'Massive surge in net migration' is helping to alleviate NZ's staff shortages

Business / news

BNZ economists say the migration surge is 'great news for moderating wage inflation' but raises questions of how strong population-led growth may become and how this may delay the Reserve Bank easing monetary conditions

3rd May 23, 2:32pm by David Hargreaves

Source: 123rf.com. Copyright: yuliaaatre

The "massive surge" NZ is experiencing in net migration is helping alleviate the country's "excess demand" for workers, BNZ economists say.

But it asks big questions as to how strong population-led growth might become - and how this might delay the Reserve Bank easing monetary conditions.

In a review of the latest labour market figures, which showed unemployment remaining at 3.4%, while employment grew 0.8% in the March quarter, BNZ head of research Stephen Toplis said what the data are starting to reveal "is the true state of the current excess demand in the labour market".

"Rather than underlying demand for staff unexpectedly increasing, per se, businesses are simply being able to fill vacant positions with the inflow of migrants. Only time will tell just how big that excess demand was/is but with net migration inflows continuing to accelerate we do know the pressure to find staff is already moderating."

He said the BNZ economists are "watching the rapid increase in migration with great interest".

"We are not convinced we have this adequately incorporated into our growth forecasts for the economy. Could it be that soaring migration coupled with the ongoing recovery in tourism numbers might claw the economy into expansion territory in the second half of this year in contrast to our contractionary expectation? It is certainly something to be contemplated."

It is widely expected that the New Zealand economy will tip into recession this year. The RBNZ has actually conceded it is trying to engineer a recession in order to bring down our rampant inflation (6.7% annual rate as of the March quarter) back into the targeted 1% to 3% range.

A major factor for the heat in our economy has been the super tight labour force, with employers simply unable to fill jobs. A significant reason for this was the closed borders, which left employers unable to fill job vacancies with migrants. But migrant workers are now flocking in again after the re-opening of our borders.

According to the Ministry of Business Innovation and Employment (MBIE), a monthly record number - over 20,000 of people arrived in NZ on work visas in March this year.

Toplis said while recession avoidance would be a “nice” thing, how “nice” it is will depend on the relative supply and demand impulses associated with the increase in net migration.

"If the supply effects outweigh the demand effects then we could see inflation diminish faster than expected at the same time the economy is unexpectedly strong. On the flip side, if the demand impulse overrules the supply effects it would take inflation longer to fall to the RBNZ’s target and could even necessitate more tightening than anyone is so far bargaining on."

The RBNZ has been rapidly increasing the Official Cash Rate in its efforts to get inflation down. The OCR has been increased from just 0.25% as of the start of October 2021 to 5.25% currently - and it is widely expected there will be a further rise to 5.5% later this month at the next OCR review.

"For us, the strongest message from today’s [labour market] data, and much of the other data we are currently witnessing, is that the Reserve Bank will not be easing any time soon. If we are right about the evolution of the economy, it will be well into next year before this will happen," Toplis said.

"While there are mitigating factors, we do believe the state of the labour market is sufficiently tight that it lends support to the RBNZ raising rates one more time (25 basis points) when it meets later this month. And, generally, we think there is enough uncertainty that it won’t rule out the possibility of further tightening thereafter."

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86 Comments

by ShoreThing | 3rd May 23, 2:39pm 1683081578

The "massive surge" NZ is experiencing in net migration is helping alleviate the country's "excess demand" for workers, BNZ economists say.

So we're allowed to point out that mass immigration does suppress wages, now that it's supposedly in our interest for that to occur. Are we going to decide as a country whether this is what we want for New Zealand, or are all our leaders just on board with everyone's real income being smashed?

by OldSkoolEconomics | 3rd May 23, 2:59pm 1683082758

Exactly - they are making it works - the solution is to simply vote for someone who has a firm policy to constrain immigration. if you find such a party maybe consider standing for them, campaigning for it etc.

I am not standing - but i think the problem these days is very few of the people who care - want to stand or protest.. so we let the others decide.

by ShoreThing | 3rd May 23, 3:36pm 1683084966

This sort of policy should be part of Labour's core tenets - the labour movement was all about looking after workers interests, and bringing in foreign workers to suppress wages is anathema to those principles. We are really poorly served by our political parties in this country, you just get to pick what colour tie your neoliberal PM wears every election.

by RickStrauss | 4th May 23, 11:34pm 1683200074

Labour and National are so close together on some issues as to it being a waste of money their spend on branding.

by 21Trillion | 3rd May 23, 3:07pm 1683083252

We're effectively telling young kiwis that they're not worth global talent value, and if they don't like it, goodbye :)

by Advisor | 3rd May 23, 3:46pm 1683085603

global talent value

Maybe a handful fit that description, the Productivity Commission recently found that net migration over the last decade has brought down the overall talent pool of the country (more skilled Kiwis leaving and lesser skilled migrants arriving).

We can kid ourselves into believing talented individuals are heading to our shores in large numbers, or admit we have nothing to attract global talent (few hi-tech employers, top-ranked universities, high wage jobs, etc.).

Our easy migration settings and decent living standards compared to third-world countries are attracting economic refugees to fill low-wage jobs and grow our economy with an aggregate increase in domestic consumption.

by bookworm69 | 4th May 23, 9:36am 1683149785

Yes, I thought we were supposed to be having a "conversation" about what type of skilled immigrants we wanted in this country. What happened to that?

https://www.rnz.co.nz/news/business/483170/immigration-not-a-solution-t…;

by huttman | 3rd May 23, 3:08pm 1683083298

does it really mean anything when you get paid $10 more, but cannot find supply because no staff to fulfill your shopping orders?

by ShoreThing | 3rd May 23, 4:04pm 1683086686

You can't find staff to fulfill orders because they've left to another job that is paying them more. The answer is yes, paying those staff more would mean they stick around to fill your orders, and other workers might be enticed to replace those that left who otherwise wouldn't have bothered if the pay wasn't adjusted.

by Zwifter | 3rd May 23, 3:00pm 1683082857

This simply has to put a strain on housing and will quickly reverse any falls. All these people have to live somewhere and nobody wants to live under a bridge.

by 21Trillion | 3rd May 23, 3:12pm 1683083526

Oh no, kiwis are leaving because housing is through the roof and nobody wants to work for peanuts, what on earth should we do to fix this?

Prevent housing from becoming an overvalued speculative bubble? No

Remove red tape and become an innovative nation attracting new industries? No

Make some hard decisions for a better future for NZ? No

I know, let's import people from poorer nations that will bite the bullet of overpriced housing and peanut pay!

It's such a huge waste, going through the entire school system as a kiwi, to then just be told you're not worth a a pay that allows you to live a standard life in this country. A waste to the country that is. So much spent on raising kiwis to just forget them once they're in the workforce.

Honk honk, wonder why birth rates are deeeeeeclining and kiwis are selling up to leave.

by yeahnah | 3rd May 23, 3:19pm 1683083994

Easier to just focus on the things that matter like social engineering, Te Titiriti settlements and the next All Blacks coach...

by Nzdan | 3rd May 23, 3:38pm 1683085088

Birth rates declining coupled with a surging retirement cohort.

But hey, people shouldn't act so entitled. If people from third world countries are happy to live 10 to a 3 bedroom place, work 80 hours a week on a diet of rice then that's the bar we're going to set. If you don't like it, either exploit their labour or leave the country. "W-w-w-w-wait where are you going?".

by Pa1nter | 3rd May 23, 6:57pm 1683097027

We lived like that 3 generations ago.

And we're working out that small nuclear families aren't economically sustainable for most.

by interesting1234 | 4th May 23, 8:33am 1683146030

Oh no, kiwis are leaving because housing is through the roof and nobody wants to work for peanuts

I'd argue this depends on the age bracket you fit into and perspective can always be due. 2019 pre-covid when I was in Wellington, there were 20 year-olds in wellington starting out on 50k a year at entry level roles which was realistically pretty damned cushy. I started my career working for $7.20 an hour shortly before the youth wage was removed and never complained, in fact now I'd argue the youth wage needs to be reinstated. When housing seems unattainable and it is something you are working hard for, it's understandable to be angry, but there needs to be consideration for when hard work is rewarded vs those in their early 20's being able to command 80k like today due to worker shortages.

On the whole I agree with most of your points, but to come out of school and feel like you're not worth anything isn't entirely the case.

by ShoreThing | 4th May 23, 9:18am 1683148707

50k starting wage might've been alright 10 years ago, but it's basically breadline today. $688.50 per week in the hand after tax and student loan contributions. What is does a room in a flat in Wellington cost these days, $200+ per week? You'll need to eat and that isn't exactly cheap now either. You'll have utilities bills at your flat, you'll have expenses commuting to your job. You have to be completely detached from reality to think that 50k could be considered "cushy" and 80k is a "reward for hard work".

by rastus1 | 3rd May 23, 4:12pm 1683087176

yeah because they all have a cool mill+ to thow at a NZ shyyytbox eh!

Tell em he's dreamin (or leveraged to the hilt).

by Rob Reid | 3rd May 23, 3:06pm 1683083162

Come to NZ. We have a tent and a garage waiting for you.

Be Quick!

by Jamin | 3rd May 23, 3:06pm 1683083213

It’s hard to disagree with many of these points. To try and cure inflation with immigration, which is usually inflationary itself was always going to be unpredictable.

Higher for longer: unfortunately this is most likely.

Often I find in these circumstances, you can try and make sensible predictions. Then unforeseeable overseas events put a steam roller through everything.

by Stephen06 | 3rd May 23, 3:18pm 1683083887

BNZ economists say the migration surge is 'great news for moderating wage inflation'

I think you will find that of the 20,000, a reasonable % are RSE Pacific Islanders brought in to perform work no New Zealander was prepared to do in the orchards and factories.

So, has the 20,000 really moderated wage inflation?

by KH | 3rd May 23, 5:21pm 1683091306

Pacific Islanders are great value. You have to pay them but you can tell them where to live and get much of their wages back. Lots in cash from your tame landlord mate. Magic

by singautim | 3rd May 23, 7:12pm 1683097954

Maybe NZ Stats have changed. They used to define an immigrant as someone staying more than a year (that includes tourists) and if less than 12 months they were not counted (that means RSE are not included in the immigration numbers). So the best figure is granting permanent residency with an adjustment for those who have just used NZ as a stepping stone for Australia once they have citizenship.

by interesting1234 | 4th May 23, 8:36am 1683146184

To get citizenship however they still need to have had residency (taken from date of first residence visa, not just permanent residency) for 5 years. Stepping stone for Aus or not, they still contribute while here.

by Caughtinthemiddle | 3rd May 23, 3:18pm 1683083917

Immigration surges will uncover more and more of our infrastructure frailties. Ask a nurse if they want more people in their hospital catchment area at the moment. You think GP's are hard to access now? Have you waited a long time for surgery? Fed up of traffic on the school run? Worried about your children's class size?

House prices I think have more pressure down even with migration surges for now, but it definitely will flatten the bottom of the correction / crash earlier.

I'm a migrant. Migration is not a bad thing. Targeted, and predictable should be the goal, with the main aim to improve the overall well being of NZ. I hope this is what this is but I remain cynical.

by singautim | 3rd May 23, 7:13pm 1683098028

May I echo: ""I'm a migrant. Migration is not a bad thing. Targeted, and predictable should be the goal, with the main aim to improve the overall well being of NZ."". Suggest you forward to your MP.

by bw | 3rd May 23, 3:40pm 1683085237

There's only one problem with this very short-sighted opinion by Toplis. And that is that every 'developed' country is after the same shrinking pool of talent. We all want doctors, nurses, teachers etc because we haven't trained a sufficient new set of our own to replace our retiring current workers. And that situation is about to get worse.

What we are importing is the substance workers from the Pacific etc and not the sort after brain surgeons from the USA. They have a range of choices available to them, and New Zealand isn't very high on the list. Why? Because on a net basis - it's not lucrative enough to live here. And we all know the reason for that....but the RBNZ has set about correcting that for us.

by Nzdan | 3rd May 23, 3:40pm 1683085238

We probably don't have enough locally born bodies to train even by force, without taking resources from other sectors of the economy. Because at one end you have a burgeoning retirement cohort and the other end is a shrinking demographic of young professionals putting off having children because the numbers just don't stack up. The only people breeding are teaching their kids about handouts not handups.

by bw | 3rd May 23, 3:42pm 1683085351

Spot on. And why haven't New Zealanders procreated? They can't afford to! Or to put it another way, they can't afford a Family Home and a Life.

by Advisor | 3rd May 23, 4:36pm 1683088577

The average cost to send your kid under-3 to child care in NZ is ~21k. For the median household, that's more than a quarter of their disposable income.

How many young couples have that kind of cash lying around after the banks/landlords have sucked out a big portion of their pay check as accommodation costs?

by sg_expat | 3rd May 23, 3:42pm 1683085341

Talent pool shortage and general 'fight for talent' also being driven by aging population (boomers and younger) in developed nations now hitting retirement

by company of heroes | 3rd May 23, 3:54pm 1683086081

Lots of these people who are on work visa are probably looking for getting residence visa here only, once they get their residence visa, they will move to other countries. Because of cost of living and families not being here. I've seen many friends had done this. And there are more that haven't left yet are planning to do so.

by Pa1nter | 3rd May 23, 6:56pm 1683096979

The population is still growing though. So more people are arriving and staying that going to Aussie.

by Halfway To Paradise | 3rd May 23, 3:54pm 1683086098

Alternatively open up the floodgates and let more people in. In turn this will lead to economies of scale as manufacturers produce more. More competition likely for supermarkets. These two things will put downward pressure on inflation.

by E46 | 3rd May 23, 4:18pm 1683087531

Fantastic, let's be like the UK they're doing great aren't they?

by Pa1nter | 3rd May 23, 7:01pm 1683097273

They're actually doing terribly and part of that's because the foreigners they hated were doing much of the crucial work.

Can you moan that migrants aren't making you wealthier when they're the ones harvesting your food? Apparently you can. On your slave labour digital device.

by E46 | 3rd May 23, 7:09pm 1683097797

They're doing terribly because there are too many people on too little land. They don't have the resources to support the amount of people they have. It's not as simple as immigration > good or immigration > bad, a balance needs to be met. I'm not saying we don't need immigrants but we need to be more selective with who we bring in. If they end up costing the country more than they bring in what exactly is the point? Our ballooning current account deficit is evidence of that. All we end up doing is lowering the living standards of everyone including the migrants who have come over here.

And the UK's problems go way deeper than not having enough low-wage workers to do agriculture work. The agricultural sector is getting hammered by losing EU subsidies and not being able to compete with more efficient agricultural nations. The UK has so many problems I don't even know where to start. When I am feeling bad about NZ I can look to the UK and feel very slightly better about how screwed we are because it could honestly be a lot worse.

by Pa1nter | 3rd May 23, 7:23pm 1683098593

A large amount of your argument rests on the assumption migrants are just there to deflate wages. End of the day there are few indigenous candidates for many roles. The UK now has a serious worker shortage and they're paying for it, just as we are paying for increased domestic labour costs due to serious labour shortages.

There aren't many places with labour shortages that are great places for the average person to live.

by E46 | 3rd May 23, 7:59pm 1683100756

I dunno I feel like having a labour shortage is a hell of a lot better than the alternative of a massive labour surplus. Would much rather be here in New Zealand rather than China or India where they have more workers than they know what to do with.

All of the economies that have labour shortages are actually globally on average pretty nice places to live are they not? I'm not really sure what you are on about there.

I really don't think the UK's issue is 100% because of a worker shortage it's much more complicated than that.

by Pa1nter | 3rd May 23, 8:07pm 1683101247

They're not 100% of the UKs problems but they're a significant factor.

End of the day we aren't going to magically make up for the labour shortfall we are facing. There is no easy and clear path to high value, 'sustainable' carbon neutral, hazard free export jobs. So it's either migrants to keep the economy going, or reduced GDP, higher good prices, and a higher cost per eligible worker to pay for the upkeep of our existing liabilities.

Like, it's definitely not mint, but it's what there is. It's going to happen.

by Palmtree08 | 3rd May 23, 7:42pm 1683099725

I really wish all the people that really enjoyed being crushed by the weight of humanity would all move to one place!

https://www.dw.com/en/uk-immigration-nearly-triples-despite-brexit-prom…

by E46 | 3rd May 23, 7:54pm 1683100467

I don't even know if labour shortages are as bad as they are made out to be. What it should do is encourage economies to distribute labour more efficiently. It's the free market in action, if we are going to accept that free markets are more efficient it has to go in both directions.

by Pa1nter | 3rd May 23, 8:08pm 1683101311

The free market is as about as real a concept as democracy.

by Small Kev | 3rd May 23, 4:08pm 1683086912

Can’t survive without immigrants yet our housing and infrastructures always playing catch up, roads are always too small, house always not enough.

$400 per room per week, wifi included…..

by interesting1234 | 4th May 23, 8:41am 1683146479

This is precisely why major cities aren't focused on new roads as it always ends up with the same result. Build more roads, more people drive and population increases until the road is at capacity, rinse and repeat. This is precisely why Wellington is making it harder for traffic and building more cycle lanes.

by Chris-M | 3rd May 23, 4:26pm 1683088000

There is the message folks. The country does not want young Kiwis. We would rather have a poorly educated low wage low productivity economy, anything just as long as we can keep the housing ponzie low wage economy going. Don't buy into it young Kiwis, it is only going to get a lot worse. You are living through a nightmare trying to put a roof over you head and have any sort of reasonable life with crazy house prices and third world wages. Imagine what it is going to be like for your children. Do you really want them to face the very much worse situation that we are heading toward? Do you really want to trust your kids education to a woke and totally failing system? Our qualifications will not be worth much overseas the way we are going. Do you want to rely on a failed health system that struggles to attract staff from 3rd world countries. Do you want to continue battling frustrating and totally inadequate infrastructure caused by an exploding population of low paid immigrants who will never generate enough wealth to fund their own needs let alone the wider country?

The wisest thing is to not waste any more time and leave the country now before it gets worse. You will be able to afford to have good holidays in NZ, visit the rellys and probably get to enjoy the country more as a tourist from over seas.

by Beanie | 3rd May 23, 4:35pm 1683088535

Jesus Chris, that's the most depressing comment I have read for ages. Because you speak the truth.

by Chris-M | 3rd May 23, 5:06pm 1683090403

It is depressing Beanie. And what is even more depressing, there is nothing we can do about it. All political choices produce the same result. National will be worse.

My advice to leave the country is not just stirring. I really believe that it is the only rational option to young Kiwis. Who wants our young kids and grandchildren growing up in situation that they have no realistic hope.

This is what it must have felt like when hoards of people left Scotland and Ireland.

by OldSkoolEconomics | 3rd May 23, 6:44pm 1683096263

Unfortunately and because its right for the kids its also right for anyone of working age who can still get citizenship in Au.

The infrastructure, crime, education, healthcare in Nz is broken and nobody has any intent to fix it, quite the opposite they will make it worse. The staff they need will all head overseas so the services will worsen.

Maybe in one or two election cycles when the place is a slum a party will get in and start to fix it.. but by then it will be a place to live only for the very wealthy who own the farms and rentals and manage the low skilled staff and who have private health etc.

Seriously a mess.

by E46 | 3rd May 23, 6:57pm 1683097071

It's genuinely depressing. We had a chance to fix stuff in the early 2010s (or earlier) but New Zealanders chose the easy path, rather than invest in ourselves, our people, and our communities we bet it all on speculation without materially improving the country with the resources and cheap capital we had access to.

Now I am not sure how we are going to fix it, but it's pretty clear that none of the Big Four parties have any clear policies that will lead us anywhere good. The world has become a much harsher place and it's going to be bloody hard to compete.

by Pa1nter | 3rd May 23, 7:08pm 1683097699

The country spent a fortune on education and initiatives in the 2010s. We are pumping out more grads than ever.

The problem is the world changed, protectionism went away and NZ doesn't have many competetive advantages.

The Saudies have over half a trillion tied up in developing non-resource dependent service industries and that's arguably not yielding very much. We are a boil on a gnats bum in the realm of trying to initiate successful new startups.

Fact is human labour isnt worth what it used to be, especially if the job is easily relocatable.

I suggest everyone unhappy book that airfare tomorrow to greener pastures.

by E46 | 3rd May 23, 7:18pm 1683098307

Guess you're right then. May as well give up, and resign ourselves to becoming a low-wage nation that doesn't produce anything value-added, and continues to decline into poverty.

by Pa1nter | 3rd May 23, 7:34pm 1683099261

Why are those the only options?

We have some core competencies and markets that have been growing and developing for years, and new prospects also coming online.

There's some issues with accommodation that really need addressing, but this is going to continue to be a desirable and favourable part of the world to live in.

The great thing is you can do anything you want and there's no barrier to starting your own business. That's what attracts many people here.

by E46 | 3rd May 23, 7:51pm 1683100269

They aren't our only options, but what core competencies are you actually referring to? We can excel at high value-added exports if we really set our minds to it. Look at what New Zealand companies have achieved, Weta, Southern Spas, F&P Healthcare. 100 more companies like that and we would be a hell of a lot better off than we are but in reality, despite what you say the government puts very little effort into encouraging that kind of innovation.

R&D, we spent about $150 million on that. It's not nothing but it's barely anything in comparison to other countries. Sure we pour funding into education but it's undirected and clumsily implemented. We need to improve Science, Maths, and Literacy but keep focusing on unimportant side issues in the education space.

I just don't know if pumping in more people indiscriminately is actually going to lead to measurable outcomes in our "core competencies". Accommodation issues are killing our productivity as well. We wouldn't need to pay as much if we hadn't inflated the value of housing to what it is now.

Ultimately you are right though, despite mismanagement New Zealand will always be a desirable place to live. It's a good spot in the world and as climate change starts to dig in it will look better and better in comparison. But that doesn't mean we couldn't do better.

by Pa1nter | 3rd May 23, 8:26pm 1683102413

Our core competencies are our location and climate. They are fairly unique being a mixture of sub tropical and near alpine. So products derived from that will be ones we can make most competitively.

There is actually good money to be made in many Ag spaces, the problem is I guess everyone has the assumption these areas are outdated, and low paid and the future is in jobs you can do at a desk - the issue is there's billions of desk spaces worldwide to compete with.

How many startups do we have to fund to get 100 winner companies? My gut says nearly 1000. I'm not sure what the ROI would be on that.

You keep mentioning Weta but firms like that are really like lightning. Without Peter Jackson you have no Weta or film industry of any significance and you can't print those sorts of people.

by IT GUY | 3rd May 23, 9:47pm 1683107251

You make a great point about competing with the saudis re investment in alternatives.... perhaps the best we have to offer is coastal property on Waiheke at 10mil an acre...... make NZ a bach destination and send our kids offshore like other third worlds do.... Or we stop focusing on co-governance and start focusing on thing that will fix our current account..... the clock is ticking Hint the Maori caucus in labour does not give a shit

by Pa1nter | 4th May 23, 6:31am 1683138663

I only used the Saudis as an example. The amount of capital globally being thrown at trying to establish new economies and industries is so immense, I doubt the return on investment is going to be close.

by E46 | 3rd May 23, 11:23pm 1683112999

I base most of my argument regarding this on Paul Callaghan's 2011 talk. It might be too late to do any of what he said but at least it has some actionable and achievable goals. I'd encourage everyone to give it a watch he was a pretty switched-on guy.

And sure the Saudis can chuck as much money as they want at stuff but who in their right mind actually wants to live in Saudi Arabia? It's a miserable desert with only one major export, and the political climate is straight-up awful. Would anyone from a developed country want to raise a family there? I would like my hypothetical daughters to have equal rights to my hypothetical sons thank you very much.

One of New Zealand's most underrated drawcards is that it's a nice place to live. We have nice weather, a stable democracy for the most part, and a clean(ish) environment. It is somewhere talent could want to live, but we've undermined this by driving up housing costs and wrecking social cohesion which has had a myriad of externalities that have been straight-up ignored. You want us to keep focusing on agriculture and we can keep doing that, but we could also try and branch out. 100 entrepreneurs could make a real difference in this country if we fostered a culture that encouraged them but we haven't actually given that a good faith effort despite what you say.

by Pa1nter | 4th May 23, 6:39am 1683139145

I've seen that video before (or something very similar). We had been doing much of what he said, and that's the problem, it's a nice idea but hard to actually do. And you don't need 100 entrepreneurs, you'd need 1000, because 900 would fail. We only get F&P healthcare's and Wetas in the ashes of many failed or stalled businesses.

Where NZ has done well is creating industries at scale, and developing business infrastructure so multiple smaller players are utilising the same resources to produce and distribute globally.

It's all well running around and saying things would have been great if only boomers had been taking high risk startup bets instead of buying houses, but aside from being unrealistic, it ignores such a large number of other factors to our current position and what can be done to migrate away from some of it.

by E46 | 4th May 23, 8:36am 1683146202

We absolutely haven't been doing what was recommended, a token effort at best. Explain to me what government incentives at an education level have been bought in to encourage people into STEM degrees that are needed to move up the value-added change.

Our gross domestic spending on R&D is nearly half of the OECD average. NZ also had less than 10% of university students graduating with a STEM degree in 2019, compared to 36.9% in Germany and 27-30% in Finland, Austria, and Estonia.

Supporting startup businesses is costly but can pay off dividends, it's certainly a better investment though than what we already spend a bunch of money on. $50m for a cycle bridge could have easily been R&D funding and would have actually seen a return on investment. Usually, public investment in R&D sees returns rather than a cost.

It's not just startups, it's existing businesses, encouraging investment into R&D through better tax incentives that we still lack, and encouraging education in a direction that is more productive than we did. It isn't just boomers or whatever I am talking about 10-20 years ago when these decisions could have actually directed us in moving up the value chain when we had a chance. There are certainly other factors to our current position but the productivity stagnating is one of the more major ones. What other options are there for actually materially improving our productivity? We have had 10 years of mass immigration Pa1nter and what has actually materially improved from that? You speak in such certainties about things that aren't certain and to be fair I do too, but there are other pathways to prosperity than the one we are currently on.

by K.W. | 3rd May 23, 5:12pm 1683090773

It reminded me of why I left in 2001. I returned thinking NZ had improved. Under John Key it at least appeared to have. Now it feels like its gone right back 20 years again. Thanks Labour.

by E46 | 3rd May 23, 5:18pm 1683091082

What did John Key do that made the situation better? If one bad government was enough to cause this much havoc the country wasn't in a good state to begin with. Neither party has done anything over the last 30 years to improve the productivity situation. The status quo for both parties has been continually importing more and more low-wage workers to suppress wages and keep housing costs high.

This is the result of decades of short-term thinking and mismanagement coming home to roost. It's not even entirely the government's fault, on some level we all have to take some personal responsibility for this. Voters have chosen short-term gains over long-term sustainable growth at the expense of future generations for decades now, and now the consequences of these actions are starting to hit.

by K.W. | 3rd May 23, 5:26pm 1683091580

I don't know. All I know is that people were returning to NZ after years of everyone leaving. People seemed to be in positive spirits, housing was cheap (at least in the South Island) and nobody was talking about how no-one can get surgery unless you are an emergent cancer patient. There was talk of a "rockstar economy" and I did not have any issues with life in general for the first few years back, and to be honest, even the first Labour term didnt appear to do too much damage. But this term? What a debacle. Everything has gone downhill. From the state of the roads, to the hospitals, to the level of crime, to kids not attending school, to Air NZ price gouging everyone, to not being able to buy eggs - the place has gone to poo in an instant. Can't blame National for it, none of these problems were as prevalent in 2014 as they are now. About the only thing i've gained from it is my house price has more than doubled.

by Chris-M | 3rd May 23, 6:21pm 1683094915

Ask the people of Dunedin if they can get get a specialist appointmernt, let alone surgery before their cancer is expected to kill them.

by IT GUY | 3rd May 23, 9:50pm 1683107444

Not just down there, girl with breast lump who clips our horses in AKL - 10 weeks wait to see a specialist at North Shore..... Labour is so out , I dont care what the polls say, people on the ground HATE them, seen it before when people hated National.. polls are the servants of those who pay for them.

by Chris-M | 4th May 23, 12:55pm 1683161704

Of all the single issues that will sink Labor (there really are so many), the health system and particularly how they have done every thing they can to diminish and disrespect nurses will be one of the largest. We are coming into winter and health wise things are looking bad. Australia has really opened there arms to our nurses and doing a lot to attract them and the Government continues to treat them like dirt. They are doing every thing but give them plane tickets out of the country. (no need to anyway; overseas employers are doing that.)

What does a collapsed hospital system look like? Are we there yet? (pretty close) One thing is sure, is that after winter it is going to be a whole lot worse. Just before the election. Any body that brainless should not be in government.

by E46 | 3rd May 23, 6:51pm 1683096677

I get what you're saying I really do. Don't take what I am saying as an endorsement of Labour they are equally if not more culpable than previous governments.

But stuff doesn't fall apart overnight. It's death by 1000 cuts. Funding cuts here and there, families fall into poverty, rentals, and housing slowly get more expensive, and wages don't keep up. It's only a while after everything starts to set in that we notice that what we are getting isn't the same quality that we used to. The best staff left, the funding isn't there to get more staff, health service is pushed to the limit with covid and no longer has the resource or ability to give the same quality. Businesses are no longer able to squeeze out more efficiency since they have to pay staff more due to the cost of living, then pushing that onto consumers and finding they can just up prices rather than improve service or productivity.

It was never one thing or one entity to blame, but a million little choices, that lead us to where we are now. We could have invested in businesses, infrastructure, and education instead of blowing it all on housing, but we chose not to. And we got to live it large well beyond what anyone earned and it was great for some. But it was never sustainable. The system eventually gives in and reality comes crashing back in and that's where we are now. Hungover on cheap debt and looking for someone to blame, looking for solutions that are no longer there. Even in 2017 when things looked good, the fact that Labour got voted in shows that a bit of discontent was bubbling under the surface. It's not just New Zealand either, I would struggle to find an example of any developed country that is materially better off than it was 5-6 years ago. We are a minnow adrift in an ocean of titans and where they go we go.

The best we can do is try to get it all back on track and stop ourselves from repeating the mistakes of the past, but looking at it, I don't think either party is going to reflect very deeply and change anything structural that will materially improve the country in the future.

It is what it is.

by IT GUY | 3rd May 23, 9:53pm 1683107619

Labour - own MPs leaving without even telling the PM.... The Maoris MPs inside Labour will eat it from the inside like a cancer Hippy is doomed as he said no to co-governance... can you not read the writing on the WALL?

by interesting1234 | 4th May 23, 8:53am 1683147183

Social cohesion decrease -> Lockdowns and vaccine mandates

Increased homelessness -> Housing price increases and supply constraint of houses, mandated out of jobs

Increased crime -> less kids in school due to woke curriculum, viral crime online influencing them, somewhat tied to increased homelessness, 501 deportees influence on increased gang presence in NZ

Lower overall mental health of country -> See all of the above + add the lack of hope due to lack of affordability to purchase a house and have children

Social resentment bubbling under surface -> Lack of Govt accountability, transparency, results and outcomes, large-scale financial acumen and decision making capability, lack of viable options at incoming election, also seeing some who prosper well above others due to housing market and cashing in 2020-2022 as well as seeing and hearing level of wealth around in certain generations,

Only my observations or thoughts of course but feel free to add-in further bullet points

by Chris-M | 4th May 23, 12:12pm 1683159177

Remember Jim Anderton's New Labor Party. A reaction to the Douglas's and Preeble's dragging Labor to the alt right. We face a pretty similar situation now. Is it time to crank up New Labor again.

Another thought. How about a party loosely around around regional issues. This could be devoted to smashing the Wellington-centric hold that our political system has over the political system. One branch could be the Otago group where their health system has been so neglected for so long now that you have a low chance of treatment for cancer inside your expected life expectancy. Further Govt is doing everything to diminish the new hospital and thereby future health services. Otago is practically ignored by government so there should be good support for this sort of initiative.

How about the BOP? The government has completely abolished the democratic process and appointed puppets that are wasting rate payers money on frivolous projects without any accountability while the area is growing like crazy and far more fundamental issues require attention.

You could probably go on like this for many areas. The only areas that get any meaningful support are Auckland and Wellington.

The governments strong moves to concentrate many services within their centralized (demonstrably incompetent and expensive) grasp is another good reason to strongly rip power away from Wellington.

by Wrong John | 3rd May 23, 6:01pm 1683093699

Things are unravelling quickly now. And not just here. Education in the states is now very split, with most going woke there as well. Australia is following. Canada started it along with the frogs & the UK has got some big hairy questions to answer & quickly. As do most of us sadly. What isn't physically being attacked from the outside is being destroyed internally by the anarchists in the media & universities.

by E46 | 3rd May 23, 7:03pm 1683097429

Would you honestly rather have your kids educated in Florida (Self-described "Anti-Woke" state) than Massachusetts (Top ranked education outcomes in the USA)?

There are two sides to the coin there with one side going way too woke and wasting time on useless stuff and the other half going way too far in the opposite direction and bringing religion back into public schools and throwing out books. They need to go back to basics with education, mathematics, literacy, and Science. The American right-wing and far left are both letting the team down in regard to that.

by IT GUY | 3rd May 23, 9:55pm 1683107704

E46 what is your degree?

by E46 | 3rd May 23, 10:36pm 1683110205

Industrial Design because I am an idiot. Why?

by nktokyo | 3rd May 23, 7:07pm 1683097643

Deriding anything progressive as woke is the the new normal in lazy thinking.

by interesting1234 | 4th May 23, 9:01am 1683147677

I'd argue that in universities where free thinking is supposed to be encouraged, and opinions are encouraged to be expressed and debated intelligently, that adding in rules and regulations where you can't say X,Y,Z and have to consider the role of sociological constructs such as gender into more scientific and regimented disciplines such as medicine, mathematics, engineering etc, detracts entirely from developing bright young well-rounded people and instead churns out youth that have more linear thinking who are too shamed or brainwashed into sharing potentially controversial opinions with the worry that it may offend someone - a.k.a woke or blinkered.

There is a big difference between someone finding offence in an opinion, a common and necessary part of a progressive society in order to solve problems and creative solutions, to someone demanding that said opinion cannot be expressed by another due to said offence. Opinions and discussion should be encouraged on all fronts, however rules, regulations and laws to limit the ability to think differently should be prevented from coming into existence.

by Let me be Frank | 3rd May 23, 6:45pm 1683096325

Increased immigration may be expected to reduce non tradeable inflation however I would suggest that the main driver of inflation in a net negative trade balance is tradeable inflation....with the obvious exception of reale state which currently is suffering from a credit crunch (long may it continue)

by HW2 | 3rd May 23, 7:55pm 1683100556

Re: tradable inflation

Well it looks like the oil price is going in the right direction for that to happen

by nktokyo | 3rd May 23, 7:05pm 1683097540

Doesn't something like 11% of the working age population not work?

Yet 3.4% unemployment?

Are 7.6% of our working-age adults physically or mentally unable to work?

Until we stop enabling this as a society, I believe we give up the right to complain that the people have to come from somewhere else.

by Zwifter | 3rd May 23, 9:54pm 1683107684

Well if you retired early and you are not claiming the unemployment benefit then you are not going to show up as unemployed are you.

by IT GUY | 3rd May 23, 9:56pm 1683107810

The unemployed do not so up in many statistics, but they may have a mortgage.

by MLSmith1 | 3rd May 23, 8:59pm 1683104347

On another note… seems waka jumping law doesn’t apply to Meka… what a role model for her people she is

https://www.nzherald.co.nz/nz/politics/claire-trevett-was-meka-whaitiris-switch-from-labour-to-te-pati-maori-pure-defection/7FHFF2VGLNHS7OODZ26ET56LAU/

by Middleaged | 3rd May 23, 9:48pm 1683107301

Thank goodness that our waves of young graduates heading to Australia will offset this wave of imported bus and Uber drivers.

At least if National get in we will be forcing our nurses to stay here until they get enough experience to be really useful.

by IT GUY | 3rd May 23, 10:00pm 1683108037

Aussie will just give them a sign on bonus of 20k if they stay 5 years........ at 20k extra a year... I love free capital markets FARK some people are insanely stupid. LUXON why not just pay them the same as Aussie so they don't leave.... ? My head hurts with the wilful ignorance.

by Middleaged | 4th May 23, 10:14am 1683152075

The recent pay rise (about 15-20%) that nurses got makes their salary broadly comparable with Oz. However, in keeping with the law of unintended consequences, every other allied health profession now feels under valued (edit: they were already feeling undervalued, now it's just more obvious). You cannot run a health service without physios, occupational therapists, SLT, etc. Those are the professions with the specialized skills that actually fix people.

We will end up with a health service with plenty of nurses (and managers) but everyone else will be leaving.

by Squishy | 4th May 23, 6:43am 1683139418

We'll paint ourselves into a corner, it's what we always do.

by Pa1nter | 4th May 23, 7:15am 1683141346

Yet things keep going.