The maths every employer should run now
The Immigration (Fiscal Sustainability and System Integrity) Bill before Parliament’s Education and Workforce Select Committee proposes a per-day levy on employers who sponsor migrant workers. At roughly $6 a day, that is approximately $2,190 per worker per year. A mid-sized construction firm running 10 migrant tradespeople just picked up an extra $22,000 in annual costs before a single nail gets driven.
Industry groups appeared before the committee in unanimous opposition, calling it another tax on employers at a time of economic uncertainty. Immigration Minister Erica Stanford acknowledged the tension, saying “We don’t want to overburden business”. That assurance rings hollow when the bill’s entire purpose is to recover fiscal costs from the businesses doing the hiring.
A shrinking pool getting more expensive to access
The levy arrives into a labour market that has already thinned dramatically. Treasury’s December 2025 HYEFU recorded just over 10,000 net migrants in 2024/25, roughly one-quarter of the medium-term assumption of 40,000 per annum. The BNZ/SEEK Employment Report for May 2025 revised the year-to-March-2025 figure to 26,351, stabilising around 26,000 annually. Either way, the pipeline of offshore workers is contracting at exactly the moment the government wants to tax access to it.
Meanwhile, the domestic labour market is not picking up the slack. Job ads sat 48% below their mid-2022 peak and 9.6% below year-earlier levels in April 2025. Unemployment hit 5.1% in the March 2025 quarter with Treasury forecasting a peak of 5.5%. Full-time employment fell 12,000 while part-time rose 13,000. Employers are not just facing a cost problem on imported labour. They are facing a structural problem in the domestic workforce too.
The fiscal motivation is obvious
The government’s real driver is not hard to spot. Treasury’s HYEFU forecast the operating deficit at $13.9 billion in 2025/26, or -3.0% of GDP, the largest deficit as a share of GDP since 2019/20. The cyclically adjusted deficit sits at -1.9% of GDP, meaning only one-third of the hole will close from economic recovery alone.
A cost-recovery levy on migrant sponsorship is politically easier to sell than a tax increase on voters. It lands on businesses, who cannot vote, and targets a population, migrants, who cannot either. Fiscal expediency dressed as fiscal responsibility.
Industry has been warning for over a year
In April 2024, EMA Head of Advocacy Alan McDonald warned that New Zealand still had shortages of truck drivers, healthcare workers and construction workers. He said: “Making it harder for motivated workers to come into New Zealand means they will go somewhere else, that hurts business and means our economy misses out.” McDonald also flagged that “continual tinkering with the current settings is off-putting for potential skilled migrants” and confusing for employers trying to keep up.
In December 2024, BusinessNZ Chief Executive Katherine Rich welcomed the removal of the median wage requirement, saying it would “help relieve cost pressures and distortions that this rule created in the labour market”. Removing one cost while adding another is not reform. It is churn.
You cannot tax what you also need more of
The policy incoherence is stark. Net migration has collapsed to levels the government’s own forecasts did not anticipate. Structural shortages in healthcare, construction and transport persist. Full-time hiring is falling. And the policy response is to add a fixed cost to the already-marginal decision of bringing a worker from overseas.
Back in 2022, Interest.co.nz identified a fundamental reliability problem with any levy tied to migration data: Statistics NZ figures can vary from originally published numbers by as much as 85% upon later revision. Any semi-annual levy adjustment based on current data is essentially a guess.
For employers in skills-short sectors, the total cost of a migrant worker, including visa fees, accreditation, levy, relocation and compliance, is approaching the point where leaving a role vacant becomes the rational choice. That is not a labour market policy. That is a slow-motion withdrawal from sectors the economy cannot function without.
The levy is coming regardless of which coalition party’s version passes. Employers should factor it into hiring cost models now, push back through industry bodies while the select committee process is still open, and prepare for a future where imported labour costs more and domestic supply does not fill the gap.
Sources
- NBR: Proposed immigration levy labelled ‘another tax on employers’ (2025-08-13)
- BNZ/SEEK Employment Report – May 2025 (2025-05-23)
- Treasury: Half Year Economic and Fiscal Update 2025 (2025-12-16)
- EMA: Immigration changes might have unintended consequences (2024-04-10)
- Scoop: Immigration Changes A Step In The Right Direction (2024-12-17)
- Interest.co.nz: ACT’s immigration policy would likely see a flood of migrant workers (2022-12-02)