25 Jul 2018

Immigration NZ plans to raise cost of work visa to stem $43m deficit

9:28 am on 25 July 2018

Immigration New Zealand's plan to more than double the cost of work visas to help close a growing $43 million deficit has employers worried.

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Photo: 123rf.com

The Ministry of Business, Innovation and Employment's consultation on a plan to stem its deficit closed on Sunday.

Hospitality industry organisations opposed the proposed changes in their submissions supplied to RNZ, and expressed concern over the government department's ability to manage costs effectively.

Hospitality NZ's submission said the industry needed 10,000 more restaurant and cafe staff over the next two years and there were not enough New Zealanders with necessary skills to take up the roles.

It said the ministry's plan to increase work visa fees by 54 percent could deter migrant workers from coming to New Zealand.

Restaurant Association chief executive Marisa Bidois said almost all of its 2000 members opposed the increase.

"Most believe that this would intensify and increase the pressure on an already challenging work recruitment market for our industry. The majority of our members as well believe that an increase in fees would act as a deterrent for prospective migrant workers coming to New Zealand."

An unprecedented shortfall

The plan to increase visa fees comes as Immigration NZ's accounts show an unprecedented deficit of $43m.

Immigration NZ is a mostly user-pays system, but lost $20m from work visas alone last year, suggesting the price paid for them no longer covered the cost of processing them.

In a Cabinet paper, Immigration Minister Iain Lees-Galloway said an increase in migrant trafficking and exploitation was to blame for increasing visa processing costs. Checks were becoming more rigourous, therefore taking longer.

Immigration NZ's memorandum account was set for the $43m deficit by the end of the 2017 financial year.

That was despite investing $140m in technology to move visa processing online.

Immigration NZ deputy chief executive Greg Patchell said without the technology investment, its accounts would have been further in the red and the proposed increase on visas would be higher.

"The changes are actually making it more efficient to process visas, however the risk situation changes, therefore other things come on board at the same time."

Mr Patchell said the increase in visa pricing would not necessarily reduce processing times.

Under the changes, work visas would cost $580 each, up from $370. Along with other changes, such as increasing the cost for employers to gain an accreditation from Immigration by 20 percent, that would balance Immigration NZ's account within three years.

Ministry spokesperson Ruth Isaac said the increased prices would remain low on an international scale.

"We're generally on par at the moment with Canada, lower than the UK and Australia. Even with these increases we're going to remain competitive."

Parliament will vote next month on whether to spread out the changes over three or five years. Visa fees were typically reviewed every three years.

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