Are We There Yet?
The changing role of skills in NZ’s visa system.
I was almost going to change the title of this article, because I had published one previously (back in 2025) with the same name. However it felt right to keep it, and the content is vastly different. The last one was about decision timeframes, but this one is a little more of a walk down memory lane with the Skilled Migrant Category (SMC) as the backdrop.
Considering we have another round of changes to the SMC coming up in just under a month’s time, it felt about right to take stock and think about how far this category has come, where it stands now (or will stand in a few weeks) and where we might be headed. The SMC is the backbone of our immigration system, generating the long-term skills and contributions our future needs, and it has had an interesting history (even if you don’t follow immigration trends).
Like most countries, with an active immigration system, our “skills” policy plays a critical role in topping up the skills we need, as well as bringing in the skills we can’t produce, and all of that is conducted in a pretty competitive space, with the nearest player being Australia. We also sit in a slightly awkward spot of wanting to select the skills we need, whilst also managing the demand for people wanting to settle here, as the world becomes far more complex and chaotic.
So the question is, are we there yet? Has our SMC, with all its various changes and updates, including those about to land, delivered New Zealand to the right destination; or will we still be hearing that question, from the backseat as employers and migrants alike try and work their way through how the new system will work.
The SMC Over Time
In some ways, the SMC system has come full circle, or perhaps it is a case of history repeating itself. Our immigration system has developed significantly over time, however the use of occupations and skills to identify our would-be migrants, essentially started 52 years ago, in 1974. Prior to that date our immigration needs were met through targeting locations and demographics, rather than selecting skills or meeting labour market demands. In 1974 we moved away from preferring British migrants and gradually changed our stance to focusing on getting the right mix of skills, albeit with an eye still firmly locked on Britain and Northern Europe as key source countries.
Where We Have Been
The attraction and retention of skills in to New Zealand has had a complex history, starting and ending with a focus on a person’s ability to secure a job offer.
In 1986 that targeting became far more agnostic in terms of source, and education, skills, business experience, age (presumably as a measure of contribution left to offer), and assets became the qualifiers, largely blind to where someone called home.
From 1974 to 1986, over a period of 12 years, New Zealand’s immigration landscape made a very significant change, one that many people won’t appreciate. While some country-specific programs remained in place (and still do), this period of just over a decade, marked a move away from simply wanting to bring people in from a preferred country and instead, trying to source migrants, who would provide the biggest impact on our economy. From that point on our skilled system, has followed a relatively consistent path - matching skills to various economic needs, although the vehicle used to deliver that objective has taken many different forms.
In the very early 1980’s New Zealand operated occupation lists, with the preference being the Priority Occupations List and then the aptly named Non-Occupational Priority List, to offer hopeful migrants a potential pathway. These were highly restrictive and whilst some exemptions were offered for those without a job or not on a list, they were very limited in availability.
In 1987 and the introduction of the 1987 Immigration Act, the system was divided in to three streams - Skills and Business, Family and Humanitarian. If that sounds vaguely familiar, it should, because that concept of streams has largely remained in place for the last 40 odd years. We identified at this point, that in terms of migrants we need to manage them via these three separate buckets.
In 1991, the ground shifted again, although the overall objective remained the same, we saw the first version of a “points-based” system. The previous occupation focus was arguably too restrictive and so the 1991 the General Skills Category sought to replace that with a process where an applicants overall profile of education, experience, connection and financial assets were assessed to determine suitability. This category also did something quite unique to our previous attempts, in that it removed the need (mostly) for a job offer up front.
I remember joining the industry towards the tail-end of the General Skills Category, where applicants would qualify, by virtue of their profile, versus today where the biggest challenge is securing the job offer (and all applicants now, do need one of those). The General Skills Category existed for twelve years, modified and adjusted but largely intact.
By 2003 however, the category was drawing significant criticisms - rocket scientists driving taxis, and physicists stacking supermarket shelves were the key complaints. The lack of a job offer component meant that matching skills to labour market demands was often a bit of a guessing game. Highly skilled applicants form labour markets vastly different to ours, struggled to get work and even they were starting to complain about the process.
In 2003, the Skilled Migrant Category (we call it “SMC”) was then created and has been in existence for 23 years since, although dressed up in a variety of different versions. The big difference between the SMC and its predecessor was the highly selective nature of the process, points were ranked against occupation lists, tiers were created for those with and without jobs and applicants were placed in to selection pools, based on shifting pass marks. Not all of these things happened all at once of course.
In 2017 the system gradually started to creep towards the job offer taking priority. This was based on a number of compounding factors, but the wheels were set in motion to arrive at where we are today. One of the bigger shifts that also became apparent in 2017 was the introduction of remuneration (hourly wages) as a proxy for skill. Over the last nine years that measure (salary and wages) has become entrenched. It sometimes feels like we get a hold of one component of a skilled migrant applicant and then drag it out until we eventually realise, there are other things to consider.
The most interesting part about this 52 year history is the fact that we started with jobs being centre stage, and have come back to that point again. It makes sense - the category is all about skills, and the measure of how compatible those skills are, is whether they can find a home in our labour market system. However, the mechanisms we have used over the years, to quantify and qualify those skills and then allow people to stay have had more twists and turns than a licorice rope.
That of course brings us to the current state of play and the next round of changes due to hit the streets on 24 August 2026.
The Current Criteria
In 2023, the former Labour-led Government rolled out a revised SMC system that removed a lot of the complexity in the system. Up until that time, and despite a brief pause in the program (thank you Covid), we had a large list of possible points options for migrants to use. While that provided optionality, it also created some confusion for officers attempting to assess and verify all of those points claims.
The 2023 changes were a pretty big shift towards a leaner and far more simple points based system, which had a brief life up until the present day, but in a few weeks will be updated again. The six-point program rode alongside our “Green List” options, which were really just an updated version of our previous Long-Term Skill Shortage Lists. Having a points and occupation system in tandem allowed for greater flexibility.
Where We Have Landed
The Government is about to roll out further SMC changes in an attempt to open up the system to more skills and simplify some of the wage assessment criteria.
The one issue I do have however with any Government attempting to “simplify” things, is that it often isn’t for the benefit of the applicant. The 2023 changes were mostly geared towards “dumbing down” the system, making the assessment process easier and removing much of the verification - a good example is the fact that previous work experience (from overseas) is largely non-existing in the current points system, because it required officers to undertake verification processes, that could be difficult to complete.
What was also lacking in the system was an appreciation that no every applicant has a degree, earns a high salary, or works in a registered of very specific occupation, but can still be a very valuable migrant - e.g. those in the trades and those with good skilled work experience. The August 2026 changes attempt to address that problem, by opening up two new pathways for those specific people, while also reducing the overall time it takes to secure residence for everyone else in the points-based camp.
I won’t go in to great detail on those changes here, because I have already written about them here. What I will however discuss is how these changes have actually created more complexity than they needed to and why that could become a much longer term problem for migrants, INZ and the Government.
Remember, our approach to skilled migrants started (50 years or so ago) by considering the value of an applicant as measured by the job they do, and we have ultimately come back to that point now and over the last decade or so. However the nature of work, how economies function, how quickly those things can all turn upside down and the world in general have become incredibly more complex. When the Government considered occupations and migrants in the 1980’s they didn’t have to factor in content-creators, remote workers and AI. People’s longevity in jobs was different, their approach to careers was different and basically everything we measure in terms of skills and experience was different.
Our need for skills has changed and while the current system rewards those who meet those current demands (by getting a job offer to fill a role that exists today), it places little to no value on what we might need to build in the future. Our system has become very reactive, as opposed to borrowing elements of previous approaches that were vastly more proactive.
Where Are We Headed?
Consider this - over a period of 50 odd years, how we treat skilled migrants has largely remained the same. Yes we have changed how assessments are undertaken, the points we might assign and the actual process by which an application is lodged - however fundamentally, our approach to what we consider skilled, hasn’t varied all that much. We tend to see migrants as “units” of labour or economic input and depending on the Government in charge, they are either viewed as a valuable necessity or a bit of a grudge purchase. However, no matter who is in charge, the simple fact is we need migrants.
Where We Are Heading
The real question for future Governments and policy-makers is whether we simply keep tweaking what we have, or do we need to rethink the approach altogether?
New Zealand has a structural need for skilled migration, driven by population ageing, comparatively limited domestic training capacity, outward migration and persistent occupational mismatches.
That does not mean New Zealand has an economy-wide shortage of workers at all times, or that higher migration automatically lifts productivity. Migration is highly cyclical and demand changes over time, but a long-term view of our system, clearly demonstrates that skilled migrants don’t just fill gaps, they have built our country. That trend is almost certain to continue, particularly as we continue to lose people who go elsewhere and as the mobility of labour and work changes.
However, how we select migrants in the future is something I think we need to have a grown up conversation about. I recently met someone very senior within INZ, to discuss various things and as we moved through the discussion, on to the new SMC changes, they made one simple comment that stuck with me “what are we trying to achieve?”. Couldn’t have said it better myself.
We have tinkered, fiddled, tweaked and patched up the system so often, its a wonder it still exists in one piece. This approach is partly based on political expediency (its easier to change than to reinvent) and also partly tied to a massive investment in IT, that makes it harder to unwind entrenched processes. There has also been a developing trend to develop policy around what we can’t do, rather than what we should do. Take for example, the upcoming changes where under the two new pathways, previous “self-employment” cannot be claimed. Why? Because its too hard to verify.
We have also become incredibly good at substituting genuine assessments, with proxies for skill. Qualifications, occupation classifications, income thresholds - all designed to quantify and codify migrants into measurable units. The question is whether those proxies result in the skills we attract being deployed in the right place.
Recent migrants are highly educated: about two-thirds of migrant employees surveyed in 2022 held at least a bachelor’s degree. Yet 18% said their job did not match their qualifications or skills, with a further 11% reporting only a partial match. Among those experiencing a mismatch, 34% could not find work in their field, 20% said their qualifications were not recognised, and 15% said employers did not recognise their previous experience (stats from MBIE).
We have also created a very reactive policy - when industries squeal, we bend. We create pathways for specific sectors because there is a labour supply issues, putting aside the question as to whether those skills are actually valuable long-term. Our system feels a little bit like that kid with the dyke…
If what we are trying to achieve is to simply react to current labour market demands, then the system is probably okay. However I dont think that is what New Zealand is trying to achieve. I think we need to consider both the short term needs of the economy and the longer-term valuable that highly skilled and qualified applicants can bring.
I am not suggesting that we abandon a points based system entirely, because you have to have a measurable way of identifying good applicants, but how that system delivers both the short term needs and long-term value could be different. A hybrid model perhaps, that looks both at what we need now, and what we can use in the future.
New Zealand was the third country to introduce a points-based system (Canada kicked it off and Australia came in behind, 13 years later), and we were the first country to introduce a pool system (the Expression of Interest). We have juggled skills and their place in the economy for decades and yet, our innovation in that respect has been pretty limited in more recent years. I think, before we do any more fiddling or tinkering, New Zealand as a country, needs to answer that key question - what are we trying to achieve and from there build a new system, one that reflects the modern world of work, and considers not just what we need right now, but what we will need to build and grow this country in to the future.
Your New Zealand Journey
One significant impact of our changing SMC system is the uncertainty it brings and for many prospective migrants, knowing which way policy-makers might be heading, can be like trying to navigate without GPS. One thing that underpins a good immigration process is certainty - most migrants, don’t wake up one morning, decide to pack their bags and give it a go in another country. It usually involves significant planning, investment and time to make the move successfully and that can be challenging when the goal posts keep moving.
This is why, having a real conversation about what the future of our system might look like, is not just important but crucial. New Zealand might consider itself as a top-tier destination, but our position in that list is constantly being challenged by other countries, with a similar view.
If we persist in patching the system up, every time we find a leak, or moving the pieces around because a certain sector of the economy needs some more people (and then shifting them back when they don’t), we run the very real risk of slipping further in terms of that market position.
If you are considering the move here, and perhaps have been tracking the numerous changes that have rolled out over the years, the one thing to remember is that New Zealand has and continues to need, good, skilled people - people who can bring those skills in to the labour market and add value. I have worked in this space for a very long time, and there is a continuity in amongst the very regular policy updates - I am still working with a similar profile of applicant as I did over twenty years ago. The mechanics have changed, the process is different, the forms are digital, but arguably it all comes down to being skilled.
Ironically that seems to be the answer in terms of what we are trying to achieve, and as simple as it sounds, skills are what we need - perhaps we just need a better way to attract and retain them…I feel a further article coming on.
Until next week.
