The Immigration Debate

An Asia 2000 Occasional Paper.

Introduction

New Zealand’s immigration policy has been the subject of public debate in recent months. This has focused in part on New Zealand’s growing Asian communities. Asia 2000’s mandate is to promote knowledge and understanding between New Zealanders and the countries and peoples of Asia. This background paper addresses some of the points under discussion. Comments and feedback would be welcome to enable revisions and updating.

Summary Comment Given its importance to New Zealand, it is not surprising that migration comes up for public discussion. At times this concentrates on emigration (the ‘brain drain’) and at others on immigration (‘open door policies’). Immigration is the focus of current attention. New Zealand is founded on immigration. It continues to be a feature of national life. Nearly one New Zealander in five was born overseas. New Zealanders also migrate overseas. Over the three decades from 1970-2000, permanent or long term departures exceeded arrivals by 65,100. Population gains from migration have resumed since the 1990s, but migration still makes only a small contribution to overall growth. New Zealand’s population grew by 1.1% since 1990, but the contribution from migration was only 0.2%. There are no restrictions on emigration and outflows are largely a function of employment and social expectations. The government sets annual quotas on immigration. Currently this is 45,000 per annum, plus or minus 5000. This includes New Zealand’s annual quota of refugees, at present set at 750. New Zealand does not discriminate against immigrants on the basis of ethnicity or origin. Citizens of European descent now represent 80% of New Zealand’s population. Nearly 15% are Maori. At 6.6%, Asian peoples slightly outnumber Pacific Island peoples at 6.5% (the figures exceed 100 percent because of multiple ethnicity). The 2001 census recorded 237,459 people of Asian ethnicity in New Zealand. Asian citizens are expected to increase to 370,000 by 2016, but this figure would still represent only 9% of the total population. New Zealand has had small communities of Asian citizens (primarily of Chinese and Indian descent) for over 100 years. They have expanded since the 1990s, with inflows in particular of people from Korea, China, Taiwan, Hong Kong and India. The advent of larger Asian communities has brought visible change in shops, signage, streets and schools. The new communities are now large enough to generate their own social gravity (e.g. news media and ethnic networks) and include people who have the wealth and confidence of the societies from which they originate. The concentration of migrants in certain locations (particularly Auckland) has made change more obvious. Large numbers of short term visitors from Asia have compounded the impression of change. Over 500,000 tourists and more than 73,000 students are expected to arrive from Asia over the next year, more than double the number of permanent residents of Asian origin. Many of these short term visitors also concentrate in Auckland. Increases in immigrants, tourists and students are a function of increased wealth, technological change, and internationalisation. New Zealand derives substantial economic benefits from this new mobility. Immigrants bring many millions of dollars in savings, many millions more are earned from tourists each year, and annual student revenues exceed a billion dollars. Immigrants also help to fill labour vacancies, pay taxes, start businesses and sustain demand for local goods and services. There is strong competition from other countries for these benefits. The personal networks of Asian immigrants and visitors underpin New Zealand’s $21.5 billion two-way trade with Asian countries, attract investment, provide new sources of cultural knowledge and language skills, promote tourism, and strengthen external links. While small numbers of refugees and asylum seekers enjoy special entitlements to social services, the large conventional immigration stream does not. Immigrants take up less than 2% of total welfare payments and refugees only 0.12%. Available evidence indicates that the net economic impact of immigration is positive, but more detailed research on the extent of this is currently underway. Migration is not an easy matter. It can take several years for migrants to reach the equivalent level of New Zealand counterparts. Employment outcomes can depend on English language ability, recognition of qualifications, local knowledge and relevant experience. Migration also entails social and employment adjustments. Schemes are being introduced to accelerate the speed of integration of immigrants into the work force. Community initiatives aimed at creating a positive interface between immigrants and host communities have also been introduced. Additional resources invested in pre and post migration programmes could further reduce the adjustment period.

Immigration and New Zealand

New Zealand is a nation of immigrants. The Maori arrived by sea many hundreds of years ago. The ancestors of the largest ethnic group in the country, the Europeans, also arrived by sea in later centuries. Immigration has continued to be a permanent feature of the nation’s life.

Overall 19% of New Zealand’s residents were born overseas. This is one of the highest rates in the OECD where the average is 8%. Australia’s percentage is higher still at 22%, while the US has just 10%. Changing demographics have resulted in a population which is now made up of 80% European, 14.7% Maori, 6.6% Asian peoples and 6.5% Pacific peoples.

New Zealanders retain their migratory instincts. Large numbers move further afield to live, and others come to take their place.

The changes in New Zealand’s ethnic composition from 1997 to 2001 are shown in the graph below.
Ethnic Group as a Percentage of the Total Population, 1991 and 2001

Latest population projections predict the Asian population will grow from 186,000 in 1996 to 370,000 by 2016. Of this, natural increase will contribute about 53% of projected growth, and net migration the remaining 47%. By 2016 the Asian population is expected to make up 9% of the New Zealand population.

Similar projections are available for the Maori and Pacific peoples populations, but the comparative years are 1996 and 2051. By 2051 Pacific people are projected to form 13 percent of the New Zealand population, and Maori 21 percent.

Who is coming to New Zealand?

Country of origin

New Zealand does not discriminate against immigrants on the basis of ethnicity or origin, and migrants are now arriving from a wider range of countries. In the 1980s approximately 30% of migrants were from the UK or Ireland, but by the 1990s this had changed to 14%.

For the 2000/01 year the top five groups of migrants, out of 44,598 people approved for residence, were Britain (13%), India (13%), China (12%), South Africa (9%), and Fiji (7%).

In the year ended August 2002 there were significant net inflows from China (14,400), India (6,300), the United Kingdom (5,700), South Africa (3,200), Japan (2,300) and Fiji (2,200).

Net migration from Asia has increased over recent years. In 1988 net permanent and long-term migration from Asian countries was 3,998. It peaked in 1996 at 23,489, but fell to 9,994 in the year ended 31 March 1999 before rising again.

How many immigrants?

There has been talk of an ‘out of control’ immigration flow into New Zealand, and of the ‘open door’ policy New Zealand has towards immigrants. Some commentators advocate drastically cutting the current number of immigrants to New Zealand, which in the 2001/02 year totalled over 53,000.

The New Zealand Government determines the number of immigrants allowed into New Zealand every year. In September 2001 the annual number of immigrants was set at 45,000, to be maintained for three years. This figure can deviate as circumstances demand by plus or minus 5000. The Minister may also allocate a further 5000 places if satisfied there are net benefits in so doing. The immigration limit also includes New Zealand’s refugee quota, set at 750, reflecting New Zealand’s contribution to an international problem.

The numbers of immigrants coming in are offset by the numbers going out. 53,000 immigrants in the 2001/02 year does not mean a 53,000 increase in NZ’s population. When balanced with outflows of people, migrants help replace those who leave.

Over the period 1970-2000 New Zealand experienced an overall net outflow of 65,100 permanent and long-term migrants. The numbers of New Zealanders leaving permanently rose from 1% of the population in the early 1970s to an average of 1.5% over the 1990s.

However, the 1990s saw a return to net population gains from migration, resulting from both increases in the number of permanent and long-term arrivals, and decreases in departures.

From 1968 to 1991, total departures exceeded total arrivals by an average of 106 people per annum. Then in the year ended March 1991, there was a net gain of 11,616 people. The net gains have largely continued, and in 2002 there was a net inflow of 34,600 migrants, compared with a net outflow of 6,800 migrants in the previous year.

While the numbers of migrants to New Zealand may seem relatively large, the actual contribution to New Zealand’s population growth is very small. Since 1975 New Zealand’s annual population growth has averaged 0.8%, with the contribution from net migration being negative 0.2%.

From 1990 onwards, New Zealand’s annual population growth has risen to 1.1%, with the contribution from net migration now a positive 0.2%. Comparatively Australia’s annual population growth is 1.2%, with net migration making up 0.5% of the growth.

Another comparison could be made with 1960s New Zealand when annual population growth was 2% and net migration made up 0.7% of that figure.

Different types of migrants

Distinctions need to be made between migrants, based on how long they stay in New Zealand. Some migrants come to live permanently while others come for a short time, such as people on temporary visas and permits.

Some of those who visit for a short time, between three months and three years, are international students. The numbers have seen remarkable growth. The latest projections indicate about 73,000 international students will study in New Zealand this year, up from 53,000 the year before. Of these students, over 80% are from Asian countries, with China now the largest source.

The large number of students, and their concentration at certain locations, especially in Auckland, can create an impression of a substantial increase in migrants to New Zealand’s population. This impression is further enhanced by the 500,000 Asian tourists who now visit New Zealand each year. In reality long-term immigrants to New Zealand contribute only a small part of New Zealand’s population growth.

Where are the immigrants living? The Auckland effect

There is an issue with the concentration of immigrants in Auckland, including a large proportion of the immigrants from Asian countries. Auckland has been home to 57% of migrants over the last five years. Asians represent around 13% of Auckland’s population, compared with 3.7% in the rest of the North Island and 3.2% in the South Island. There is recognition that other centres need to draw migrants towards them.

One attempt to draw migrants to other centres are pilot programmes established by the NZIS with the Ministry of Economic Development. These aim to attract skilled migrants to fill skills shortages in the Southland and Wellington regions. The mayor of Wellington, Kerry Prendergast, has said that she is doing all she can to attract immigrants to Wellington, including putting together a package promoting Wellington as a destination for immigrants with the right skills. There is similar interest from the wider Wellington region.

International students are also concentrated in Auckland, and again attempts are being made by the New Zealand International Education Marketing Network to draw students southwards.

Do migrants get work?

A growing number of workers in New Zealand are migrants. In 2001 one in five of the working-age population was born overseas and the proportion in Auckland was one in three. However, many migrants do experience difficulties in getting work.

Unemployment rates for resident New Zealanders, from the 2001 census figures, show that among Asian New Zealanders 13% are unemployed, compared with a national average of 5.7%. Comparatively European ethnic groups have an unemployment rate of 5.6%, Maori 16.8% and Pacific Islanders 16.2%.

The under employment of migrants with high skill levels is a problem. New migrants take time to find new jobs and the rate at which they are being employed has deteriorated: from 64% in 1986 to 46% in 1996 before improving again more recently to 50%.

Research has shown that although migrants who arrived in New Zealand in the 1980s and 1990s were on average more highly educated and younger than working-age New Zealanders, it was difficult for many to adjust to the New Zealand labour market. Average labour market outcomes of these migrants were almost invariably poorer than for locals of the same age group and educational level, with outcomes for migrants from Asia and the Pacific being particularly poor.

Migrants who integrated most readily had high education levels and came from an English-speaking background. Even then, they took five to 10 years to achieve employment rates and incomes equivalent to those of comparable New Zealanders. For migrants who integrated less readily (typically those with lower education or less English language) average convergence times were in the range of 25–40 years.

However, there are indications that settlement outcomes have improved. Recent figures for immigrants and refugees who have been in New Zealand less than five years, show that fewer are using welfare benefits: 10,668 received welfare benefits in August 2002, compared with 12,613 last August. Of total welfare payments, immigrants take up only 1.8% and refugees 0.12%.

Outcomes for refugees are more concerning. 645 of the 1500 refugees admitted to New Zealand under the United Nations quota system in the last two years are receiving benefits. Many refugees are from war zones and refugees camps, and the figures may reflect past trauma as well as their difficulty in adjusting to life in New Zealand. Furthermore, quota refugees in particular have poor English and need to participate in ESOL (English for Speakers of Other Languages) classes before they can join the workforce: this accounts for much of the need to rely on benefits, at least initially.

For migrants, the good news is that early qualitative information from the Longitudinal Immigration Survey New Zealand, carried about by the NZIS, indicates that only around 8% of the current General Skills Category migrant cohort is looking for work after six months.

Employment issues

The underemployment of migrants highlights the difficulties they have in securing work. Recruitment problems faced by Asian migrants have been identified as including:

lack of recognition of overseas qualifications lack of New Zealand working experience preference for applicants with familiar local characteristics insufficient English skills and being over-qualified for vacancies.

Research conducted for the NZIS has shown that to achieve better employment outcomes for migrants certain steps need to be taken. Migrants need to be provided with adequate pre-arrival information including objective information on local labour market conditions and existing rules and regulations on qualification recognition. Post-arrival courses also need to be run on New Zealand society, culture and economy. Migrants also need more assistance to gain jobs, both those that are low skilled and highly skilled, and they need more assistance to access English language classes.

Integration initiatives

Initiatives designed to make the integration of migrants into New Zealand easier are now being undertaken. The NZIS Settlement branch provides printed and web-based information. It also runs a Migrant Helpline and the Business Migrant Liaison Unit and employment referral service, which provide information to new migrants. Since 2000 the NZIS has also run programmes through service providers to offer orientation and employment advice.

With regard to employment, the NZIS has carried out pilot-settlement projects, some of which have now turned into entrenched programmes, in Auckland, Palmerston North, Wellington, Christchurch and Hamilton regions. The pilots focused on three target groups: asylum seekers, the families of quota refugees, and migrants. Funding was provided for organisations to provide services to these groups, including emergency accommodation for asylum seekers, mentoring of job seekers, information provision, business courses, language and career path advice and so on.

An evaluation of these programmes found that the funded projects were in a number of cases demonstrably successful. The pilots were successful in: raising awareness of migrant and refugee issues in the wider community building on existing networks to create orientation or employment support for new arrivals boosting the confidence of new settlers and their understanding of New Zealand systems creating successful models for other agencies to follow for the provision of mainstream settlement services.

One successful programme in the Auckland area is the NZIS/Auckland Regional Chamber of Commerce’s New Kiwis website for job seekers and employers, funded by the NZIS and the Chamber itself. As at July 2002 this website had: 411 registered employers made 308 work placements around 200 new job seekers registering each week.

Another example is the Auckland New Ventures Trust, which is running the Highly Qualified Migrant (Hi-Q) programme, co-funded by the NZIS, Auckland City Council and the Ministry of Social Development. The programme is successful in matching employers with prospective migrant employees and providing migrants with information and coaching to overcome barriers to employment.

In the Wellington region the ESOL (English for Speakers of Other Languages) Home Tutor service has set up an employment mentoring service to try to help migrants get work in the field they are qualified in.

At a community level, all four Auckland cities (Auckland, North Shore, Waitakere and Manukau) are developing or implementing specific initiatives to promote the constructive engagement of new migrant communities. Other city councils actively encouraging migrant work are the Palmerston North, Christchurch, Hamilton and Wellington councils.

The business and economic impact of migrants

Inflation and interest rates

One economist, Gareth Kiernan of Infometrics, argues that the increase in migrants coming to New Zealand has fuelled inflation and pushed up interest rates. He believes that the number coming to New Zealand should be slowed, otherwise interest rates will continue to rise to the detriment of exporters and New Zealand’s economic prospects.

On the other hand, it has been estimated by BERL (Business and Economic Research Ltd) that migration has generated demand of about 2% of GDP for housing and education. In fact in Auckland the demand from migrants for housing, along with low interest rates and rising house prices, has created a property boom. House prices have risen between 10 to 15%.

Migration is also increasing labour supply by 0.5%-1% per year and inward migrants are increasingly productive. Instead of a brain-drain, in the year to June 2002 there was a net inflow of 1,276 people under the higher skills category. Comparatively in 2000 there was a net outflow of 5,500 in the same category.

BERL believes that so long as New Zealand remains attractive to migrants and to New Zealanders themselves, the stimulus created by migration of around 2% GDP is sustainable and non-inflationary.

The labour market

Fears have been expressed on the one hand that new migrants are taking jobs away from New Zealanders. On the other hand, however, there are labour market vacancies which cannot be filled. Manufacturers are recording difficulty in finding staff, as too are wholesale and retail trade merchants and builders. Labour shortages are increasingly being cited by businesses as a constraint on expanding output.

Immigration is an important factor in addressing skills shortages. The Government has introduced the ‘Talent Visa’ to fill these shortages. Simon Carlaw, chief executive of Business New Zealand, has said that far from taking jobs from New Zealanders, immigration enables firms to grow and create jobs.

Economic and fiscal impact

Aside from filling skills shortages, there is a question as to the contribution of migrants to the New Zealand economy as a whole. This is a complex area, with research only now being done by the NZIS on the economic impact of migrants to New Zealand. However, research carried out in the United States found the economic benefits of immigration are positive in the long term.

In New Zealand a study was completed in 1999 on the fiscal impact of migrants to the country. It revealed that the main impact of migrants was largely on income tax revenue. This impact was greater than the estimated impacts on the other categories of central Government revenue and expenditure, and was positive.

Migrants have been a major source of investment of personal capital from overseas in recent years. Large Asian investors in Auckland have been estimated to each have between $20-30 million invested in the region.

Asian migrants admitted to New Zealand under the business migration schemes between July 1992 and June 1998 contributed NZ$969 million in investment capital to the economy. Overall, Asian investment in New Zealand through resident companies as well as individuals has been estimated at around $7 billion.

Migrants also contribute through their ownership of businesses, such as real estate agencies, investment and money transfer companies, travel agencies, restaurants, jewellers and so on.

There are other economic impacts of migrants which are more diffuse and hard to measure. They include a contribution to the internationalisation and effectiveness of personal business networks, transfers of knowledge and expertise, increased VFR (visits to friends and relatives) tourism, and expanded domestic demand for goods and services specific to new community demands (foodstuffs and restaurants being an example).

The mayor of Christchurch, Garry Moore, outlines further benefits of migrants: ‘For cities like Christchurch migrants make us grow and become more cosmopolitan, they bring colour and vibrancy and considerable economic benefits. They help us to become more comfortable with the wider world and we welcome them.’

The economic effects of related people movements include continued growth of international education, which contributed $1.1 billion dollars to the New Zealand economy in 2001. Around 80% of full fee-paying international students coming to New Zealand are from Asian countries, namely China, Taiwan, South Korea, Japan, Thailand and Malaysia. The export education industry is already as big as the wool industry and four times the size of the wine industry, and is expanding very rapidly.

One indication of growth in the education sector is the occupancy rate of office space in the Auckland CBD. A report from Bayleys Research notes that ‘It is hard to imagine a time when any other tenant group has had as much impact on the Auckland CBD office market as education’. The report also comments that if the current rate of growth continues, education will occupy close to 15% of the CBD by the end of 2002 and possibly 20% by the end of 2004.

Changes in migration patterns

In a rapidly globalising world where the movement of people and information is becoming faster and more efficient, migration patterns are changing.

Migration can no longer be viewed as a permanent one-way movement. Due to greater ease of travel and an increasingly international labour market, there is more scope for people to migrate more than once. In New Zealand’s case, some migrants do not view New Zealand as a final destination but as a stepping stone to other locations.

This has implications for migrant settlement services, which must be easily accessed and effective to attract migrants. New Zealand’s immigration policy is based on the desire to attract highly skilled migrants, seen in the use of the points system and varieties of visa available. The need for highly skilled migrants is tied to skills shortages in the economy.

New Zealand’s need for the ‘best’ migrants is in direct competition with other countries, such as America and Europe. Some argue that these countries, and Australia, are ahead in their planning for changing migration patterns. For instance in Australia there is said to be a growing acceptance that immigrants from Hong Kong may well split their lives between Hong Kong and Australia, with the family living in Australia and a parent working in Hong Kong.

Fraud?

The demand from people to migrate has led to claims that fraudulent means are being used to gain residency, for example, by buying bogus jobs to increase the chances of being accepted into New Zealand. However, Lianne Dalziel, the Minister of Immigration, has said that there is no evidence of this, and if there was action would be taken.

There is also criticism that the immigration process is not robust enough to ensure that New Zealand accepts only those who properly qualify and cannot ensure that potential migrants are kept away from corrupt avenues, for instance buying fraudulent passports.

Health screening

Some are concerned that the New Zealand Immigration Service (NZIS) does not, or cannot, screen those coming to New Zealand for infectious diseases. Here distinctions need to be drawn between immigrants, refugees and asylum seekers.

For refugees, figures released by NZIS show that in the last three years 2230 refugees were health screened at the refugee resettlement centre in Mangere. Of those 28, or 1.25%, had HIV status.

Similar figures are available for asylum seekers. Of the 600, mainly Middle Eastern asylum seekers, in 1999-2000 the rate of infection for HIV was 1.1%. 3.6% showed signs of old TB infection and less than 1% had active TB.

In comparison the rate of HIV infection for the whole of New Zealand was estimated in 1999 to be 0.06%. To the end of June 2001, a total of 741 people have been notified with AIDS, and 1,513 people have been found to be infected with HIV.

New Zealand screens all refugees, but a positive result for HIV/Aids does not affect entry to New Zealand. The NZIS interviews and selects New Zealand’s refugees, based on United Nations eligibility, and health screens potential refugees in the country they are in before arrival. In this year’s Budget $500,000 has been allocated for overseas screening of refugees.

Asylum seekers are obviously not screened because they arrive unannounced. However, those identified as genuine asylum seekers who seek residence in New Zealand are screened. Again, a positive result does not mean they are rejected: under international law New Zealand must accept genuine asylum seekers.

A claim has been made that public health statistics show that 16% of new HIV infections recorded in New Zealand between 1994-2001 comes from refugees. But this figure includes asylum seekers also, not all of whom are genuine and therefore allowed to stay. In the 2001/02 year 548 people were removed from, or left New Zealand, due to their refugee status claims not being upheld.

Migrants coming to New Zealand must be medically certified to determine their health status. Each applicant must undergo medical examinations and tests in order to complete the NZIS medical and X-ray certificate form.

Queue jumpers?

There is a perception that migrants are somehow able to queue-jump for houses, jobs and health care. However, migrants have to become New Zealand citizens, which usually takes two years, before they are eligible for state housing. State Housing statistics show that 150 refugee families are allocated housing each year, about 1.5% of total lettings.

As for health care, migrants have access to doctors and hospitals like all New Zealand citizens. Should they require to go on a hospital waiting list, the requirements are the same as for New Zealand residents.

The role of the New Zealand Immigration Service (NZIS)

While migrants make up only a small proportion of New Zealand’s population, the rapid growth in applications is putting the NZIS under pressure.

NZIS recognises that there is room for improvement in the employment and settlement of new migrants. In some places immigration numbers are putting pressure on infrastructure; there is a significant backlog of residence applications to be dealt with; and there may be benefits from a more proactive stance in selecting migrants who are most able to make a high-value contribution to New Zealand.

Increased immigration flows (both permanent and temporary), particularly in high-volume markets such as New Delhi, Beijing and Auckland are imposing strains. While NZIS’s capacity has increased greatly from last year, residence processing times have lengthened. As at 19 July 2002 there was a backlog of 25,205 applications. This backlog could take two years to clear.

It is recognised by the NZIS that if New Zealanders perceive immigration outcomes as poor then their support will be lost for the policy. For instance, criticism has come from Maori leaders that immigration policies have been made without consultation and at the expense of Maori.

One suggested way to involve the public has been to obtain community feedback on the Immigration Programme, in a way similar to the annual consultation by the Australian and Canadian governments on their immigration programmes.

The NZIS is concerned too that while progress has been made, there is still no robust and integrated framework for migrant settlement (e.g. acting on employment, education, training, health, income and social support issues). Since the migrant adjustment process can take around 10 years on average, a fundamental question is how settlement assistance can reduce the period of adjustment.

Asia 2000 Foundation (asia2000@asia2000.org.nz)

6 November 2002

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