It is a serious question. MBIE’s immigration data are pretty hopelessly poor – not published in readily usable formats, not seasonally adjusted etc. The Migration Trends and Outlook publication for 2017/18 is still not available. I know they have plans afoot to improve things, but it is past time they did: immigration, after all, being one of the major instruments of economic (and social) policy in New Zealand.
But from time to time, I have a look at what they do publish – huge tables in small fonts, from which one has to transcribe numbers if you want to do anything with them. And the other day I had a look at the latest residence approvals data, and was quite surprised by what I found.
This chart shows the number of people approved for residence in each June year. The 2018/18 number is the annualised number based on September quarter actual data.
The “target” rate of approvals was around 47500 per annum for a long time, lowered slightly to something centred on 45000 per annum late in the previous government’s term. As you can see, give or take 5000 or so people, they more or less meet that target. And so last year’s drop took me by surprise. I didn’t make anything much of it then, when the numbers finally came to light: after all, announced policy hadn’t changed much, and perhaps it was just noise.
But the early data for the current year suggest something more than noise. If the September quarter rate of approvals was kept up only about 33000 residence approvals would be granted in 2018/19. Perhaps there is some seasonality in the series – did I mention that MBIE don’t publish seasonally adjusted data, or make the raw data available in a form in which I could see for myself? – but if not, it would represent quite an undershoot relative to the official target.
I don’t usually pay much attention to the nationality of those getting residence – my arguments about immigration are mostly macroeconomic in nature, indifferent as to whether the migrants come from Bangalore, Birmingham, Brisbane or Beijing. But as I’d been writing about the PRC and our political parties, out of curiosity I checked the residence approvals granted to people from the People’s Republic. And finding those interesting, I looked a bit further.
That (the blue line) is a staggering drop-off in approvals from China. Again, perhaps there is some seasonality – but it isn’t obvious why there should be, given that most residence visas are granted to people already in New Zealand, initially on other visas.
The falls in approvals from India and the Philippines are also pretty large. And yet clearly the fall isn’t across the board. So far this year approvals from the UK are running at about the same (annualised) rate as last year (as were, more or less, when I checked, those from South Africa another significant source country, and those – much fewer – from Singapore and Taiwan).
I’m puzzled by what is going on. I’d taken the new government at its word when it swore that it wasn’t changing the residence approvals target, but if not it looks as if something is going on that is markedly reducing the number of eligible people (especially from China and India) applying. (In another of the huge, not user-friendly, documents MBIE puts out, it looks as though there are also fewer applications in hand now than usual.) Perhaps it has something to do with the earlier wave of foreign students studying here, but although there has been a significant drop in numbers from India those from China haven’t changed much. Perhaps there is something in the publicity around foreign investment restrictions – which don’t of course apply to those who have residence?
I’m puzzled. And, of course, I’ve spent years calling for a reduction in the residence approvals target, so in one sense I’m not unhappy to see the reduced numbers. But I also strongly favour open and transparent policy, and there has been nothing announced suggesting that we should have been expecting – or that the government was seeking – such a large reduction in the number of residence approvals being granted.
If any officials or industry experts have informed insights on what is going on the comments section is open.
croaking cassandra 
The chart below shows the behaviour of residency and other visas for immigrants based on the monthly data available from Infoshare. Â The chart uses seasonally adjusted three month averages annualised using the excel add-in I mentioned. In terms of the reason for the fall, Immigration NZ has brought approval for most residency visas back to head office from overseas offices and as a result there has been an effective tightening in the policy that seems to be mainly around approval for family members (i.e. where one or more members of the family is already in NZ and they are applying to get more in). I donât know if this partly a result of the change in government but it may not be.
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Beat me to it …..
I would suggest a probable clue is in the (second graph) peak followed by simultaneous downturn in residence visas for both China and India which suggests the answer is due to NZ internal events and not external. Check-out the “The Parent Residence Visa” being flagged mid 2016 then closed October 2016.
Immigration – Parent Residence Category Closed – What are your options now?
https://www.morrisonkent.com/2016/11/immigration-parent-residence-category-closed-what-are-your-options-now/
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It was changed in typically arbitrary way – no discussion or vote in parliament. I’m mildly surprised the social justice wing of the Greens didn’t protest it was a racist decision because Asians and PIs have more respect for their elders compared to pakeha and European with nuclear families who are happy to leave their parents in a home half a world away.
Meanwhile one of the teachers at my son’s North Shore college has returned to the UK to look after his elderly parents. I have no knowledge of the details in his situation but it is now impossible to bring elderly parents to NZ even with health insurance, pension and significant finances. Our Labour minister of Education is attempting to recruit teachers from the UK.
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It may be part of the story – esp in 2017/18 – but I’d be surprised if it could explain the further drop in the current year’s data.
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When the Bill English National government tweeked the immigration settings by moving skilled migrant salaries up to around $51,000 they applied it immediately to all existing residency applications for skilled migrants. One of my staff was on a base wage of $36,000 and her application for residency already in progress was rejected a couple of months later.
Also China has been attracting their labour skills back to China. One of my other staff already qualified and working in NZ resigned and returned to China to work for a US company seeking english speaking staff operating in China. Obviously there is still massive investments by foreign companies that require overseas trained staff which does mean lots of work opportunities in China.
On my visit to Shanghai just last week, I visited the a mega Starbucks. The staff wore badges indicating where they have relocated to China from and there were around 5 badges with chinese faces that indicated they had returned to China from NZ in just one of that mega Starbucks store. Of course I said hello and wished them well and had a brief chat. The indication that even though the pay scale was lower in Shanghai but it was more fun and exciting in Shanghai than in Auckland.
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Just recently I was able to give my staff what she required to restart her residency application and moved her salary to $51,000 and asked if she could now proceed with her residency application. She tells me that there is a 2 year work experience criteria as well in the skilled work category so I said to her that she should have told me that earlier and I would have kept her wage at $36,000 for much longer. Unfortunately my kiwi born employer would now have $15,000 less to spend whilst this foreign worker will have $15,000 more in her own pocket. Not too sure how all this immigration tweeking actually helps local born New Zealanders.
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Not to forget my regular weekend goat curry from Spice Traders is now $14.50 up from $11 from before all these ludicrous immigration tweeking. The 2 Indian chefs obviously smiling all the way to a big pay rise.
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GGS: The chefs deserve it and you can afford it. Sounds like a great bargain; I may have to cross the bridge.
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But the Infoshare date covers arrivals by visa types, rather than approvals (the focus in this post – administrative data which should be, but isn’t, in readily available and manipulable time series format, including on Infoshare.)
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Could it be that potential immigrants are losing interest in NZ as a destination? Could it foreshadow a recession (people who want to migrate cannot afford to)?
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Remember that most residence approvals are granted to people already here on work and study visas (and prob even a larger proportion now that the parent root has been closed off). I haven’t tried to look at trends in those particular visas (again, the data as published aren’t at all user friendly).
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Hi Michael! It’s nice to read your blog again. Minsk is right. New Zealand is not that appealing anymore. Or at least not to Eastern Europeans. I wouldn’t be that sure that most of the migrants get their residency after staying here for a while (and with a job). The best visa that you can get as a migrant is the Skilled Migrant Visa. This is the visa that I got for me and my partner after applying from home and having spent zero days in NZ. Skilled Migrant visa gives you residency from the beginning and I reckon it is the best for Kiwi people as well because it ensures you that you get skilled migrants. Not migrants that just want to cheat the system and stay here with no value to add to the country.
The truth is that if you compare New Zealand with some other possible destinations like UK, US or EU (European Union) then it comes the last. There is pretty much nothing appealing here other than pure nature. You are an economist and you know that very well. I could detail more on my thoughts here but I’ll take the opportunity with another article :).
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Nice to hear from you again Daniel. I have a lot of sympathy with your perspective on NZ. It is, of course, still attractive in an absolute sense to people from places like India, the Philippines and (to a diminishing extent) China, but even then only as some sort of fifth choice, if people can’t get into the US, UK, Canada or Aus.
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My purely unqualified guess would be the step up in terms of funding/activity by the Labour Inspectorate. As a result, the bad-egg/scam employers are shying away from the making of bogus employment offers as a means to exploit those seeking to convert post-qualification student work visas to PR.
Not sure whether you have seen it, but this was a very interesting article – and a link through to the website of the students sponsoring the initiative, gives a really useful insight in terms of this exploitation too.
https://www.interest.co.nz/news/96378/anti-corruption-student-media-start-says-there%E2%80%99s-ugly-underbelly-building-new-life
In other words, the “underbelly” industry is hopefully spooked by the new government initiatives to clean up this sector of exploitation.
Hence, I think you might be seeing a reduction in target – not because of any change in immigration policy – but because of a change in labour law enforcement policy.
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I was going to make much the same comment. I also suspect that various press and social media reports in foreign countries will have made the typically educationally semi-challenged middle class 3rd world applicants less naively trusting of the agencies that are ‘selling’ them NZ citizenship. I’ve read of reports in the Phillipines and in India about the exploiting their nationals and it would not be surprising if similar tales are being told in China.
I can date my own interest in NZ immigration policies to mid-December 2016 when the NZ Herald had a headline “No Sex, No Visa” being a demand made to a 30 year old Indian woman working in NZ. That kind of message spreads.
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Looking more closely, I this appears to be a simple reporting anomaly, and is NOT a real trend.
I downloaded these figures from Statistics NZ back in March 2018 and the figures appear to have changed since then. This suggests you’re looking at a simple reporting artefact. Here’s my hypothesis: the decisions are reported according to the year in which the application was received, but some applications take years to finalize. So you have low figures for 2017-2018 simply because they’re incomplete.
For the 2008/2009 and 2009/2010 period, the two tables report exactly the same number: 46,097–so I expect these are in fact the same statistic. All applications from that period have been processed.
For every year from 2010/11 to 2016/17, the newer table produced in October 2018 shows slightly more decisions than the older table, because more decisions have been finalized.
For 2017/18, the newer table also shows more decisions, in fact, many more decisions, because there are still many applications from that period still pending.
Here is proof, with the two tables prepared at different dates, showing different figures:
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Or not? Here’s the discrepancy, by year, from year-ending 2009 to 2018:
2009 0
2010 0
2011 100
2012 184
2013 199
2014 224
2015 234
2016 133
2017 149
2018 14 978
There’s no trend of the discrepancy getting systematically larger as the years go by, like we’d expect if they were just finalizing earlier applications.
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Thanks
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Would it be possible that closing of the visa parent category maybe causing lower “interest” from these countries as I assume it’s not longer a solid way for parents how to escape china through sponsorship of theirs child (so they look for other countries now?). And I would expect lower interest in students visas too as that was another way how to accomplish the same thing…
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Possible. What is interesting is that the points threshold is supposed to be used to regulate numbers to meet the overall target: fewer applicants should lead to a lowering of the threshold and vice versa. the previous govt raised the points threshold when they modestly lowered the target number of residence approvals, so perhaps things have overshot. If so, they may be reluctant to do anything explicit about it, for fear of reawakening a narrative about how modestly skilled many of our migrants really are.
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The missing dimension is where did Zhang acquire his wealth from. A mystery person. Did he arrive in NZ with wealth. Was it transferred in shortly after. Or, has it been, as suggested, earned from owning and selling restaurants in Auckland. One article has him shipping local funds offshore to China for humanitarian purposes. It is highly unlikely for a person who doesn’t speak English to prosper to the extent he has. He can only have prospered at the expense of his own ethnic community
Just saying
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Anybody who bought a property in Auckland from the recession of 2009 would be a millionaire today. Buy 2 and you are a multi-millionaire. It is actually not very hard to make money in property. If you had bought a Beijing or a Shanghai property you would be worth even more. As much as 8 times more than a Auckland property over that same period. Not exactly rocket science where his wealth comes from.
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“Asset inflation isn’t wealth creation. It simply creates a charge elsewhere in the economy” Kurt Richenbacher (?) Former Austrian school economist.
Do you agree Michael?
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RBNZ calculated definition of Net Wealth of NZ households equates to $1.5 trilliion includes new asset values. Assets are valued according to demand. No demand usually equates to no value. If demand exceeds supply then value appreciates. I think you need to read any writings by economists in the full context. Most economists can’t even understand the fundamentals of basic finance or can even read a set of financial statements.
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A part answer …..
A staff member said Zhang made his wealth in China although he did not know in what. A Chinese news website said in 2015 Zhang was director of a real estate company in China – Puning Lianshengfa Real Estate
https://www.stuff.co.nz/business/money/107915296/alleged-national-donor-yikun-zhang-bringing-1000-wellconnected-compatriots-to-nz
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I’m from the UK and having lived in shared houses with immigrants from all over, I can honestly tell you that recently the tone of coversations regarding immigration have turned sour! Seriously, people think they have been lied to, like about working after being a student and about being banned from buying houses. Whether that’s true or not is irrelevant. The 5-eyes countries are no longer considered peoples only options.
All these people in the comments analysing the stats to death are rather missing the point here….people are just generally less interested in staying. Punto.
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I can see some of that drop off in my 45sqm property in the city fringe. Last year around July 2017 I was able to secure a rent of $490 a week. By February 2018 the rent jumped to $530 a week which vacated in Sep 2018. I have just managed to get $450 a week just recently. It would interesting to see how the rental market delivers next year Feb 2019.
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Jay: I am sure you are right. Clearly NZ has issues caused by too rapid a rate of immigration and more importantly we do not have a predictable and fair immigration system. It fails because it is not discussed in parliament; it fails because changes are arbitrary and often retrospective; it fails because its clients do not complain. INZ deliver a service that would be unacceptable in any other area of government; if they cannot consistently process a vistors visa in a timely rational manner then what hope have they trying to define a needed ‘skill’. Our immigration policy serves interested parties such as tourist businesses and PTEs but it has little concept of giving a potential immigrant a fair go. Sadly we will lose serious talent and only the most corrupt and desperate will hang on to achieve residency.
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And the day after I write another example in the Herald. https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12146112
Which reminds me of a denied visitors visa that prevented the father seeing his Kiwi child born in Auckland two years ago. In two ways this is case is less significant. Firstly a bridesmaid is not as significant as a parent at the birth of a first child and secondly they have produced an answer before the event instead of just sitting on the application for a couple of months. We only have one side of the story; maybe they good reasons for suspecting this sister will attempt to overstay or work or will require expensive critical medical treatment. All would be legitimate reasons for querying the application. However INZ could ask for health insurance and a reasonable sum in escrow that will be confiscated if the visitor breaks the rules. The sum should be sufficient to cover the costs of finding the overstayer and sending her home. My guess is about $10,000 but when I was the visitors sponsor I would have happily multiplied that by 20.
I hope I sound grumpy because inside I am still livid. However for balance I can assure you the NZ passport office is remarkably efficient and a pleasure to deal with. And in partial defence of INZ their visitors visas which had over one in five processed exceeding their 5 weeks target has now improved to one in twenty beyond target.
If INZ cannot handle their simplest task: a visitors visa then it is no wonder potential immigrants have a very poor opinion of the organisation.
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But then Bob, excuse me, this is called corruption.
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Spot on Jay!
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I wrote a letter to the Press on saturday re the new library which is 100% Maori in it’s thermage. In response to an earlier letter:
“Trevor Agnew [18 Oct] is right the new library does contain our identity (on it’s shelves). I have looked: 121 years after settlement (1971) there were 4300 Maori in Christchurch out of a population of 260,200 . For a visual reminder we can look at Philip Temple’s Christchurch a City and it’s People (1973). Lianne Dalziel told Nigel Latta that if a city is too homogenous it “gets stuck”. As a former immigration minister she played her part in un-sticking us. Does she now want to bury us? In 1956 94% of New Zealanders identified as “New Zealand European” the Labour Party changed that in 1987. Sonya Davis confided that “if the people had any idea of the scale of the changes they would be horrified [but] no one has told them and they haven’t got a clue” Does the new multicultural New Zealand mean we can now be ignored?
………….
Every point in that letter was referenced. Martin Luther would not have succeeded today?
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In case you didn’t see it, Michael;
https://www.stuff.co.nz/national/crime/108136698/immigration-nz-fields-more-tip-offs-scams-than-it-can-manage
Particularly of note from the article:
Malkiat believed most visa applications contained some level of exaggeration and misrepresentation, and significant number involved substantial corruption. There was now a generational pattern of exploited migrants in turn exploiting the next wave to arrive, he said.
“The reality is that if all immigration advisers speak up, 80 to 90 per cent of all applications are wrong, and should not be approved – it is a massive number,” he said.
“Most of the industry exists because of fraud. If there was no fraud, many advisers and lawyers would leave the industry [because they wouldn’t be needed].”
It was clear Immigration NZ was not equipped to deal with the widespread fraud that it was encountering, Malkiat said.
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Thanks Katharine
It is more than depressing to read that……and yet the ideology seems to drive them (Nat and Labour) forward in the mad pursuit of ever more people, no matter how poorly qualified.
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