29 May 2024

Questions over visa fee increases as minister eyes savings

12:26 pm on 29 May 2024
National MP Erica Stanford

Immigration Minister Erica Stanford Photo: RNZ / Angus Dreaver

With visa fees expected to rise, the Immigration Minister is refusing to explain whether those hikes will be used to help find $120m a year in savings.

The minister has confirmed she has completed consultation with specific interest groups and plans to take a paper to Cabinet on visa fee increases soon.

But National promised to recoup at least $119m a year from Immigration ahead of the election and - with the minister's office saying under $20m a year in Crown funding is currently spent on processing - questions remain over where the remaining money would come from.

The party's tax policy unveiled in August proposed to make visa processing "largely user pays and no more than 90 percent of Australia's equivalent cost".

Their fiscal plan in September expected this to be able to save $492m over the four years from 2024/25, with annual savings of $119m increasing to $127m by 2027/28.

Post-election, in December's mini-Budget, Finance Minister Nicola Willis signalled "further work underway to put New Zealand on a firmer financial footing" including "enabling full cost-recovery for immigration visa processing".

Nicola Willis

Finance Minister Nicola Willis Photo: RNZ / Samuel Rillstone

Immigration Minister Erica Stanford's office was asked to provide the total spent on subsidising visa costs, and confirmed the Crown spent just $19.549m subsidising visas annually.

These included Skilled Migrant Category, RSE scheme, Pacific Access Category and Samoan Quota, and visitor visas.

"The Crown funding was provided in the 2022 fee and levy review so visas remain competitively priced with comparable countries (Australia), to support economic recovery from COVID-19, and to recognise the government's commitment to support Pacific resilience and economic development," the minister's office said.

RNZ asked if the government remained committed to the savings set out in the fiscal plan, and the policy of keeping New Zealand's visa fees at or below 90 percent of Australia's.

A report by Newsroom in August estimated bringing fees to 90 percent of Australia's would see partner visa fees increase from under $3000 to more than $8500.

Other fee increases would include post-study work visas increasing from $700 to $1856, fee-paying students' visa costs rising from $375 to $660, while skilled migrant and working holiday visas would remain the same.

Stanford refused to be interviewed on the matter, but in a written response revealed a shift towards prioritising cost recovery over and above the 90 percent benchmark.

"Where feasible, the objective is that visa charges remain within 90 percent of Australia's charges while ensuring that costs are fully recovered," she said.

She did not say whether the government remained committed to the savings outlined in National's fiscal plan.

Meanwhile, an Official Information Act Response to RNZ shows Cabinet was also expected to make decisions about a proposed "Immigration (Fiscal Sustainability) Bill" by 11 March.

Some further information about the proposed bill was redacted under an Official Information Act clause providing protection for advice related to ministerial or Cabinet decision-making until those decisions had been made.

This would be followed by the Ministry of Business, Innovation and Employment providing options for the scope and timeframes of the bill.

Stanford's response to RNZ this week confirmed targeted consultation had been completed on changes to visa fee and levy rates.

"The government is committed to improving the immigration funding system to ensure it is more efficient, self-funding, and sustainable," she said.

"This work supports the government's priority to deliver effective and fiscally sustainable public services. My officials have consulted with key immigration system stakeholders on proposed fee and levy rates that will help us achieve this.

"The feedback from these stakeholders will be considered as we make decisions on what a sustainable immigration funding model will look like. I will have more to say on this soon."

The minister is expecting to take a paper to Cabinet in the coming weeks.

Other National Party policies announced ahead of the election included a plan to offer fast-tracking for visa processing for a fee, including for incoming international students.

Announcing that policy in September, then-opposition leader Christopher Luxon - now the prime minister - said the international student market should be a strong part of helping New Zealand "rediscover growth".

He said it would be up to Immigration NZ to set the rate to allow them to fully recover costs.

The priority visa processing would be paired with other policies including four extra work hours per week for international students, and expanded worker rights for students and their partners.

Thursday's Budget numbers under the coalition's policy programme is unlikely to match National's fiscal plan exactly, but should reveal how much the government now expects to save in the coming year - and where those costs for visa applicants will be weighted.

Labour's immigration spokesperson Phil Twyford said he would be very interested to see cuts to the system and would not be surprised to see visa fee increases.

"I would think that's probably one of the most likely options. They campaigned on actually making some savings in the immigration system," he said.

"I did ask the minister at select committee what their plans were in this regard and I got a reassurance they're not looking at making any cuts to the immigration system.

"Largely all of the machinery around visas and the administration of the system is designed to be self-funding with fees, but don't forget this government's made some big promises about changes to the system and so they're going to have to invest in the people to run it, checks that are made on visas, and so on and so forth.

"If they do look to make savings, it's going to put real pressure on their ability to meet some of the promises that they've made, so we'll be watching carefully."

The previous Labour government had increased visa levies by 279 percent in October 2022, after having written off $284m in losses from Immigration NZ.

At the time, another funding review was expected to investigate ways to overcome a further deficit of $135m by the end of 2024.

That came after successive deficits - reaching $134.6m for the financial year to June 2020 - in the wake of border closures from Covid-19.

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