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In its final report on an inquiry into New Zealand long term immigration settings, the Productivity Commission recommends abolishing the category of 'permanent resident'

Public Policy / news
In its final report on an inquiry into New Zealand long term immigration settings, the Productivity Commission recommends abolishing the category of 'permanent resident'
prod-imig1

The Productivity Commission's recommending the issuing of a policy statement requiring New Zealand's governments to set a clear strategic direction for immigration policy.

That's the highlighted recommendation in the commission's final report into its inquiry into New Zealand’s long-term immigration settings.

Another recommendation is that the Government should discontinue the issuance of new Permanent Resident visas for new Residents and require new Residents to renew their Resident visas every six years.

Altogether the commission has made 24 recommendations. 

Commission chair Ganesh Nana said immigration policy has profound effects on families, communities, businesses and those who aspire to call this country home.

"Yet immigration policy appears to be decided in a black box, shielded from the public scrutiny and robust policy assessments required of most other public policies."

He said improving the country’s "languishing productivity" is a long game.

"This is often at odds with how successive governments have run the immigration system: reactive to short-term pressures and sometimes conflicting priorities."

On the recommendation to issue an Immigration Government Policy Statement (GPS), Gana said this would require governments to set a clear strategic direction for immigration policy. Governments would also be required to specify how the demand for temporary and permanent visas would be managed to reflect the country’s capacity to settle more people and how it would invest, if necessary, to expand that capacity. Ideally the GPS would look ahead for five to 10 years.

The commission's report says several public management tools are available in the New Zealand state sector that could serve as guides for an immigration GPS. The two that the Commission thinks best to consider are the Government Policy Statement (GPS) in the Land Transport Management Act 2003 and the fiscal responsibility provisions of Part 2 of the Public Finance Act 1989.

“A GPS would have improved the transparency around the Government's recent immigration rebalance announcement, by including how policy changes would affect the expected number and composition of migrants and the planning range for residence visas," Nana said. “It would have explained how its objectives in immigration related to its other objectives for education and training, and investments in infrastructure overall.”

The commission has found that the current immigration system:

  • lacks transparency and clear objectives;
  • struggles to make trade-offs between employment, productivity, capacity, and other objectives; and
  • has a short-term focus and takes incremental decisions that fail to take account of cumulative or wider effects, or other government policy objectives.

Here is the detail of the GPS recommendation:

The commission says an immigration GPS could change behaviour.

"What would have changed if an immigration GPS had been in place over the last thirty years?

"Governments would have been tracking a broad range of indicators with an eye on the population growth rate and pressures on absorptive capacity.

"Figure 5.1 shows population growth rates over the last 80 years. Hypothetically, if the government of the day made investment decisions based on a planned annual population growth range of between 1% and 1.5%, and the rate was threatening to exceed that over several time periods, the government of the day and other parties could have adjusted their migration and infrastructure investment decisions.

"Of course, any tightening of criteria to lower migrant inflows would need to assess the costs and benefits of doing so (including taking into account short-term effects in the labour market and on macroeconomic demand pressures). 

"It is also clear that applying a simple rule across time without understanding underlying causes would be unwise.

"For example, since the Second World War, New Zealand’s population growth has been a story of two halves. In the first half, to around the 1980s, New Zealand’s population grew largely from natural increase. In contrast, in the second half the population grew mainly from net migration (Figure 2.1).

The commission says restricting migration to prevent potential job displacement of low-skilled or low-paid workers may cause greater harm because migration, on average, creates more jobs than it destroys, and has a small net positive impact on wages and employment of local workers and on productivity.

"Even so, for those negatively impacted through job loss, the cost can be very high and felt by the individual, their whānau and community.

"The Government should monitor and evaluate the impacts of the immigration system, and where there is evidence of migration displacing local workers, the Government should empower displaced workers. Empowering displaced workers could include improved access to education and training; tailored active labour market programmes; and Industry Transformation Plans. Such an approach should be a primary focus regardless of the reason for displacement."

On the recommendation that the Government should discontinue the issuance of new Permanent Resident visas for new Residents and require new Residents to renew their Resident visas every six years, the commission says eligibility criteria for this renewal should include residence (eg, a minimum of two years residence in the last six years) and other measures of commitment (eg, investment, running a business, or having the rest of the family living in New Zealand).

The commission says New Zealand has large numbers of Permanent Resident visa holders offshore.

It says the Ministry of Business, Innovation and Employment (MBIE) has estimated that over 110 000 Permanent Resident visa holders had been overseas for at least six months at the end of February 2020 (just before the border closures due to the pandemic) with almost 80% of them being overseas for more than two years.

Moreover, Immigration New Zealand issued an average of around 40 000 residence class visas every year from 2011 to 2019.

"If this trend continues, another one million people will obtain New Zealand residency over the next 25 years – suggesting that the number of Permanent Resident visa holders living overseas is likely to reach 200 000 in a couple of decades.

"This situation increases the risk of future population volatility and makes planning for housing, infrastructure, and public and private services more difficult.

"These problems are compounded by foreignborn migrants being more likely to return to major cities, compared to the New Zealand-born diaspora (Stats NZ, 2021a). Any unforeseen flow of returnees due to overseas inter-state or civil conflicts, natural events or economic downturns could put intense pressures on public infrastructure and services.

"Managing such a population surge could be a significant challenge for policymakers and create wellbeing, productivity, and fiscal costs and risks (NZPC, 2021c). As noted, the current settings allow Permanent Residents, even those on long-term absence, to return to New Zealand at any time and make use of a range of public services, including healthcare and schooling for their children. Requiring new Residents to renew their visa every six years would limit these risks, should a person decide not to stay or renew their visa."

Another topic raised in the report is that several visa categories have been created to fill gaps and meet specific local demand "in an incremental and ad hoc way" without examining the cumulative impacts.

The commission recommends therefore that MBI should develop a rolling programme of independent evaluations for major visa categories, to assess their productivity and other economic and wellbeing outcomes.

"These evaluations should be published and should inform immigration policy and any future immigration Government Policy Statement."

And the commission recommends the Government should actively monitor the labour market for impacts on particular groups or communities over the economic cycle, with a particular focus on times of significant changes in immigration policy and/or migration flows at a regional or national level.

"If indicators of job displacement are found, the Government should undertake further work to understand their cause (for example, by applying the methods undertaken in the Ministry of Business, Innovation and Employment (MBIE) 2018 study).

"At the same time, the Government should address any impacts through improving access to education and training, tailoring active labour market programmes, and through Industry Transformation Plans.

"The Government may need to consider short-term support policies or programmes, or bespoke interventions, to protect those particularly vulnerable. In addition, MBIE should regularly update its analysis of migration, employment and wages to assess the impact of current migration on local wages and employment. MBIE should undertake this analysis at the aggregate level, as well as with a distributional lens."

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77 Comments

This reads like a report designed to soothe the anxiety around endless importation of wage slaves, but it effectively outlines that the government needs to be transparent on immigration policy using clear policy metrics.

But that just opens up the government to opening the flood gates in proportion with infrastructure and government spending. Any metric set by the government will be manipulated and the level of infrastructure service available can simply be deemed 'sufficient' to meet the needs of business for indentured servants. 

The reason it was opaque before was because big business used its lobbying fronts to demand the number of visas handed out and this was well known within MBIE by the bureaucrats themselves. I suspect the practice hasn't changed at all and this merely provides a shield for the government to continues its plantation economics.

Why is it worth importing endless alien peoples simply for a percentage point or two of GDP?

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Because very few (none?) modern era societies have managed to deal very effectively with rapidly declining birth rates.

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Rapidly declining birthrates are a symptom of the rapidly declining affordability of housing. Unsure how mass immigration resolves this problem.

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Agree with this. They've made it too expensive to live even for a working couple they don't have time to even think of having kids even if they want to.

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*looks at rest of world*

Appears to be a little more involved.

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Yes, it is. It really does play a big part.

Edit: Huh. You edited your comment?

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If that were strongly the case, you'd see birth rates increasing in areas with house price depreciation.

Maybe in urban Detroit.

Was super obvious even 20 years ago our demographics weren't capable of supporting tomorrow's aged population. So what, less immigration, much higher taxes to support the elderly.

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It's a factor. But it's not the only factor.

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Sure, but debasing every issue facing NZ by attributing it to the housing crisis doesn't frame the issue properly.

Sounds like there should be a social media derived party to gain 5% or more of the vote, with the sole policy of a massive nationwide housebuilding scheme to make housing of little value. The voting mechanism and technology already exists.

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You'd need a few screws loose to argue that people not having enough kids has nothing to do with the insane cost of housing.

Labour got into power with the flagship policy of a nationwide house-building scheme in 2017.  Turns out their priority was mass immigration and building an undemocratic racist apartheid.

Voting for things doesn't work.

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Maybe the elderly can work.

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Or just cut back on the RV's and e-bike tours. 

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So super obvious that other countries raised the retirement age.  NZ chose the immigration fix. Rather short sighted; I should know because I'm an immigrant (2003) and now retired, receiving Superannuation and medical treatment for a heart condition.  The proven option is less immigration, increase retirement age, invest in keeping the elderly fit and healthy.

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Raising the retirement age another two years does seem reasonable given life expectancy increases. (Understand the point re tradies and physical breakdown, but it's not like we don't need more building inspectors to keep the sector from building shite, so we could employ them.)

Of course, when microplastic accumulation and poisoned drinking water bring life expectancy back down we can always adjust the pension age down again.

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The first pension in the UK chose 65 because that was life expectancy.  Apply that now and it would about 80 for men and 83 for women.  

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It is obvious that NZ has to raise the retirement age.  In addition, immigrants need to have lived and worked in NZ for 20 years before they can be eligible for NZ Superannuation.

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There was a time when families looked after their elderly, now shoved in a rest home requiring imported labour. Of course now, with increasing population, depleting resources and inflating living costs, everyone works longer and granny gets shoved in an aged care factory costing 000s a month, so we need to import people to staff the factory and pay the taxes etc....... 

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Smaller families. More mobile families - they can be like my kids living in England and France.  Granny has the whip hand so long as she owns her own house.

 

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When you say families looked after the elderly, what you really mean is women looked after the elderly, because caregiving was women's work that had no monetary value.

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Nope. Not even close. The lowest birthrates occur when women are better educated, partnered later in life, earn higher incomes, better access to birth control. Women who are free to choose can and do choose fewer births, later births and many eschew the whole process altogether. And that is a thing to celebrate in an overpopulated world.

 

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They can choose that, but let's not pretend western families aren't being constrained by living costs and the availability of traditionally-sized housing too. At some point you're past the effects of well-earning and highly educated, and the thing making the difference is the fact that spawning is no longer financially viable except for all but a select few. 

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The people having the least children are the more well off ones, and it is mostly because women have the choice not to repeatedly breed. There'lll be a few delaying because of housing costs, but at the lowest end is where you find the higher birthrates. You simply cannot argue that. 

Ir is an enormous commitment and potentially dangerous thing to do, as women can end up abandoned if the partner moves on or dies, leaving women particularly in precarious positions. 

Women can and do choose fewer births, a later start (that alone can reduce birthrates, especially if the children they have also choose a later start) and more and more are deciding not to breed at all, preferring their career and other things in life that they'd rather do, not everyone is a born parent.

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This is true but only a part of the problem.  

If men asked we women why we don't want more children you would get a greater perspective on the issue.  

Most women from gen X onwards now have to work to afford a family(not so much in past generations). They also still take on the lions share of the child raring(there are far most expectations on the level of parent participation than in generations gone and costs) and the lions share of the household work and management(larger homes and greater initial and ongoing costs than in generations gone by). Effectively women are working three jobs while being paid for only one of them(ouch). How many children do you think women really want to raise in this situation? I for one think the replacement two is plenty to cope with, especially without the help of a village(you know the saying..."it takes a village to raise a child").  Then add the guilt built into female maternity and we have to deal with the mental anguish of the future prospects for our children, due to future economic conditions and climate change. Is it any wonder women are choosing to refrain from marriage and children bearing?

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Because no one can afford it and we are worked to death to merely own a home, which requires delaying children until near infertility? Importing alien peoples is a civilizationally suicidal move, because when this economic situation comes crashing down, we will all be at each other's throat in future.

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Yeah...just imagine how much else could be achieved in New Zealand if so much of adult life wasn't forcibly focused on achieving security of housing. We have truly shafted the country with greed-driven policy.

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That is true. The downside of diversity is reduced social cohesion.   

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Social cohesion is a choice.

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Those bar charts are interesting. It is not clear whether migrants came into NZ on the basis of providing hospitality services or some other route (family reunion or student concerts) - but you would think NZ policy statement should involve importing highly qualified staff in the main NOT (so much) those who can learn such skills as hospitality, administration, and to a certain extent forestry/agriculture on the job. Trouble is NZ is a low-wage economy which has helped keep inflation low by suppressing wages for such lower-skilled jobs. Also there are a lot worse places than NZ in the world whereby there will always be willing participants to migrate from to sustain this wage suppression strategy.

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A factor rarely mentioned is that opening the immigration floodgate would effectively marginalise Maori even more by diluting their percentage of our ethnic makeup. The government must be very aware of this.

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The suggestion that the govt should consult Māori as part of treaty obligations is worth considering.  The late Ranginui Walker made an eloquent case that the treaty only permits immigrants from countries where the Queen is sovereign.  There are still forty odd such countries but the empire that the sun never sets on now is St Helena, Pitcairn, the Falklands, etc -with Barbados being the last to leave. Defining it as the commonwealth would permit Indian immigrants but not Chinese or Filipino etc. 

 

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I'm proudly a Kiwi of English origin but if I was Māori I would propose that the British over the last 180 years have over-utilised their quota so no more would be allowed in.

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Thats capitalism baby.

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I shouldn't worry. Government regularly ignore most, if not all, the findings of committees and working groups. This one is unlikely to be an exception.

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Yes, I agree. Even if the PC makes rational findings, I think that its real purpose, through its submission process, is to give a venting mechanism for people that are getting increasingly frustrated at successive Govts. incompetency.

It stops the rational people from starting to demonstrate in other real forms, whether it is changing their voting habits or rioting in the streets.

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The commission says restricting migration to prevent potential job displacement of low-skilled or low-paid workers may cause greater harm because migration, on average, creates more jobs than it destroys, and has a small net positive impact on wages and employment of local workers and on productivity.

Doesn't this statement disprove the thinking behind this Government's Great Immigration Reset ?

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Given we can't preserve living standards for our existing population in terms of access to basic services or environmental issues, we're probably at the 'might as well just go for broke' policy stage. We've got no capability in rolling out rapid transit in our cities, the urban environment and density issues are being undermined by councils and we're still unable to build basics like 'housing' at anywhere near a reasonable $/sqm cost, let alone hospitals, schools, universities or medical colleges. To quote Fidel Castro in The Simpsons "We all knew this mumbo jumbo wouldn't fly".  

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Economists love to say that migration doesn't suppress wages, although there's plenty of evidence opposing that (including the real life 2020 Covid closed borders experiment) that's had wages rising for the first time in years particularly in industries (like agriculture) dependent on migrant labour.

Notice there's no mention of climate change, or NZ's reliance on fixed natural resources to generate export revenue.

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Listen closely and you'll notice those economists quote the findings from studies performed in dissimilar economies such as Germany and the US. There has not been any such extensive research performed in NZ, at least in the 21st century.

Migrants are overrepresented in the skilled workforce in most of the high-value export sectors in those higher-wage economies. Their economists argue short-term wage deflation from migrant labour in these sectors are more than offset by the long-term gains from export success for the broader economy.

One has to be a certain type of moron to think that the same applies to low-value tourism in NZ.

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That statement is untrue.  Authoritative liberal economists have reluctantly stated the obvious: low-paid immigration is good for the immigrant, may or may not be good for the country but definitely is bad for the low-paid local workers. 

For example Paul Krugman ""a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration"";

"" the net benefits to the U.S. economy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of 1%""; 

""while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration"";

""The most authoritative recent study of this effect, by George Borjas and Lawrence Katz of Harvard, estimates that U.S. high school dropouts would earn as much as 8% more if it weren’t for Mexican immigration.""

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Advisor - good point. Also the net positive impact is so small that minor changes to the parameters of the studies could well reverse their findings. 

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This world needs fewer of us, and last time I looked, we are part of the world. An artificial rapid population growth has done nothing to improve the basic lot of everyday NZers. We are now in a situation, via wholesale selling off to foreigners and outsourcing everything (we can't even park our bloody cars without a foreign corporation for crying out loud). All those chickens are coming home to roost, we have almost zero ability to provide for ourselves now, and profits are disappearing overseas.

At least lets legalize marijuana use and production, maybe then we wouldn't have to have so much money fleeing the country in a bid keep the illicit drug supply up.

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Do you actually think people are importing cannabis from offshore?

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No one thinks that but we all know the gangs prefer to sell more profitable drugs than weed and people often buy it because they are not offered an alternative. Meth killed someone I know. 

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That ship has sailed unfortunately. Cannabis funded and built up gangs for decades but they've moved on. That revenue should've been cut off decades ago, through legalization.

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Duh. No. But if cannabis was easily and legally obtained and out of the hands of gangs, then their opportunity to push the other rubbish onto who would normally be happy with cannabis would be gone.

I hope everyone who voted 'no' understood they were voting WITH the gangs and crims.

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Permanent visa or residency requirements should be they must reside here for more than 2 years in 6 it should be more like not to be out of the country for more than 6 months per year . Don't have much faith in nz government being professional enough to have a disciplined approach to immigration. 

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Exactly. The rule should be if a permanent resident is out of the country for more than 6 months in any 12 month period then they should lose their NZ residency visa. 

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200,000 have applied for fast track residency visa. 

The floodgates have opened.

 

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I understand these  are people already living in NZ on temp visas etc

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Meanwhile the global race for talent continues 

World's top graduates get new UK visa option - https://www.bbc.co.uk/news/uk-61628740

Unsurprisingly, no NZ Universities qualified 

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That chart half explains the housing crisis.

Too many people chasing too few houses.

When your own citizens are sleeping in cars in the tens of thousands, when multiple families have to live in one house, when families become homeless because a rental got sold and theres nowhere else to rent.

...and you want to bring more people in.. NZ is still a few hundred thousand houses behind, I am all for restrictions on immigration so anything to make it harder.

 

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Well, immigration has already become harder and harder over the years. INZ reached out inviting people to come in the 90s.

NZ runs an immigration economy. Immigrants provide not just labour but also consumption. It is always easier to blame immigrants, but there are structural problems like this report pointed out

 

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You nailed the problem with one word, intentional or not? 'Consumption'

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The statistics show it has become easier, record high levels of immigration in recent years and about to be a record high number of permanent residents, labour breaking all the wrong records. 
 

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Or maybe we should deport people instead to control labour forces. Why is it wrong to blame the importation of alien peoples for suppressing wages when wages have skyrocketed with closed borders?

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Skyrocketed? What an extra $2 an hour of an already low wage is your definition of skyrocket?

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Tech wages are up 30-40%, so yes.

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Source? 

Also which sector of tech and represents how many people? Overall what I have been reading that wages are up around 5% across the nation. 

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Working in the sector, you can't even get a senior dev for an interview for less than 120-130k right now. It was 100-110k two years ago. Most of the time you are looking at 140-150k for a senior, 160-180k for a Lead.

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Sounds like being a senior dev and a landlord is the ticket to riches in NZ.

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I'm in ICT too. I have lost 3 senior devs in two months, the market has gone nuts. Very difficult to get skilled people with the current border situation. 

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The pay rises aren't that much compared to the pay rises given to property owners over the last couple of years.

I received both, but more meaningful of one from the Reserve Bank than from my company (though that was pretty good too).

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Tech wages are a tiny part of the community.

As a tech guy, you might have already heard of this cool site called Google?

https://www.stats.govt.nz/news/annual-wage-inflation-rises-to-3-0-perce…

3%

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Dairy farm workers, horticulture workers, truck drivers are a few off the top of my head where pay rises have been substantial due to lack of migrants.

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"Why is it wrong..." if you think of it from this perspective:

Immigration is a business, and immigrants are customers. Would you tell your customers to piss off? Of course, you may do it if you are a monopoly. It is certainly not the case for NZ, as many other countries are competing with NZ to get good people.

 

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Elevating productivity is a long-term game indeed. Many things can determine it; leadership is one of them. NZ can certainly use better leaders at almost all levels. 

I don't know if removing permanent residency will make a huge impact. It makes no difference to people who want to stay in NZ, and people who wish to use NZ as transit can always apply for citizenship and leave. 

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NZ productivity problem = Economy based on incentivising land speculation rather than productive work.

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Yes this is true.  Why can't we fix this?  Because we are not competent or worse those in charge are corrupt.  (Yes hit me over the head with JK again lol).

This would be simple enough to fix with penalty tax rates for investments in housing beyond say the second house.  Current changes have been effective in the same way a baseball bat can be used in brain surgery.  The operation was a success but the patient died.

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Yeah...a chronic infestation of property speculators in parliament seems to have been the problem for a while now. Occasionally waffle about productivity and business - especially hark "business experience" - but just invest in property oneself and do nothing to encourage capital to business instead of speculation.

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Good question for those who sit in the parliament, I guess lol.

Ps. The absolute majority of them are not immigrants.

 

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The last chart says it all. Immigrants aren't being employed in highly productive industries.  And this will continue under the "immigration reset" which is anything but, a pathetically low amount that migrants must be paid, which will (once again) be mainly clawed back by those exploiting the system in accommodation costs and other fees for the new migrants.

If we were actually interested in employing productive migrants, the largest bars would be in the Construction/Manufacturing/Professional technical services/Financial and insurance services/mining/Information media etc. 

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Incredibly hypocritical of the governnment to even mention the term 'housing crisis' when you look at the net migration rate the last few decades....

"hey we have a problem (housing supply), but we created it (by importing too many people), but if you elect us into power we will solve it for you (but we won't tell you how), but actually we also intend to make it worse by importing more people"

Isn't this just completely insane when you have governments with two conflicting positions on related issues...? 

A decent/reasonable/rational party would say "hey look we aren't importing any more people until we have housing and infrastructure in place to handle more people...until then, it isn't going to happen". 

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Interesting there’s no mention of climate change.

Adjusting our country’s stocking rate down I would think would be a good way to reduce our co2 footprint?

Maybe it’s better to introduce new taxes, policy, regulations, ets, etc that has no meaningful reduction of actual oil burnt.

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if I recall correctly Ganeesh Nana is an economist? But no mention of endless population growth within a finite landmass with limited resources. Just more of the growth mantra? When will we learn?

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No need to worry about infrastructure because reasons.  No need to worry about the skills needed in market, again probably same reasons.

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The graph showing population growth split by immigration and natural increase may be misleading. The important figure of population growth is as reliable as NZ stats figures but what is 'natural increase'?  The first member of my family to attain NZ citizenship was my grandson by birth - his parents are Melanesian with one returning to the Islands and the other becoming a citizen after 7 years living in NZ.  The annual lists of the most popular names show Sikh, Muslim and Chinese names as being very popular; many will be children of non-citizen immigrants and others will be children of well-established Kiwi families.  My point being a reduction in immigration over a period would reduce 'natural increase'.

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I'm really happy that the subject is now open for discussion.  After 70 years of govt's setting policy behind closed doors maybe the Kiwi public can offer their advice.

NZ has one particular specific problem that other countries don't have to the same extent. About a third of all immigrants arrive as partners; we simply cannot stop Kiwis going on OEs and getting hitched to locals while overseas.  When they are Aussies or POMs or Americans there is a possibility they will stay overseas so NZ ends up with high emigration but the rest return. NZ also has large numbers of working-holiday visas - another source of applicants for residency via partnership.

Kiwis are randy. 

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