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Migration Trends 2006/07

Skilled/Business Stream

Introduction

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). [1]

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. [2]

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. [3] 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). [4]

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

Data Table for Figure 5.1

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

Data Table for Figure 5.2

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

Data Table for Figure 5.3

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)

Data Table for Figure 5.4

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.

Table 5.1 SMC points for employability and capacity building factors

Factors	Points
Skilled employment
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
Work experience
2 years	10
4 years	15
6 years	20
8 years	25
10 years	30
Additional bonus points if work experience in New Zealand:
2 years	5
4 years	10
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
Qualifications
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
Partner qualifications	10
Close family support in New Zealand	10
Age (20 to 55 yrs)
20–29	30
30–39	25
40–44	20
45–49	10
50–55	5

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).

Table 5.2 Points claimed by SMC principal applicants in 2006/07

Factor	% gaining points
Skilled employment
Skilled employment 12 months or more	23
Skilled employment <12 months	44
Offer of skilled employment	18
No employment	15
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
2 years	11
4 years	10
6 years	10
8 years	8
10 years	28
Bonus points for New Zealand work experience
2 years	7
4 years	1
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
Qualifications
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
Partner qualifications	16
Close family support in New Zealand	6
Age
20–29 years	40
30–39 years	37
40–44 years	13
45–49 years	7
50–55 years	4
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

Data Table for Figure 5.5

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. [6] 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.

Table 5.3 Location and type of employment for approved SMC principal applicants in 2006/07

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. [7] 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.

Table 5.4 Region of employment for SMC principal applicants in 2006/07

Region	n	%
Auckland	4,038	44%
Wellington	1,315	14%
Canterbury	1,264	14%
Waikato	699	8%
Bay of Plenty	385	4%
Otago	320	3%
Hawkes Bay	182	2%
Northland	169	2%
Manawatu	167	2%
Taranaki	135	1%
Nelson	98	1%
Southland	88	1%
Marlborough	60	1%
Wairarapa	60	1%
Central Plateau	53	1%
Wanganui	48	1%
West Coast	48	1%
Other regions	82	1%
Total	9,211	100%

* 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.

Table 5.5 Occupations of SMC principal applicants in 2006/07

Occupational group	Main occupation*		Job/job offer**
	n	%	n	%
Legislators, Administrators, Managers	1,736	18%	1,426	15%
Professionals	3,548	36%	3,177	33%
Technicians and Associate Professionals	1,883	19%	1,611	17%
Clerks	185	2%	213	2%
Service and Sales Workers	652	7%	682	7%
Agriculture and Fishery Workers	192	2%	187	2%
Trades Workers	1,384	14%	1,273	13%
Plant and Machine Operators and Assemblers	175	2%	221	2%
Other***	69	1%	881	9%
Total	9,824	100%	9,671	100%

* 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.

Table 5.6 Examples of the main occupations of SMC principal applicants*

Main occupation group	Examples of occupations
Legislators, Administrators, Managers	Sales and/or marketing manager Restaurant or tavern manager Project manager General manager
Professionals	Nurse and other medical specialists IT/software related occupations Secondary or early childhood teacher University lecturer Accountant Civil, electronic, or mechanical engineer
Technicians and Associate Professionals	Book keeper Computer systems/services technician Graphic designer Health related occupations (social worker, occupational therapist, physiotherapist) Telecommunications technician
Clerks	Accounts administrator Researcher
Service and Sales Workers	Chef Prison officer Police officer Hairdresser
Agriculture and Fishery Workers	Dairy farmer, dairy farm worker Arborist Farm manager (sheep, cattle, pig)
Trades Workers	Electrician Plumber Motor mechanic/diesel mechanic Fitter welder/fitter turner Carpenter/other building trades
Plant and Machine Operators and Assemblers	Roofer Aluminium joiner Line mechanic Gasfitter

* 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. [8] 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. [9]

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. [10] 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

Data Table for Figure 5.6

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

Data Table for Figure 5.7

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. [11] 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.

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