By Bernard Hickey
In all the hullaballoo this week about New Zealand's record high migration a strange fact has emerged.
The number of approvals for permanent residence has actually fallen from over 50,000 a decade ago to 43,085 in the last full recorded year of 2014/15. That's mainly because the number of skilled migrant approvals for permanent residence have fallen from over 35,000 to 24,274 over that decade.
Say what? Surely Winston Peters has been banging on about the ruinously high migration approvals and how it's driving up house prices and clogging up Auckland motorways?
Mr Peters has been on a very high horse about migration, but his main concern is the astonishing growth in the number of working holiday and foreign student visas over that period, and particularly over the last three years.
The Government likes to talk about the amazing turnaround in net migration of New Zealand citizens too and from Australia in the last couple of years, and that's true to an extent. Just under 50% of the 72,000 jump in annual net migration since 2012 was driven by these Trans-Tasman flows and no one is suggesting these can or should be stopped.
But that still leaves an increase of over 36,000 extra people coming in as new migrants over the last year, compared with four years ago. Who are they if they're not permanent and high skilled residents?
MBIE's figures from its annual migration trends publication show international students made up about 20,000 of the increase, while rest came from higher numbers of people with temporary work visas. These include those here on a myriad of working holiday maker schemes and those here on temporary work visas known as 'essential skills' visas.
That 'essential skills' phrase conjures up images of people working here as doctors and filmmakers and software engineers. But the actual details are less glamorous. MBIE lists the top 10 categories of 'essential skills' (with the numbers approved in 2014/15):
| Chef | 2,283 |
| Dairy Cattle Farmer | 1,596 |
| Cafe or Restaurant Manager | 975 |
| Retail Manager (General) | 924 |
| Carpenter | 901 |
| Dairy Cattle Farm Worker | 806 |
| Retail Supervisor | 797 |
| Aged or Disabled Carer | 731 |
| Truck Driver (General) | 401 |
| Registered Nurse (Aged Care) | 372 |
The occupations of working holiday makers and students able to work here aren't given, but anyone frequenting the cafes, bars, dairies, Uber cabs and service stations of Auckland, Wellington, Christchurch and Queenstown over the last couple of years will have a reasonable idea.
And so does Treasury, which arrived this week as an unusual ally for Mr Peters with a sustained criticism of the surge in temporary and student migration over recent years and a proposal for new entrepreneur migrants. It released a series of papers advising ministers over the last year, which firstly showed its growing discomfort with the rise of lowly skilled migrants and the risks they are displacing local workers and repressing wages.
"Secondly, current policy settings may not be doing all they can to support the growth of higher productivity firms and industries, including facilitating the flow of higher skilled migrants to sectors of the economy where skill shortages may be acting as a significant constraint," Treasury officials said.
"In addition, our current approach to selecting migrants may have encouraged reliance over time on lower-skilled labour in some parts of the economy. This may have been discouraging some firms from either increasing wages and working conditions or investing, either in training existing workforce or in capital," they said.
This is the crucial point. Enabling employers to bring in low skilled migrants instead of investing in new technology and becoming more productive so they can pay local workers more is essentially stunting the growth of New Zealand's productivity and real GDP per capita.
In rejecting New Zealand First's calls to slash migration and listen to Treasury, John Key said in Parliament this week that the Government did not always accept Treasury's advice: "I think New Zealand is a far better and richer country for having migration in the way that we do.
"Yes, it puts some pressure on the system, and we just simply need to fund that or build more houses," he added.
Mr Key is right about the pressures on the system and the need for more houses, but he is just plain wrong about our recent migration patterns making the country richer. It has made some people richer by pushing up land prices in Auckland and beyond, but it has led to stagnant wage and real GDP growth and has just lumped a big up-front infrastructure bill on to taxpayers in general and Auckland rate payers in particular.
I've called in the past for New Zealand's Productivity Commission to analyse the effects of our migration policy on the economy, similar to analysis done by Australia's Productivity Commission last year. The final report from that Australian analysis has yet to be published, but the early findings were that a migration shock wouldn't actually boost productivity much, particularly if it was a low skilled migration shock like the one we've just had.
That local analysis is now needed more than ever. Mr Key is reluctant to take Treasury's advice about the need to encourage more skilled migrants. Perhaps he would listen to a Productivity Commission analysis instead.
A version of this article was also published in the Herald on Sunday. It is here with permission.
80 Comments
The number of approvals for permanent residence has actually fallen from over 50,000 a decade ago to 43,085 in the last full recorded year of 2014/15. That's mainly because the number of skilled migrant approvals for permanent residence have fallen from over 35,000 to 24,274 over that decade.
Say what? Surely Winston Peters has been banging on about the ruinously high migration approvals and how it's driving up house prices and clogging up Auckland motorways?
Um, anyone can buy a house here. They don't have to be a permanent resident. We could have zero permanent residents but if we have 100k migrants a year and they are all allowed to buy a house, our prices will go up.
Evrryone knows that most restautent main business is providing job letter for residence in NZ. The owner gets good money that is free of tax and also free or very cheap labour for few years. Cafe and restaurent and many takeaway are only a front business. Same thing happens in many travel agency that is why many a time agency opening up too many branches as each additional branch means additional job letter.
Even many educational institue when they advertise is not for education but by joining their course which is this level course will get work visa. Most institution that people join is not for study but only to get work visa n than residency.
Everything is big racket but no one minds specially govt as money is comming in. How and at what cost to NZ does not matter.
Winston Peter may be correct in many aspect about immigration but just it is Peter Winston, it is bad is a wrong notion.
I think it is current government who are totlay sold out to overseas money irrespective of any cosy to NZ. Current housing crisis is prime example of it and also lack of infrastracture.
National government knows and understand everything but the problem is that as they do not want to act they deny but fail to understand that by denying the exeistance of a problem lthe problem does not go away but come back with a force.
The reason they are in denial mode is election nexy year and they are protecting and do not want to disturb their main voters. So it is just politics and are not at all worried about their country. They are good businessmen but have falied miserably as leader who works for all and see that their is social harmony and just in the country.
Also power is intoxicating and makes one arrogent and stuborn and that should lead to their downfàll - for sure and they too know so may be are just protecting and safeguarding their future prospect after being thrown out next year.
If the government accept and face the reality, may be we will have problem for a short time but will overall be good for long time to come.
Do not feel nice to say that our government is interested in political gain ONLY and does not care about the country. Also in last few years specially they have made enough for themselves and their family and next generations to come so who cares about average Kiwi as it is our just a data for them to be manipulated to suit their vested interest.
Hope next year are not only booted out but should be complitely wiped out in the interest if the nation.
But who to replace them? The Nat's that is.
Many NZ voters may not care.
They are anesthetized by rising house prices.
They look at the latest property junk mail that arrives, and well congratulate themselves on how superficially rich they are.
And slowly but surely the country is lost.
Importing truck drivers to help drive down the wages of citizens just shoots the economy in the foot. Think what would happen if they just paid $10 per hour more. There would be a queue of applicants. People would upskill to do the job. That $10 would flow into the economy -(better than a helicopter throw).
I will pay 10c more at the supermarket, but I can afford it as business will be booming.
truck drivers have always been poorly paid compared to the licenses, laws and hours they need to do the job.
who wants to work 14 hours a day at a job when you could get paid the same for less hours doing many other jobs unless you love doing it.
also new technology will eventually do away with many drivers especially the overnight linehaul depot to depot drivers
http://techcrunch.com/2016/04/25/the-driverless-truck-is-coming-and-its…
I would be surprised to see Key win another election. And in any way after putting PM of NZ on his CV, he can now aim at a UN job to go one better. His pathetic announcement to increase the intake of so-called refugees certainly points to cheap point scoring with a UN.
I think a lot of people underestimate the financial and social costs involved. Look at Australia with their Hawke-Keating Lebanese "refugee" problem. At best you are looking at chain migration ("marrying back" etc) which multiplies the numbers, ongoing above-average welfare dependency generation upon generation etc. At worst, look at Aussie again, you have imported a security threat.
Take note that Key has set aside 50 million NZD for his 800 Syrians for the first three years alone. That is not change and it is not money that would not have better use elsewhere in our society.
The current refugee cult is in my view morally indefensible. 0 refugees is the correct number given child poverty, and so many other social ills our government is refusing to deal with.
Except not all Lebanese who came to Australia as refugees are a bad problem you get bad apples in every group. Lebanon is the only country in the Middle East & North Africa with a major Christian population of (40.5%) while all the other countries have Christian populations of 10% or less.
Somali refugees in NZ have had their own bad apples too such as Somali-Kiwi terrorist Amir Mohammed.
55% of people of Lebanese background in Australia are Christian.
Let us conduct a small thought experiment. Someone you love gets blown up, killed or maimed by one of the few rotten apples. Will you take it like a true philosopher and not care, because that person was attacked by a lone rotten apple? Does it matter less for you then?
Or will you ask why a government imported completely needlessly a security risk? There is one way of lowering this risk to the 0 it should be and the government can take it, if it so choses. If not, it - once again - breaks the social contract and should not be our government.
One should not sacrifice lives for the sake of ideology. I thought humanity had learnt that after the bloody 20th century. But I am wrong. In order to implement the ideology of multiculturalism human lives are being put at risk and to top it off this blatant irresponsibilty is widely portrayed as a form of humanism.
I don't see why such a decision needs to be imposed collectively in this day and age. Surely in this modern age of hyper- individualism only people who want to support refugees should. Would you, Crow22Darkness, be willing to pay a voluntary extra tax of say, $5k a year...for the rest of your life? All very well saying we should double quotas but these things cost money, a huge amount of money:
German states to spend around 17 billion euros on refugees in 2016
The government should create a fund - as you have suggested previously - so that people can put their money where their mouth is. Btw, the AUS govt does it already through a "humanitarian" intake component that is financially sponsored through donations and not tax money.
I take any bet that Mr Crow would be the last person to donate.
I wonder whether the people of Orlando would agree.
Btw, is there any logic to doubling something because it has not been doubled for 30 years? Is that a general rule or something? Given the state the world is in, a reduction of 100% after 30 years of misguided policy would be much more rational.
I can't see any other current party taking a harder line on refugees than National except NZ First. A Labour-Green win would be disastrous in this regard. The trouble with refugees is that there are not just a few but potentially many millions and set to get worse as their populations expand further and the management of the source countries worsens.
Oh, I see now although I'm pretty sure we can still call a spade a spade in NZ. Yes it is certainly something that can be expected unfortunately. I'm not sure it would be a severe blow as such attacks seem to be sadly comparable to transport accidents nowadays. Such an attack should lead to a sort of militarization of the security of such a city in a sane world.
Edit: I hadn't read the latest news when I wrote this comment. Roll on Trump for President.
Yes, a suitable graveyard retirement jolly where money certainly talks louder than ethics.
UN Secretary-General Ban Ki-moon has admitted that his decision to remove the Saudi-led coalition in Yemen from the organization's blacklist came after threats from a number of countries. Human rights groups are urging him to backtrack on the decision. Read more
New Zealand should be increasing its intake of refugees as NZ as hasn't increased its refugee quota in almost 30 years while all other developed countries have done the heavy lifting.
NZ,Japan & South Korea should be take in much more refugees.
Australia is increasing its annual refugee intake to either 18,000 (Liberal) or 27,000 (Labor)
Japan is a very special place, like Iceland and should be regarded as a world heritage country. They shouldn't be forced to change their demographic makeup. In fact Iceland is a very special population that is having some very important gene study work done on it.
For once a BH article I can agree with. John Key's near infantile denial of the obvious is peculiar and irrational. What would he have to lose by taking policy advice from Treasury and improving the profile of inbound migrants? He would appear professional, in control and as making policy for the common good. Given that Labor and Greens will probably shy away from changing immigration policy for the good of our country, it would be a sure winner for Key.
Did Key catch some kind of infection from Merkel when she holidayed in NZ last year? Some sort of mental ailment that makes Key fantasize that he is a genius and king of New Zealand and that any suggestion that the country is not in the best possible state and any of his policies could be improved on can only be an insult to his majesty? Does he suffer from Merkel syndrome?
The flag campaign already pointed towards some kind of trouble, for sure.
Key and co must feel they have a divine right to rule so no changes needed and they have clearly laid it out : nothing wrong with our immigration.
So despite all the evidence to the contrary, huge infrastructure and housing problems with even the immigrants wanting less immigration they seem determined to stick with the current settings. They're surely running out of runway for the next election.
Power has gone to their head as a result jot only PM but all their minister have lost all logical and just thinking. They are so blinded by power that the only way for them is down. Just imagine everyone even school going childern are aware of the housing crisis and is newx day in and day out but they still deny that their is a problem and the denial is only as they do not want to take any action to suit their vested interest.
It is shame and pity that NZ has such a narrow minded pity self centered shallow government.
It sure is. The Keys of this world live off the ignorance and indifference of the masses. That is why we need to limit terms for PMs (e.g a maximum of 2 or a combined time in office of no more than 8 years). People power does not stop the arrogance of the government fast enough, so Constitutional arrangements have to be made.
Nonetheless we also need a lot more elements of direct democracy. If, as in Switzerland, the people are asked regularly to make decisions on policy matters, then many also live up to it and keep themselves better informed and involved.
the education and immigration industries have turned into a huge money making industries that have contacts all the way to the top.
why would the national party do things to hurt there donors, along with the real estate industry.
all you have to do is follow the money, and it takes money to stay in power
The immigration/economic growth model of this government and prior governments is just plain bloody lazy. The shortest route to winning votes is what this country's policy is based on. Of course the Key government will fob off the treasury's advice because it takes thought and sacrifice to implement it.
Government dies not take genuine advise and piks and throw data at us which are faulty and not totaly true like oversea data that was announced and that houses are more affordable now than in 2008.
Natjonal does not understand that the govt now stand exposed with all their lie and insensetive statement and their creditability with newzealanders is so low that even if they come out and say that sun sets in west, people will doubt the universal truth also.
They should listen to the story of wolf has come and stop blufing as you cannot fool people all the time.
Wake up Mr PM as you are in charge and do not pass the blame to other. If u do or not do anything stand up to it.
Oh, New Zealand is following the UK's lead.
Immigration-led productivity shrinkage.
Wasn't it Kosovan doctors driving taxis quarter of a century ago?
Seems like NZ has trouble designing a fit-for-purpose immigration system.
Or are Kiwis really too dumb to pick apples?
Umm... Not so sure, the UK has far more restrictive measures for Non-EU migrants on work visas.
Such as their currently looking to increase their minimum salary requirements from £20,800 ($42,000 NZD) to be raised to £30,000 ($60,000 NZD) for "experienced" workers.
Also under new rules, Business could face an annual charge for each non-EU skilled worker. And for low to unskilled workers these would have been under Tier 3 in their immigration policy, as it was intended to be a pathway for unskilled immigrants. But after the system began operating the British government decided there was no need for further unskilled immigration from outside the EU.
BBC Article: Businesses face £1,000 annual charge per non-EU skilled worker
http://www.bbc.com/news/business-35890751
Me too, one couldnt find the street number on our letter box.
Next time he bought a young guy who succeded in finding the number.
We have some command of english and that should give us an advantage, all we need is motivation and some basic business skills, should be compulsory.
Since the entire narrative of government policy is geared to increasing consumption of energy and resources and increasing levels of pollution, and none of it geared to increasing sustainable production, the present set of arrangements must end very badly. But not just yet.
John Key said in Parliament this week that the Government did not always accept Treasury's advice: "I think New Zealand is a far better and richer country for having migration in the way that we do.
"Yes, it puts some pressure on the system, and we just simply need to fund that or build more houses," he added.
Typical shallow comments from our PM. God only knows how people in this country believe the tripe he comes up with. Looking at the list provided there are thousands of unemployed fellow New Zealanders that we have to support as a result of this madness, let alone the extra infrastructure costs and overall impact on wages.
Don't fret too much., 'Zeds', the system is in the process of 'blowing itself up' via negative interest rates, energy depletion and environmental degradation. Not long to go now.
This is well worth reading if you're not up with the play:
'The Money Cult'
http://cluborlov.blogspot.co.nz/2016/06/the-money-cult.html#more
National is wide open to get absolutely hammered on this, however the Opposition is so weak - apart from Twyford doing a good job nothing much is heard. I suspect Labour's bitter tax pills are not what voters will want to swallow as collateral medicine to voting for clamping down on this immigration scandal. Labour is not yet a viable alternative to National compared to the Helen Clark glory days. It may be that a National and NZ First coalition is the answer, with the latter's immigration policy predominating. It's going to be an interesting year ahead.
Where is this fallacy that the Opposition is so weak coming from? Weak compared to what - Collins, Smith, Joyce, Brownlee, McCulley, Coleman, Woodhouse, Guy -c'mon team get real? English is the only one you would invite round for tea without locking up the silverware.
The issue is one of perception. Touched on here is National's strength in remaining on song even though most would say they are in complete denial of the facts. Crack that and the thrall that most kiwis have in our supposedly worldly PM and a change in government is a shoe in. English daring to say that housing is in crisis is the first real honesty I have heard from National in a long time.
Remember what happened in the safe National forever Northland By Election.
No, of course not. That'd be pretty damn unthinking, don't you think? Unthinking means unthinking, and taking the media and propaganda at face value, wh0ever it's coming from. I'm perfectly comfortable with people disagreeing with me or holding different views. But I'll respect it more if it's based on evidence rather than wishful thinking or just swallowing whatever they're told.
Unthinking - I have a young colleague who is a recent graduate in one of the practical sciences. Quite intelligent but when I discuss politics with him its like I am talking to a vegetable. Ask him how he votes and he says he votes as his father votes. Ask him why and he says he votes like his father votes. At that point I move on and ask him what he knows about National's policies and its about then that he asks me if i have any aspirin.
His maim aim in life is to get a house he tells me........
How common is this in NZ?
Maybe it's just a common human thing. The downside of being a social primate species is dominance hierarchies, tribalism and authoritarianism.
I'm really fascinated by the way these memes are perpetuated. PR people strategically plant a phrase or idea in the media, and before you know it's being parrotted all over, and within a worryingly short time people think it's their own opinion arrived at through a process of reasoned thought.
Sort of lost me at 'Unthinking means unthinking'.
What evidence is required other than the fact that the average kiwi now can't afford to buy an abode in their own country?
These imports going to do anything productive, or just open another takeaway shop and employ their relatives who they ship in under a tourist visa and never leave.
Never questioning what one is told by those 'in authority' would be a better way of putting it. Believing whatever nonsense a politician bloviates. Believing utter nonsense because it is on television 'news'.
An important component of the system that keeps the masses dumbed-down and believing is the 'education' system, which assiduously avoids informing pupils/students about matters they need to know about -the Ponzi nature of the financial system, the finiteness of resources, the cumulative nature of pollution etc.-and fills their brains with trivia and irrelevance.
Another important component of the dumbing-down is advertising. And of course, the food that many people eat lacks essential nutrients, so neither their brains nor their bodies function properly.
All this stuff gets discussed week after week -and nothing changes for the better: indeed, everything gets made worse as time goes by because those in charge are, by and large, psychotic sociopaths. However, most people are too dim-witted to realise. Indeed, many (most?) do not understand what psychotic sociopath means.
Government policys are making NZ look naive and stupid, the immigration scams and student scams, financial scams... We need to be smarter if we are to survive. NZ Inc needs to be innovative, 100% pure and understand that growth is not necessarily better or sustainable. Maybe stop immigration alltogether, and make it easier to tender internationally for skills we need through a govt portal?
Bernard alludes to the obscure practice of subsidising dairy farmers.
Dairy farmers have for so many decades told us how hard they work in all sorts of weather. That sort of talk has put New Zealanders off working on dairy farms, unless they get paid huge money; because New Zealanders have been force fed so many stories about how hard dairy farming is; as bleated out incessantly by dairy farming leaders.
So when dairy farmers offer a wage that seems okay, it is not ok with New Zealanders. New Zealanders demand more to work in such an unpleasant job. But paying the wage that NZers would need to work in that unpleasant job would put the finances of highly geared dairy farmers at risk, and the loan books of the big four Aussie banks at risk..
So, rather than pay the market rate for workers the farmers have been subsidised by importing lots of Filipinos and Uruguayans who will undercut the NZ market. The farmers win; the rest of NZ loses.
Not just dairy farming. It's probably the worst for the reason you describe but the same issue applies in other occupations. A now significant group of NZrs believes it has the right to be idle by choice and thinks others should work longer hours to pay the required tax to subsidise this lifestyle decision. Screams of outrage from the handwringing brigade prevent other than minor policy tinkering on this issue at the political level, so what alternative do governments have to importing willing labour to perform the work our own people refuse to do ?
I disagree Middleman. I believe the NZers are staying on their arse because the wages offered are too low. If the wages were higher then the unemployed would get off their collective bottoms. But the unemployed are relentlessly having their market driven out from under them by big big immigration of people willing to undercut them. And our government is encouraging that to happen.
Although I have been described as a right wing reactionary, I still have a soft spot for unskilled New Zealanders who are, unfairly, the ones getting it stuck right up their chutney.
Southland with it's aging & declining population is becoming reliant on migrants.
http://www.stuff.co.nz/business/73395481/southlands-asian-population-fa…
http://www.stuff.co.nz/business/farming/dairy/80015888/Southland-stands…
The more the national deny the more anguish in people. Early they realize the better for them as now people are able to see the lie of national government (Telling lie 100 time to make it truth now does not apply)) Movement has started as people have started to discuss and critisize government at all level. It is good for the country and democracy.
Momentum will pick up in time to come as national party has become so arogent with power and vested interest that still not able understand that they are in isolation and have lost total crediability.
Best to describe : Nero Filddled While Rome Burned.
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