Easing border pains

Roger Partridge
Insights Newsletter
27 August, 2020

In mid-April, German sewerage experts were allowed through New Zealand’s tightly controlled border with the country still locked down at Alert Level 4.

At the time, Wellington ratepayers were paying nearly $100,000 a day to ferry wastewater by truck from the city's Moa Point treatment plant to a landfill. The German workers had specialist skills that were needed to fix a pipe that had broken in January.

New Zealand’s small size means both the public and private sectors often rely on international experts with niche skills unavailable locally. Without them, economic activity across the country risks grinding to a halt. With the Alert Level 3 lockdown in Auckland jolting an already faltering economic recovery, ensuring businesses can access the skills they need has never been more important.

Unfortunately, the scarcity of managed isolation and quarantine capacity means exemptions from the Ministry of Business, Innovation and Employment for overseas workers to enter the country are scarce as hen’s teeth. To address the scarcity problem, MBIE starts with a list of priority projects, with businesses not covered by the list needing to make a special case for exemption.

But a recent business survey reveals serious shortcomings with MBIE’s exemption process. Firms report the procedures are overly bureaucratic, inflexible and lack transparency.

Unless the problems are solved, major projects will stall, costs will overrun and critical overseas staff will be lost.

Fortunately, the Government appears to be alive to the problems. The Prime Minister recently said the Government is “keen to get local businesses more access to essential skilled workers to help grow the economy and create opportunities for resident Kiwis.”

The Initiative outlined how managed isolation and quarantine capacity could be upscaled in our July research note, Safe Arrivals. With business willing to meet the cost, existing budget constraints for Government-provided managed isolation could be significantly relaxed. This would increase the range of available facilities.

In the meantime, MBIE must ditch its priority-list approach to granting border exemptions. The Ministry cannot tell which critical workers are most critical to the economy. While it was surely critical that foreign sewerage workers could enter to fix Wellington’s pipes, was it really necessary for scarce spaces in managed isolation to be filled by workers on horse racing tracks?

If there are only a small number of spaces available for critical workers, the Government would do better by auctioning those spaces off among New Zealand firms than by handing them out for free for Ministers’ pet projects.

But the bigger concern is fixing the capacity constraints. With the economy’s unexpected shock from the current Covid-resurgence, it is critical that Government unblocks the pipeline of expert foreign workers businesses need.

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