➡️New Zealand has proposed a new amendment aimed at improving the fiscal sustainability and strengthening the development of the immigration system.
➡️Once these changes are in place, we can expect noticeable shifts in costs across several areas of immigration.
➡️Out of the ten proposed amendments, two are directly linked to the fiscal sustainability of the system, and those are the ones we will focus on here.
➡️At this stage, it is not yet clear whether the current levy paid by existing levy payers will be increased, or whether their levy will stay the same with a separate extended levy introduced for new stakeholders such as employers and education providers.
Amendment 1 – Expanding the Immigration Levy Base
What is changing
The immigration levy is currently paid mainly by certain visa applicants. Under the new rules, more groups would contribute:
- Employers who hire people on temporary work visas.
- Education providers who enrol fee-paying international students.
Why this matters
The aim is to shift a greater share of the cost to those who directly benefit from immigration, such as businesses that gain skilled labour and schools that receive international student fees.
Potential fiscal impact
- This change could increase total levy revenue for the country, but the overall expense of the international students or the workers might increase.
- The additional funds would help cover more of the system’s operational expenses.
Amendment 2 – Expanding How Levy Revenue Can Be Used
What is changing
At the moment, levy funds are mostly used for immigration-related services. The amendment allows the levy to also support:
- Education system: building school facilities, funding specialist teachers, teacher training, and learning support, where demand is linked to immigration.
- Health system: covering extra costs caused by parent visas.
- Skills training: helping to train the domestic workforce, especially in areas where employers bring in already skilled workers from overseas.
Why this matters
The government is linking levy spending directly to public service costs that rise with immigration.
Potential fiscal impact
- Levy funds could be redirected to these areas to meet demand.
- Employers hiring from overseas would contribute to training costs that would otherwise be met through other funding sources.
