The failed economic strategy goes on

MBIE has finally released its annual Migration Trends and Outlook report.   This is an annual publication, in this case covering the year to June 2016.   When it was finally released –  five months later than usual –  it was nine months since the end of the year to which the data related.  And all of this is simply adminstrative data –  in MBIE’s own computer systems and files.  Government agencies manage to collect and publish building permits data within a few weeks of the end of each month.  MBIE’s performance here is inexcusable – the more so, as immigration policy is one of the major instruments of economic and social policy that the government wields.

When I’ve had time to work through the report and associated tables, I will no doubt have some more posts.  In the meantime, I will simply leave you with this extract.  From the roughly half of people granted residence approvals who come under the Skilled Migrant category, these are the top 4 occupations of the principal applicants (typically, almost by definition, any spouses will be less skilled –  if not, they themselves would presumably have been the principal applicant).

Recall the nonsense MBIE –  and to a lesser extent Treasury  –  have run about immigration policy as a critical part of economic transformation strategy (“critical economic enabler” used to be MBIE’s description).    It would be great to see some evidence for the transformative effect –  productivity gains for all, not wage reductions for New Zealanders in these and associated occupations –  of the annual influx of so many people “skilled migrants” to our restaurants, cafe, and shopping sectors.  Or, indeed, the aged care sector, where – as I’ve argued before –  the so-called pay equity settlement looks to have been mostly not a response to gender-discrimination, but to glutting the market with immigrant nurses (and, in work visas categories, other aged care workers).

Main occupations for Skilled Migrant Category principal applicants, 2016/17  
   
Occupation 2016/17
Number %
Chef 684 5.7%
Registered Nurse (Aged Care) 559 4.6%
Retail Manager (General) 503 4.2%
Cafe or Restaurant Manager 452 3.7%

MBIE is so slow in releasing the data that all these approvals occurred under the previous government. Sadly, there is no sign that things will be any different under the new government. Presumably, buying a franchise for a coffee shop will continue to be a path to –  in effect, buying –  New Zealand residence, and all the associated family immigration this new resident aspires to.  It probably wasn’t what the designers had in mind when they thought of entrepreneurial immigration, but it is the sort of shabbiness that our immigration system has been reduced to.

42 thoughts on “The failed economic strategy goes on

  1. I could write a comment much longer than your article just about the mind-blowing incompetence (well it is either incompetence or it is racism by INZ staff) on the very minor issue of granting Holiday Visas to Melanesian Pacific Islanders.
    Recent reports on 10,000 over-stayers gives the bureaucracy an excuse to keep hitting competence levels that would be unacceptable in a third world country. Instead of bewailing the lack of resources to chase down the over-stayers all they have to do is pursue the sponsors.
    I have sponsored several; usually fairly distant family members and my sponsorship involves putting my house and my term deposits on the line. So if the people I sponsor misbehave or overstay INZ can simply sue me (a simpler method would just put a sum into escrow but simple and INZ never meet).
    Our family has experienced remarkable delays processing the simplest of applications which has resulted in fairly lowly paid people having to cancel flights and persuade employers to rearrange holidays. There a sad lack of humanity in INZ. As an example of a simple Visitor application a church elder who is also a senior bank official with his family who have visited several times and never caused any offence – surely that should only take minutes to process? No, a single simultaneous application resulted in weeks of delay and then the visas were issued separately over three weeks up to the day of joint departure.
    Clearly if they cannot handle a simple visitors don’t expect them to actually do the more difficult task of providing an immigration policy that is for the benefit of New Zealanders. I strongly suspect we are losing the really top job creating immigrants to other countries because of the known NZ bureaucratic minefield. The result being excessive numbers of low-paid immigrants taking opportunities away from my Kiwi children. So instead of the new businesses that Indian entrepreneurs have created in the UK where Indian owned firms in the UK employ over 1m UK workers, we get owners of coffee shops and petrol stations predominately employing their own families.

    You sum it up well “” the sort of shabbiness that our immigration system has been reduced to “”.

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    • One reads similar stories about the UK and short-term visitors from poor countries (eg African bishops sponsored for a conference in the UK by the Archbishop of Canterbury). A substitute – often inhumane – for real policy action on the underlying permanent flows: in the UK the govt can’t do much (at least until March next year), and in NZ they just won’t.

      And whereas pursuing exploitation cases around work visas etc there is organised employer pushback, in the case of stories like your own it is isolated individuals, and most of the rest of us are even aware there is an issue.

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      • Visitor Visas are a symptom of something badly wrong. Although NZ visitor visas that I have been involved with have caused me to become more incoherently angry than anything else that has ever befallen me in a long and interesting life, the recipients have requested me not to raise a fuss because they are sure they will be victimised next time they or a member of their family applies (or maybe they were worried about my blood pressure). However the worst cases are hearsay with for example a recent applicant who had been accepted for a course of study in NZ being delayed and delayed until eventually they learned their visa had been issued; the trouble being it was for only two days and the two days had passed.

        Melanesian tourists are a very small fraction of NZ tourism. Similar stories are heard from the UK and USA. However there is no way of avoiding the fact it is a disgrace.

        Probably Mr Lees-Galloway is only just beginning to realise the scale of his problems. It would help if there was a polite, rational, national discussion of what we are trying to achieve and how successful we have been in the past with our current policies.

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      • Visitor visas for 4 million tourists each year does mean that immigration probably gets overworked and under appreciated.perhaps a few additional migrant workers would help ease the workload.

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  2. It is laughable that Labour thinks they can solve the housing crisis when we are operating such a turbo charged immigration programme. Phil Twyford has been trumpeting the unitec housing development, but how long will that take to complete and it will only add 3000 or so homes. In the meantime the housing shortage in Auckland is probably increasing at around 5000 annually. Even if net immigration was cut to zero, we would need probably 20 unitec sized developments in Auckland alone. Then we’ve still got the problems of delivering all the additional infrastructure that will be needed around schools, hospitals, roads, public transport, wastewater etc. There seems to be a consensus among Labour, National and Greens that we need to keep running this mass immigration scam despite all evidence that it does nothing to make most New Zealanders better off and instead actually harms them (unaffordable housing, congestion, etc.)

    Also I’ve got nothing against the guy, but why does every news article on immigration include quotes from Professor Paul Spoonley ? It would be good to get a diversity of viewpoints rather than Paul Spoonley’s constant pro-immigration narrative (without any supporting evidence).

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    • The more I think about it and read all the comments the more I see a drastic distinction between high salary immigration and low wage immigration. We have both but the balance is strongly towards the latter.
      Simply put low wage immigration is importing 3rd world wages. The individuals involved (i meet new ones at each North Shore petrol station every time I fill up) can be delightful, they are well spoken, diligent and pleasant and usually seem to be trying to be as Kiwi as possible. Each and every one I meet are good people. However unlike Prof Spoonley and many journalists I have children working or looking for work without specific qualifications. Their opportunities are reduced and the wages they are offered are curtailed by the rapid influx of immigrants.
      It is quite probable that people not living in Auckland where most immigrants arrive do not have the same experience. It is also quite probable many middle class voters benefit from services being delivered at lower prices and their house prices increasing.
      I am unsure whether high salary immigration is good or bad for NZ but it certainly is very different to the way most NZ immigration proceeds.

      BTW if you read the story in today’s Herald (page 7) you can read about a pleasant hard working North Indian who is very likely to benefit NZ in the long term with his hard work and ambition. However his route to citizenship involves buying a Cafe franchise with money raised from his family in India. I was seriously thinking of doing something similar for my daughter and her family. I cannot work out the morality or the economics but from my view point something seems wrong. Maybe some of the pro-immigration economists can explain it.

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      • My mother is being cared for by part timers mainly by mostly Polynesian with Indians and a Chinese lady from time to time. These cleaning and grooming visits occur 4 times a day. Yesterday the Joshua and Parker boxing championship was on. There was not enough cleaners in the morning. They opted not to show up. The boxing was more important than earning the dollars that ACC pays them.

        The groomers arrive every 3 hours from 9 am till 7pm. When they arrive it takes them longer and longer, now around 15 minutes to walk up 6 metres to get to the front door. Many times we get no show with the excuse that the car is broken down or battery is flat. No amount of complaints would get them on time because there is a shortage of labour and there is really little choice but to grin and bear it. The cleaners and groomers will earn around $50k to $60k a year if they were diligent, showed up and worked hard with sleepover care.

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    • Labour has realised that the John Key strategy to drive tourist numbers up for the fastest way to balance the budget also do require a massive influx of low skilled foreign workers to provide the very best service at the lowest cost. You can’t do one without the other and it would be dumb to think that you can.

      The population is also aging and care workers need to be young, fit and strong. Again it would be dumb to think you can properly care for an aging population without increasing the number of young people.

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      • I’m not convinced that young foreign people are required for care homes. Not needed in other countries or are arguing Kiwis just less respecting of age than other countries and more willing to dump their elderly into care homes? Your argument is often made especially by those who consider reasoned thought about immigration has to be racist. But the simple point that immigrants become elderly themselves seem to have slipped their mind. I visit various retirement villages and the number of immigrant residents I meet is astonishing; it is just that most of them are not visible immigrants until they open their mouths.

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      • We have 600k kiwis in Australia plus another 400k elsewhere around the world. That’s a clear indication that they are overskilled for the jobs we have available. They depart for jobs and better careers that they can’t get in NZ.

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      • Bob, you might not be convinced and neither was NZ First or Labour until they actually got into government. The very first day of their meeting with their respective operational departments and then they realise there is no easy solutions to this migrant and foreign workers problem. We are so short of staff in every sector of the economy and so short of staff in every department in government and that basically stops the anti migrant and anti foreign worker bias in Winston Peters, in Phil Twyford and in Andrew Little.

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      • GGS: You write ” the anti migrant and anti foreign worker bias in Winston Peters, in Phil Twyford and in Andrew Little”. I hope none of them have that bias, I certainly don’t (well I am an immigrant) but along with those three politicians I do have a pro New Zealander bias.

        You don’t explain why NZ is so different from other countries.

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      • 25% of our population has left the country leaving the old to care for themselves. Tourism, milk, and services are our largest industries. We do not have a Samsung where a single company has the turnover of $350 billion and require only 350k workers. If we had only one of those companies our productivity will increase by 2 fold overnight. Productivity is a product of where our industry focus is. And our focus is not in keeping our manufacturers.

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  3. Tangentially

    Your reference to “buying NZ residence” brings to mind the insidious behaviour of the Ethnic Take-Away cohort, Franchise Cafe Cohort and the PTE’s who peddle the allure of NZ residency as the honey-pot of their offering – they are selling something that does not belong to them

    They are “selling NZ residency”

    In the past days has seen an example of that selling in the most blatant manner by the powerful

    The Finance and Expenditure select committee is conducting hearings for the Overseas Investment Amendment Bill (OIAB). There have over 200 submissions, all of the submissions so far have been opposed to the new law, casting it as “bad law” with the Newsroom headlining it as “Why the foreign buyer ban is bad law”

    On reading the article you get to the submission by Jamie Hutchens, a partner with NZ’s biggest apartment developer Conrad Properties who sell off the plan told the select committee: “Once this bill was proposed, our sales stopped”
    https://www.newsroom.co.nz/2018/03/26/99800/why-the-foreign-buyer-ban-is-bad-law

    Tweet in Twitter

    With a little research we find
    Headline in NZ Herald October 2017 by Anne Gibson is damming – says it all
    Conrad selling off-the-plan Auckland apartments for NZ residency
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11930194

    Conrad Properties are not building for NZ’ers but have the temerity to stand in front of a Select Committee and call it bad law

    That they can immune enough to stand in front of our government and make these statement and for the News Media to trumpet it is cause for pause for what is happening in NZ

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    • Entrepreneur category migration does still require an investment of $1.5 million to $10 million and above. That is a very high risk investment for the average punter. If foreign buyers are prepared to fork over that sort of risk money and allow more building of apartments to occur then I wailed say. “ more money than brains”.but not all bad.

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  4. ” There seems to be a consensus among Labour, National and Greens that we need to keep running this mass immigration scam ”

    So where does that leave democracy – where do NZer’s get the option to vote to reduce immigration?

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    • I guess politicians go where they think the most/easiest votes are. NZF and TOP both campaigned partly on lower immigration, and neither did that well (and, of course, true to form NZF has done nothing to follow through on the occasional rhetoric).

      I’m not really surprised. Often overseas, immigration galvanises public opinion when it is illegal or (perceived to be) out of govt control. In NZ, it is almost all legal, and every single arrival has the govt’s stamp of approval – not because of some international treaty but from considered domestic policy choice.

      To me, the indifference is partly commendable (avoiding some of the racist vitriol sometimes seen abroad) and partly just of a part with the indifference to our continued gradual economic decline. Perhaps there are a large number of voters out there waiting to be galvanised, but even if so, so far the man or woman to lead that charge effectively hasn’t emerged. (And thus, our new central bank Governor could get away unchallenged with claimiing in his first public comments that the economy is “very very healthy” – the economy with almost no productivity growth, obscene house prices, exports shrinking as a share of GDP, weak investment etc).

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      • For most of us economic productivity equates to longer hours and more work for no extra pay. Instead the national psyche is actually less work, more time on Facebook or twitter and planning the next holiday. As long as there is food on the table, great restaurants for the weekend feed and lots of entertainment, most of us are happy. Less work is a good thing.

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      • Why gain 30kg in the gym if you can’t lift more. We keep growing but no productivity gains. Progressive overload needs to be applied.

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      • GDP is still running around 3% so someone needs to do the heavy lifting.

        Unfortunately, Tesla and Elon Musk is finding out that full automation is creating a huge amount of costs and delays in fixing robot errors in its first giga factory. Robots are still at the infancy and still not quite up to humans ability to be flexible and adaptable. Productivity does not measure if the cost outweighs the return.

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    • yesterday reviewing Auckland Council’s public consultation document for their 30 plan I object to their assertion that Auckland’s population would increase by a specific figure (from memory about 750,000) by 2050. Firstly pointing out they had guessed wrong in the past and they really couldn’t guess any better now and that the factors were out of their control (Australian economy, immigration rules, etc). But the main problem all these immigration and population experts have is ignoring the high probability that medical breakthroughs will change life expectancy and stop or even reverse aging. There are many scenarios for such changes: from a series of small expensive incremental steps to a magic bullet conferring youthful immortality. My own interpretation is it is high probability (similar to climate change causing sea-level changes) and we would be wise to keep our country as low population and stable as possible.

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      • You should check out the Auckland international airport 30 year plan which is now up in the airport departure lounge. Massive constructions are being planned. Work has already started.

        1. Additional gates for additional aircraft started in 2017 to 2020
        2. Upgrades and extensions to departure terminals in 2017 to 2018
        3. Expand public transport and roading in 2017 to 2022
        4 Expand international arrival terminal in 2020
        5. Add a new 5 star hotel in 2020
        6. Expand the Airfield in 2022
        7. Expand the international checkin in 2022
        8. Add a ne domestic jet terminal in 2022
        9. Add a 2nd runway in 2028

        I think the plan is for more arrivals and not less.

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      • I was not saying the Council and their airport shouldn’t be preparing for expansion; of course they should. Only that changes are out of their control. It is the lack of imagination that bugs me; they see an annual growth percentage, extrapolate it and then assert it is a credible figure. meanwhile ignoring the potential for say 2 million climate refugees arriving with short notice or a sudden change in immigration policy (say TOP gain power).

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    • jh: ‘This glossing over of Maori opposition is consistent with the procedure of elites generating policy from above and imposing it on the people below.’ Ranginui Walker knew how to write English with clarity.
      I wish he was around to review the Auckland council’s consultative document – it was so keen to add a well-meaning Maori reference to every issue that in places it read like an old fashioned imperialist tract with our worthy civil servants knowing what was good for those natives whether they knew it or not.

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      • I think you are awfully mistaken. I am pretty sure Maori representatives are now driving the agenda. The 70% white imperialists unfortunately behave more like white lambs being guided by the minority 15% Maori.

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  5. Good blog! I really love how it is easy on my eyes and the data are well written. I am wondering how I could be notified whenever a new post has been made. I have subscribed to your feed which must do the trick! Have a nice day! dbdbadbefgeedgec

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  6. Good news? With some idle time taking the implied prompt from Michael Reddell about INZ stats I checked the latest INZ R1 statistics. No longer in a user friendly CSV database but still available as a giant .pdf (see link https://www.immigration.govt.nz/about-us/research-and-statistics/statistics ).

    This gives data to 28th Feb 2018 and initially it does look promising (although I’ve another 71 pages to review). On page 10 there is a annual summary for approvals of permanent residents; since the data for 2017/18 is for only 8 months I have extrapolated for the year and it seems as if we are heading for the lowest number of residency approvals for a decade.

    Fin.Year Approved
    2007/08 46,077
    2008/09 46,097
    2009/10 45,719
    2010/11 40,637
    2011/12 40,264
    2012/13 38,762
    2013/14 43,784
    2014/15 42,851
    2015/16 51,919
    2016/17 47,535
    Avg 2007/17 44,365

    2017/18 22,970 July-Feb
    2017/18 34,455 Extrapolated

    Without the monthly data we have to guess that the reduction is mainly the result of the new minister (although there could be other factors such as the usual reduction over Xmas and possible bureaucratic inaction during change of ministers). On the face of it a quiet 20% reduction or 10,000 new residents is a serious achievement for a new minister.
    Putting it another way Mr Lees-Galloway has already saved Phil Tywford building 4,000 houses.

    I’m not withdrawing any of my criticisms of INZ made in earlier comments but they were in the past and it is great to see evidence of a change of direction. After an immigration experiment lasting over 70 years our elite may have noticed something wasn’t working. Now I am optimistic that our host will soon have to change his “” In a country with a modest savings rate, running an immigration programme three times the size (per capita) of that in the US – which in turn is larger than the influx in most European/Asian advanced countries “” to ‘two times’.

    The report in Thursday’s Herald reports Mr Lees-Galloway as mentioning ‘11% under-utilisation’ and ‘tackling exploitation’ so he is aware of issues that eluded his predecessors. It also report an increased retention rate for residents, maybe fewer are moving on to Australia.

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    • But the count is still net gain of 70k PLT migrants. So we are just replacing long term residency with short term residency but still just as many that needs to be housed. I guess it is ok to stack 30 foreign workers into a 2 car garages as they do in Queenstown. Just make sure you have sprinklers just in case of a fire or run the garden hose inside the garage just in case.

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    • Looks as if I got over excited. Figures for Partnership and Skilled.

      Jul/17 691 557
      Aug/17 653 1201
      Sep/17 545 1215
      Oct/17 607 1389
      Nov/17 679 1654
      Dec/17 519 1493
      Jan/18 674 1610
      Feb/18 860 1725

      So approvals of the two main categories are on their way up in the first two months of this year. Partnership should never change – it is just Kiwis falling in love and their partner being permitted residency. But ‘skill’ is in the eye of the INZ beholder.

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  7. While I too am bothered about immigration there area couple of points to note – first that the occupations mentioned may represent a rather different level of drive and acahievement in the countries they come from; and second that immigrants have children whose work ethic, valuation of education, and ambition could make an important contribution to the future labour force of NZ

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    • I’m sure that your second point is true but it points to the conclusion NZ should be taking immigrants from the most desperate countries say Haiti and Somali instead of SA and China and that we should be taking the lowest segment of their society – from the slums and settlements not the children of civil servants. At present we seem to be taking mainly middle class and lower middle class from UK, China, SA, India, Philippines, etc. My own preference is for proven ability – most talented people have talented parents so look for the really bright ones and maybe their kids will be bright too. Check out Lawrence Bragg as an example.

      I lived in PNG for many years and to start with I noticed the many differences between its 800 different languages and cultures – for example some cultures seemed more aggressive and clearly some were matriarchal but eventually I realised easily the best predictor of achievement was family. The number of exceptional Papua New Guineans who have exceptional siblings is quite astonishing. I’m not sure we can ask INZ to check out family before issuing residency visas.

      Your first point would be revealed by salary. For example a top French chef is quite different from the five Filipino chefs in Birkenhead Auckland who reported their employer for treating them (in the Judges words) as modern slaves. They were on minimum wages ($16 per hr) and being forced to work many hours without pay. A Cordon Bleu trained chef would be earning over $100k and earning salary not wages.

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  8. Dreamtime

    In the last paragraph Michael references Jatin Walia who has applied for permanent residence as a business entrepreneur

    Jatin Walia, aged 26, came to Auckland 8 years ago from a small village in northern India as an international student with dreams of becoming a New Zealander

    In May last year, Walia bought an Esquires Cafe franchise with money his family raised in India. The business has six fulltime employee and three part-time staff. “The best part of the dream will of course be when I get my New Zealand residency.” Walia said he intended to bring his wife, and was hopeful that other family members would join him after that happens.

    Note: (for Bob Atkinson – this is where the partners come from)
    He has been here 8 years and does not yet have permanent residence status. Applying now. Has a wife back in India waiting to come and join him. Presumably he has returned to India at some point to get married. Now his aim is to get her and her family into NZ. By buying a coffee bar

    He has purchased an Esquires Cafe Franchise. The business has six fulltime employees and three part-time staff. What is not revealed is did he buy the franchise as a going concern, already operational – or as a start up – hardly entrepreneurial

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    • 8 years trying to get residency. This chap is a sucker for punishment. Obviously this is his 2nd attempt. The first would have been the skilled migrant category from his student visa to work permit to residency but unfortunately did not quite make that cheaper option where employers paid you a wage. The 2nd option would be the entrepreneur plus category which requires a small investment of $500k and employ 3 kiwis and that’s the Esquire cafe investment option.

      Makes me feel rather guilty because when I came on a holiday visa, Fletcher Construction gave me a job with a company vehicle after 2 weeks of landing in NZ and arranged for the work permit and also eventually sorted out my residency. My brother and sister had already come 6 months before me and had already secured jobs and work permits also within weeks of arriving. My girlfriend joined me from overseas and we got married in NZ which sorted out her residency. My parents came later to join us after 5 years in NZ and that application was also quite easy with all the kids in NZ.

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      • I have friends who arrived over 50 years ago with UK passports and as far as I can tell that was it. It is still the same for a UK tourist – just roll up and you are in but try being an honest Melanesian who just wants to spend money in NZ and it is just like Russian roulette – a one in five chance of random delay – that is delay without any feedback. Hopefully that grumble is about the mistakes of the past – I’ve not heard of any major problems since the change of government – OK decisions I don’t agree with but at least with an attempt to communicate with the applicant.

        Liked by 2 people

      • That’s lucky, In the uk kiwis on working holidays can’t look for professional roles on that visa. Not your fault but the holiday visa to residence should be reciprocal.

        Liked by 2 people

      • Maybe I was ambiguous – it is trivial for any POM to enter as a tourist. Since the sixties it has got way harder to change that into a work visa and then permanent residency. Which is what I did in 2002/2003. Certainly a bureaucratic nightmare which is why they have immigration agencies. Not too much problem for me – I could afford a few months twiddling my fingers waiting for the paperwork to be processed. Someone really exceptional (I would define that as employer offering over $200,000pa ought to have a high speed immigration process otherwise they will just go to another country.

        Liked by 2 people

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