Skilled labour shortage 'a problem we've got to address', Finance Minister Grant Robertson says

A skilled labour shortage in New Zealand is both a “good problem to have” and one that must be addressed, Finance Minister Grant Robertson says.

Robertson told a business audience in downtown Auckland on Tuesday he recently completed a post-Budget tour the length of the country and “had some 2019 nostalgia” given the number of questions about a lack of access to skilled staff.

New Zealand’s tough border restrictions, designed to keep Covid-19 under control, have largely halted immigration, leaving businesses across a range of sectors crying out for overseas workers as they struggle to fill roles locally.

“It is a 'good problem to have' as the saying goes, but it does allow us just for a moment to reflect that the strong public health approach we took was the best economic approach and has allowed us to live lives of relative normality, albeit with significant impacts felt unevenly across our country and our people,” Robertson said.

He said the need for skilled labour showed the economy was growing and businesses were looking to hire staff not lay people off.

“I’m in no way diminishing it. It’s a problem of growth, but it’s a problem we’ve got to address.”

In May last year, Treasury was forecasting unemployment to peak at 9.8 per cent in September before dropping to 5.7 per cent by 2022.

Last month unemployment was just 4.7 per cent.

“While unemployment is low there are still people who are unemployed and there are certainly people who we call underutilised,” Robertson said.

“That underutilisation rate is still high.”

Underutilised workers were those who wanted to take on more hours but were unable, he said.

Border restrictions were both the cause of the labour shortages but also what had allowed businesses to operate so openly, he said.

“It's a sign of the fact that we’ve recovered much quicker than we expected, but it’s undoubtedly a problem for the businesses who are having to deal with it.”

He said the Government understood businesses frustrations and had taken measures, such as creating a critical worker scheme which had brought in 17,000 people to support businesses. It had also extended working holiday visas so people could stay in the country for longer, and enabled people on a seasonal worker scheme to switch to different industries.

The Government was listening to businesses concerns about labour shortages created by border restrictions and working with sectors to prioritise MIQ spots for workers, he said.

It also wanted to work with businesses, so they could attract workers through improved work conditions, such as offering better pay, more flexibility and access to training, he said.

The Government has signalled an immigration reset is coming to up-skill New Zealand's workforce, increase productivity and reduce the country's reliance on overseas labour, but little in the way of detail has been provided.

The reset was an ongoing process, being worked on by Immigration Minister Kris Faafoi, that would result in short term and long term changes to New Zealand’s approach to immigration, Robertson said.

He said immigration had contributed socially, culturally and economically to New Zealand, and society was better for it.

But Covid-19 had created a rare opportunity to reassess the economic impact of immigration.

“We do need to consider that immigration has had an outsized role in our economic development in recent years and in some important ways that impact has not always been positive.”

Parts of the business sector had become too reliant on continued access to low skilled labour and there had been fewer incentives to increase productivity through investment in capital and new technologies, he said.

“It is not our intention that inward migration should switch from one extreme to the other.
“However, we also need to be clear that this is the right time for an immigration reset.”

There were high growth sectors which required specialist skills that were unlikely to be found in New Zealand, he said.

John Anthony, stuff
July 13, 2021