Plan to raise work visa fee to stem deficit

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

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

Hospitality NZ has voiced opposition to the proposed changes in its submissions supplied to RNZ, and expressed concern over the government department’s ability to manage costs effectively.

The hospitality industry organisation’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% 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.’’

Immigration NZ (INZ) has a mostly userpays system, but lost $20 million 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 LeesGalloway said an increase in migrant trafficking and exploitation was to blame for increasing visa processing costs. Checks were becoming more rigorous, therefore taking longer.

INZ’s memorandum account was set for the $43 million deficit by the end of the 2017 financial year.

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

INZ 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 INZ by 20%, that would balance INZ’s account within three years. — RNZ