Is Jacinda Ardern also a fake?

See the latest Australian dollar analysis here:

Australian dollar runs riot on BoJo win

Cross-posted from Croaking Cassandra.

It was confirmed yesterday that the new government’s immigration policy will be the policy the Labour Party campaigned on (albeit very quietly).  And so we learned that the new government will remain a fully signed-up adherent of the same flawed, increasingly misguided, “big New Zealand” approach that has guided immigration policy for at least the last 25 years.

If that is disappointing, it shouldn’t really be any surprise.     The Green Party approach to immigration is pretty open –  the “globalist” strand in their thought apparently outweighing either concern for New Zealand’s natural environment or any sort of hard-headed analysis of the economic costs and benefits to New Zealanders.  Only a few months ago, they were at one with the New Zealand Initiative, tarring as “xenophobic” any serious debate around the appropriate rate of immigration to New Zealand.  Never mind that population growth is driving up carbon and methane emissions, in a country where marginal abatement costs are larger than in other advanced economies, and yet where the same party is determined that New Zealand should reach net zero emissions only 33 years hence.

As for New Zealand First, they talk a good talk.  But that’s it.   As I noted a few months ago, reading the New Zealand First immigration policy (itself very light on specifics)

If one took this page of policy seriously, one could vote for NZ First safe in the expectation that nothing very much would change at all about the broad direction, or scale, of our immigration policy.     Of course, there would be precedent for that.  The last times New Zealand First was part of a government, nothing happened about immigration either.

Even so, I was just slightly surprised that there wasn’t even a token departure from the Labour Party’s immigration policy that New Zealand First could claim credit for.   The New Zealand Initiative’s report on immigration policy earlier in the year was largely (and explicitly) motivated by concerns about what New Zealand First might mean for immigration policy.

Six months ago, when we started scoping the Initiative’s immigration report, we had a very specific audience in mind: Winston Peters. Our aim was to assemble all the available research and have a fact-based conversation with New Zealand’s most prominent immigration sceptic.

Turns out that, perhaps not surprisingly based on the past track record, that they needn’t have bothered.

And so Labour’s election policy will be the immigration policy of the new government.    The policy documents themselves are here and here.   I wrote about the policy here at the time it was released in June, before the Ardern ascendancy.   It was notable how little attention Labour gave to immigration policy during the campaign –  perhaps it didn’t fit easily with the “relentlessly positive” theme –  and I understand there was a conscious decision by the new leadership to downplay the subject.    It will be interesting to see now whether they follow through on their manifesto, but very little about immigration policy requires legislative change so, in principle, the changes should be able to be done quite quickly.  In fact, as the biggest proposed changes affect international students one would assume they will be wanting to have those measures in places in time for the new academic year.

What also remains quite remarkable is the extent to which Labour’s policy has been taken as a substantial change.  Serious overseas media and intelligent commentators have presented Labour’s proposals as some sort of major sustained change in New Zealand approach to immigration, and thus to expected immigrant numbers.    To read some of the Australian and American commentary you might have supposed, say, that in future New Zealand’s immigration approvals might be cut towards, say, the sorts of levels (per capita) that prevailed in the United States under Bush and Obama.

Labour’s policy is, of course, nothing of the sort.  Under the proposed policy, New Zealand will remain –  by international standards –  extraordinarily open to non-citizen migrants, with expected inflows three times (per capita) those of the United States, and exceeded only (among OECD countries) by Israel in a good year (for them).

What determines how many people from abroad get to settle permanently in New Zealand is the residence approvals programme.   Under that programme, at present the aim is to grant around 45000 approvals to non-citizens each year (Australians aren’t subject to visa requirements, but in most years the net inflow of Australians is very small).  The outgoing government reduced that target (from 47500) last year.   Labour’s immigration policy document does not, even once, mention the residence approvals programme.  That was, no doubt, a conscious choice.  They are quite happy with the baseline rate of non-citizen immigration we’ve had for the last 20 years; quite happy to have the highest planned rate of non-citizen immigration anywhere in the OECD.  Medium-term forecasts of the net non-citizen immigration inflow will not change, one iota, if Labour proceeds with their policy.  For some of course, that will be a desirable feature.  For others it is a serious flaw, that results from failing to come to grips with the damage large scale immigration is doing to the economic fortunes of New Zealanders.

Of course, there are planned policy changes.    There are various small things:

  • an increased refugee quota,
  • steps to increase the utilisation of the existing Pacific quotas,
  • more onerous requirements for investor visas (including requiring investment in new “government-issued infrastructure bonds”),
  • a new Exceptional Skills visa,
  • a KiwiBuild visa

Taken together, these won’t affect total numbers to any material extent.

There is also a (welcome) change under which they will

Remove the Skilled Migrant Category bonus points currently gained by studying or working in New Zealand and standardise the age points to 30 for everyone under 45.

All else equal, these changes won’t affect the number of people getting residence, or materially affect the average quality (skill level) of those getting residence.   That is a shame: at present, too many migrants aren’t that skilled at all, and maintaining such a large approvals target (in such a remote, not very prosperous, country) makes it hard to lift the average quality.

The bigger changes are under two headings.    The first is around temporary work visas.   Here is what they say they will do.

Labour will:

• Actively manage the essential skills in demand lists with a view to reducing the number of occupations included on those lists

• Develop regional skill shortage lists in consultation with regional councils and issue visas that require the visa holder to live and work within a region that is relevant to their identified skill

• For jobs outside of skills shortages lists, Labour will ensure visas are only issued when a genuine effort has been made to find Kiwi workers

• Strengthen the labour market test for Essential Skills Work Visas to require employers to have offered rates of pay and working conditions that are at least the market rate

• Require industries with occupations on the Essential Skills in Demand lists to have a plan for training people to have the skills they require developed together with Industry Training Organisations

• Review the accredited employers system to make sure it is operating properly.

The broad direction seems sensible enough –  after all, the rhetoric has been about lifting the average skill level of the people we take.   But as I noted in my comments in June, the policy is notable for its touching faith in the ability of bureaucrats to get things right, juggling and managing skills lists, and now extending that to a regional differentiation.   There is no suggestion, for example, of letting markets work, whether by (as I’ve proposed) imposing a flat (quite high) fee for work visas and then letting the market work out which jobs need temporary immigrant labour, or by requiring evidence that market wages for the skill concerned have already risen quite a lot.  The latter would have seemed an obvious consideration for a party with trade union affiliates.

On Labour’s own estimates, these changes won’t have a large effect on the number of people here on work visas at any one time, although in the year or so after any changes are implemented, the net inflows that year will be lower than they otherwise would have been.

Much the same goes for the biggest area of change Labour is proposing, around international students.

Labour will:

• Continue to issue student visas and associated work rights to international students studying at Level 7 or higher – usually university levels and higher

• Stop issuing student visas for courses below a bachelor’s degree which are not independently assessed by the TEC and NZQA to be of high quality

• Limit the ability to work while studying to international students studying at Bachelor-level or higher. For those below that level, their course will have to have the ability to work approved as part of the course

• Limit the “Post Study Work Visa – Open” after graduating from a course of study in New Zealand to those who have studied at Bachelor-level or higher.

In general, I think these are changes in the right direction.  Here were some of the comments I made earlier

I’m a little uneasy about the line drawn between bachelor’s degree and other lines of study.  It seems to prioritise more academic courses of study over more vocational ones, and while the former will often require a higher level of skill, the potential for the system to be gamed, and for smart tertiary operators to further degrade some of the quality of their (very numerous) bachelor’s degree offerings can’t be ignored.  …… I’d probably have been happier if the right to work while studying had been withdrawn, or more tightly limited, for all courses.   And if open post-study work visas had been restricted to those completing post-graduate qualifications.

The proposals are some mix of protecting foreign students themselves, protecting the reputation of the better bits of our export education industry, and changes in the temporary work visas rules themselves.     In Labour’s telling –  and it seems a plausible story –  the changes are not designed to produce a particular numerical outcome, but to realign the rules in ways that better balance various interests.  The numbers will adjust of course, but that isn’t the primary goal.

Labour estimates that these changes will lower the number of visas granted annually by around 20000.   That is presented, in their documents, as a reduction in annual net migration of around that amount.   But that is true only in a transition, immediately after the changes are introduced.  The stock of people here on such student and related visas will fall, but after the initial transitional period there will be little or no expected change in the net inflow over time (which is as one would expect, since the residence approvals target is the key consideration there).

To see this consider a scenario in which 100000 new short-term visas are issued each year, and all those people stay for a year and a day (just long enough to get into the PLT numbers).  In a typical year, there will then be 100000 new arrivals and 100000 departures.

Now change the rules so that in future only 75000 short-term visas are issued each year.  In the first year, there will be 75000 arrivals and (still) 100000 departures (people whose visas were issued under the old rules and who were already here).  But in the next year, there will be 75000 arrivals and 75000 departures.    Measured net PLT migration will have been 25000 lower than otherwise in the first year, but is not different than otherwise in the years beyond that.

That doesn’t mean the policy changes have no effect.  They will lower the stock of short-term non-citizens working and studying in New Zealand.    They will ease, a little, demand for housing.  In some specific sectors, with lots of short-term immigrant labour, they may ease downward pressures on wages (although in general, immigrants add more to demand than to supply, and that applies to students too).   But it won’t change the expected medium-term migration inflow.

Oh, and the student visa changes will, all else equal, reduce exports

Selling education to foreign students is an export industry, and tighter rules will (on Labour’s own numbers) mean a reduction in the total sales of that industry.   Does that bother me?  No, not really.  When you subsidise an activity you tend to get more of it.  We saw that with subsidies to manufacturing exporters in the 1970s and 80s, and with subsidies to farmers at around the same time.  We see it with film subsidies today.  Export incentives simply distort the economy, and leave us with lower levels of productivity, and wealth/income, than we would otherwise have.   In export education, we haven’t been giving out government cash with the export sales, but the work rights (during study and post-study) and the preferential access to points in applying for residence are subsidies nonetheless.  If the industry can stand on its own feet, with good quality educational offerings pitched at a price the market can stand, then good luck to it.  If not, we shouldn’t be wanting it here any more than we want car assembly plants or TV manufacturing operations here.

I participated in a panel discussion on Radio New Zealand this morning on Labour’s proposed changes.  In that discussion I was surprised to hear Eric Crampton suggest that the changes would put material additional pressure on the finances of universities.    Perhaps, although (a) the changes are explicitly aimed at sub-degree level courses, and (b) to the extent that universities are getting students partly because of the residence points that have been on offer, it is just another form of “corporate welfare” or subsidy that one would typically expect the New Zealand Initiative to oppose.      Whether hidden or explicit, industry subsidies aren’t a desirable feature of economic policy.

Standing back, Labour’s proposal look as though they might make a big difference in only a small number of sectors, notably the lower end of the export education market.  If implemented, they will be likely to temporarily demand housing demand –  perhaps reinforcing the current weakness in the Auckland housing market, along with some of their other proposed legislation (eg the extension of the brightline test and the “healthy homes” bill).   But they aren’t any sort of solution to the house price problem either: after the single year adjustment, population growth projections will be as strong as ever, and in the face of those pressures only fixing the urban land market will solve that problem. Time will tell what Labour’s policy proposals in that area, which have sounded promising, will come to.

Two final thoughts.  One wonders if whatever heat there has been in the immigration issue –  and it didn’t figure hugely in the election –  will fade if the headline numbers start to turn down again anyway.   The net flow  of New Zealanders to Australia has not yet shown signs of picking up –  but it will resume as the Australian labour market recovers.  But in the latest numbers, there has been some sign of a downturn in the net inflow of non-citizens.

PLT non citizen

There is a long way to go to get back to the 11250 a quarter that is roughly consistent with the 45000 residence approvals planned for each year.  But, if sustained, this correction would provide at least some temporary relief on the housing and transport fronts.  As above, Labour’s changes will have a one-off effect on further reducing this net inflow in the next 12 or 18 months, but nothing material beyond that.

And in case this post is seen by the new Minister of Immigration, or that person’s advisers, could I make a case for two things:

  • first, better and more accessible data.  The readily useable migration approvals is published only once a year, with a lag even then of four or five months.  The latest Migration Trends and Outlook was released in November 2016, covering the year to June 2016.  It is inexcusably poor that we do not have this data readily, and easily useable, available monthly, within a few days of the end of the relevant month, and included (for example) as part of Statistics New Zealand’s Infoshare platform.  The monthly PLT data are useful for some things, but if you want a good quality discussion and debate around immigration policy, make the immigration approvals data more easily available.    As a comparison, building permits data is quickly and easily available, reported by SNZ.  Why not migration approvals?
  • second, considering referring the issue of the economics of New Zealand immigration to the Productivity Commission for an inquiry.   Perhaps the current policy, as Labour proposes to amend it, has all the net gains the advocates say it does.  If so, the Productivity Commission could helpfully, and in a non-partisan way, demonstrate that.  But there are still serious issues around New Zealand’s unusually liberal immigration policy, in a country so remote and with such a poor track record in increasing its international trade share.  Whatever the economic merits of immigration in some places, it is by no means sure that large scale immigration here is doing anything to improve the fortunes of most New Zealanders.  It may, in fact, be holding us back, being one part of the story as to why we’ve failed to make any progress in closing the productivity gaps with other advanced economies.  It would seem an obvious topic for the Productivity Commission, and a good way of lifting the quality of the policy debate around this really substantial policy intervention.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Latest posts by David Llewellyn-Smith (see all)

Comments

  1. It appears from this article, New Zealand housing speculators are missing a few important matters …

    New government’s policies could hurt housing market | Susan Edmunds | Stfuu – Fairfax NZ

    https://i.stuff.co.nz/business/98203429/new-governments-policies-could-hurt-housing-market

    House prices could drop as much as 10 or 13 per cent over the next three years, it has been predicted.

    As more details are revealed of the coalition agreement between Labour, New Zealand First and the Greens, commentators are picking over the potential policy impacts on the housing market. … read more via hyperlink above …


    No mention above of …

    Housing – New Zealand Labour Party

    http://www.labour.org.nz/housing

    … extracts …

    Remove barriers that are stopping Auckland growing up and out

    Labour will remove the Auckland urban growth boundary and free up density controls. This will give Auckland more options to grow, as well as stopping landbankers profiteering and holding up development. New developments, both in Auckland and the rest of New Zealand, will be funded through innovative infrastructure bonds.

    Create an Affordable Housing Authority to fast-track development in our cities

    Labour will establish an Affordable Housing Authority to work with the private sector to cut through red tape and get new homes built fast. It will partner with private developers, councils and iwi to undertake major greenfields and revitalisation projects, building affordable homes with KiwiBuild and the private market. These homes will be part of great communities built around parks, shopping centres and transport links. …

    … and too … nuch of the rest of it …
    .
    .
    March report … some important recent history …

    It is important too to understand the significance of the opposition political parties working together within the MMP environment … as illustrated with the RMA amendment legislation back in March (much the same with the HASHA legislation September 2016) … reported by Bernard Hickey of Newsroom soon after …

    https://pro.newsroom.co.nz/articles/1629-newsroom-pro-s-8-things-at-8-trolling-millennials-is-easy-defamation-retrials-loom

    7. Just in case you missed it…

    One curious coda to the RMA debate that concluded last week was that the Opposition parties plus ACT and United Future all voted again during the third reading debate for amendments that would have abolished Rural Urban Growth Boundaries and allowed the financing of infrastructure bonds paid for with targeted rates.

    The amendments were defeated by National and the Maori Party.

    The irony of a Government that has railed against restrictions on land development by councils voting against removing those restrictions should be noted. And also that the proposal for infrastructure bonds was backed by the right-leaning New Zealand Initiative and voted for by the Greens and Labour. Strange times indeed.

    • Labours ‘Kiwibuild” is nonsense and will be enormously politically damaging unless they revamp it substantially … so they are not directly involved in development / construction. A NZ Herald article with extract from yesterday …
      http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11936574

      … extract …

      “The rationale for KiwiBuild is that the market on its own has really struggled to deliver affordable homes. We want to be able to deliver medium-density townhouses and terraced housing for $500,000 and under and stand-alone homes, mostly on the fringes such as Auckland’s north west and the south, for $600,000 but most products will not be stand-alone.”

      – Phil Twyford

      We have this current sorry example of a ‘political development’ (in the suggested Kiwibuild mold) in Christchurch … with this sorr exercise where central government, the Christchurch Council and Fletchers are holding hands …

      Apartments downsized on Crown-Fletcher Christchurch housing project | Stuff.co.nz

      https://i.stuff.co.nz/business/97925325/apartments-downsized-on-crownfletcher-christchurch-housing-project

      The new Labour – led Government must learn fast that it is going to be judged quickly on what works and what doesn’t.

      It will be harsh.

      Spare us the infantile ideological eyewash.

      We voted for something new … called performance !

    • In order for housing to be more affordable, the prices must fall! If prices are kept high by rapid, immigration fueled population growth, that will suck the lifeblood of capital out of the economy and leave almost everyone poorer. The big picture is better when housing is cheaper and costs are stable.

      • Quite correct Peter !

        Our new housing industry is so bureaucratically buggered back to the Stone Age of cottage building, it is in no fit state to cope with high immigration. Structurally sound markets such as Houston, Dallas Fort Worth, Atlanta and others can cope with higher immigration though.

        I told off former Prime Minister Bill English ‘most severely’ a few months back …

        Ardern v English: Leaders’ house price claims face credibility claims … Rob Stock … Fairfax Stuff NZ

        https://i.stuff.co.nz/business/money/96556989/arden-v-english-house-price-claims-face-credibility-claims

        … extract …

        VERDICT ON ENGLISH

        English’s answer may provide comfort for homeowners enriched as a result of a failure to build enough homes to meet demand, but it offers none to a generation of people left renting from astronomically high house prices.

        Hugh Pavletich, who describes himself as “somewhere to the right of Genghis Khan”, said: “There has already been a generation that’s been severely mistreated because of this housing issue, and what Mr English is saying is another generation should miss out. That is grossly irresponsible.”

        Pavletich said prices must fall, gradually, until they are around three times median income.

        English’s vision of prices staying level, but falling in real terms as wages rise, wouldn’t achieve that.

        Auckland needed only look to Christchurch for its housing solution, Pavletich said. Spread out. Free up land supply. Let people build.

        Pavletich does not believe National has the policies to keep prices flat as incomes rise.

        “We will get to Sydney levels and beyond if we leave the current government in place,” said Pavletich.

        When National came to office under John key the median house in Auckland cost 6.4 times median household income, he said. “It’s now a “stratospheric” ten times.”

        “After nearly a decade of inaction from this government, we have really had enough.”
        .
        .
        Labour needs to read its own polling from September last year …

        The NZ homeowners who hate high house prices are revealed in Labour polling | Stuff.co.nz

        http://i.stuff.co.nz/business/money/90244287/The-NZ-homeowners-who-hate-high-house-prices-are-revealed-in-Labour-polling
        .
        .
        Most Kiwis just want housing affordability to be restored … to what it used to be …

        Housing through the decades, what is affordable? | Newshub

        http://www.newshub.co.nz/home/money/2016/08/housing-through-the-decades-what-is-affordable.html
        .
        .
        I really do want to see this new Labour – led Government to succeed.

        I have high regard for Jacinda Ardern … and am most impressed in how she has assembled her new Cabinet.

      • Quoting Houston, Dallas Fort Worth, Atlanta is just stupid – there is no correlation!!!

        You are a poster extraordinary, with a wee bit of perfidious insight

      • There are dozens of cities in the USA with median multiples of around 3, including many high growth ones, and while Hugh may concentrate too much on the ones you mention, it is absurd to claim that there cannot be any correlation between the circumstances of any of them, and of any cities in Australia.

        In fact I would have thought there were far more similarities even between the cities in Texas, and Australia. Both places are hot, dusty sometimes, saunas sometimes, and unpleasant in a large number of natural aspects including weather events.

        Australian cities managed to have median multiples similarly affordable for decades, so what changed? The cities natural environments, latitudes and longitudes, the geography, what?

        Not the urban planning system?

        There is a certain class of person, of questionable motivations, who stoop to the most absurd and dishonest lengths to obfuscate on this issue. Hugh’s long dedication to advocacy has involved the most powerful conceivable evidence being marshaled in support. It is his sniveling opponents who lack all credibility, whether because of mental incompetence or deliberate dishonesty.

      • Either nominally , Inflated away , in USD terms or a combination of some / all. But yes fall they must.

      • And Peter is exactly right. The alternative fashionable view of “economic stimulation” from rising house prices, is a Ponzi. It involves the artificial equity from rising house prices being used as collateral for unproductive debt.

        In contrast, cities with stable, affordable house prices, simply have far more of the budgets of every household in the long term, free for discretionary spending, rather than servicing a colossal mortgage. Most of the strongest local economies in the USA are cities with stable house prices. The so called “strong” economies with volatile house prices, have hell to pay at the end of every economic cycle, and in the long term, they have to be killing off the real, productive economy; even the one they may already have built in past decades.

      • Phil and Peter … thank you for your constructive and honest comments.

        This has indeed been a long haul exercise by Wendell Cox of Demographia and myself, since getting the Annual Demographia International Housing Affordability Survey underway 2004 and released early 2005 … some 13 of them to date accessible via my archival website http://www.PerformanceUrbanPlanning.org .

        Check this out from the 2007 articles section (bottom front page) of the Performance Urban Planning website above …

        Dallas Fort Worth / Sydney New Fringe Starter Housing
        Cost Comparison

        “Land Supply is the Issue” – Dermographia

        http://www.demographia.com/db-syd-dfw-rls.pdf

        After a decade (through gritted teeth) when are we going to see detailed costs breakout comparisons of fringe starter developments of our metros with the affordable / near affordable North American ones. Note Andrew Atkins THE REAL DEAL from early 2013 as well …

        http://andrewatkin.blogspot.co.nz/2013/03/the-real-deal-housing-in-new-zealand.html

        Wouldn’t it be real good to have the detailed costs breakout of these new Pulte Homes in Arizona for example …

        https://pulte.com/homes/arizona/phoenix/florence/parkside-at-anthem-at-merrill-ranch-7739#CommunityDetailsView

        … EVEN NEW ZEALAND LOCAL GOVERNMENT IS WAKING UP … BELATEDLY ASKING THE RIGHT QUESTIONS …

        Waipa mayor: Affordable housing problem remains unless attitudes change | Stuff.co.nz

        https://i.stuff.co.nz/waikato-times/life-style/96484661/waipa-mayor-affordable-housing-problem-remains-unless-attitudes-change

      • When are those in the National Party going to wake up and remind the new Labour Government of this ? …

        Inquiry. The Great British Housing Disaster (Adam Curtis, 1984) – YouTube

        https://www.youtube.com/watch?v=Ch5VorymiL4

        … and ask why low and light Rolleston coped better than the dense old dump of the former Christchurch Central … for just some of these reasons I outlined way back mid 2011 …

        OPINION: Hugh Pavletich accuses Christchurch City Council of blindness, blunders and chain dragging; calls for effective leadership, ‘open land’ policy and bendy zoning. Your view? … Interest Co NZ

        https://www.interest.co.nz/opinion/53947/opinion-hugh-pavletich-accuses-christchurch-city-council-blindness-blunders-and-chain-

        … with screeds of other stuff via this mid 2012 article …

        Christchurch: The Way Forward | Scoop News

        http://www.scoop.co.nz/stories/AK1206/S00251/christchurch-the-way-forward.htm

  2. So an immediate and ongoing 25% reduction in short term visa’s…just a walk in the park on their first outing?

    Also, taking slight at the focus on vocational students, who every man and his dog knows is just code for some bullsh$t hairdressing-esque sign-off, while said visa holders provide hyper cheap labour to whichever lucky employer is willing to pay in cash (usually expats of the same visa holders nation).

    I don’t know what the author thought was going to happen under the Nationals, remembering that, as they themselves noted, it wasn’t a major election issue.

    Still, euphoria is apparently being tempered by realistic expectations. Time will tell whether it is all noise or whether it signals a new direction.

  3. Good on you, H&H, for picking up on the excellent Croaking Cassandra site – the work of Michael Reddell, a former RBNZ staffer and a truth-speaker in that context.

    There is a massive disconnect between the way the MSM presents these issues, and the reality. Labour has risked charges of “racism”, it seems, almost for nothing given the mildness of their actual reforms! Of course for the MSM and the virtue-signalers in it, anything but increases in immigration and refugees would be “racist”. NZ-ers are certainly never told that their immigration is already running at 2 to 3 times the level that led to US electoral pushback.

    It is also strange that Winston Peters didn’t insist that more be done, as part of the coalition agreement, he has suffered media portrayal as a “racist” similar to Pauline Hanson, again seemingly for nothing when it comes to the actual practice! One has to conclude that the MSM defaults very rapidly to lies and smears and character assassination as a means of punishing the slightest sign of a tendency to departure from the approved SJW agenda on anything.

  4. What Hugh points out about Housing Minister Phil Twyford’s statements, is even more cause to suspect betrayal, than the immigration policy. Aiming for $500,000 row-houses!!! And $600,000 FRINGE family homes!!! And in a cosy crony relationship with the country’s biggest construction company!

    100,000 houses at these prices, is using Spain as an example, not affordable US States!! I expected better of Twyford, especially as he has so comprehensively “got it” about things like infrastructure financing (in contrast to Nick Smith and the arrogant, closed-ears-and-minds Nationals who have fiddled while the housing bubble raged, for 9 years).

  5. I am visiting Spain next year, I will look for a retirement home while I am there. Move cash move everything, Oz and NZ are in deep trouble;

    • Interesting, Spain has already made the mistakes we are making now out here, and their crash has already been. It is telling that their economy still has not recovered 10 years later in real terms, although property prices have been rebounding in some places. You will always get property prices rebounding at the expense of the real economy, regardless how bad things are, until you fix the urban planning racket. Liverpool is the UK’s Detroit and should have housing as cheap as Detroit, but it remained unaffordable even with massive unemployment and loss of industry and population.

      But there would be bargains in Spanish Real Estate, especially apartments built in the wrong places! They even built a whole international airport somewhere where growth ended up not happening after all. You just have to factor in the very high youth unemployment, and social unrest. But whatever – these things are object lessons about what we can expect in this part of the world too after this cycle ends. You might as well be in Spain, and not in negative equity.

      • House prices in Spain recovered not because there is shortage of caused by urban planning racket but because endless supply of free money by ECB and because everyone is allowed to buy in Spain (including tonydd).

        Liverpool house prices are not that much different than Detroit’s. Once you remove unlivable poverty stricken parts of Detroit from the count prices are roughly the same. Of course, prices would be lower in Liverpool if you want to see such poverty there as well.

      • Does Liverpool not have blighted areas too, and “real poverty”? And if you compare like for like housing, and isolate the land values, Detroit’s is far lower everywhere, even in the classy exclusionary areas. It is practically impossible to get a decent size section in Liverpool.

  6. The fact that Labor is fake lake has been well established for decades now. What is surprising is that MB got to that conclusion only after being disappointing on one of the least important political issues – immigration.
    Labor is so much more “fake left” on important issues like ownership of essential and social services, taxation, distribution of wealth, employee rights, deregulation, etc.
    A left that is not fake would not care about immigration until they nationalize banking system, utilities, fix industrial relations laws, reintroduce fully public health care system, make higher education free, …

  7. One of my favourites from Croaking Cassandra:

    https://croakingcassandra.com/2016/07/28/a-couple-of-cartoons/

    “…There are no totally easy or fail-safe ways to unwind the disaster that the New Zealand – especially Auckland – housing market has become. But this is a clear example where the sooner it happens the better. If house prices rose sharply one day and were reversed the next, almost no one suffers. If prices rise sharply for six months and then fully reverse, a few people will have difficulty – but the losses will be isolated and limited, posing no sort of systemic threat. But if real house prices stay at current levels for the next 20 years, most of the housing stock will have been purchased (and borrowed against to finance) at today’s incredibly high prices. There will have been a massive real wealth transfer to this generation of sellers (sellers, not owners). And that transfer itself simply can’t be unwound no matter what happens to house prices. If house prices were to fall now, there has still been quite a redistribution, but four years of turnover is quite different from 20 years of turnover…”

      • That might be what will provoke a crash ultimately. But what is the “correct” interest rate when you have a problem with quota schemes in land for urban growth? Bear in mind that Australia and NZ had interest rates 2 to 3 times higher than the famous “helicopter money” era in the US and other economies, and our median multiples had still gone higher than everywhere except California by 2007.

        Having base interest rates dictated by the need to cool off housing markets, is like having to give a cancer patient more overdoses of chemo when previous doses have already just about killed off all his vital organs and failed to kill the cancer.

        From the OECD report “Bird’s Eye View of OECD Housing Markets” January 2010

        “…Another concern is about the ability of monetary policy to thwart the development of a housing bubble without causing widespread damage to the rest of the economy. In a house price boom, prices increase strongly – often at double digit rates – and expectations of future prices are similarly upbeat.

        Under these conditions, large policy rate hikes would be necessary to cool housing markets. High interest rates would crowd out sound and socially useful investments…”

        The productive/tradables sector is already seriously damaged by the urban planning and the high economic land rents that also cause the price inflation in the first place. Higher interest rates is just the last nail in the coffin for them.

    • migtronixMEMBER

      Any rate at which people have to think, is there any cash flow in this, will work. I don’t have any problem with your urban land use angle, do your thing, but these rates will only encourage speculation on cap gains with zero thought to investment….

  8. “Progressive” Aussies need to stop looking at NZ as a “better than Australia” model for anything. They are going to continue to frog-boil their people and continue the ponzi, just like Australia.

  9. I’d have said yes if you’d asked to use my material, but it would have been nice to be asked………

    • I should also stress that the heading you have put on the column did not, and does not, represent my views. Labour’s election policy was quite clear and fairly specific. The surprising thing was that some commentators took it as representing a more substantial change than it actually does.

  10. I doubt if she will renege on her/Winston’s undertakings. There is way too much support for a strong, sensible immigration policy – not from the commentariat or the virtue-signallers, but from the ordinary citizen (i.e. those who vote.) Australian politicians can ignore this message to their peril. Here’s proof: The article itself matters little – just check the comments and tell me this approach doesn’t have the full support of the average punter!
    https://www.theguardian.com/world/2017/oct/25/new-zealand-to-ban-foreign-buyers-existing-homes-jacinda-ardern