By Bradley J So and Marcus N Beveridge
Everyone is bracing for the impact of the biggest recession post-GFC. How will New Zealand handle the impact? Many Kiwis are under significant mental, and financial stress as uncertainty looms because of COVID-19. And our economy might be on its knees. The tide of unemployment will continue to rise, but the government will need to balance this with the need for skilled migrant workers. New Zealand cannot expect to continue infrastructure and construction projects in the pipeline using just local labour, not if we want such projects to be done in a reasonable time frame. The decimation of our tourism and hospitality industries will cost us billions. Initially, the talk is that there will be a need to rely on the domestic market and our big brother, Australia, to partially sustain these industries. A significant number of SME’s are likely to fold with regional businesses getting hit the hardest.
Our road to recovery will rely heavily upon these businesses continuing to trade and create sustainable employment. A recent report by ABC Business shows the following trends that are expected to increase in the short to medium term:
- High volumes of newly unemployed people looking to buy businesses to replace their lost income.
- Landlords becoming business owners by default.
- Existing businesses looking for equity partners (rather than bank debt) so they can continue to exist and grow post COVID-19.
- Experienced & cashed-up buyers have become more active, looking for opportunities to purchase at discounted valuations resulting from COVID-19.
How can Immigration help NZ in these times?
At present, business migrants who are wanting to establish and operate a business in New Zealand can rely on our Entrepreneur Residence programme. These business migrants are here to establish businesses or look for local business partners to establish a new business, grow and revitalise existing businesses and create employment for local Kiwis. Over the last 3 years, this category has experienced major decline rates compared to its predecessor. The main culprit is the flawed Immigration Instructions and policy framework. The prescriptive nature of the Instructions makes it almost impossible for business migrants to satisfy. They could create significant benefit to New Zealand and have their residency declined anyway. This is reflected by the exceptionally high decline rate over the last 2 years. At its peak, the decline rate was 97%. Last year, lawyers and immigration advisors made submissions to the Minister of Immigration to either cancel this policy or create a new one that works. Unfortunately, this was not seen as a priority, and no meaningful progress has been made. It is now timely to revamp this policy and make it capable of achieving excellent outcomes. The Entrepreneur policy is indeed a tool of significant potential benefit to the New Zealand economy that our government can utilise to help regional SME’s survive this pandemic.
Over the last two decades, the lawyers at Queen City Law have assisted the government policymakers design different business immigration categories. We are very well placed to do this given not only our direct coal face experience but also our skillset in commercial and business law, tax law, property development and construction, OIO and immigration law. This overview and decades of representing assorted business people and entrepreneurs enable us to assist in formulating policy settings that are workable and sustainable, creating win-win outcomes. Wins for Aotearoa and wins for immigrants willing to come to New Zealand, take calculated risks and pump money and sweat equity into our economy, create employment for Kiwis and other positive downstream economic benefits and hopefully set up enduring business operations that continue beyond the minimum amount of time required for a visa. In reality, getting the right policy settings to exploit this opportunity is not so hard. It just takes good teamwork plus a fair dose of political will.
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