labour Force Survey results for the quarter.
• Summaries of quarterly information about skill shortages, primarily focussed on the Quarterly Survey of Business Opinion from the New Zealand Institute of Economic Research and the Job Vacancy Monitor from the Department of Labour.
• Wages reports that examine wage growth measures each quarter, using information from Statistics New Zealand’s Labour Cost Index and Quarterly Employment Survey.
• Analysis of trends in permanent and long-term migration, using data collected by Statistics New Zealand from arrival and departure cards. The analysis is supported by immigration approvals information that we collect ourselves.
• We also report on skill shortages in 14 trades across a range of industries from construction to the food and beverage sector. Our analysis indicates that after a significant increase in training, skill shortages are expected to ease this year and beyond. Reports about skill shortages are part of an ongoing programme of research and analysis led by the Department.
• An update every six months on Maori labour market outcomes focuses on changes in the past six years and prospects for the next two years and uses data from Statistics New Zealand’s quarterly Household Labour Force Survey.

This work by the Department also contributes to long-term goals 1, 2 and 4 – improved labour market outcomes through effective partnerships and strategies, all people have opportunities to participate in well-paid and meaningful employment, and workplaces being attractive, innovative and productive.

Job Vacancy Monitoring Programme

The aim of the Job Vacancy Monitoring Programme is to produce timely and relevant information about skill shortages. This information is used by employers, training providers and the Department. Key Job Vacancy Monitoring Programme outputs over the 2005/06 year include:

Job Vacancy Monitor

The monthly Job Vacancy Monitor looks at job vacancies advertised in 25 newspapers and two internet job boards. From February 2006, interpretation and commentary of Job Vacancy Monitor findings have been incorporated into the quarterly Skills in the Labour Market report (published in March and June 2006).

Survey of Employers who have Recently Advertised

The 2005 findings from the Survey of Employers who have Recently Advertised were published in November 2005. Survey results identify occupations in which employers are having difficulty filling vacancies. The scope of the 2006 survey will be extended to include not only highly-skilled and skilled occupations, but also semi-skilled/ elementary occupations. Broadening the sample base will enable the calculation of skill shortage indicators for most occupational groups.

In-depth skill shortage assessment reports

Skill shortage assessment reports were published for 10 professional occupations in November 2005. These reports draw on the 2004 results of the Survey of Employers who have Recently Advertised and provide insight into the supply and demand forces contributing to skill shortages in each of the occupations analysed.

Skill shortage assessment reports were published for 14 trade occupations in June 2006. These reports include four trade occupations not previously analysed by the Department. Production of the reports involved extensive consultation with tertiary education stakeholders. The reports drew on the 2005 results of the Survey of Employers who have Recently Advertised and assess skill shortages in the trade occupations analysed.

Skill shortage assessment reports will be published for 11 professional occupations in November 2006. This series of reports will include four professional occupations not previously analysed by the Department. Results from the 2005 Survey of Employers who have Recently Advertised will contribute to the analysis of skill shortages in each of the professional occupations analysed.

IT Recruiters Survey

The 2005 IT Recruiters Survey findings were published in November 2005. Findings from the survey provide an indication of the types of IT skills that are in greatest demand.

Research Programme

The Department completed research on the longer-term labour market outcomes for injured workers and former beneficiaries, using Statistics New Zealand’s Linked Employer-Employee Dataset.

A significant milestone was achieved during the year with the publication of Successful Benefit-to-Work Transitions – The Longer-term Outcomes of People who Move from a Working-age Benefit to Employment. The research examined employment and benefit receipt patterns for different demographic groups.

Other research programmes that were significantly advanced during the year include:

• Patterns of Labour Market Fragmentation and Worker and Firm Employment and Earnings Change, 1999-2005
• Worker – Firm Heterogeneity and Matching
• Cyclical Earnings Variation and the Composition of Workers and Firms.

Research comparing productivity growth in New Zealand and Australia was also completed. Work continued on the development of two new surveys. The first will collect information about individuals’ employment conditions and working arrangements, and the second will collect information from employers about a variety of employment practices.

This work by the Department also contributes to long-term goal 2 – all people have opportunities to participate in well-paid and meaningful employment.

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