So what is the current rate in New Zealand? Its running at 2.5% per annum, given that in the past year net migration has been 130,000. The Australian government says it will halve the migration intake within two years in an attempt to fix the country's "broken" system. An important part of that plan is strengthened visa rules for international students.
Where is your plan, Mr Luxon? You told the media this year that you want to "rebuild the overseas student industry, which was a huge source of university funding", in other words, the reverse of what Australia is now doing to cut immigration. Are you planning to pack in more immigrants, even as the per capita incomes of native NZ'ers drops, as it is currently doing? I didn't trust your statement this week that our current immigration level is "unsustainable" and related to catching up from the Covid years. The UK and Australia and many other countries are also in that same situation yet their immigration rates are far lower than ours and they have already drawn up plans for cuts. What's more, on 7 September this year, you vowed to increase immigration even more, saying "Migration does have huge tax benefits for us. It does have economic multiplier effects". That was only three months ago.
You have an urgent problem on your hands, one that needs addressing before Christmas, before it overwhelms our schools, our roads, and our hospitals. Mr Luxon, do you fully comprehend the scale of this matter? Where is your plan to half the numbers?
John Key got away with high rates of immigration, rates that are way higher now, since there was less pressure on infrastructure a decade ago & economic growth was strong, whereas you, Mr Luxon, you are sitting on a stagnant economy, a world situation full of staggering risk, and falling living standards of locals. Meanwhile, Mr Peters, was it you who said in 2017 that the "massive immigration influx is distorting all the economic indicators", creating a "flattering but misleading impression that NZ is an economic success" and "government spin is that we can manage a staggering influx of immigrants each year with no cost"?
As DownToEarth Kiwi warned National many times before, although their Finance Minister, Nicola Willis worked in John Key's office, and their Chief Economic Adviser, Matt Burgess, was also Bill English's Chief Economic Adviser, should the Party run the economy the same way John Key ran it, sentiment may sour on their ability to provide solutions.
Sources:
https://www.nzherald.co.nz/business/annual-net-migration-gain-nears-130000-smashing-records/RTCTCVTG6NGFRJXVNWJJQGQZAE/
https://www.newshub.co.nz/home/politics/2023/09/election-2023-national-vows-to-boost-immigration-to-help-new-zealand-economy.html
https://nz.news.yahoo.com/australia-halve-immigration-intake-june-045122569.html
https://www.odt.co.nz/news/national/luxon-criticises-slow-return-international-students
https://www.stuff.co.nz/national/politics/92163124/winston-peters-says-immigration-is-all-about-ethnicity-and-race
Where is your plan, Mr Luxon? You told the media this year that you want to "rebuild the overseas student industry, which was a huge source of university funding", in other words, the reverse of what Australia is now doing to cut immigration. Are you planning to pack in more immigrants, even as the per capita incomes of native NZ'ers drops, as it is currently doing? I didn't trust your statement this week that our current immigration level is "unsustainable" and related to catching up from the Covid years. The UK and Australia and many other countries are also in that same situation yet their immigration rates are far lower than ours and they have already drawn up plans for cuts. What's more, on 7 September this year, you vowed to increase immigration even more, saying "Migration does have huge tax benefits for us. It does have economic multiplier effects". That was only three months ago.
You have an urgent problem on your hands, one that needs addressing before Christmas, before it overwhelms our schools, our roads, and our hospitals. Mr Luxon, do you fully comprehend the scale of this matter? Where is your plan to half the numbers?
John Key got away with high rates of immigration, rates that are way higher now, since there was less pressure on infrastructure a decade ago & economic growth was strong, whereas you, Mr Luxon, you are sitting on a stagnant economy, a world situation full of staggering risk, and falling living standards of locals. Meanwhile, Mr Peters, was it you who said in 2017 that the "massive immigration influx is distorting all the economic indicators", creating a "flattering but misleading impression that NZ is an economic success" and "government spin is that we can manage a staggering influx of immigrants each year with no cost"?
As DownToEarth Kiwi warned National many times before, although their Finance Minister, Nicola Willis worked in John Key's office, and their Chief Economic Adviser, Matt Burgess, was also Bill English's Chief Economic Adviser, should the Party run the economy the same way John Key ran it, sentiment may sour on their ability to provide solutions.
Sources:
https://www.nzherald.co.nz/business/annual-net-migration-gain-nears-130000-smashing-records/RTCTCVTG6NGFRJXVNWJJQGQZAE/
https://www.newshub.co.nz/home/politics/2023/09/election-2023-national-vows-to-boost-immigration-to-help-new-zealand-economy.html
https://nz.news.yahoo.com/australia-halve-immigration-intake-june-045122569.html
https://www.odt.co.nz/news/national/luxon-criticises-slow-return-international-students
https://www.stuff.co.nz/national/politics/92163124/winston-peters-says-immigration-is-all-about-ethnicity-and-race
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
4 comments:
Spot on Robert.
The country has had to endure a constant stream of immigrants for years that have a flow on effect and yet no politician will discuss the issue.
At least in Australia policy is being questioned and journalists like Judith Sloane, Peta Credlin and Terry Mcrann give a good analysis of the issue.
We need to concentrate on productivity and not a BIG New Zealand policy approach.
John
The problem in NZ is productivity and more modestly skilled immigrants is no help.
If you look at the infrastructure and general community cost of a family arriving in NZ it exceeds $2m.
Think in terms of a house all services, electricity, sewerage, water, roads, plus the need for shops etc. If the same amount was directed to improve our plant and machinery so to speak robotics, CNC, computer power, and education we would see a rise in incomes and no extra burden on our over stretched infrastructure.
This can be done by changing depreciation rates on plant and machinery to 100%/yr and remember this is only a tax delay not a tax giveaway, many countries do this or similar to energize productivity.
Excessive immigration has been a major problem since 2013. In the period from 2013 until 2020, when Covid stopped immigration, the net migration gain was 480,000 people. Thats huge! 10% of the population, equivalent to the population of greater Wellington. That lead to all sorts of infrastructure shortages: housing, roading, education, medical… And now immigration has kicked off again at even higher rates.
Immigration is a huge short term boost to the economy. It increases aggregate demand and increases the supply of labour, and capital. However the long term cost is enormous. Net, net there’s no gain to the living standard of NZers. Some labour shortages may be plugged but the infrastructure cost is massive. We need to focus first on getting the large numbers of people on benefits into the work place. Some 11% or 350,000 people of working age (16 - 64) are on benefits. That’s unsustainable. Immigration is not the answer.
Yes, it was an easy way to stimulate the economy, but it's by no means a longer term fix and now with our GDP figures down, how bad is that going to look on a GDP per capita basis? Our housing issues aren't going away anytime soon, nor our other roading, water and energy infrastructure problems. While Labour are by no means exonerated, Luxon and Co (who are loaded up on residential real estate), will be thinking it's not so bad, but the rest of us without that kind of personal wealth are going to feel the consequences. You're right, Robert, to call this out and ask what they're going to do about it? They need to act, and now!
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