Bernard Hickey says rather than just debating foreign buying of houses we should be having a tougher debate about migration

Bernard Hickey says rather than just debating foreign buying of houses we should be having a tougher debate about migration

By Bernard Hickey

We're now having a fractious debate about foreign buying of houses, but the more important and tougher debate we should be having is about migration.

Does it actually generate the right type of long term economic growth, or does it just pump up house prices and interest rates, suppress wages and reduce the incentives for New Zealanders to obtain the necessary skills for a modern economy?

Neither of the three biggest parties, National, Labour or Green, have challenged the consensus of at least the last 15 years that New Zealand needs plenty of skilled and unskilled migrants to juice the economy along.

There are plenty of employers who regularly argue that they need both types of migrants to keep their businesses, hospitals, hotels and farms running and growing. The Government has a target of allowing around 45,000 to 50,000 new permanent residents each year, including around 60% who are skilled migrants, over 32% who are family reunifications and over 7% who are approved for humanitarian reasons.

It may argue that one reason for high net migration is the uncontrollable movements of New Zealanders and Australians (who are often ex-pat New Zealanders), but that's not the whole truth. The Government does control that Residence Programme and various schemes for international students, working holiday visas and seasonal workers.

Over 300,000 migrants have arrived over the last 15 years encompassing the current National and the last Labour Governments.

Understandably, New Zealanders see themselves as the descendants of migrants in one form or another who have an open and welcoming approach to new migrants. That is all good.

But migration that is too fast can put a strain on the economic system and the key variables of interest rates, the exchange rate, house prices and unemployment show the stresses involved of the latest migration surge. When there are restraints on the supply of houses, schools, motorways and hospitals, as there are in Auckland, then prices and interest rates respond.

Former Reserve Bank economist Michael Reddell pointed last week to Reserve Bank modelling showing a 1% rise in population will lead to a 10% rise in house prices. Last year Reserve Bank and Treasury separately forecast that a surge in net migration to over 45,200 and over 41,500 respectively would increase the Official Cash rate by between 50 to 100 basis points and increase nationwide house price inflation by four percentage points.

Net migration alone is increasing New Zealand's population by more than 1% per year at the moment and that's before natural population growth adds to the pressures.

"Rapid population growth and a low responsiveness of supply have led to housing and urban infrastructure constraints,": the OECD concluded in its report on New Zealand earlier this year.

All this creates costs for taxpayers and ratepayers alike because the infrastructure costs and rent subsidies triggered by net migration has to be paid for with higher rates and taxes. Auckland's ratepayers may blame the Auckland Council for their near-10% rates increase this year, but they could just as easily blame New Zealand's migration policy makers.

The other costs are borne by the rest of New Zealand's businesses and exporters through interest rates and the exchange rate being higher than they otherwise would need to be. New Zealand has had strangely high long and short term interest rates over the last 20 years relative to the rest of the world and there's a strong case that our high migration is at least partly to blame.

The other losers are resident workers and the unemployed because the high net migration has helped suppress wage growth and kept unemployment stubbornly high at over 146,000 or 5.8% of the workforce. This may be as good as it gets.

The latest migration tweaks announced last weekend show how responsive the Government has been to the calls from employers to make it easier to solve their labour shortages by importing workers. The rule change to allow long term migrants on temporary work visas in the South Island to apply for permanent residency is one example.

Wage growth has been much lower than everyone expected in the last two years, which is at least partially due to strong net migration soaking up the pressure that would otherwise have been applied to wages.

It also begs the question: why can't we train or educate some of those 146,000 unemployed for these jobs? Is the Government and society collectively taking the easy option of migration to avoid the much crunchier problem of ensuring kids graduate from schools and tertiary institutions with the literacy, numeracy and life skills needed for these jobs.

Turning full circle, the migration debate is also inevitably intertwined with the debate about foreign buying of houses. New Zealand may discover after October 1 when the tax residency status of buyers will be recorded that much of the money being pumped in from overseas is going through the accounts of new migrants, students and those on short term work visas, all of which would be recorded as local buying.

Ultimately, taking pressure off house prices, interest rates and unemployment will require lots of hard work to improve the supply of houses and skills, but in the short term a debate about the number of migrants is needed. 


A version of this article has also appeared in the Herald on Sunday. It is here with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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We can debate immigration policy all we want but is central government willing to act or even interested if the people say "ease up"
The recent treasury report had this to say: "over the past couple of decades the positive effects of immigration on per capita growth, productivity, fiscal balance and mitigating population ageing are likely to have been modest"
" Meeting the infrastructure needs of immigrants in an economy with a quite modest rate of national saving may also have diverted resources from productive tradable activities, with negative macroeconomic impacts. Therefore from a macroeconomic perspective, a least regrets approach suggests that immigration policy should be more closely tailored to the economy's ability to adjust to population increase. At a minimum, this emphasises the importance of improving the economy's ability to respond to population increase. If this cannot be achieved, there may be merit in considering a reduced immigration target as a tool for easing macroeconomic pressures"
This from an outfit that is normally gung ho about any sort of growth - good or bad.
So the government well know that the positive effects of immigration are modest at best and that it is placing unacceptable and unpopular strains on infrastructure, housing and employment. Yet it just carries on like a ship on autopilot. Is anyone even on the bridge?

The problem is:
National, Labour and the Greens are pro migration.
The media are pro migration. They are either Andrea Vance types or he who pays the piper is calling the tune.
The universities are pro migration and they turn out the public servants and journalists.
The well off either benefit or are least effected.
People prefer people like themselves (and cultures they feel at home in). This has an evolutionary basis. Therefore accusations of racism are potent as they touch a nerve. The immediate goal of proponents of immigration is to force opponents across the disqualifying racist line regardless of the merits of the argument.
The immigration debate should be framed differently: if there was an open border which way would people go? Obviously it wouldn't be equally in both directions but if it is too much in one direction (a flood) then we should be saying no. Ultimately it is the choice of the people (and this is something elites are deliberately denying us).

Mass migration helped Maori, didn't it?

What is your point?

I was trying to introduce Bernard Hickey to Kettle.

As far as I can see Maori are more opposed to immigration trends than any other group.

In March 1991 the Government Working Party on Immigration reported to Mr Birch, the Minister of Immigration. The report recommended the adoption of a points system for the selection of immigrants with skills and money for business investment in New Zealand. The Minister called meetings with a limited selection of 13 Maori leaders in Auckland and 14 in Wellington to consider the report. They were mainly leaders of voluntary organisations. Few of them represented tribal groups. Although many speakers spoke against the immigration proposals, they were ignored. When the Minister was questioned in Parliament during the debate on the Immigration Amendment Bill, he cited all those in attendance at the Maori meetings as being ‘broadly positive’ towards his immigration scheme. This glossing over of Maori opposition is consistent with the procedure of elites generating policy from above and imposing it on the people below. The report was a fait accompli, and the Minister’s
restricted discourse with Maori leaders after the fact, gave an illusion of democratic consultation. The select committee hearings on the Bill were also a charade. Of the 75 submissions made to the committee, 73 opposed the Bill. The two submissions in favour were made by immigration consultants, the people who earned substantial fees from processing immigration papers for clients wanting to get into New Zealand.

We've been colonised by a foreign power once already and an apparently innocuous agreement was used to facilitate the take over. Is the China Free Trade agreement the new Treaty of Waitangi? John Key is talking like it is - he says we can't say no thanks to Chinese land and asset ownership. Another provision is that any Chinese owned business has the automatic right to bring in it's own workers. Not the same but similar.

unfortunately they didn't have control or understanding of allowing migrants in until too late.
they were quite happy to let some in as it improved trade and brought new technologies and products.
when they realised they were being over run in their own country and had been sold down by some smooth talking people it was too late to reverse it.
as they say history repeats for those that don't learn from it

2013 census now up to 25.2 % of NZ not born here, Auckland is 39.1%

The danger for Maori is that they will become not just second class citizens, but third class as the Asian population increases. By 2038, Statsnz projects that the Asian population will comprise 21% of the population compared to Maori who will constitute 20% of the population.


A couple of student immigrants with $26m helping out with donations to the National party of $370k are very good.........for New Zealand the Nats!
Who could ask for more?

Labour and the Greens would probably ask for more. More money that is.

Yes Bernard. Right on target. We need to be having this discussion. New Zealanders are certainly naive about the need to protect their own interest. We have taken the expansion story as gospel. But there are better ways to a good life for us.


What's needed in New Zealand is a Donald Trump or a Jeremy Corbyn!
Not for their policies per se (that are diametrically opposed), but for the candor that each is bringing to the political debate. In every 'democracy' we have been reduced to a choice, often between a pair, of similar Parties, with a few differences about the edges and until we have a different option to the universally agreed policies then we shall remain the same.
What is frightening the establishment of both the USA and the UK at the moment is not 'which of us is going to win' but, 'who is the outsider who is threatening to upturn the apple-cart by telling voters what they must not be allowed to know', and migration is one topic that is desperately in need of alternative views.

(NB:Gareth Morgan may have given it a shot, but that has been blunted by non political issues)


Agree the discussion needs to be had - no issue with highly skilled individuals, who will contribute massively and in areas we have gaps - nor do I mind us taking a % of refugees on a humanitarian basis - but with 160,000+ unemployed we don't have any need for unskilled labour and immigration - much better to develop policies to ensure those who can work in this number actually do instead of sitting on welfare costing the country.

Also developing the apprenticeships, and investment in education to start training and upskilling our next generation to fill the higher skill gaps - to support higher productivity and more R and D

About time that all these decisions were based on the best for all Current new Zealanders - and the long term goals - not short term fixes and papering over bigger issues

It is easy to lose perspective when talking about employment and (permanent, work-realted) migration. It is especially easy to blame migrants for our unemployment levels. But it is just not true.

This chart relates the quarterly numbers of migration (for work) with the quarterly increases and decreases in employment in New Zealand, and unemployment in New Zealand. Even though migration has doubled in the 12 years Stats NZ data is available, it is very hard to conclude this has any impact one way or another on our jobless levels.

The chart is in this link.

Without perspective, conclusion-jumping is easy.


A bigger problem than "without perspective" is the assumptions you just made in your refute David.

He wasn't blaming migrants for unemployment levels.
So no point rolling out the cliched responses for it.

You chart is the biggest load of ...correlation... and actually has no information on other causal factors so is useless for analysis. It's the type of stuff media and government used to get away with before Internet let individuals have voice to point out such erronous processes to the public.
At the very least you would need economic strength data to show which way the economy was building, and indicators of how long migrants stayed in work, and most importantly some indicator of who was actually displaced..... and that latter point is what was being addressed.

We do have over 100,000 unemployed. fact.
what is being done to remedy that?

Will importing labour and skills fix that? NO. In fact it relieves the pressure of government, and on industry and _on_education_and_certification_ sectors to address the problem at all. In fact without pressure from industry, and money still coming in, it lets government off the hook completely.

And _that_ is the problem.

Like a 4 year old eating chops (or eggs)... they can take just the bit they want and dump the rest as not their problem.


David Chaston, (at the risk of being verboten) I would like to raise a statistical point about your chart.

The quarterly employment/unemployment figures are too volatile to provide any statistical comparison. You need to present the figures as either rolling annual or even biennial numbers, so that any trend can be identified.

In regards Bernard's article I would also like to congratulate him on presenting an unusually rational and intelligent piece that without prejudice or fear presents real issues that need discussed.

David - I am not blaming migrants for unemployment - they come and more often take either high skilled jobs we don't have candidates for - or unskilled jobs that the unemployed and many Kiwi's refuse to do - the problem is not the migrants - its the lack of high quality education and skills in our labour force and the attitudes to work from a large number of those on Welfare


David - that is complete rubbish!!

In my parents generation only one income was needed to provide a great lifestyle. Today both partners must work and even then most families barely make ends meet.

Immigration has driven down the average Kiwis living standard. Anyone who says different either has vested interests or has been sucked in by endless media propaganda.

Sorry David -- immigration does have an impact on employment levels. Just go into any service industry and see. Look also at horticulture and hospitality in Queenstown. Perspective.
Now it's true many employers have trouble attracting New Zealanders to do their work. But I don't believe it works for the nation to open the gates so that employers can find people who will work for the minimum wage. When that means we pay benefits to unemployed New Zealanders.
If in future we have to pay New Zealanders $25 an hour to service hotel rooms and run cafes then so be it.
That will be a hard adjustment both for employers and cost coffee drinkers like me. It will cost us.
But I am up for it. I am happy to pay if it means that we have a more inclusive society with members able to participate in work and we also are able to expect them to. And we get government out of their lives.
What is your hundred year plan.

I can corroborate this with my own experience. I'm currently working in the tourism industry and the vast majority of my workmates are from offshore. Australians, Germans, Dutch, Italians, Canadians, Americans, French, Poles, Czechs, Chinese, Japanese, but precious few Kiwis. The foreign workers complain about the low wages (which are miserable) and the cost of living, but are happy to indulge themselves for a year or two, because they get to ski and snowboard for free and they don't suffer the same workplace pressures that they have at home.

I reckon its a pretty marginal business, so I don't know how it could absorb a substantial increase in wage costs. Guest numbers are pretty thin outside school holidays and weekends and people already complain at the cost of the lift passes, so I don't know how much leeway they have in raising prices before it would deter guests from coming through.

price is one of the things that draws adventure and young tourism to NZ.

and yes increase of price dovetails straight into low wage, as the overheads are numerous (especially certification and compliance which are unavoidable - same with products bought from folks who do a lot of advertsing/sponsorhip, as they pass their price onto all their consumers) many of the immigrant friends and tourists I meet say the same things. A lot of the US folk get excited at our high minimum wage, then horrified what it costs for basic living and standard services

Mandarin speaking migrants have a big advantage in the tourist industry. Take a look who is driving the tour busses.

Kpnut - sounds good in theory, but in truth for those lower paid manual jobs in particular, you can't force employers to take those that are unemployable through either ability or attitude. We all run into industries where they just can't get people to do the job, and immigration is what keeps those businesses going - there's got to be a balance on immigration at both ends of the skills spectrum.

True but that's the problem.

The current system makes that the only option.

There is no pressure (reason) to explore other more useful options.
Like making more part-time low skill positions legal. Identifying low cost maximum impact programs for helping these people (as opposed to the slave-work-for-dole bureaucratic heavy BS).
Dropping back the certification process for limited applications.

whole system is designed to milk cash and labour ... what to do with those that don't fit or aren't in a position to pay.

OTOH we have a consumer bound ... I have work to do, but not the extra funds to cover it - so now people needing to work, needing business revenue miss out. and I have none of the advantages from the labour.
When on farm many many jobs could have been done but NZ's oppression employment system meant there was no way I'd risk everything on hiring someone to do it - and the certified people were useless, normally requiring me to go around and finish the job/make safe after them.

But that is the issue - I am an employer and often struggle to fill vacancies at $18 to 22 an hour - so whilst not great - not exactly minimum wage. - but run into the I'm not working for that shit money from people on benefit who are not working.

Why should these individuals be allowed to not work, and still be paid benefits - ??? this is the issue not the long term sick or vulnerable, single parents of under 5's - but healthy individuals just refusing to work and contribute

We should be spending the money on educating, supporting and training those people to play a productive part in the society they live in - and not allowing them to simply scrounge off the rest of hard working New Zealanders - and part of this is creating better jobs and opportunities that pay better - but part of it addressing a system that creates a welfare dependency.

Might be a good idea for those who harp on about not cutting benefits, or taking them away for drug users to remember that they spend all day Monday each week working to pay the taxes that are partly given to beneficiaries - and in SOME cases not all by any means used to pay for Alcohol and drugs.

And as for freedom and choice - for those that ARE HEALTHY but have the attitudes you mention - that's a choice they are making - and the consequences of that choice should be a restriction of choices in many other areas - plenty of working people who cant afford to buy a drink or go out for a meal - instead chose to feed their family.

Don't get me wrong, the immigrants I employ are very hard workers and an asset to my business - but there is nothing they are doing that could not be done by many of those currently unemployed.

Back to my original point - we need immigration - but it should always be adding huge value and in areas that we cant currently meet - and that is not unskilled labour

All true, however examine Immigration stats of work visas and resident visas issued
Go through it and have a look at the skills being imported over the past 5 years

Work Visas
Recorded Occupations of Work Visa principal applicants, by occupation standard

Total for 5 years 872,000
Recorded 286,000
Not recorded (unknown?) 586,000

This is an extract of the largest identified categories

Aged - Disabled Carers
Hospitatlity Managers
Ministers of Religion
Office Managers
Personal Care Assistants
Retail Supervisors
Tour Guides
Truck Drivers General

Stats are here

Of those skilled, chefs and restaurant managers are the largest

Look under - W3 - Work applications approved by occupation

yes because existing immigrants can open ethnic eaters then import "specialist staff" from back home. they don't end up in sustainable businesses but it's lots of points to get someone with "qualifications" and "essentials skills with a job waiting" when they can't speak English properly....

Where is your business kpnuts?

From where I stand, $18-22 is pretty generous and considering the "jobseeker support" payment is equivalent to $6 per hour. I can't imagine someone receiving a benefit without also having an illicit secondary income turning down your offer.

"Why should these individuals be allowed to not work, and still be paid benefits "

Did you report them?
When I was on benefit refusal to take on an appropriate job was automatic stand-down.

Part of the difficulty is that cost-of-living is so high, and benefits (esp for solo mums) so high that it frequently costs them more to work that it does not to work. That's why I often mention about lowering the cost of "life basics". For many they immediately lose accomodation suppliment and any other assistance, effectively meaning the first 80-100 they make is actually a loss (they lose $1 for $1 gross after 80, and since they only get Net they lose money). Working costs, travel, clothes.

How many hours are you promising and is it regular. It's got to be regular, especially if it's going to dovetail into other responsibilities (training, kids, partners, hobbies)

And we don't need more competition for skilled labour. Lot of folks on unemployment that DO just need to be taken on, plenty of them do have partial or full degrees and other qualifications - just can't do anything with them as the employers expect degrees and many years experience, which we can't get unless people are offering positions using those skills to us lesser mortals.

I have always thought the one thing wrong with our system is payment for nothing.
it has led to a inter generational you owe me mentality. I personally would like to see anybody that collects a unemployment benefit have to do something ' to earn it' . I am not talking much 1 or 2 eight hour days a week doing something in their local community, helping out at schools or old peoples homes, mowing the lawns at the local rugby/lawn bowls club.
anything to make you feel like you are earning the benefit and not just being given it

What a stupid comment. The unemployed are unemployed for a reason. They're unemployable. That's why migrants are brought in to fill the vacant positions.

and what can be done to solve that _unemployable_ problem? certainly your way isn't fixing the problem is it.

what should we do with us terminal unemployable people? just kick them into the street? support them at everyone elses expense (and their kids and grandkids).
You think some of them might just see folks like yourself as completely undesirable and thus want nothing to do with your world and that's what makes them unemployable by people with your attitude?

We could certainly could do with a better informed discussion about migration policy.

I have read some of Michael Reddell's arguments on migration. I'm not sure that I understand them fully but they could do with a more detailed model of migration patterns and composition as their basis. For instance during the calendar years 2005-2014 the number of people arriving in NZ on a permanent resident visa declined by 30% while the work visa and student visa categories experienced high growth. Both the last two categories have a much lower impact on housing than the first. But you never see this important distinction mentioned publicly.

There is a lot to discuss about the overall costs and benefits of migration but when it comes to housing playing with immigration numbers is still a demand side tinker. We have a supply problem that would still exist even if managed migration was cut to zero.

The nuance that is lost on most people is that we need a responsive housing supply system. Because our system plods along at a highly predictable pace (thank you ,councils) the speculators get plenty of opportunities to exploit the mismatch between demand and supply. Canning immigration doesn't change that fact at all.

Without any visa-based migration we would have had two occasions in the last ten years when the country's population declined. The volatility in the residential construction industry would have been severe. You just can't build a long-term industry on feast or famine demand. And we would still have land-banking, "investment" and, therefore, inflated house prices.

You can't base an economy on building houses?

Done the right way construction would be a significant part of our economy for at least the next 30 years. But who is going to invest in an industry where demand not only fluctuates wildly from year to year but goes to zero from time to time?

Houses are workers houses. You can't base an economy on building one part only of the factors of production?
The point is that migration creates it's own demand; the problem with that is that it won't lead to higher productivity unless a higher population brings large positive benefits (which haven't shown after 20 years of growth) and what happens if all we get is more people trying to eek out a living here but no rise in incomes (except for the few)? Architects are criticizing the houses being built "they won't age well ("slums of the future"). Imagine larger and larger sprawling slums while we wait for "large positive benefits".

not under our current system.
To much is skimmed off to be sustainable economy

Dead right, but in a properly functioning one, it makes up a part

Well said.

I understand that many overseas student visas turn into resident visas because of our lax attitude to the application to stay. Most countries do not allow application for permanent residence without the applicant living offshore. We seem to allow the use of prospective employment without bonding and of course there will be no follow up to make sure the employment actually is longer term.

I thought that was the case here? has it been changed

On Michael Reddell's blog he attends the Pathways Conference: 120 attendees 50 public servants and no one (he suspects) who is just a little bit skeptical of the benefits of immigration. So public resources ploughed in to immigration propaganda. He has an outstanding request with MBIE for advice to ministers on numbers of migrants. Why would they not want us to know that?
Shame on the Green party for their socialist paradigm of population issues.
Shame on National Radio for it's biased coverage (shame on the media generally).

one thing that interests me about Michael Reddell's writings is the notion of immigration into developed countries and the effect on per capita GDP (not to mention quality of life). Development seems to relate to making the most of the achievable advantages. While it may be true that bigger populations have advantages of scale it is a case of other things being equal eg could a Samoa become a Singapore? Singapore is a niche state?


Watch Q and A in TV One on demand. This morning Rodney Jones of Wigram Capital Advisors based in Beijing talks about Chinese investment in NZ housing. He says it is a “big issue” - capital outflow from China last 12 months $600 billion NZ – property market in Auckland is a symptom of that. Labour raising this caused a flurry in media that came and went. Says government should bring in a stamp duty on foreign investors at 20%. Says China has banned foreigners themselves in Beijing, Shanghai etc unless you have been resident 5 years. We are facing a serious issue in Auckland housing. We must develop strategies now to deal with the spillover into the Auckland.

Thanks bigblue
watched it, was interesting how he said china stepped in to control the housing bubbles internally
I also got the impression he has been talking to officialdom here who have not been listening to him and he seemed frustrated over it.


You are right on the money Bernard – the simple economic fact is that we have let far too many migrants come to Auckland in the last three years and it is the Chinese that are now based here who are buying multiple rental properties and paying well beyond the fundamentals. This combined with the unintended consequence of the 30% deposit requirement for Auckland investors from 1st October has lead to a surge of house sales that have pushed prices up significantly over the last two months. Barfoots sales figures for July which will be released in the next 48 hours will show this. They should also publish the surnames of all purchasers – suspect 60% to 65% of sales by Barfoots in July will have been to Chinese if what has been played out in the auction rooms over the last 4 weeks is any indication.

This debate, is of course, not new. It's a matter of continued debate as to whether the author of this piece from ~50 years ago was correct or not.

We must be mad, literally mad, as a nation to be permitting the annual inflow of some 50,000 dependents.....It is like watching a nation busily engaged in heaping up its own funeral pyre......For reasons which they could not comprehend, and in pursuance of a decision by default, on which they were never consulted, they found themselves made strangers in their own country. They found their wives unable to obtain hospital beds in childbirth, their children unable to obtain school places, their homes and neighbourhoods changed beyond recognition, their plans and prospects for the future defeated; at work they found that employers hesitated to apply to the immigrant worker the standards of discipline and competence required of the native-born worker; they began to hear, as time went by, more and more voices which told them that they were now the unwanted. On top of this, they now learn that a one-way privilege is to be established by Act of Parliament; a law which cannot, and is not intended to, operate to protect them or redress their grievances, is to be enacted to give the stranger, the disgruntled and the agent provocateur the power to pillory them for their private actions...

(Powell 1968 - "Rivers of Blood speech)

Ask Matt ridge about that one : " at work they found that employers hesitated to apply to the immigrant worker the standards of discipline and competence required of the native-born worker;"

I always have a good laugh when a former member of the former British empire is quoted about 'rivers of blood'. We all know that the poms spread love peace and tolerance around the world just for sh*ts and giggles right?

No laughing matter I assure you. Yes, I thought Enoch was just a populist politician at the time, but now it seems he was willing to say what no one wanted to believe:

Whats photos of an attack on a bus full of Israeli tourists in Bulgaria got to do with the topic in question Roger?

Michael Reddell

In the late 19th century and early 20th century, immigration to New Zealand could be seen
as reflecting a favourable shock to the tradable sector. Opening up new lands to
production, falling transport costs, refrigerated shipping combined to lift the population
capacity of New Zealand while still offering high wages and high rates of return.

By the middle of the 20th century, New Zealand was settled and producing, and
technological change in the key export sectors was no longer as rapid (relative to other
producers). The factor price equalisation justification for strong population growth had
dissipated, yet population growth remained high. Across the OECD, there is some
evidence that rapid population growth in post-war advanced countries was associated with
an apparent cost to per capita growth rates.

Indeed, in the period between the end of the Second World War and the late 1970s, the
New Zealand debate about immigration was primarily about its macroeconomic impact.
Economists such as Belshaw (1952), Gould (1982), Holmes (1966), Hawke (1985, 1981)
and others warned that immigration shocks in a supply-constrained economy with low
Indeed, in the period between the end of the Second World War and the late 1970s, the
New Zealand debate about immigration was primarily about its macroeconomic impact.
Economists such as Belshaw (1952), Gould (1982), Holmes (1966), Hawke (1985, 1981)
and others warned that immigration shocks in a supply-constrained economy with low
unemployment would generate excess demand, inflationary pressure and a deterioration
in the balance of payments.

In 1974, New Zealand tightened eligibility for entry, and began focusing more on the skills
of migrants instead of favouring particular source countries. Soon after, in response to
declining economic prospects in New Zealand, large numbers of New Zealand citizens
began to leave. A marked liberalisation of arrivals policy began with the passing of the
Immigration Act in 1987 and continued with the introduction of the points-based system in

and those changes ( "long awaited") were pure social engineering

The attitudes of New Zealanders in the mid-1990s towards immigration may not have reflected the positive perspective on the value of diversity in our society that is contained in the Review of Immigration Policy August 1986. But this does not mean that the globalisation of immigration to New Zealand was an “unintended consequence of policy changes in 1986”. It was a deliberate strategy, based on a premise that the “infusion of new elements to New Zealand life has been of immense value to the development of this country to date and will, as a result of this Government’s review of immigration policy, become even more important in the future” (Burke 1986:330).


This process of population replacement is occurring at a time when natural increase amongst all components of the New Zealand resident population is falling.

"Soon after, in response to declining economic prospects in New Zealand, large numbers of New Zealand citizens began to leave."

It wasn't "declining _economic_ prospects. In todays' parlance it was effect of high interest rates (Didn't RBNZ and finance min say high interest rates mean the country is high economic growth), the excessive control and regulation in local markets that prevented R&D and career development, and the certification controls that stopped NZ importing foreign technology to progress or develop careers unless the technology was being imported through the government assigned monopoly. Old terminology these things were lumped together as "economic prospects" and part of the reason why the way forward is correct identification of the different parts of the system - not everything responds the same when hit with the government hammer, and not always the same way twice.

The reason for the leaving is that we _had_ open door. And technical skills were short. But development was low, and NZ has always been very bad at protecting it's citizens IP rights (which is one reason I was sacred of TPPA). We did have great big debt, and the low unemployment meant enactment of such things as "Gemstone" to force unemployment rates UP, so employers could then get a choice of employees and pressure good employees to stay - previously with very low employment it was easy for critical staff to get a stranglehold on an organisation since finding a replacement was nigh impossible, and the leaver could walk into a dozen other jobs looking for that skillset. Something which is difficult with todays level of specialisation and certification (want Drupal, Lua, and .NET skills? sure lots of people out there have a little skill but getting them to professional level takes time and resources. Want to get a plumber or electrician? Takes 3 or more years AND a qualified plumber/electrician to make it happen. Massive inelasticity. Back in the day the skill level was much lower, so people could be trained as assistants much quicker, and correspondingly most employment hurdles were much lower for reapplying - and employees expectations of remuneration much lower (None were expecting $100k+ (ie paying $30k+ to government of a company's market revenue))

The United Nations has a strategy of 'diversity' and multiculturalism for all European countries including NZ, Australia, Canada etc
With statements like these: "The countries of the EU have two options: They can either make a vain attempt to revert to outdated, mono-ethnic models of statehood, or they can accept diversity with the realization that their national cultures will not only survive, but flourish.”

This is the UN Migration Representative advocating increased immigration and uncontrolled borders for Western European countries.
So the agenda is not simply an economic one (even although those benefits are debatable as well).
This is about NZ falling into line with a wider agenda.

Because the UN policies have been so beneficial to everyone else who took them up.

Tell the UN to fix Israel/Palastine problem first, then get back to the rest of us with their _agenda_.

And when they do start with what testable bonuses are materially going to result - not just vague beliefs "good stuff" will happen, (vs things wot might be bad maybe )

Hah. The UN Peacekeeping Motto: "Let's hold committee meetings until they're All Dead"...


Housing is only the tip of the iceberg.
Traffic conditions are hurting AKL big time now, watch job opportunities,education, health and policing suffer as the years go by. Trouble is no one is listening, they all have such short term focus - just out to the next election.

s/"no one is listening"/"no-one in power is listening"

Why should they? They keep getting elected anyway.

Don't blame the politicians so much as the context.

In most cases, they know exactly what should be done to fix the issues:
- rationalise immigration
- dismantle Brit-style planning policies
- embed a 'right to build' constitutional framework a la Germany
- de-credentialise the Elfin Safety busyness
- invoke trust-busting on the Building Duopoly
- and so on.

It's just that they know perfectly well that doing any of this will see them tossed out next time the Great Unwashed get their paws on a voting slip and a marker pen.

So, they don't.

Incentives Always Matter.....

Thank you Bernard, this is an issue (immigration) that should be debated.

Peters slams Govt over immigration

has been pulled from radio NZ website. Instead it links to
Peters defends embattled Corrections Minister. That item lead the news on One and Three.

What happens if the media is throttled by either vested interests or a rabid left wing? I recall Winston using the phrase "tsunami of migrants" and Mary Wilson saying to the reporter: "should we even be reporting him?"

Mr Peters will be getting my vote. He isn't perfect, but at least he isn't afraid to voice his concerns.

Its too late to close the door on immigration , its so far out of control already that I doubt we will ever recover form this utter stupidity .

Winston Peters , who I detest , is actually right on this score

And here's the bad news: Spoonley says the two big talent pools in our region, India and China, will face the same challenges and want to keep more young people at home, forcing us to try new markets.

He said he was "deeply disturbed" some saw problems with immigration instead of opportunity.
"But we are not going to stop it - India and China have the two biggest talent pools in the world and we are rightly recruiting from them."

What was it Keynes said? "When the facts change I change my opinion"?