New Zealand


New Zealand government to review immigration numbers

by Ray Clancy on September 8, 2016

The government in New Zealand will review the number of arriving immigrants after figures showed a record 69,000 people settled in the country in the 12 months to July 2016.

The review comes at a time when concerns are being voiced at the high numbers, however Immigration Minister Michael said he does not expect any change in policy despite the fact that immigration has been increasing for 23 months in a row.

new-zealand-flagHe said that the numbers for the new residents programme would be reviewed by the Cabinet in the next month or so. It is currently set between 45,000 and 50,000 a year.

But the number of commentators and experts calling for change is increasing. Labour Party leader Andrew Little, for example, believes that there is currently a mismatch between immigration and labour market needs with workers being brought in from overseas to fill jobs while thousands of New Zealand were unemployed.

Others are saying that record immigration levels are pushing up house prices, especially in Auckland. Little wants a review of migration settings for temporary low skilled workers as well as lower targets for permanent residents.

‘I’ve been pretty clear for some time now that issuing work visas for categories of occupations where there are unemployed New Zealanders just doesn’t add up and we want to review the immigration system so there is a better matching of genuine skills and needs, not just taking anybody,’ Little said.

‘When you’ve got 15,000 New Zealanders saying that they are unemployed labourers and you’ve issued 6,500 work visas to people to come here to do labouring work, that is a mismatch that we have got to get right,’ he added.

Bank of New Zealand head of research Stephen Toplis has written a report calling for the debate to be broadened into one about the kind of population that New Zealand wants in terms of size and composition.

A reshaping of the country’s immigration policy would help to lower house price growth in Auckland, lower interest rates, drop the exchange rate and raise average incomes, according to Michael Reddell, a Wellington based independent economist and commentator on economic and financial affairs.

He claims that most of Auckland’s population growth comes from immigration and that the current programme of 45,000 to 50,000 new residents a year is one of the largest active immigration policies anywhere in the world.

He says that recent new regional GDP data casts real doubt on whether the strategy is working. ‘New Zealand can offer an excellent standard of living for a small population, based primarily on applying the skills and talents of our people to the natural resources. But that natural resource base is largely fixed,’ he explained.

‘And our location makes it really hard to generate economic opportunities for lots of immigrants in ways that benefit us all. New Zealanders have implicitly recognised the limitations for decades. Huge numbers have pursued better opportunities in Australia. It would be much better to reshape our immigration policy,’ he added.

He called for the annual target to be lowered to around 15,000 really able people. ‘That change alone would largely end the craziness of Auckland house prices. But it would also put an end to us having persistently higher interest rates than the rest of the world. And our real exchange rate would fall materially,’ he pointed out.

‘That would create a much better climate for investment by firms that successfully take on the rest of the world, not just meet the local needs of a fast growing domestic population. In turn, that opens up the prospect of catching up once again with average incomes in the rest of the advanced world. Perhaps then more of our people will come back to stay,’ he added.

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