Good morning ladies and gentlemen – I’d like to acknowledge the Hon David Caygill, Chair of the Education New Zealand Trust and Robert Stevens, CEO of Education NZ. It’s great to be here, to have the opportunity to discuss a very important sector of the New Zealand economy – export education.

I’d like to begin by briefly mentioning the importance of immigration to the New Zealand economy in order to give wider context to the value of export education.  

There’s no question that migrants put more into New Zealand than they take out. Migrants contribute 25 per cent of government revenue and account for 18 per cent of government expenditure. In 2005/06, migrants contributed 68 percent more in taxes than they received in benefits. And between 2001 and 2006, 60 percent of New Zealand’s workforce growth came from migrants.

Immigration is a major contributor to New Zealand’s economy … as is export education. Export education is one of New Zealand’s top five export industries, generating over $2 billion annually in foreign exchange for New Zealand’s economy. In addition, there are an estimated 32,000 jobs associated with the export education industry. Export education is big business for New Zealand, but of course, it could be much, much bigger.

Despite a downturn in the export education industry from 2002/03, the market for students studying in New Zealand is showing pleasing signs of growth, even in the face of the current economic recession.

In 2008/09 almost 74,000 foreign nationals were approved student permits.  These figures are six percent higher than 2007/08. 

This increase has come from non-traditional markets – for example a 42 percent increase from India, a 20 percent increase from Germany, and an 18 percent increase from Fiji. 

China, New Zealand’s largest market, has seen an 8 per cent drop in the number of foreign nationals approved to study in New Zealand from 2007/08.  Foreign nationals from China currently comprise 20 percent of people approved to study in New Zealand, down from approximately 50 percent in 2002/03.   

The number of foreign nationals approved offshore to study in New Zealand (a proxy for first-time students) has increased by 11 percent since 2007/08.  This increase is driven by 38 percent more approvals from India, 22 percent more from South Korea, and five percent more from China.

Part of the growth can be attributed to a low exchange rate which favours visitors, and tightening of entry criteria in the United Kingdom and Australia – two of our key competitor countries. 

The emerging growth in numbers is positive, but not a reason to be complacent.  The number of foreign nationals approved student permits for 2008/09 is still 16 percent lower than the peak of around 87,800 approved in 2002/03. 

Immigration New Zealand obviously has a big role to play in the facilitation of export education.

I’ve got ambitious plans for immigration. We recognise the vital role it will play in New Zealand’s future social and economic development. But it will only do this if we get the policy mix right and improve the performance of Immigration New Zealand — in other words create a world-class immigration service.

In recent years immigration has been in the headlines for all the wrong reasons. In recent times the reputation of Immigration NZ has come under fire amidst the release of the Auditor General’s report and earlier in the year the Pacific Division Review also reflected in an unfavourable way on Immigration New Zealand.

You’ve probably all seen it or heard about it but the Auditor General’s report found an unacceptable variation in the quality of decision making between branches, training provided to staff, procedures for reducing back logs, and I’m afraid the list went on.

Basically it painted a picture of a siloed organisation where people don’t talk to each other, the management practices are poor, and there’s a lack of standardisation in the way things are done across the service.

I am under no illusions that there is a lot of work required to bring Immigration New Zealand up to scratch and it’s a number one priority. The Chief Executive of the Department of Labour has undertaken to implement all necessary steps to turn the organisation around. There are some pretty significant organisational changes which will need to occur so it’s not something which will happen overnight but in two years I would expect to see significant improvements at INZ.

Aside from the bad news there has been some good news also in the immigration portfolio. New Zealand’s net migration inflows are now above the average of the past 10 years.

Permanent and long-term migration statistics for the year to June show a net gain of 12, 500, more than double that of the year to June 08.

We acknowledge this has much to do with the current global recession and returning Kiwis. In addition, fewer Kiwis are heading across the Tasman.

That aside, this is great news for the economy. A recovery in immigration could bolster spending and create a demand for housing. Thanks to increased net migration, some economists are even predicting a solid housing recovery this time next year.

Some more good news .. last week we announced our new business migration policy. Stakeholder feedback indicated that less restrictive policy requirements would facilitate a greater flow of capital into New Zealand.

Business migration has been a particular area of concern – the policy settings for it haven’t been right with capital requirements and language levels too tight, and the choice of investment vehicles being too prescriptive.

The new business migration policy addresses these problem aspects and aims to bring in the capital and entrepreneurial skills that the country badly needs.
 
The policy creates two new business migrant categories. It also introduces the Entrepreneur Plus category, which offers a faster path to residence for higher value applicants.
The government’s immigration manifesto said that New Zealand can benefit significantly from having more business migrants – investors and entrepreneurs. In addition, the recent Jobs Summit also agreed that attracting business migrants is one of the near-term and high priority initiatives. So that’s the good news in immigration– now back to export education.

Student Visa processing times

I am aware that processing times can have a significant impact on New Zealand’s ability to capture a higher share of the international student market.  Delays in obtaining student visas can see students bypass New Zealand as a study destination.

INZ processing times are a constant source of criticism.  However, it is important to note that application processing times are impacted by a range of factors, including the completeness of applications received, the volume of applications received, and the quality of those applications. 

Providers and agents can help by ensuring that applicants submit complete applications. 

Other reasons for delay include: additional medical / character investigation, verification concerns (e.g. previous academic record, evidence of funds), and fairness and justice processes that require us to inform applicants of information that may adversely impact on the decision. 

However, that’s no excuse for poor performance. We do need to work on improving processing times. In Australia, they are able to process student applications within six hours, in New Zealand I’m afraid it can take up to six weeks. That’s an issue for us in terms of upgrading systems to support the delivery of service.

New Zealand’s immigration policy needs to evolve constantly in order to remain competitive with our key competitors: the United States, the United Kingdom, Canada, and Australia. 

Being competitive is not just about replicating our competitors’ policies.

It is also about finding new and innovative ways to make New Zealand ever more attractive to international students.

While a range of factors influence students’ choice of study destinations, such as the quality of education and the cost of studying offshore, it is clear that a world-class immigration service is a prerequisite if we want to foot it in this globally competitive economy.

The Minister of Trade, the Minister of Education, sector representatives and I have been in discussions as part of the Export Education Roundtable.  These talks have focused on what we can do at a strategic level to facilitate growth in the export education industry. 

From an immigration perspective, we need to take a hard look at the way our immigration system currently operates, building on our strengths, and acknowledging and improving areas of weakness, while carefully managing immigration risks.

In addition to the roundtable discussions, I have been actively meeting with a range of industry stakeholders (e.g. English New Zealand, Education New Zealand) to better understand the issues facing the export education industry.  The meetings have provided valuable insight into the areas of concern, and opportunities that exist for improving New Zealand’s ranking in the industry. 

The feedback indicated that both immigration policy and operational issues impact on New Zealand’s ability to effectively compete in the global education market, and that more work can be done to better support the industry. 

Recently introduced policy changes

Working Holiday scheme changes
There is some work that has already been completed to ensure that NZ immigration policy is more competitive on the international stage.

In July 2009, we introduced changes to the study entitlements for working holidaymakers which allows them to study multiple courses, for a maximum duration of three months.  Previously, working holiday makers could only study on one course.

It also allows participants from schemes with Canada, Germany, Japan, Taiwan and the United Kingdom to study multiple courses for a maximum duration of six months. 

These changes make New Zealand more competitive with countries like Australia and Canada, and provide more incentive for young people from overseas to come to New Zealand for a working holiday.

However, its also important to note that student numbers are not the sole indicator of the success of the industry.  It is vital that New Zealand attracts high quality students who genuinely intend to study, and have the potential to contribute to New Zealand.

Later this year, the Department will be looking at whether our existing student policy requirements are effectively assisting the entry of genuine students, and whether other opportunities exist to encourage growth in the industry.  

I understand one area of interest to the industry is the issue of students changing course and/or provider (otherwise known as waka jumping)

The government has been made aware that some students obtain student visas offshore for a specific course at a provider, and then deliberately change to cheaper, lower level courses at other providers on arrival in New Zealand. 

This issue is complex and involves a range of key players – providers, agents and students.  The practice not only exposes New Zealand to immigration risks, but also impacts adversely on providers and the wider industry.

In consultation with the sector, Immigration NZ has been working closely with the Ministry of Education and the New Zealand Qualifications Authority on this project to identify options for addressing this behaviour.

From an immigration perspective, further work is being done to ensure that only bona fide students can change their course and/or provider. Subject to further decisions, any changes are expected to take place later this year.

It is clear that there are a number of challenges ahead for the export education industry in terms of encouraging growth and sustainable employment. 

The government is committed to working together to identify opportunities for the immigration system to remove barriers to the export education industry, while ensuring that immigration risks can be effectively managed. 

The current headlines in Australia surrounding Indian students who have chosen to study in Australia purely to gain residence highlight the importance of this. 

I would like to conclude by acknowledging the important contribution each and every one of you has made to the export education industry.

This conference provides a valuable opportunity for the industry to share ideas and to reflect collectively on what we can do better to grow the industry.  I would encourage you to engage with immigration officials today if you would like to raise any issues of interest to the industry.    

Thank you.