On Newshub Nation: Lisa Owen interviews Immigration Minister Iain Lees-Galloway

Lisa Owen: The Immigration Minister has just announced plans to crack down on post-study work rights for international students. It’s part of Labour’s plan to turn down the tap on immigration by about 20,000 to 30,000 people a year. Immigration Minister Iain Lees-Galloway joins me now. Good morning, Minister.
Iain Lees-Galloway: Morning, Lisa.
How exactly are you cracking down on international students?
So, what we really want to do is make sure that students are getting a good education and they’re getting a good experience here in New Zealand. And we’ve been really concerned about the exploitation of international students when they’re working here after they’ve finished their studying. So for students who are studying at degree level or higher, they will continue to get three years of post-study work rights, and, actually, that’ll be a much more straightforward process for those students than it has been in the past. But for students who are studying at below degree level, we’re reducing their post-study work rights to one year. If those students want to carry on in New Zealand, then, obviously, they’ve got the opportunity to apply for different visas, but they will be labour-market-tested visas, and they’ll need to demonstrate that they’ve got skills that are in demand here in New Zealand.
How does this fix the exploitation problem?
So, one aspect of the Post Study Work Visas under the current settings is that after the first year, students have to demonstrate that they’re in a job that is relevant to the area that they have studied. Unfortunately, what’s resulted from that is employers saying to those students, ‘Look, I’ll enhance your job description, or I’ll try to make it look like you’re working in an area that you’ve studied, and in return for that, I expect a big payment.’ So a lot of students are going into those jobs, they’re getting their wages, and then they’re walked down to the ATM, they take a lot of cash out and pay that money straight back to the employer. That’s the kind of exploitation that we’ve seen.
Yeah. So they’re not going to be beholden to a single employer. That’s the point.
That’s right.
If you’re under two years with your qualification – any qualifications under two years – you’re out in the cold, yeah?
Well, that’s right. We’re saying to people we want to encourage people into high-quality courses that are actually going to set them up with skills that are either going to be of value to them here in New Zealand or of value to them in other parts of the world as well.
And you can’t have high quality under two years?
Well, again, as I say, if you’ve studied for less than two years and you want to carry on here in New Zealand, then there’s the opportunity to apply for a work-tested visa. So if you’re studying a skill that’s in demand in New Zealand, then there’s that opportunity. But if you’re just coming and studying a generic business course—
Yeah, I was going to say— Give us some examples. What kind of courses are you cutting out with that under-two-year mark?
So, as an example, there used to be three business schools in Te Puke. Now, I’m glad to say that under the current settings, those have been able to be shut down. Those business schools were teaching generic business skills, but, actually, what they were doing was making sure that those students were available to go and work on kiwi-fruit orchards.
Okay, so, people were rorting the system, in your view.
That’s right.
So, at the moment, we are getting about 37,000 new students turning up each year. How many will this affect? How many do you think won’t come as a result of these changes?
Yeah, so, we think it will affect between 12,000 and 16,000 students. Now, when we say ‘affect’—
Sorry, say that again.
12,000 and 16,000.
Right.
Now, when we say ‘affect’, we think there will be three effects. One is some people will decide not to come – that they won’t see that easy path to residency and will decide not to come. Some, of course, may choose to study at degree level instead, and we think that’s good. That’s going to be good for them, and it’s good for our education system, because it’s a better-value proposition for us and for the student. And some students, of course, will come, they’ll study, but they’ll be going home a lot sooner than they are at the moment.
So you can’t really model how many will not turn up. What specific percentage of that, up to 16,000, just won’t bother turning up?
It is hard to say exactly how many simply won’t turn up, but what we’re trying to achieve here is an improvement in our immigration settings – both to improve outcomes for the students themselves and to make sure that our export education proposition is a more high-value one. We’re not that fixated on the numbers in terms of how many students actually com here; what we’re interested in is improving our immigration settings and improving our export education market.
But as a byproduct– And you stated during the election campaign that you were wanting to bring those overall numbers down. So as a byproduct of making these changes – in your view, to get to a higher-quality product – you’re also achieving the secondary goal of lowering numbers.
We do anticipate that numbers will come down, and we’ve actually already seen that. A lot of what’s driving the reduction in permanent long-term migration right now is people coming to the end of their student visa pathway and finding that there is no pathway to residency and heading home. We anticipate that this will reduce the numbers further, but our focus is on improving the education system and on improving our immigration settings.
Okay, so it’s a double-edged sword, because export education is worth almost $4.5 billion. So how much is this going to cost us in lost revenue?
Well, actually, it’s not about bums on seats. It’s not about numbers; we’re trying to get a better-value proposition here. So we anticipate that we’ll see more people going into higher-value courses—
But it is going to cost us, isn’t it, Minister? We’re going to lose some revenue from this. And how much is it? I’m sure you’ve done the modelling.
Look, there is some modelling that suggests it could be around $260 million. That’s, as you say, out of an industry that’s worth 4.5 billion.
And that’s the best-case scenario number, isn’t it? That was the advice to you – that that’s the best-case scenario that you will lose just that amount. But it could have flow-on effects to tertiary education. You can’t guarantee that won’t happen.
It’s one scenario. But let’s look at where those cuts are going to happen. They’re going to happen amongst the low-quality courses, the courses where students have been getting an education that isn’t of much value to them and where they have been ripe for exploitation by unscrupulous agents, providers, employers. Yeah, we need to knock out that exploitation, and we also need to demonstrate to prospective students that there is a real value proposition in New Zealand, that if they study courses that provide them with skills that are going to help them thrive here in New Zealand or if they study at a higher level, there’s really good opportunities for them there.
Won’t it just push some people to work illegally, though?
I doubt it. I think you’ll have people working under the one year, where they’ve got open work visas. There’s not many criteria there that they have to meet, so it makes it more likely that they’re going to be working legally, and after that one year, they then have to, if they want to work further in New Zealand, go through a labour market test. I think those tests are reasonably rigorous. That’s the next area of work for us — is strengthening the labour market test and strengthening other visa criteria that require work testing. We want to make sure we’ve got those settings right as well.
All right. I want to come to other parts of immigration shortly, but businesses will go to the wall over these changes, won’t they?
The only providers who need to be concerned are the ones who are offering a low-quality proposition to their students. If they’re in the business of pretending to provide an education in order to wrought the immigration system, they may have a problem on their hands, but the high-quality providers — and it doesn’t matter what sector they’re in, whether they’re high-quality universities, whether they’re high-quality PTEs or polytechnics — they’ll thrive under this policy.
Okay, so are you saying the only people, the only businesses that will fail as a result of this are the dodgy ones?
I’m very confident that that’s the case, yes.
Because in 2016, 85 per cent of students studying at private training institutes were below the two-year training period — studying two years or less.
And that’s why we’re saying to those providers they need to be providing a high-quality education that’s of value—
So are they all dodgy, those ones? They are all rorting the system?
We’re saying to them we’re putting criteria in place that encourage them to provide a high-quality education for their students, and if their students want an opportunity to continue on in New Zealand, if they’re looking for residency as their long-term goal, then they need to be studying in an area that’s actually in demand in New Zealand so they can contribute to our society and our economy.
So if they fold it’s because they were substandard?
I think so. I think only those substandard providers—
Do you know how many will, though? How many jobs will be lost? How many of those institutes?
I don’t know how many providers are going to look at the signal that we’re sending and say, “We’re going to lift our game.” I hope they will. I hope providers will—
Have you been given any estimates or any modelling on that?
Well, it’s up to providers to make that decision for themselves. If they want to provide a high-quality offer to their students, then they’ll thrive. If they don’t want to make those changes, then they may struggle.
So you’ve been given no figure of the number of businesses that could go out of…?
Well, it’s very hard to predict what people’s behaviour is going to be. If they respond positively to these changes, they’ll do fine.
You want to encourage us as a top-tier education destination, but, quite frankly, that’s not how we’re seen overseas at the moment, and all advice to you is that we do not have the comparable level of brand recognition at the high end. Are you confident that we can?
That’s why we’re retaining some work rights — so that they can be part of the package. We know that when students are looking around for where they will study, they are looking not only at the education that they’re able to receive, but also at what work rights they get whilst they’re studying and after they’re studying, and that’s why we have retained some work rights, that one year for people who are studying below degree level, and actually, that’s why we’ve made it more straight—
So you’re easing them into it.
That’s why we’ve made it more straightforward and simplified for students who are studying at degree level and higher. So it is part of the package, but we need to make sure that the focus is on getting a quality education.
So we should tell people that this does not affect anyone who is studying currently; it’s only new people coming in, right?
That’s right.
So what about work rights while they are studying? Because international students can study during their course year, they can work full-time in the holidays, etcetera. Are you going to take a look at that?
That’s an area that we’re doing some work on right now, and I’m expecting to get some advice back from MBIE on that before the end of this year.
Do you anticipate changes there?
We’ll look at the advice, and we’ll do some consultation. I have to say—
You’ve been here a while now, so you must have a bit of an idea. What are you thinking?
Look, the previous government, they left it to the last minute, but they did make some changes, and those changes are starting to flow through now. So we need to be cognisant of those changes and the impact that they are having on the international education market and make sure that any future changes we make are tailored to supporting—
But you’re looking at making changes to in-work rights while you study?
It’s something that we’re examining right now, yes.
Okay, we’ve got about 11,000 workers who come from overseas for seasonal work every year, right? And those businesses have been crying out for more workers. A lot of students take low-skill jobs, right? So, picking and service industry stuff. In terms of the seasonal work, are you going to raise the quota for the number of people who can come in?
We are looking at the RSE quota, if that’s what you’re talking about. We are looking at the RSE quota to make sure that that continues to be fit for purpose. The other thing that we’re looking at is—
Do you think it is? What’s your gut feeling?
Oh, look, I think that the RSE scheme works well. And each year, we need to re-examine the quota and look at current conditions and make sure that it’s working well.
Three notices have been issued this year, haven’t they? For shortage of labour in those industries? Does that tell you that you need to up the quota on the RSE?
Well, it certainly tells me that we need a more regionalised approach to our immigration system. We need a system which can better respond to the individual needs of each region around the country. For a small country, our regions are actually incredibly diverse, and their needs are very different. So we’re looking at the RSE scheme, we’re looking at the quota — that’s constantly under review—
So there’s potential for that to go up? Because the kiwifruit industry has said that they would like double what they get.
There’s potential for it. And there’s also potential for other changes around the transparency of the decision-making and the certainty that employers get into the future around how many people they’re going to be able to access.
We’re very short of service workers, including aged care workers, right? And over the next three years, it’s estimated that we’re going to need about 220,000 extra service workers. They’re not on the skills shortage list — the aged care workers. They won’t meet the income thresholds. How are you going to address that?
These skill shortages have to be approached through a number of different avenues. Immigration isn’t the only solution. We have a lot of people in New Zealand who want more work than what they’re currently getting or want a different kind of work—
So you can do it without opening the gates to more immigrants?
As I say, it has to be a range of solutions. So part of it has to be the education system; part of it has to be working alongside those industries to make sure they’re creating training opportunities for people to be able to get in to those jobs and get the skills for those jobs; part of it will be immigration, absolutely. But for me, I want to see that employers are offering a premium, in terms of their terms and conditions. If they’re short on staff, they need to be making the job as attractive as possible. I want to see them invested in training, and I want to see a record of good employment practices in those industries. When we see all of those things, and if people are still short of the staff that they need, the immigration system absolutely should be there to be part of the solution.
All right, thanks for joining us this morning, Immigration Minister Ian Lees-Galloway.
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