In the lead-up to this Saturday’s New Zealand General Election, the Labour opposition has continually taken aim at New Zealand’s excessive immigration program, which Labour claims is choking housing, infrastructure and public services in Auckland, as well as undercutting working conditions.
The Economist has published an interesting profile on Labour’s leader, Jacinda Ardern, which explains the party’s rationale behind the proposed immigration cuts:
Not all locals have benefited from the strength of New Zealand’s economy. Wages are stagnant and the price of housing has soared, feeding a debate about New Zealand’s high levels of immigration. A record 71,000 more people arrived in New Zealand last year than left, partly because Kiwis who had left the country have been lured home by a stronger economy. Inadequate investment in housing has exacerbated the problem: New Zealand needs 60,000 new homes. The government spends NZ$140,000 ($100,000) a day accommodating the homeless.
Unusually for a left-leaning leader, Ms Ardern has put immigration at the heart of her campaign, proposing to cut net arrivals by up to 30,000 annually. Labour also plans to ban non-resident foreigners from buying homes, arguing that it is wrong that American tech billionaires and Chinese investors can snap up houses and leave them empty amid such a shortage. (The Nationals, in contrast, say curbing immigration would hurt the economy.)
But Ms Ardern rejects the idea that she is trying to stir up or harness hostility towards immigrants. If the government had responded faster to the housing crisis, she says, “we would not be having this conversation.” Labour also wants to double New Zealand’s intake of refugees. Her real target, she says, is the high cost of living: “I want everyone who chooses to call New Zealand home to have a decent start”…
Labour’s plan to cut immigration is sensible. New Zealand’s population has grown by a record 100,000 people in the past year, with the lion’s share coming via net overseas migration:
New Zealand’s biggest city, Auckland, has been the major recipient of this growth (44,500 people):
According to Statistics NZ, “about a third of all migrant arrivals for the year were people coming to New Zealand on work visas”.
The Salvation Army, the Treasury, the RBNZ, and former RBNZ special adviser Mike Reddell have all raised concern that New Zealand’s immigration program does not take sufficient account of whether their are genuine labour shortages, and may be depriving incumbent residents of employment opportunities.
Meanwhile, dwelling construction in New Zealand has failed dismally to keep up with population growth, with only 30,404 new dwellings consented across New Zealand in the year to July 2017, and just 10,051 consented in Auckland – way below the 15,000 homes required to keep pace with Auckland’s population growth.
Due in part to this supply-demand imbalance, Auckland’s average dwelling value has surged to over $NZ1 million, thereby pricing young Kiwis out of the market:
Traffic congestion has also become hideous in Auckland, due to manic population growth, costing Auckland’s economy $1.3 billion a year.
Clearly Sydney and Melbourne are facing similar pressures to Auckland. Immigration-driven population growth is extreme in both cities. Infrastructure is crush-loaded. Housing has become extremely unaffordable. And visa rorts are widespread, which has helped to erode wages and working conditions.
Rather than labeling anyone wanting to reduce Australia’s world-leading immigration program “political extremists”, Labor leader Bill Shorten would do well to emulate his counterpart across the pond, stand up for Australian workers, and argue to reduce immigration and temporary work visas.
Maintaining a mass immigration program is utterly illogical when labour underutilisation is high, wages are barely growing, people cannot afford homes, and infrastructure is failing to keep up. In fact, it is a guaranteed recipe for lowering living standards.
