Productivity Commission inquiry

Immigration settings - Productivity Commission inquiry material 2021 - 2022

The Productivity Commission undertook an inquiry into what immigration policy settings would best facilitate New Zealand's long-term economic growth and promote the wellbeing of New Zealanders.

The inquiry#

The Commission published its preliminary findings and recommendations in November 2021. These created considerable interest and feedback, representing a range of views. The report received 181 submissions and the inquiry team took over 65 meetings with individuals, government and non-government organisations and firms throughout New Zealand. The final report which was published in May 2022 benefitted from feedback from this process of consultation.

The final report Immigration - Fit for the future makes 32 findings and 24 recommendations to Government.

What did the inquiry find?#

Immigration is not likely to be the solution nor the cause of the productivity challenges facing Aotearoa New Zealand.

The relationship between productivity and immigration requires a balance of trade-offs between government objectives, and a consideration of short‑run and long‑run impacts.

Immigration has played an important part in New Zealand's economic development.

On average, immigration is not driving down wages nor displacing local workers.

The use of Labour Market Tests, Skill Shortage Lists and tying migrants to employers can suppress wages and productivity.

The supply of infrastructure is less responsive to population growth now than in the past.

What does the Commission recommend?#

Successive governments need a robust and transparent way to balance the longer-term benefits of immigration policy with short-term pressures and challenges. Alongside this, the focus of immigration policy should be on selecting migrants who can make the biggest contribution to the economy and ensuring that New Zealand remains attractive to skilled migrants as the global competition for talent intensifies. The Commission recommended the Government:

  • Publish an Immigration Government Policy Statement (GPS) to clarify how immigration will be managed and connected to other government objectives, including what investments will be made in absorptive capacity.
  • Create stronger links with education and training policies through the GPS and by requiring Workforce Development Councils to report on how demand for migrant labour and skill gaps inform their training priorities.
  • Engage with Māori in good faith on how to reflect Te Tiriti o Waitangi in immigration policy and institutions.
  • Increase funding for iwi involvement and partnership in the expansion of the Welcoming Communities initiative.
  • Reduce the use of Skills Shortage Lists for immigration purposes and encourage wages to reflect scarcity.
  • Regularly review visa categories and the residency points system to ensure they sufficiently prioritise high skilled migrants.
  • Cease the practice of tying migrants to a single employer.
  • Provide additional funding for the Labour Inspectorate to support labour market regulation, the proposed accredited employer scheme, and the integrity of the immigration system.

The final report presents 24 recommendations to Government.

Government response#

The interim response from Government on 3 April 2022 highlighted general agreement with the recommendations made in the final report.

The response summarises the major reforms being undertaken to drive a more coordinated, connected and longer-term approach to workforce planning and development, as well as the further work that's needed based on the Commission's recommendations.

See Interim Response to the Productivity Commission’s Report - Immigration (Beehive website).

Timeline#

  • Terms of reference - 3 May 2021
  • Issues paper - 21 June 2021
    • Public submissions
  • Preliminary findings and recommendations - 8 November 2021
    • Public submissions
  • Final report to Government - 30 April 2022
  • Independent evaluation - September 2022
  • Government response - 3 April 2022

Key documents#

Final report#

Final Report: Immigration Settings Inquiry
Doc. Date Sort ascending Creator Title
New Zealand Productivity Commission
New Zealand Productivity Commission
New Zealand Productivity Commission
New Zealand Productivity Commission
New Zealand Productivity Commission
New Zealand Productivity Commission

Terms of reference and issues paper#

Issues Paper: Immigration Settings Inquiry
Doc. Date Sort ascending Creator Title
New Zealand Productivity Commission
Minister of Finance

Research#

Research: Immigration Settings Inquiry
Doc. Date Creator Title Sort descending
New Zealand Productivity Commission
New Zealand Productivity Commission
New Zealand Productivity Commission
New Zealand Productivity Commission
Whaia Legal
New Zealand Institute for Economic Research
New Zealand Productivity Commission
New Zealand Productivity Commission

Research (externally hosted)

29 May 2022 | Fry, Taylor | Data-led approach to identifying skills shortages (apo.org.au)

Case studies#

Case Study: Immigration Settings Inquiry
Doc. Date Sort ascending Creator Title
Schiff, Aaron
Knopf, Elizabeth

Draft report#

Draft Report: Immigration Settings Inquiry
Doc. Date Sort ascending Creator Title
New Zealand Productivity Commission
New Zealand Productivity Commission
New Zealand Productivity Commission

Submissions#

Public submissions on issues paper - Immigration settings inquiry

Public submissions on draft report - Immigration settings inquiry

Evaluation#

Evaluation: Immigration Settings Inquiry
Doc. Date Sort ascending Creator Title
Spencer, Kathy
Bedford, Richard
New Zealand Institute for Economic Research
New Zealand Productivity Commission