Migration Trends 2006/07
New Zealand’s growing economy has led to a high demand for labour and a low unemployment rate, which, in turn, has had implications for the supply of labour. In 2006/07, there was a strong focus on attracting skilled migrants to address New Zealand’s long term labour market shortages. Skilled immigration policy is one of a number of ways to address skill shortages. This chapter provides a breakdown and analysis of residence approvals through the Skilled/Business Stream in 2006/07.
The main category in the Skilled/Business Stream is the Skilled Migrant Category (SMC). The SMC is a points-based policy that allows for people to gain permanent residence in New Zealand if they have the skills, qualifications and experience to contribute to New Zealand economically and socially. In 2006/07, the Department of Labour issued a general instruction to prioritise applications made through the SMC, Refugee policy, Family Partnership and Dependent Child policies over other residence categories in the New Zealand Residence Programme (NZRP). 
Skilled Migrant Category
The aim of the SMC is to contribute to New Zealand’s economic growth, innovation and global connectedness. Gaining residence through the SMC is based on employability and capacity building factors and an applicant’s ability to settle and contribute to New Zealand. Applicants must also meet relevant health, character and English language requirements. Applicants must meet a minimum threshold of 100 points to submit an expression of interest (EOI) into the pool. 
A number of changes have been made to SMC policy since it came into effect in 2003. Changes were made to the selection process in December 2005 to give priority to highly skilled migrants and those with a skilled job or job offer in New Zealand, and to help limit oversubscription to the SMC.  Since December 2005, principal applicants who score 140 points or more in their EOI have been selected from the pool automatically.
In July 2007, changes were made to the SMC to improve its competitiveness and to align the characteristics of migrants more closely with New Zealand’s skill needs. The changes included:
- amendment to the allocation of points to skilled employment, recognised qualifications and work experience in an identified future growth area
- amendment to the allocation of bonus points for study in New Zealand and for partners’ offers of skilled employment and their qualifications
- SMC Work to Residence period extended from six to nine months
- the introduction of a more transparent definition of skilled employment, based on the Australia New Zealand Standard Classification of Occupations (ANZSCO). 
Appendix L details the SMC points structure that has been in force since July 2007. Details of the SMC points system that applied in 2006/07 are given in section 5.2.4.
Expressions of interest
Applicants who score between 100 and 140 points and have a skilled job or offer are ranked and selected from the EOI pool in sufficient numbers to meet the required places for the Skilled/Business Stream at the time of that selection. If further places are available in any given selection, additional EOIs may be selected from the pool on the basis of criteria set by the Minister of Immigration. Since February 2006, the following criteria have been used to select additional EOIs from the pool. Where these criteria have been used for selection, they have been applied in the order set out below:
- EOIs that include 15 points for work experience in an area of absolute skills shortage (in descending order of their points total).
- EOIs that include 10 points for work experience in an area of absolute skills shortage (in descending order of their points total).
- EOIs that include 10 points for a qualification in an area of absolute skills shortage (in descending order of their points total).
- The points total of EOIs not meeting any of the above three criteria (in descending order).
Figure 5.1 shows the number of EOIs submitted per quarter over the last two financial years. EOI inflows increased over the second half of 2006/07, a result of the substantial increase in the number of principal applicants submitting an EOI with a job or offer. Figure 5.1 also shows the effect of the changes to the EOI selection process in December 2005. The impact of those changes was an immediate decrease in the number of EOIs without a job or offer. Since those changes, the number of principal applicants submitting an EOI with a skilled job or offer has been substantially higher than the number without.
Figure 5.1 EOI inflows in 2005/06 and 2006/07
There were 25 pool selections in 2006/07. In total, 17,930 EOIs (39,753 people) were selected from the pool, down slightly from 18,153 EOIs (41,251 people) in 2005/06. Seventy-one percent of principal applicants selected from the pool in 2006/07 claimed points for a job or offer, up from 62 percent in 2005/06. Appendix M details the draws in 2006/07. Selected EOIs undergo an initial verification process and, if successful, are offered an invitation to apply for residence through the SMC. In 2006/07, 14,007 principal applicants (31,072 people) were issued an invitation to apply for residence, compared to 16,151 principal applicants (37,854 people) in 2005/06.
Nationality of SMC approvals
In 2006/07, 25,885 people were approved for residence through the SMC. SMC approvals accounted for 55 percent of all residence approvals in 2006/07, compared to 54 percent in 2005/06. SMC approval numbers were down slightly from 27,539 in 2005/06, reflecting the lower number of people approved through the NZRP overall.
The UK remains the largest source country of approvals (35 percent), although the proportion from the UK has decreased since the SMC came into effect. The UK accounted for 41 percent of SMC approvals in 2005/06 and 49 percent in 2004/05. South Africa was the second largest source country (12 percent) followed by China (11 percent). SMC approvals from the Philippines have increased over the last 12 months, from 808 in 2005/06 to 2,404 in 2006/07, and were 9 percent of approvals in 2006/07. Figure 5.2 compares approval numbers over the last two financial years by nationality.
Figure 5.2 Nationalities of SMC approvals: 2005/06–2006/07
Age and gender of SMC approvals
Figure 5.3 shows the age of principal and secondary applicants approved through the SMC in 2006/07. Most principal applicants were aged 20–39 (75 percent). Principal applicants aged 20–29 can claim the maximum points for age (30 points), with the points for age decreasing after this. Thirty-eight percent of principal applicants claimed the maximum points for age. The low proportion of principal applicants over 50 (4 percent of principal applicants) reflects the maximum age limit of 55 under the SMC. Fifty-three percent of secondary applicants were under 20 years old.
The average age of people through the SMC has decreased over the last three years, as growing numbers of young Chinese migrants (former international students) have gained residence. The average age for principal applicants has decreased from 35 in 2004/05 to 33 in 2006/07. The average age of Chinese principal applicants approved in 2006/07 was 25 years old. In 2006/07, 91 percent of Chinese principal applicants approved through the SMC were aged 20–29 years old.
Figure 5.3 Age ranges of SMC approvals in 2006/07
Slightly more males (52 percent) than females were approved through the SMC in 2006/07, and 65 percent of principal applicants were male. In comparison, 59 percent of secondary applicants approved in 2006/07 were female.
Figure 5.4 Gender of SMC approvals in 2006/07 (n = 25,885)
Points claimed by SMC principal applicants
This section includes information on the points claimed by principal applicants approved through the SMC. Table 5.1 provides a description of the SMC points that applied in 2006/07. Different criteria operate within each point factor, and more information can be obtained by consulting the website www.immigration.govt.nz/skilledmigrant.
|Current skilled employment in New Zealand for 12 months or more||60|
|Offer of skilled employment in New Zealand or current skilled employment in New Zealand for less than 12 months||50|
|Bonus points for employment or offer of employment in:|
|An identified future growth area or identified cluster||5|
|An area of absolute skills shortage||10|
|Region outside Auckland||10|
|Partner employment or offer of employment||10|
|Additional bonus points if work experience in New Zealand:|
|6 years or more||15|
|Additional bonus points for work experience in an identified future growth area or identified cluster:|
|2 to 5 years||5|
|6 years or more||10|
|Additional bonus points for work experience in an area of absolute skills shortage:|
|2 to 5 years||10|
|6 years or more||15|
|Recognised basic qualification (e.g. trade qualification, diploma, bachelor’s degree, bachelor’s degree with honours)||50|
|Recognised post graduate qualification (master’s degree, doctorate)||55|
|Bonus points for:|
|Recognised New Zealand qualification (and at least two years’ study in New Zealand)||10|
|Qualification in an identified future growth area or cluster||5|
|Qualification in an area of absolute skill shortage||10|
|Close family support in New Zealand||10|
|Age (20 to 55 yrs)|
Table 5.2 shows the points claimed by SMC principal applicants in 2006/07. Sixty-seven percent of principal applicants gained points for current employment, while 18 percent had an offer of skilled employment. In total, 85 percent of SMC principal applicants were awarded points for a job or offer of skilled employment in New Zealand, up from 75 percent in 2005/06.
Over half of all principal applicants (56 percent) claimed bonus points for a job or a job offer outside the Auckland region, down slightly from 58 percent in 2005/06. Eighteen percent claimed bonus points for a job or a job offer in an area of absolute skills shortage.
The majority of principal applicants (67 percent) gained points for work experience, and 18 percent gained bonus points for work experience in an area of absolute skills shortage. Thirty-two percent had qualifications in a skills shortage area, up from 31 percent in 2005/06 and 29 percent in 2004/05. Seventeen percent of principal applicants gained points for a recognised New Zealand qualification, unchanged from 2005/06. The majority of those with New Zealand qualifications were 20–29 years old (90 percent), and were typically from China (75 percent), India (7 percent), or Malaysia (4 percent).
|Factor||% gaining points|
|Skilled employment 12 months or more||23|
|Skilled employment <12 months||44|
|Offer of skilled employment||18|
|Bonus points for employment or offer of employment|
|Identified future growth area||5|
|Identified cluster area||<1|
|An area of absolute skills shortage||18|
|Region outside Auckland*||56|
|Partner employment or offer of employment||3|
|Relevant work experience|
|Bonus points for New Zealand work experience|
|6 years or more||<1|
|Additional bonus points for work experience|
|Identified future growth area (2 to 5 years)||2|
|Identified future growth area (6 years or more)||2|
|Identified cluster area (2 to 5 years)||<1|
|Identified cluster area (6 years or more)||<1|
|An area of absolute skills shortage (2 to 5 years)||7|
|An area of absolute skills shortage (6 or more years)||11|
|Recognised basic qualification||69|
|Recognised post graduate qualification||10|
|Bonus points for qualifications|
|Recognised New Zealand qualification||17|
|Recognised qualification in an identified future growth area||3|
|Recognised qualification in an identified cluster area||<1|
|Recognised qualification in an area of absolute skills shortage||32|
|Close family support in New Zealand||6|
|Total principal applicants||11,563|
*9,824 principal applicants were awarded points for a job or job offer. Of these, region data was recorded for 9,211. Fifty-six percent of those with the region of employment recorded stated a region outside of the Auckland region.
Distribution of point rankings
Figure 5.5 shows the distribution of point ranks for those approved for residence through the SMC. The average (mean) point rank for approvals in 2006/07 was 135 for offshore approvals, 145 for onshore approvals and 140 overall.
Figure 5.5 Distribution of point rankings for SMC approvals in 2006/07
In 2006/07, 9,824 approved principal applicants (85 percent) were awarded points for a job or offer. Principal applicants approved onshore were more likely to have been awarded points for a job or offer of skilled employment.  In 2006/07, 56 percent of onshore approvals had been employed for less than 12 months, up from 47 percent in 2005/06. The proportion of offshore approvals with a job or job offer increased from 49 percent in 2005/06 to 64 percent in 2006/07. Table 5.3 shows the breakdown of onshore versus offshore principal applicants and the types of employment for which they were awarded points under the SMC.
|Type of skilled employment in NZ||Onshore||Offshore||Total|
|Employed 12 months or more||30%||0%||23%|
|Employed less than 12 months||56%||2%||44%|
|Offer of employment||5%||62%||18%|
|Neither a job nor a job offer||9%||35%||15%|
|Total principal applicants||9,047||2,518||11,563|
Region of employment
The SMC recognises the value of immigration to all regions in New Zealand and awards bonus points for employment outside Auckland, the location of New Zealand’s largest migrant population.  Table 5.4 details the proportion of approved principal applicants by region of employment. The table shows that Auckland, Wellington and Canterbury were the main regions of employment.
|Bay of Plenty||385||4%|
* Of the 11,563 principal applicants approved through the SMC in 2006/07, 9,824 had a job or offer of employment. Of these, 9,211 recorded their region of employment.
Occupations of SMC principal applicants
Experience shows that migrants are likely to settle quickly and make a greater contribution to New Zealand's economic and social well-being if they are able to apply their particular skills in satisfying employment. The information presented here provides a basis to evaluate the impact of migrants on the New Zealand labour market.
Occupation data collection
Occupational data is recorded for a number of residence categories. For applicants through the SMC, data is captured on the principal applicant’s main occupation (their occupation during the 12-month period before residence). The occupation of job offers is recorded on the EOI form. The New Zealand Standard Classification of Occupations (NZSCO) is used to classify both the occupational group (NZSCO level 1) and the occupation description (NZSCO level 5) of the main occupation and the job or offer of employment. The data is collected for the principal applicant in each application.
Of the principal applicants awarded points for a job or offer, 36 percent had a main occupation classified as Professional and, in particular, recorded occupations in the health, education, engineering and information technology sectors. A further 19 percent had main occupations classified as Technicians and Associate Professionals, and 18 percent were Legislators, Administrators and Managers. Fourteen percent were classified as Trades Workers. The proportion of people classified as Service and Sales Workers decreased from 9 percent in 2005/06 to 7 percent in 2006/07.
The job offer data has been coded to NZSCO for most but not all principal applicants approved in 2006/07 (see note below Table 5.5). For those that are coded, there is a high correlation between the principal applicant’s main occupation and their job or job offer in New Zealand. Of the job or job offers coded to date, 79 percent of principal applicants had a job or offer in the same occupational group as their main occupation. This correlation demonstrates a strong link between an applicant’s occupation in their home country and their employment outcomes in New Zealand. It also reflects the high proportion of applicants working in New Zealand prior to gaining residence.
|Occupational group||Main occupation*||Job/job offer**|
|Legislators, Administrators, Managers||1,736||18%||1,426||15%|
|Technicians and Associate Professionals||1,883||19%||1,611||17%|
|Service and Sales Workers||652||7%||682||7%|
|Agriculture and Fishery Workers||192||2%||187||2%|
|Plant and Machine Operators and Assemblers||175||2%||221||2%|
* Main occupation is the job the applicant spent the most hours doing in the past 12 months.
** Not all SMC approvals had a job offer recorded on their EOI form.
*** Includes elementary occupations, occupations not listed in the NZSCO codes and those not able to be coded.
The SMC has attracted skilled migrants in a broad range of sectors. Some of the main sectors in 2006/07 included health, education, finance, information technology and trades occupations. Some of the most common occupations included registered nurses, secondary school teachers, chefs, restaurant managers, electricians and accountants. Table 5.6 shows the most common main occupations recorded at the 5-digit NZSCO level for SMC principal applicants approved with a job or offer.
|Main occupation group||Examples of occupations|
|Legislators, Administrators, Managers||Sales and/or marketing manager
Restaurant or tavern manager
|Professionals||Nurse and other medical specialists
IT/software related occupations
Secondary or early childhood teacher
Civil, electronic, or mechanical engineer
|Technicians and Associate Professionals||Book keeper
Computer systems/services technician
Health related occupations (social worker, occupational therapist, physiotherapist)
|Service and Sales Workers||Chef
|Agriculture and Fishery Workers||Dairy farmer, dairy farm worker
Farm manager (sheep, cattle, pig)
Motor mechanic/diesel mechanic
Fitter welder/fitter turner
Carpenter/other building trades
|Plant and Machine Operators and Assemblers||Roofer
* Main occupation is the job the applicant has spent the most hours doing in the past 12 months.
Skilled Migrant Work to Residence policy
Principal applicants applying through the SMC are assessed on their ability to settle and contribute to New Zealand. Applicants may be granted residence if they can demonstrate this ability – such evidence includes skilled employment in New Zealand (or an offer of skilled employment), or New Zealand qualifications that are either to a specified level, in an area of identified growth, or relevant to an occupation that is in absolute shortage.
Applicants who are unable to demonstrate their ability to settle and contribute, but who demonstrate that potential, may be issued a work permit for the purpose of obtaining an offer of ongoing skilled employment in New Zealand. The Work to Residence permit is issued for nine months.  To gain residence through the SMC, an applicant must show that they have obtained an offer of skilled employment in New Zealand. Following their residence approval, they must work in that skilled job for at least three months. 
Since the policy came into effect in December 2003, 2,112 principal applicants have been issued a Work to Residence permit through the SMC policy. At the end of June 2007, 878 (42 percent) had been granted permanent residence through the SMC. However, the transition rates vary depending on the policy under which the Work to Residence permit was issued.
Approximately 67 percent of people issued their permit under the original two-year policy had gained residence by 30 June 2007. Of those issued a six-month permit between 21 December 2005 and 9 April 2007, approximately 38 percent had gained permanent residence. Most people issued the nine-month permit under the 10 April 2007 policy change have had insufficient time to gain permanent residence – 8 percent of people issued the nine-month permit had gained residence by 30 June 2007.
Work to Residence policies – Talent Visa and LTSSL
The Talent Visa and Long Term Skill Shortage List policy foster links between temporary work and permanent residence in New Zealand. The Talent Visa enables accredited employers and certain organisations to recruit non-residents who are highly skilled or talented. The Long Term Skill Shortage List policy enables people who have an offer of employment in an occupation on the Long Term Skill Shortage List (LTSSL) to gain permanent residence.
To qualify for a Talent Visa (Accredited Employers), an applicant needs to have an offer of employment in New Zealand for at least 24 months with an accredited employer and a minimum base salary of NZ$50,000 per annum.  Under the Talent (Arts, Culture and Sports) policy, an applicant deemed to have exceptional talent in a declared field of art, culture or sport can be sponsored by a New Zealand organisation of national repute in the declared field.
To qualify through the LTSSL policy, a suitably qualified applicant needs to have an offer of employment in New Zealand for at least 24 months in an occupation on the LTSSL. The offer of employment must meet the LTSSL specifications for that occupation. After two years, permit holders may apply for residence if they continue to meet the requirements of the policy.
In 2006/07, 1,862 permits were issued under the Talent and LTSSL policies, up from 1,645 in 2005/06. The main source countries were the UK, South Africa and Canada. There were 1,346 people approved through the Talent (Accredited Employers) policy, 484 through the LTSSL policy, and 32 through the Talent (Arts, Culture and Sports) policy. Figure 5.6 shows the nationalities of principal applicants issued work permits through the Talent (Accredited Employers) and LTSSL policies in 2006/07.
Figure 5.6 Nationality of people approved a work permit through the Talent (Accredited Employers) and LTSSL policies in 2006/07
The number of people issued permits through the Talent (Accredited Employers) policy has grown steadily since 2002. The number of applications through the LTSSL policy was highest when the SMC first came into effect but has decreased over the last two financial years. It is likely that many potential LTSSL work permit applicants choose to apply for permanent residence through the SMC because of the points awarded to applicants who have an occupation, qualifications and work experience in an area of absolute shortage. The number of people approved through the Talent (Arts, Culture and Sports) policy has remained steady but low. Figure 5.7 shows the number of approvals through each of the Work to Residence policies since they came into effect in 2002.
Figure 5.7 Number of people approved a work permit through the Talent and LTSSL policies since April 2002
Research into these policies has shown a tendency for Talent and LTSSL work permit holders to convert to residence earlier than intended by the policy, particularly for LTSSL permit holders.  A high proportion of those who gain permanent residence do so through the SMC, rather than through the Residence from Work categories.
Since the Work to Residence policies came into effect, 6,872 people have been granted a Talent Visa or LTSSL Occupation work permit. Of these, 2,785 (41 percent) had been granted residence by the end of June 2007. Of the 2,785, approximately 72 percent gained residence within 24 months of being issued the work permit.
Table 5.7 shows the residence categories through which applicants were approved and the proportion approved through each category. Ninety-seven percent were approved through Skilled residence categories, predominantly the SMC. Twenty-six percent were approved through the Residence from Work categories.
|Residence category||Work permit category||Total|
|Talent (Accredited Employers)||LTSSL||Talent (Arts, Culture and Sports)||n||%|
|Skilled Migrant Category||1,137||739||19||1,895||68%|
|Talent (Accredited Employer)||551||0||0||557||20%|
|LTSSL Occupation policy||0||114||0||116||4%|
|1995 General Skills Category||40||43||0||83||3%|
|Talent – Sports||0||0||28||28||1%|
|Talent – Arts and Culture||0||0||20||20||1%|
|Total gained residence||1,781||922||82||2,785||100%|
|Total work permits granted||4,576||2,108||188||6,872|
|% converted to residence||39%||44%||44%||41%|
Business immigration policy seeks to increase New Zealand’s level of human and investment capital, as well as increase enterprise and innovation, and foster international links. In 2006/07, 1,263 people were approved for residence through the Business categories, representing 3 percent of all residence approvals in this financial year. Business category approval numbers have decreased steadily since reaching a peak of over 4,500 in 2001/02.
Investor Category approval numbers have decreased over the last five years but, up until 2006/07, have been offset by growing numbers through the Entrepreneur Category. However, Entrepreneur Category approvals fell from 2,902 in 2005/06 to 1,128 in 2006/07, causing a decrease in the total number of approvals through the Business categories. Figure 5.8 shows the composition of Business category approvals over the last five financial years.
Figure 5.8 Business category approvals: 2002/03–2006/07*
* A small number of people are approved through the Employees of Relocating Businesses Category each financial year (six people in 2006/07).
The Investor Category allows people to gain residence in New Zealand on the condition that they invest in New Zealand. In July 2005, a new Investor Category policy came into effect, with a significant shift in the way investors are granted residence. The 2005 policy required the targeted use of investor funds, but has attracted relatively few skilled business people to New Zealand.
In November 2007, the 2005 Investor Category was replaced by the Active Investor Migrant policy.  Under the new policy, investor migrants must actively contribute to New Zealand businesses, directly or indirectly. Passive investment, such as having money in a bank or in residential property, will not be an acceptable form of investment. The Active Investor Migrant policy is segmented into three sub-categories on the basis of the migrant’s potential contribution and the assessed level of risk.
Global Investors – highest priority category for high value investors investing $20 million (including at least $5 million in active investment).
Professional Investors – a second priority category for migrants investing $10 million (including at least $2 million in active investment).
General (Active) Investors – a category for those investing a minimum of $2.5 million.
The General (Active) Investor category is a points-based system, which prioritises migrants on the basis of their potential to contribute to New Zealand businesses. The points system recognises the importance of having both financial and human capital, the benefit of active investment, and the value of export linkages, entrepreneurship and management skills.
There were 129 people approved through the Investor Category in 2006/07. Of these, 49 were approved under the 2005 Investor Category, and 80 were approved through the former Investor Category. Figure 5.9 compares the nationalities of approvals through the Investor Category policies over the last three financial years.
China was the largest source country of Investor Category approvals in 2006/07 (33 percent), followed by the UK (19 percent) and the USA (10 percent). While the number of approvals has fallen for all of the main source countries, the decrease has been most significant for China, particularly following policy changes in 2002.
Figure 5.9 Nationality of Investor Category approvals
Figure 5.10 shows the inflow of applications through the Investor Category since July 2000. The impact of the policy changes in November 2002 is clearly evident. These changes tightened operational requirements around an investor’s source of funds and increased the English language requirements from IELTS level 4 to level 5.
Figure 5.10 Application inflows through the Investor Category
Figure 5.11 compares the nationalities of people approved through the Entrepreneur Category in the last three financial years. Approval numbers increased in 2004/05 and 2005/06 as a growing number of people on Long Term Business Visas (LTBVs) became eligible for residence (see section 5.7.3). In 2005/06, however, most of those LTBVs had worked though the system, and in 2006/07, the number of Entrepreneur Category approvals was considerably lower (1,128 compared to 2,902 in 2005/06). China was the largest source country in 2006/07 (29 percent), followed by South Korea (23 percent).
Figure 5.11 Nationalities of Entrepreneur Category approvals
Figure 5.12 shows the inflow of applications through the Entrepreneur Category since 2001/02. Inflows grew steadily in 2003/04 and 2004/05 as a high number of LTBV holders reached the three-year requirement of their permit, after which they could apply for residence. Lower inflows of applications in the last two years, combined with decreasing numbers of LTBVs granted, have resulted in the lower number of approvals in the 2006/07 financial year.
Figure 5.12 Application inflows through the Entrepreneur Category
Long Term Business Visas and the Entrepreneur Category
The LTBV is a temporary immigration policy that caters for people who are interested in establishing a business in New Zealand, and subsequently applying for residence through the Entrepreneur Category. People can also use the LTBV if they are interested in establishing a business in New Zealand but are not living permanently in New Zealand.
The LTBV is issued for nine months. By the end of the nine-month period, applicants must provide evidence of having established a business in order to be granted an extension to their LTBV for the remainder of the three-year term (including the initial nine months).  The LTBV can still be renewed for three years if certain conditions are met, and holders can still apply for residence after being self-employed in the country for two years.
In 2006/07, 170 principal applicants were granted an LTBV. This compares to 153 in 2005/06 and 229 in 2004/05. Since the LTBV was introduced in March 1999, 4,947 principal applicants have been granted an LTBV. The number of LTBVs granted has decreased since 2001/02 when numbers were at their highest, but have levelled out over the last three financial years. The following analysis is of those principal applicants who would have spent over three years on an LTBV by June 2007, and examines their conversion rates to residence.
Between 1 March 1999 and 30 June 2004, 4,414 principal applicants were granted an LTBV. By the end of June 2007 (a minimum of three years after being approved for an LTBV), 65 percent had converted to residence. Table 5.8 details the categories through which these LTBV holders converted to residence. As at 30 June 2007, 84 percent (2,401 principal applicants) converted via the Entrepreneur Category.
|Residence category||Number of principal applicants||Proportion of conversions||Proportion of LTBV principal applicants|
|Total LTBV principal applicants||4,414||100%|
The rates of conversion to residence differed across the main nationalities of LTBV holders. Table 5.9 shows that conversion rates to residence for the top nationalities ranged from 48 percent to 82 percent. The UK, Fiji and Japan had the highest conversion rates, while the USA and China were lower.
|Nationality||LTBV principal applicants||Conversions to residence|
IELTS scores for the Skilled/Business Stream
Principal applicants, their partners and dependent children aged 16 years and older included in an application in the Skilled/Business Stream are required to meet a minimum standard of English. Usually this requirement is met by providing evidence of an English-speaking background or by sitting an English language assessment test. Secondary applicants can pre-purchase English language tuition in New Zealand.  The International English Language Testing System (IELTS) is used to assess ability in English.
IELTS is managed jointly by the University of Cambridge Local Examinations Syndicate (UCLES), the British Council and IDP Education Australia (IELTS Australia). Its General and Academic Modules provide band totals (test results) showing overall ability as well as performance in listening, reading, writing and speaking. The band scores range from 1 being a ‘non user’ to 9 being an ‘expert user’ of English. Prospective migrants can be asked to sit this test or to submit existing test results to determine whether they meet the minimum English language requirement. Appendix N-1 provides a description of the IELTS band scores.
Under the SMC, principal applicants (and their partners if that person is claiming points for a job or qualification) must score an average of 6.5 across all four bands.  Principal applicants through the Business categories are required to score an average of 5.0 across all bands. Secondary applicants aged 16 years and over must have an English-speaking background, an average IELTS score of 5, or have pre-purchased ESOL training if they do not meet the required standard.
The number of applicants providing an IELTS certificate has decreased in recent years as a greater number of migrants come from English-speaking countries, or meet the English language requirements via their qualifications or work experience. Table 5.10 shows the overall average scores achieved by those required to provide an IELTS certificate in 2006/07. IELTS scores were available for 2,095 migrants.
The average score for Skilled/Business Stream principal applicants has increased since the higher English language requirements came into effect in November 2002. In general, migrants scored at the ‘modest’ to ‘good’ English user level, with SMC principal applicants gaining the highest scores. Appendix N-2 provides a breakdown of the IELTS scores for the Skilled/Business Stream by the top 12 countries.
|Application criteria||Applicant type||Number sitting test||Average score|
|1995 General Skills**||Principal||19||6.1||6.3||5.8||6.3||6.1|
* This table excludes categories with fewer than 10 people sitting the IELTS test. These categories include Employees of Businesses, Talent (Accredited Employers), Talent (Arts and Culture), Talent (Sports) and Long Term Skill Shortage List Occupation policy.
** Scores lower than the expected 6.5 average resulted from people being approved who had lodged their applications prior to November 2002 when the English language requirements were increased.
- The Skilled Migrant Category (SMC) is the largest residence category in the New Zealand Residence Programme (NZRP), with 25,885 people (55 percent of the NZRP) approved through this category in 2006/07. SMC approval numbers were down slightly from 27,539 in 2005/06, reflecting the lower number of people approved through the NZRP overall. Seventy-eight percent of SMC principal applicants were approved onshore, up from 71 percent in 2005/06.
- The UK remains the largest source country of SMC approvals (35 percent), followed by South Africa (12 percent) and China (11 percent). SMC approvals from the Philippines have increased over the last 12 months, from 3 percent of approvals in 2005/06 to 9 percent in 2006/07.
- The number of expressions of interest (EOIs) submitted by principal applicants with a job or offer rose steadily in 2006/07, while the number of EOIs without a job or offer remained steady. In 2006/07, 17,930 principal applicants were selected from the pool – 71 percent had a job or offer, up from 65 percent in 2005/06.
- Eighty-five percent of SMC principal applicants were awarded points for a job or offer of skilled employment in New Zealand, up from 75 percent in 2005/06. Eighteen percent claimed bonus points for a job or a job offer in an area of absolute skills shortage, and over half (56 percent) claimed bonus points for employment outside of the Auckland region.
- Growing numbers of young Chinese migrants are applying for residence through the SMC after completing their New Zealand qualifications. In 2006/07, 91 percent of Chinese principal applicants approved through the SMC were aged 20–29 years old.
- The SMC attracted skilled migrants to a broad range of occupations in health, education, finance, information technology and trades occupations. Some of the most common occupations were registered nurses, secondary school teachers, chefs, restaurant managers, electricians and accountants.
- Since the Talent Visa and LTSSL policies came into effect in 2002, 41 percent of people approved through these Work to Residence policies have gained permanent residence. Most gained residence through the Skilled categories, predominantly the SMC.
- Business category approval numbers have decreased steadily since reaching a peak of over 4,500 in 2001/02. In 2006/07, 1,263 people were approved for residence through the Business categories, including 129 through the Investor Category and 1,128 through the Entrepreneur Category. The new Active Investor Migrant policy came into effect in November 2007.
- Sixty-five percent of LTBV holders had gained permanent residence after holding their permit for at least three years. The majority (84 percent) gained residence through the Entrepreneur Category.
- Average IELTS scores for Skilled/Business migrants have increased since the English language requirements were increased in 2002/03. Migrants sitting the test in 2006/07 scored at the ‘modest’ to ‘good’ English level, with SMC principal applicants achieving the highest average scores.
 See Chapter 6 for details about the prioritisation of applications in the Family Category.
 EOIs can be made manually or online (via the Immigration New Zealand website). An EOI made online will only be accepted if the points initially total 100 or more. EOIs selected from the pool undergo a verification process, which may result in a change to the number of points claimed by the principal applicant.
 Up until December 2005, EOIs were ranked on the basis of the points claimed and those meeting a set selection point were selected from the pool. Between September 2004 and December 2005, the selection point was set at 100.
 The ANZSCO definition will be implemented in February 2008.
 From 30 July 2007, the allocation of points under the Skilled Migrant Category differs from that described in Table 5.1. A summary of the points structure that has been in force since 30 July 2007 is given in Appendix L.
 In 2006/07, 78 percent of SMC principal applicants were approved onshore, and 22 percent were approved offshore. Ninety-one percent of onshore approvals were awarded points for a job or offer compared to 65 percent of offshore approvals.
 Employment is outside the Auckland region if the principal applicant’s entire or principal place of work is not within one of the following territorial authorities: Rodney District Council, North Shore City Council, Waitakere City Council, Auckland City Council, Manukau City Council, Papakura District Council and Franklin District Council.
 The Work to Residence permit was issued for up to two years when the policy first came into effect, but was reduced to six months in December 2005. Since 10 April 2007, onshore applicants have been granted a nine-month permit. Offshore applicants are granted a three-month visa, allowing a nine-month work permit to be granted on arrival in New Zealand
 For applicants who lodged an application on or after 21 December 2005 and before 10 April 2007, a further work permit may be granted (for a maximum of three months) where the applicant has an offer of skilled employment but requires a further work permit to meet the three-month job requirement of that policy. Where the permit holder has not obtained an offer of employment after six months, they may be issued a further three-month permit. If they obtain an offer of skilled employment within this period, they must submit an expression of interest to re-apply for residence through the SMC.
 Applications made before 30 July 2007 required a base salary of $45,000.
 Merwood, P. (2006). From Work to Residence: An evaluation of work policies that provide a pathway to permanent residence in New Zealand. Department of Labour. Wellington.
 The final date for submissions of expressions of interest under the 2005 Investor Category was 31 July 2007.
 Prior to 20 November 2002, an LTBV was issued for three years and could be extended by a further three years if necessary. LTBV holders could apply for residence after being self-employed in the country for two years.
 Under the SMC, a principal applicant’s partner must have an English-speaking background or have reached an average IELTS score of 6.5 if they are claiming points for a job or qualification.
 From November 2002, GSC principal applicants had to score an average of 6.5 across all four bands.