The Labour Party would consider putting the brakes on New Zealand's rate of immigration - citing the impact on house prices as a factor.
While Labour finance spokesman David Parker made no reference to the potential new policy when releasing the party's monetary policy statement this week some detail is contained deep in the document (on page 13) in a section headed: "Counter-cyclical easing back on inwards migration or work permits."
In this section the statement refers to a 2011 Reserve Bank presentation, which said, when talking of the housing boom of the early to mid-2000s, "there is little real doubt that the major precipitating factor was the
huge swing upwards in net migration earlier in the decade (at a time when monetary policy was probably looser than it should have been). Net migration appears to be more variable in NZ than in most advanced countries, and at the peak in 2003 total net migration was adding 2% a year to our population, from net outflows only a couple of years earlier".
The RBNZ has done subsequent work last year, which said the recent strongly surging migrant inflow could increase house prices by around 7%, and increase the number of monthly building permits by around 150 this year.
The issue of foreign buying of houses, particularly in the heated Auckland market, has become very contentious. Labour, along with other opposition parties, already has a policy that would see New Zealand adopt similar measures to those in Australia, where offshore based buyers cannot buy existing houses, but may buy new onces.
The new Labour policy statement said the rate of net migration had been seen by Reserve Bank study to be "a driver of housing demand which has impacted on house prices, consumer confidence, in turn influencing consumption and general price inflation".
Net migration varies enormously. According to Statistics New Zealand the highest net gain ever recorded was 42,500 in the May 2003 year. The highest net outflow was 43,600 in the July 1979 year. Over the last 20 years (December 1994–2013 years), New Zealand's annual net inflow of migrants has averaged 11,700.
At the moment there is a huge upswing in net immigration, caused mostly by fewer Kiwis leaving to go abroad, particularly to Australia. However, there has been a steady move upwards of the number of inbound migrants as well.
Based on current rates (over the past three months) of net immigration, New Zealand is gaining people at the rate of about 42,000 per year which, if maintained would see net migration come close to record levels this year.
The rates of immigration is being watched closely by the RBNZ and was referred to by the central bank in its statement announcing an increase in the Official Cash Rate last week. The RBNZ noted that "net immigration continues to increase, boosting housing and consumer demand".
The Labour policy document noted that immigration "tends to be pro-cyclical, with higher net inwards migration rates coinciding with strong local economic conditions".
"There may be a case for varying inward migration and/or work permits in a counter cyclical manner," the document said.
"This would require consideration of a range of factors, including the lag time between approval and arrival, the wage effects of inward migration at times of supply constraints, and the need to meet skill shortages."
18 Comments
A true breath of fresh air.
As long as the numbers include all returning citizens and residents ahead of others this should work.
Unfortunately in recent years the exodus to Australia has clouded the real numbers of new residents granted access. Now under a realistic control no new immigrants would be allowed in while we accommodate our own.
We definitely need to take a breather while we get on top of the housing backlog.
And a question ....What are these migrants doing for a lving ?
Our unemployment rate statistics do not show the real picture of piece rate workers , casualised labour , under-employment , contract workers or part-time workers looking for fulltime work .
Nor do sickness beneficiaries get counted , and many of them can work .
We still have structural unemployment at the unskilled or semi-skilled levels , so why do we let more people in ?
Your question is one I often ask myself. Is the policy not supposed to relate to skilled worker shortages or alternatively, high wealth individuals? This being the case, why I so many operating $2 shops, suburban booze and legal high shops, dairies, taxis and the like. I do admire their work ethic and entrepeneurial skills, but I find it odd they fit a criteria.
With respect to skill shortgages, nursing is another oddity. There are numerous nurses graduating in NZ, only to find the jobs in the rest homes have gone to Indian and Phillipino imports and the hospitals are alsol bringing in large numbers. Many of these are from poorly trained quick set up 'school's. Mean while our own graduates are left jobeless.
Some real crazy stuff going on with our immigartion - needs a torch shone on it badly
"This being the case, why I so many operating $2 shops, suburban booze and legal high shops, dairies, taxis and the like"
Yep....that is one good Q.
Nursing, rest homes pay poorly and its not a pleasent job, hence you'll find most newly qualified nurses wont work there. Also you dont need qualified nurses there but helpers.
regards
Well that is speculation on your part, I mean no Govn MP/Minister has said this? The property bubble is becoming an election issue, which will cost them votes. Now yes what you suggest is a side effect, but their direct intent? I find thet hard to believe, political dogma, yes sure.
Other asset bubbles? since you used the plural?
Sure I see property as one, cant say much else jumps out at me at least due to immigration.
regards
I just about wrote Labour off after that stupid baby bonus policy anouncement that encouraged people who can least afford them, to have babies then cut off the funding after two years when children are just starting to get expensive ( and keep on getting increasingly expensive into their late teens.) However the creative and intelligent variable Kiwisaver contribution policy and suggestions of reigning back immigration make a lot of sense. Slowing population growth would significantly help control house prices, reduce the demands for foreign borrowing to fund housing and infrastructure growth and thereby lower our rate of exchange, free up labour from the construction sector to be redeployed in more export focused enterprise, and finally force us to raise our dismal productivity to compensate for the lack of plentiful foreign immigrants. Get these things right and we should sustainably raise the incomes of all New Zealanders and thereby remove the need for silly baby bonus election bribes and the entrenched social welfare for a large proportion of our population by way of the Working for Familly scheme, Accomodation Suppliments etc.
Yet counter cyclic ie allowing more ppl in while in a recession, while I assume un-employment is higher than normal is just nutty IMHO.
I really fail to see why with 6% un-employed we have a net inflow, better to offer subsidised tertiary education/apprentiships in needed skill areas to NZers IMHO.
regards
Exactly. Raise the education, skills and hope of our existing population rather than grind them down further by giving their jobs to immigrants. (and by existing population I include recent immigrants. Consider the poor immigrant taxi drivers hanging arround the airport making $4.00 per hour) People will rise to met the opportunities and hope given to them. I really believe that because I have had so many conversations in planes and airports with ex NZ'rs now living in Australia where they have cleary advanced there skills, achievement and material comfort, whereas if they had remained in NZ they were getting nowhere and a drain on the state.
That's it, you see, as this whole grow, grow, grow thing has no full stop at the end of it. A few years ago it was suggested that NZ would be better with about 5 million people, and now that we are nearly there the ante is being upped to an oft heard number of about 15 million, so when we start approaching that number, then it'll be 25 million or more, because regardless of the number, under the economic system we operate at the moment ANY stop in growth will cause "problems" for that way of measuring things.
It is not more people that we need, it is a different way of doing things, as we are going to have to face that the world cannot support the magic 10 billion that some think the human race will top out at and in fact to support comfortably the planet can really do about 3 billion. The only reason I think 10 billion has been picked for the magic number is that whoever did it, will be dust by then and won't have to worry about the consequences, therefore ignoring the consequences we already have from around 7 billion
Sadly, we will probably kill each other as our solution to the problem, again, then start the growing all over again.
Human race, most intelligent species? Indeed.
Not.
You are absolutely right. We are a small nation that survives largely by agriculture, which has a relatively small workforce. If NZ was run as an exporting buisness most of the rest of us are just expensive overheads and you could say that pretty much all of Auckland is an overhead.
You are right, that they love to paint opposition to immigration as a racist issue and shut down our opposition by trying to make us feel guilty and embarassed. Off course it is not. Those people who do frame there opposition in racist terms, play right into their hands and completely undermine any argurment to stop immigration.
Look closely now - right there - hidden in the body of the text
Now you have it, straight from the horses mouth -
- inbound migration is
- forcing house prices up, and
- part-justifies the RBNZ increase in the OCR
[quote] The rates of immigration is being watched closely by the RBNZ and was referred to by the central bank in its statement announcing an increase in the Official Cash Rate last week. The RBNZ noted that "net immigration continues to increase, boosting housing and consumer demand". [endquote]
What does immigration bring to the table?
If it fills trades that are desperately needed then OK but how many 2$ shops and Chinese takeaways are actually needed. The Chinese cafes that are filled with mum, dad, the kids and aunty Loh are not doing much for diversity either.
Really, even if a party starts that is called " Save the Gay Whales party" they will have my vote as long as they have a strong immigration policy. Health, housing, roads & education are all screaming out " enough is enough"
I question why we cant get NZers into trades. On top of that my limited experience with a few foreign trained trades ppl frankly leaves a lot to be desired, I can quite understand why some end up as petrol pump attendants...which of course can be done by an unskilled NZer.
Stress on infrastructure is a longer term issue, and I agrre with you on that...but you see every pollie is locked into the growth mantra, bigger and bigger is better and better.
seems nuts.
regards
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