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David Hargreaves doubts any NZ Government will resolve the vexed migration issue till it first forms a proper population policy

David Hargreaves doubts any NZ Government will resolve the vexed migration issue till it first forms a proper population policy
WHICH WAY? Choosing the right path for immigration policy is problematic.

I am not optimistic the Government's announced reset of immigration policies will resolve what has become an increasingly vexed issue.

Both the Government speech on the reset last week and the earlier briefing to the Productivity Commission for an inquiry into immigration settings are, in my view asking the wrong questions. And if you ask the wrong questions you don't get the right answers.

I have four key questions:

• What does New Zealand want from its immigration policy?

• What size population does New Zealand want?

• Do we accept that some New Zealanders are just too 'useless' to work and we therefore need to fill jobs they could otherwise do with imported labour?

• What do we do if once the borders are re-opened, a lot of Kiwis take flight (particularly to Australia). Do we let the population drop? Or do we (as we have in the past) make up the numbers with migrants?

Those questions are not tackled in either the speech delivered by Stuart Nash last week or in the instructions from Finance Minister Grant Robertson to the Productivity Commission.

The Government might argue that it is simply trying to address immigration issues in isolation. But if that's the case then there is your fundamental problem. You CAN'T tackle immigration in isolation.

The word 'population' is sprinkled in both the Nash speech and the Robertson instructions.

Consider these two quotes from the Nash speech, with bold type inserted by me: "But while we’ve been progressively moving to reduce our reliance on lower-skilled migrants over time, we’ve still seen significant population growth – one of the highest in the OECD – driven, in large part, by migration."

And this: "High levels of migration have contributed to 30% of New Zealand’s total population growth since the early 1990s."

Those two quotes imply that population is a big issue here - but that's not what's being tackled. 

We can't sensibly talk about what level of migration is acceptable till we actually have it clear as a nation what size we want our population to be. 

What if...

If we want to grow it, we can just open the borders. If we want it to stay the same, there has to be a balancing act. If we want to reduce it, we should shut the door. 

But what do we do if large numbers of Kiwis (possibly not able to afford houses) start to leave? Are we okay with that? Some people would say a lower population would be lovely, but the problem is that inevitably the impact would be uneven. Some parts of the country could start to 'die'. 

So, then, the corollary question: What do we want from immigration? We need to have a clear idea of what we actually want an immigration policy to achieve. We don't have that. And that's one reason why in the past 10-15 years or so, if not longer, we've effectively had 'accidental' immigration. People come 'for a while' and they end up hanging around. 

We have absolute control over our borders and immigration policy. We can achieve whatever goal we want with it. But we need to know what it is we actually want to achieve.

We don't have control over how many people are born in this country. Once they are born they are ours and we've got them for life. How many of these people therefore can we 'write-off' as useless and say they are unable to do jobs, so, we'll fill those jobs with migrants? 

Scrap heap

Problem is, as I say, we are 'stuck with' people who are kiwi-born. And if we consign them to the scrap heap then very antisocial outcomes can occur. My question here is genuine: What proportion of the population do we consider we just can't do anything with? Do we take the view that everybody has something to offer or do we say that some of us will be 'wastage'. I really don't know the answer to that question. And I'm not sure anybody in Government has ever properly tried to answer it either. But again, it's actually central to the immigration question.

I sat at home and laughed out loud in the evening last week when reading a copy of the Nash speech. The journalist in me immediately alighted on this sentence in the middle of it all: "When our borders fully open again, we can’t afford to simply turn on the tap to the previous immigration settings. That path is a continuation of pressures on our infrastructure, like transport, accommodation, and downward pressure on wages." Yeah, I thought. That's the zinger. That's your quote right there. 

So, no, that wasn't laugh out loud, but then looking at the interest.co.nz website and seeing that, sure enough, colleague Jenée Tibshraeny had chosen that very bit for her headline on the article about the speech, was funny. 

And the Government will have known that quote was the showstopper. It was a quote I believe with two objectives: Firstly to control expectations of various industries that have become reliant on migrant labour and secondly, as a crowd pleasing sop to a portion of middle New Zealand that's more angry about immigrants than it (generally) lets on.

Posturing

But I don't think it all means a lot, other than as a piece of posturing. The reality is that once it looks like the borders are going to reopen then the Government will just be bombarded by all sorts of worthy causes and reasons why this company and that company really do need to bring in labour. 

Any policy therefore that the Government sets around numbers of migrants allowed to come in, based on the 'reset' programme it has kicked off will be very easily reversible. It won't mean anything.

Why? Well, until this country actually tackles the more fundamental issues around population size and what we want from a migration policy our chances of producing a sustainable policy are zip. Immigration policy is not a 'thing' unto itself. It has to fit into a broader template. Otherwise policies will change like the wind.

I will finish with my favourite quote from the accidental philosopher 'Yogi' Berra:

"You’ve got to be very careful if you don’t know where you are going, because you might not get there."

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67 Comments

21
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Good article.

How about one looking at optimum population next?

13
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That's a tricky one to answer while people hold such divergent views of the future.

Those concerned regarding probable resource constraints and hard limits to growth will clearly support having a lower population (I.e. It's better to have more resources available per head).

Those who subscribe to a techno-cornucopian view will likely advocate for a larger population for historical economic reasons (more people = more consumption).

I'm firmly in the former view. If things really turn to shit well be thankful for having a comparatively small population. People are going to be increasingly more desperate to more to NZ due to our lower population as more countries hit their limits. Unfortunately once you've grown your population you can't easily put that genie back in the bottle, I hope NZ doesn't stuff this up.

25
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Optimum Population?

We have the ridiculous situation where the more we bring in, it has the effect of pressing the domestic population down to the point they can't afford to breed themselves, feed themselves, house themselves.

When the country has finite resources we just can’t have infinite immigration. Population limit will be one good way to judge the number of applicants we let in. For instance, if the population limit is 4.7 million, and we have 4.6 million people in the country, then we let 10,000 people in. If we lose more through emigration, then we process more and welcome more into the country.

One thing that the pandemic has thought that even if you are a kiwi overseas, you can rightfully so, return anytime. So how many NZ passports and permanent residency are we prepared to have? 6 million total? Presuming that most living abroad 10 years and over don’t return?

As many wards as you can build in hospitals and wings you build in schools, you just cannot build another island like West Island or east island. New Zealand is lovely to live for several reasons . Clean air, beautiful scenery, minimal pollution, parks, beaches, great outdoors. If you just flood it with people none of those will last very long.

Yes there will be a set of able bodied unproductive population. What we need to concentrate there is on support for their offsprings so they don’t live, feel and only know that way of life.

There is nothing wrong in incentives such as if you are on the benefit for more than 2 years, over 30 and have had 2 children then the government provides 5k for family planning operation should they choose to have it.

It needs to be more a wider programme of work to improve the quality of all New Zealand. Just tinkering here and there on a few numbers won’t help that much.

A government that first and foremost acknowledges our general lack of strategic direction and unified voice on areas of high national importance would be a great start.

Whatever changes take place now are likely to be reversed in the future because every party in Parliament other than Labour seems to be content with our current immigration programme, i.e, importing population who primarily add to the consumption side of the economy; if we're lucky, they come with a secondary use of participating in low-value production.

Labour have only woken up in the last 3 months or so 6 months at the outside. Both Labour and NZ first electioneered on lower immigration. The degree lower I'm uncertain but my impression was at least 50% reduction on the 70,000 or so that it had been running for sometime.
It's noteworthy that Collins at the National Party convention picked out areas where Labour have grossly under performed but nary a word on immigration. ACT will open the flood gates.

I've always thought it weird the Libertarian party (Freedom party) should advocate for less freedom. Less resources, space / head. They seem solely focused on freedom from controls on how much money they can hoard?

13
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Great questions from David here. I'd be very surprised to get straight answers to them from politicians of any stripe, except perhaps quietly, one-on-one, over a beer in a darkened corner somewhere.

It does feel like Covid has opened up the conversation somewhat, relative to a year or two ago. Businesses and lobby groups still get their sob-stories in the media, but there's a higher level of skepticism applied.

31
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I agree, many things we were told were "essential" for the economy - mass tourism, high population growth from migration, many thousands of international students - more than 12 months without them and the sky hasn't fallen. Could be it was a con job promoted by vested interests.

16
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Sparrow - agree but perhaps not a con job, but a belief, that we should grow our exports and GDP through another “think big” in the form of mass tourism, selling our education services to masses of international students, and mass immigration. Unfortunately many of the benefits of this have proven illusory eg many jobs are very low paid, profits go overseas, and we haven’t invested in the infrastructure to support our much higher population. Sadly, there is also lots of migrant exploitation.

17
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COVID-19 showed that the Emperor had no clothes. We built a lazy economy based on mass tourism, masses of international students, and mass immigration. With the fig leaf gone, they fell back on the other key pillar of the lazy economy: selling houses back and forth to each other for ever increasing amounts of money (ever increasing amounts of debt).

13
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Great article, and important questions to ask. I think the answer to some of them might be a bit more fundamental than we think, though.

We tend to manage success in terms of growth, not in absolute terms. We don't set a GDP target of X and when we reach it say "that'll do", we're always striving for more next time round.

And as long as we continue to measure success in terms of growth, the answer to the question "how many people do we want in New Zealand?" is always going to be: "more".

David has 4 key questions. And just how does he propose 'the nation' answer these questions? Via a referendum? Don't say 'a national conversation' as that is just meaningless buzz words when there is no concrete forum to garner concrete answers. Apparently this was a great article but it's actually pretty pointless if David cannot tell us how these big questions could be answered.
"I have four key questions:
• What does New Zealand want from its immigration policy?
• What size population does New Zealand want?
• Do we accept that some New Zealanders are just too 'useless' to work and we therefore need to fill jobs they could otherwise do with imported labour?
• What do we do if once the borders are re-opened, a lot of Kiwis take flight (particularly to Australia). Do we let the population drop? Or do we (as we have in the past) make up the numbers with migrants?"

15
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Well said.
MSM take note - you get huge amounts of coverage and revenues but little old Int.Co is doing all the heavy lifting.

If you want answers begin with Strategic Planning

A Strategic Plan at its simplest is to first determine where you want to get to in 5 or 10 years
Next you define all the steps you need to take to get there
Identify all the obstacles
Begin the implementation
Then, most important of all define a series of milestones, and then
Conduct annual reviews of whether you are meeting those milestones
Its not hard

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.

As heretical as it may sound, get Sir Roger Douglas out of the cupboard

resurrection of roger would not help ACT,what about ruth richardson? she is still kicking.

Yes it's amazing that we're sort of just 'winging it' when it comes to how the country is run, what we want, what we are doing etc. There's no overarching plan at all.

Seriously.

I do not think NZ will ever have a political party to lead because of the 'democratic' system.

Any party is only motivated by purchasing enough votes to be in the office for not more than 3 terms or at most 10 years.

You cannot even make a man out of a kid for only 10 years. How would a country grow strategically given its leadership and development direction change every 10 years?

This is kidding.

10
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Yeah, more convenient just to skip the whole 'voting' part, eh?

23
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It's not just the total size of the population that matters. It's the composition.

New Zealand is running a grand and stupid experiment where they drive their best and brightest abroad. What are you left with?

And of course Australia filters out the ones that they don't want and sends them back. That further "raises" the quality of our population.
Remember the old joke how a plane load of poms immigrating from NZ to Australia raises the average IQ of both countries. That is looking a bit sick now.

1) Population strategy = maximise gdp/capita - externalities.

2) Employers can then bid for the immigration quota. They either pay the prevailing rate or train/increase wages & use NZ skills.

GDP is a crap measure. It's useless apart from telling us what the country's turnover is. It has nothing to do with health, wellbeing, the environment etc.

That's exactly what "externalities" is aimed at measuring.
Its a measure of wellbeing per capita excluding the gdp/capita component.
Its unfortunately likely to be negative due to carbon emissions, child poverty, housing crisis, nitrate levels in water etc.
So we want to minimise these while maximising gdp/capita.

Too late. Properly accounted, it's been negative for a decade at least

19
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On 30 March I wrote to Bernard Hickey
There are 120 politicians in the Parliament. There are 73 policticians in the Government. Do you accept that out of all those there is not one able to articulate the reasoning behind successive governnments obsession with mass-immigration. There must be concrete reasons that the star-chambered can't share with the populace

Reply from author Bernard Hickey March 30
Politicians are very nervous about touching the topic for fear of being labeled xenophobic.

19
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This sums up the ridiculous age we live in.

People are afraid to speak the truth in case they get cancelled.

Wow.
Not surprising, of course.

11
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Fortunately sensible questions are asked by immigrants.
1. Does adding say another POM (like myself) add 'diversity'?
2. How do countries with low immigration succeed: Japan, Korea, Norway, Iceland, etc?
3. If immigration is so great and boosts GDP why not just swap 1m people with another small country?
4. Why is serious worker exploitation almost always linked to immigrants?
5. Why isn't immigration and purchase by foreigners of NZ land and businesses a reciprocal arrangement?
Not a xenophobe with a visible immigrant family. I like immigration and immigrants. We don't want an immigration freeze. But like adding seasoning to a stew a little is great and too much disastrous.

12
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There was nothing 'accidental' about the immigration settings....just unspoken.

The questions you pose are questions no politician wishes to acknowledge let alone answer.

... a crowd pleasing sop to a portion of middle New Zealand that's more angry about immigrants than it (generally) lets on.

I'm not sure i agree with this sentiment. Almost all of the people I've discussed this issue with actually really appreciate and are very welcoming to those who have immigrated here. What people object to is the way our immigration policy has been used with no real forethought or planning.

I'd add a bit more nuance - it's not the immigrants who are already here that middle NZ is angry about, it's the rate (twice that of other OECD countries) and the fact that successive governments didn't ask the country if they wanted 25% of the population to arrive over a period of 20 years.

It's not contradictory to welcome the migrants who are here and not want any more large scale immigration.

Spot on!

11
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What do we do if there is mass migration to australia? Do we bring in more immigrants?

Well no that would perpetuate the problem. House prices will remain high - more people will leave for Australia and even more immigrants would be needed.

How about just letting the housing market deflate a little instead.

Yes, but it never seems to happen. We seem to have to grow the economy, and what's worse, we only know how to do it one way: Increase our population.

17
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Replacing kiwi migrants with immigrants?
Too many immigrants and the flow on effects of low wages, low productivity and unaffordable houses are the biggest reason why Kiwis are leaving for Australia. I strongly suspect with the latest burst of genius from our "kind and caring' government we will see a huge uptick in migration out to Aus. For most young people there is simply absolutely no hope that they will ever be able to afford their own home in New Zealand.
What are the government trying to achieve here? Is it part of some grand plan to displace people, upset their stability and cause people churn around different countries. Some sort of disruptive management by causing chaos in people lives and security??
I remember a reply to an email that I sent to Michael Cullen re unaffordable home pushing Kiwis to Australia. He said he did not care because there were plenty of people desperate to get to NZ. So there you have it; this is a long standing policy of the Labor party. But Why????

18
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I will repeat this post because we seem to be drifting along with an immigration policy that has no sound economic analysis to support what the government are doing.

We are short of at least 10's of thousands of houses and many people are not housed. That means that if an immigrant is to be housed then one of our existing residents must be kicked out of their accommodation. Simple arithmetic, much as the government try to pretend otherwise the logic is iron clad and we all witness the results daily.
Therefore if any immigrant is so desperately needed here then the desperate employer should be required to build a new house for them. If we ran a fair user pay system then they should also be required to make a substantial contribution for all the services and infrastructure required to service the new person. In Auckland, new houses for such an elevated individual would cost north of a million dollars. Any guess on how much the cost of all the extra infrastructure and services will cost? - Another million say, probably more, but certainly of that order. So probably well north of $2 or 3 million for each special worker and their family. If the people wanting to employ these immigrants had to face these consequences of their demands, would they be so keen to want immigrants - I doubt it. So in other words, the government and industry wants these people for commercial reasons, so it is totally appropriate that the costs should lie with the businesses and the business case must stack up. Why should we, the mug citizens pick up the tab. When faced with these choices you would think that it would be a far better proposition to hang on to, train, and make the best of the people who already live here. All that I can see this government doing is chasing them away with impossibly high house prices (in perpetuity according to Jacinda) and no wage rises. Real geniuses aren't they.

While I agree with many of your comments, in particular, that businesses which rely on immigrants should have to bear the hidden costs of using them, I am less clear as to why you singled out Jacinda on wages and house prices. Do you think the previous National or Labour governments put any effort into derailing the housing train? And let's be honest, home owners and business owners need to take their share of the responsibility. If any government came out with a policy that said "We're raising wages to point where the average Kiwi can afford a home" businesses would cry bloody murder and vote them out. If any government came out with a policy that said "This policy is targeted at seeing housing prices drop significantly (>30%)", home owners would show their true colours as well. You see, we all want to collectively wring our hands and do a sad face when talking about how terrible the housing problem is, but few of us want to be impacted financially by the solution.

12
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Several years ago, when we were heading to 4 million, it was said we should be all good at about 5 milliion. Well, we are there now, so we should be all good now.

11
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Not according to these clowns...

https://nzier.org.nz/publication/grow-for-it-how-population-policies-can...

"New Zealand struggles to grow its economy partially due to its small size and remote location. There is little that can be done to change location, but the size can be increased over time. It is feasible to adopt a population policy with the aim of the population reaching 15 million in the next 50 years – an annual growth rate of 2.5% per annum. This would bring the size and density of the population to levels closer to more prosperous European countries. Fifteen million – two and a half times current projections – is a good target, too, as it allows for several large cities, fostering competition within New Zealand."

13
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God they are awful.

Off their flaming rockers. What they don't realise is that what they are proposing is simply more, there will never be enough for them.

13
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Isn't 15 million roughly the population of Manila's metropolitan area? I was last there 35 years ago - it didn't seem more prosperous than NZ.

16
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Might be true with 15 million prosperous Europeans in a prosperous part of Europe.

Just an absolutely stupid idea on an isolated island in the south pacific rammed with imported people from less prosperous cultural backgrounds.

Muppets.

10
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Clowns is too polite.

Call them economists. It's a word well on the way to meaning: joke.

Forecasting endless exponential growth - along with misunderstanding productivity - was always going to leave egg on the faces of the forecasters. And on the (so-called) discipline.

Good article. As is usually the case, the government isn't asking the key, fundamental questions.

Wow all those comments and no mention of climate change and the need to reduce the man made component.

That's because Climate is merely the exhaust-gases of our one-off energy-burn. It's the energy and the work it does, is the issue. And both are destined to be 'less'.

I'm with KH - ex fossil energy, food production at a sustainable level in NZ, probably supports 2 million. But it'll be a struggle.

12
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Brilliant writeup David. Congratulations.
The important word indeed is 'population'. 'immigration' comes well down the list.
My answers to your questions.
A. A happy wealthy population, with full particpation by all. Sounds a bit applepie yes. But note I did not say words like 'growth' or 'GDP'. Rich means folk being rich, which 'GDP' and 'Growth' have not provided.
B. I would accept five million max as part of the political settlement. But think the place would be better with two million.
Yes. Some places would die. But I remember growing up in a lowish income family, having a bach 20 feet from the sand. We were not fighting over the good places.
C. Always we will have a range of abilities. I have a rightish view and dislike welfare. As much as possible we need to set up to involve all - so a high income low cost economy. That maximises the ability of nearly all to maintain themselves. No scrapheap. Nobody cast out to be a drag.
Not idealistic. It's just the opposite of the view we need to keep incomes down to promote GDP. Nut's to the idea of planning to be a low income country.
Imported labour? Nah. If you can't pay higher wages and make it work - it's a business that's a drag on the nation and it needs to stop.
D. No flight problem if incomes are good.
We do need a flow both ways over the border to maintain skills. Including New Zealanders going away for a few years and coming back.
But not the basic labour force topped up with imports.

Managing a declining business or leading a retreating army is difficult. But NZ should be planning for it; other countries are doing so. Most of our regions have declining populations while a few cities experience congested bloat. We should not have an unofficial policy of rapid population growth via immigration just because it makes the lives of our politicians easier.

Remember Milligan from Puckoon? "So one man retreating is called running away, but an army running away is called a retreat. I demand to be tried by cowards".

@ Lapun. Much of the cities bloat comes from external immigration. Interesting to know of NZers the net internal migration has been out of Auckland- yes out- and has been for many years.

True. In the 1920s American sociologists realised immigrants tend to go to the largest cities and then stick together. Native born Kiwis are more likely to stay put where their family, friends and memories are. So the natural worldwide phenomena of drift to the city is accelerated n NZ. Compare with Germany with its numerous small cities (200,000 -to 500,000) - that is where you get efficiency, productivity and exports.

Am not convinced Auckland is productive. Looks to me to be less so than towns.

There are data showing that. From memory, Croaking Cassandra blog covered this multiple times over the last few years

Chicken and egg problem. A problem too complex for the peasant minds.

Just create another working group.

Problem solved.

"David Hargreaves doubts any NZ Government will resolve the vexed migration issue till it first forms a proper population policy"

I doubt if any government can solve any problem...they take one step forward and two step backward.

Having a plan / strategy with clearly signalled actions seems beyond the capabilities of modern governments.

Auckland transport have asked the public for feedback about its 10 year plan. When you have little idea of population change how can they plan or we comment?

The government wants to exclude a lot of people and not offend anyone. Popcorn in row 7, be kind.

Excellent piece David.

A couple of points stand out; "if we consign them to the scrap heap then very antisocial outcomes can occur" We've been doing that since the introduction of Rogernomics and the Free market model of economics. Those anti-social outcomes are already rife throughout our communities, and are steadily getting worse as successive Governments fail to have the vision or courage to do what is really needed. In addition, current discussion seems to assume Kiwis cannot attain the level of achievement, knowledge or performance some foreigner can bring. Yet the world seems to consider we punch above our weight. Why the disconnect?

But you are absolutely correct, immigration cannot be discussed without considering population size. And population size discussions must consider resources. But then we are encumbered with politicians from multiple generations, who cannot get themselves out of the 'unlimited growth' mindset.

If you were able to correlate population size and its 'needs'. Would you then be able to configure an economy based on the size of consumption?

Knowing this may help determine what it is that needs to be known. As Dick Cheney once said, "You can not know what you don't know ..."

Found it! "As we know, there are known knowns; there are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don't know. But there are also unknown unknowns. There are things we do not know we don't know."

Yeah most people (especially our beloved politicians) are far too scared to have a conversation on this topic.

Politicians and Economists are obsessed with "Growth" rather than standard of living.

For every extra person that adds to the populations we reduce the quality of our lifestyle.

I say we be selfish and try and stick at 5millionish. After all there are probably a couple of Billion people that would prefer to live here than where they are, saying no to all of them is fine by me.

Speaking of immigrating to Australia, it appears that Australia wants its Covid refugees back. The Australian Govt has just relaxed its "Pathway to Residency" requirements for Kiwi's applying for permanent residency. You now only need 3 out of the last 5 years of income over $54k to qualify, and any time spent out of the country because of Covid still counts towards your 5 year residency requirement.