By Bernard Hickey
The debate over whether and how to control migration has intensified as Labour and National accused each other on Wednesday of 'dog whistle' politics and raised the ugly issue of race.
Labour Finance Spokesman David Parker asked Finance Minister Bill English in Parliament about Treasury's stronger growth scenario in the Budget, which included net migration peaking at 41,500 in the December quarter and increasing the 90 day bill rate by a further 100 basis points.
"Given that immigration numbers are now tracking to over 40,000 net for the year, does he agree with his party’s paid pollster David Farrar that discussing the relationship between migration and housing is xenophobic?," Parker asked.
English rejected Parker's accusation, saying the Government did not believe slashing migration was the answer for the economy.
"We do not agree that there is a problem with the economy or that that problem is too many Chinese, too many Indians, too many Samoans, and too many vans clogging up the truck lane on the motorway," English said.
Parker then tabled this Treasury paper published in April on "Migration and Macroeconomic performance."
"Is it xenophobic or racist of Treasury to say that “immigration policy should be more closely tailored to the economy’s ability to respond to population increase?," Parker asked.
English responded that it was surprising Labour Leader David Cunliffe "believes that he can slash inflows of migration without any impact on the supply of skills to the economy or without getting a few questions at the next ethnic celebration day that he goes to where he says that he loves having them in New Zealand."
Parker then moved on to cite Reserve Bank research showing a link between migration and pressure on interest rates. The Reserve Bank published this briefing paper in December 2013 on "Migration and the Housing market."
"Is it xenophobic or racist of the Reserve Bank to link immigration to house prices when it says that a 1 percent increase in population causes an 8 percent increase in house prices over 3 years?," Parker asked.
"And is it not the truth that it is the Prime Minister who is dog whistling in an attempt to cover up his Government’s failure to control house prices at affordable levels for all New Zealanders, be they recent migrants or born here?"
English said he rejected Parker's assertions.
"The Labour Party has a dog whistle in its mouth and it cannot decide whether to blow it or not. And then when it talks to its front bench, it disagrees," English said.
Parker later said Prime Minister John Key was trying to "twist a legitimate debate on the effect of immigration on house prices and interest rates into a divisive argument about race."
“The only major party that has brought up race in the current immigration debate is National. Labour has been focussing on the economic effects of migration on housing and interest rates. It’s John Key who keeps raising Samoans, Indians and other races in an attempt to turn a debate that New Zealanders want into one that divides Kiwis.
Parker said Key was reacting because he knew the Government was on the back foot on housing.
“A better balance must be struck between the benefits migrants and work permit-holders can bring and the effects that immigration peaks are having on house prices," Parker said.
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