Ardern Labour shows the way on immigration reform

Earlier this month, the Ardern Labour Government of New Zealand vowed to end low-skilled, wage crushing migration via a “once-in-a generation” reset for New Zealand’s immigration system.

It flagged a significantly smaller migration intake post-Covid that focuses on highly skilled, highly paid and productive migrants that fill genuine skills shortages. This means abolishing the current low-skilled system, which has allowed businesses “to rely on lower-skilled labour and suppress wages rather than investing capital in productivity-enhancing plant and machinery, or employing and upskilling New Zealanders into work”.

The Ardern Government has also tasked the New Zealand Productivity Commission (PC) with undertaking a system-wide review of the nation’s immigration program, with particular focus on the “impact of immigration on the labour market, housing and associated infrastructure, and the natural environment”.  The goal of the inquiry is to “enable New Zealand to strategically optimise its immigration settings” so that it maximises community wellbeing and living standards.

Westpac’s economics team estimates that the Ardern Government’s policy reset should result in New Zealand’s post-pandemic immigration level being around half of its pre-COVID level:

We expect that this will result in a significant tightening in migration settings in the form of tougher skills requirements for new migrants.

A tightening in migration settings along the lines we expect would mean that, when the borders do eventually reopen, net migration is likely to settle around 30,000 per annum through the middle part of the decade. That would be well down on the levels of around 50,000 to 60,000 per annum that we saw over much of the past decade. This would see annual population growth slow from rates of close to 2% prior to the outbreak to a little over 1% in the coming years. That signals a huge reduction in the economy’s underlying growth rate and is a key reason why we expect GDP will linger below its pre-Covid trend for an extended period.

Changes to migration policy will have a myriad of effects on the economy. On the demand side, this will moderate an ‘easy’ source of growth that businesses in sectors like retail and hospitality have enjoyed in recent years. It will also have an important impact on the housing market, with population inflows adding to the demand for both rental and owner-occupied housing.

In terms of the labour market, lower net migration will reduce the pool of available workers in some industries, which signals a related lift in wage pressures. However, with the Government looking at a targeted tightening of migration settings, impacts will be varied across sectors. In particular, we’re likely to see fewer unskilled workers arriving, which will be particularly important in areas like hospitality and retail.

If the Australian Labor Party had half a brain it would follow the New Zealand Labour Party’s policy.

Last week’s Newspoll reported that nearly three-quarters of Australians want Australia’s international border to remain closed until mid-2022:

Australians want to keep Australia's border shut

Australians want to keep Australia’s border shut.

The latest Australia Talks survey from the ABC, released yesterday, was even more emphatic. It revealed that 79% of Australians support keeping our international borders closed until COVID-19 is under control:

Australia talks

Australians want the international border to remain shut.

While these polls are related to COVID risk, they also show how comfortable Australians have become with stronger borders.

The Ardern Government is now providing a clear policy process, as well as a national interest and moral leadership path to lower immigration.

In summary, the political, intellectual, economic and moral ballast is now in place for Australia to pivot away from the mass immigration model that failed the nation so badly in the last business cycle.  Yet, remarkably, the Morrison Government wants to return to it without hesitation.

This is, therefore, a golden opportunity for Labor to win the next election in a landslide. All it needs to do is reset the permanent migration target (currently 160,000) to its historical average of between 80,000 and 100,000 a year with temporary and permanent skilled visas required to be paid above average full-time ordinary earnings (currently $92,000).

Immigration reforms along these lines will resonate completely with community sentiment exhausted from years of crush-loading. The reforms would play well with working families by supporting local jobs and wages, not to mention limiting traffic. They will be received particularly well in Queensland, the power base of the federal Coalition, where Labor must make gains to win. Youth can be persuaded that they will benefit via less competition for jobs, higher wages and lower house prices. The green vote can be retained via the basic truth that lower population growth delivers better environmental outcomes across the board.

The only groups that it would offend are the business and property lobbies that favour the Coalition anyway and are generally viewed cynically by the public.

Again we ask the question: does Labor want to govern or not?

Unconventional Economist
Latest posts by Unconventional Economist (see all)

Comments

  1. Patrick Swanson

    We accept companies who insist on ‘50% female representation’, so why don’t we have countries that insist on at least 51% females on all visas from all countries? Add diversity on top of that – maximum 10% from any one country.

    • Why? Why isn’t it based on skill/merit only. I looked at some woman who have been given management positions such as in cyber security on LinkedIn, no past experience at all, this is just a power grab. And if you believe in what you say why not protest Ardern, the NZ gov as far as I believe is now about 62% woman. Where is the equality in that. And why have they created the greatest homeless and gang crisis ever in NZ?

      • El MerenderoMEMBER

        It’s one of the many great hypocrisies: swapping equity for manufactured equality, a clearly acceptable form of positive discrimination that is fully and loudly endorsed – shock and horror – by those who benefit the most from it and would otherwise appear to squarely fail the merit test. There are a lot of truly impressive women out there, and while misogyny is still rampant in many areas I bet all of them agree that quotas are a bs way to fix it and they completely resent that special kind of blackmail feminism.

        • Another problem is it will cause a credibility issue, a woman says I am an executive, a man replies how did you get that job, was it given to you or did you actually earn it. Of course the answer will be you are a misogynist .

          • Silvio Gesell

            Yes feminism reminds me of dodgy used car selling. The sales assistant will let you walk around the car and kick the tyres, but as soon as you attempt to lift the bonnet and see what’s really going on underneath, they aggressively attack, swat your hand away and accuse you of hating women. Feminism can’t hide behind women forever.

      • Putting aside the issue of ‘merit’ as that is clearly unfashionable today. I think Patricks point is more around the inconsistency, cognitive dissonance or just plain hypocrisy evident in demanding multiple forms of diversity at a micro level but failing to do so at the macro level.

        • drsmithyMEMBER

          Putting aside the issue of ‘merit’ as that is clearly unfashionable today.

          Firstly, the idea of “merit” in a “meritocracy” is that people have merit because they have been successful, not that people who have merit will be successful. Or to put it another way, those with the most “merit” in our society are people like property investors.

          Secondly, even if you were to go with the optimistic definition, quotas are in no way inherently exclusive of “merit”.

          I think Patricks point is more around the inconsistency, cognitive dissonance or just plain hypocrisy evident in demanding multiple forms of diversity at a micro level but failing to do so at the macro level.

          At the macro level, the Australian population is 50.7% female and the five largest ancestry groups are:
          English 25%
          Australian 23.3%
          Irish 7.6%
          Scottish 6.4%
          Chinese 3.9%

      • What about all the poorly qualified and demonstrably incompetent men in positions of power and influence. They’re on linked in as well. Have a look.

        • drsmithyMEMBER

          It would be fascinating to hear what some people think the origin and meaning of “the boys club” and “it’s not what you know, it’s who you know” are, since it’s apparently not the obvious answers.

        • El MerenderoMEMBER

          @mackak no one is disputing that but surely the way to fix it is not to create a gender equivalence of unqualified incompetence in high places?

          • I think it’s interesting that diversity seems to automatically imply incompetence in the minds of some. I do think that perspective is missing a lot.

      • Anders Andersen

        It always surprisers me when I hear the “it should be solely on merit” argument, because for centuries it wasn’t solely based on merit, a significant number of men are in the positions they have because they didn’t have to compete with 50% of the population; did planes crash, did buildings collapse? So why is it a problem now?

        I would also add that in the past this exclusion had a greater impact percentage wise as women were virtually excluded from a number of careers, so 100% of positions went to men, whereas positive discrimination today isn’t even aiming for that, you’re lucky to get 50% of positions for women.

        The other point is when a women fails the response inevitably revolves around how they failed. Women should have the same right to rise to their level of incompetence and fail, just like men do every bloody day of the week, in every field.

        • El MerenderoMEMBER

          knew this was going to be a minefield. No one is disputing the absurdity of masculism and the damage it inflicted on women for centuries, and of course everyone deserves the same freedom to fail nor does diversity imply incompetence. The argument however seems to be that said masculine toxicity can be eradicated over time by the introduction of mandatory quotas until (I assume) older generations are buried 18 feet under and with them, their mindset and followers. As a result you then achieve the necessary cultural change in a social/professional environment. That may or may not be the way to go, I have my reservations about that approach as in my working environment I see cases where it is not working, to the frustration of my female colleagues. Quotas of course do not exclude merit or competence, or whatever we want to call it, yet in my view – as a method – they are potentially as discriminating. I’ll let time be my judge and happy to come back here and eat my words.

          • El MerenderoMEMBER

            Case in point guess could be Brittany Higgins and Grace Tame, and their opinions about certain ministers and assistant ministers, including the basis on which they were appointed.

          • Silvio Gesell

            ‘The argument however seems to be that said masculine toxicity can be eradicated over time by the introduction of mandatory quotas…’
            Why bring up masculine? Is toxicity as a whole not an issue? Or perhaps you are referring to the carcinogenic feminist idea of ‘toxic masculinity’. Masculinity is defined as ‘*possession* of the qualities traditionally associated with men’. Feminism needs to get busy and provide evidence that it is possible to possess a thing in a toxic manner. Possessing a thing is a pretty passive state. Can one toxically own their pants? And if feminism represents ‘equality’, bloviating about ‘toxic masculinity’ and not making a sound about ‘toxic femininity’ is a mighty odd way of representing ‘equality’.

          • Anders Andersen

            EM,
            You still haven’t answered how the sky didn’t fall down when women were excluded almost completely. Men were promoted above their capabilities and society survived and my guess is that it will again.

            Does anyone have any stories from their fathers talking about how large numbers of men were promoted beyond their ability? Didn’t think so, but we have them all over the place now with regards to women.

      • Silvio Gesell

        ‘…this is just a power grab. And if you believe in what you say why not protest Ardern, the NZ gov as far as I believe is now about 62% woman. Where is the equality in that…’
        Equality is not a feminist idea. Feminists simply dishonestly and deceptively use the word ‘equality’ (and ‘equity’) as a rhetorical weapon to beat people over the head with in a bait and switch. And you are one-hundred percent correct that it is a power grab. It is a corrupt power grab. A corrupt, non accountable power grab without limit.

    • nah
      the intake should be 90% from europe
      we had it right 50 years ago, then the treacherous social engineers got control of the levers
      when a revolution comes they will all die

        • Utter BS. Again, I know we aren’t meant to mention it. . I think you’ll find all those ethnic groups are plotting their own little revenge fantasies. Notice the amount of blow ins in council/ government jobs. Its like you’ve got to have a back up nationality to get ahead these days. Otherwise your just a legazen or one of the racialust Whitey’s who displaced the black fellas.

        • the multiracial society will never work, it has never ever worked anywhere
          dennis, the Garden of Eden only exists in The Bible

          • Anders Andersen

            So Patrick, you’ve changed your mind have you? Back then you tried to claim the southern Europeans as the same as us, or are you now contending that they didn’t integrate?

    • Silvio Gesell

      ‘We accept companies who insist on ‘50% female representation’…’
      Well that’s not true as people who are not feminists do not accept that. When feminists are trying to sell feminist ideas (as opposed to talking around feminism, being deflective, deceptive along with abusing and slandering people who are not feminists for not being feminist) what they are doing is building a smokescreen. Feminism is the project to increase the power of women with no clearly defined end point. This is empirically observable in any area where women have greater than 50% (university graduates), there is no feminist project to decrease the amount of women for ‘gender equality’ or ‘equity’, which are coded language, slippery word, dog whistles used as a smokescreen through semantic trickery and mind games. Feminism doesn’t get to claim labels for itself such as ‘equality’ and ‘equity’ that is deliberately fails to live up to.

  2. happy valleyMEMBER

    “Again we ask the question: does Labor want to govern or not?”

    Short answer: clearly No.

  3. i fear for the future of a country with a Left-nationalist goverment that wants to govern in the national interest 🙁

  4. You are still well remunerated in opposition. Albo is on $390k a year which is multiples of the working class they claim to represent.

    Add in that Labor only managed just over 30% of primary vote, it is well on the path to irrelevance. LNP had almost 40% and the rest was 30%. Yet the answer for Labor seems to be more neoliberal policies and wokeness which alienates its traditional working class.

  5. Again the answer, LVO, nope. Albanese is locked in with Morrison and Treasury on mass immigration. The forced Keneally retraction proves nothing will ever shift him, because that would be “racist” and not in the pure UN spirit.

    Why would they want to be competitive nationally, when instead they can do victory-laps around inner Sydney and Melbourne?See mine on this, “No opposition to post-COVID mass migration plan”, Independent Australia, of yesterday.

  6. “The only groups that it would offend are the business and property lobbies that favor the Coalition anyway and are generally viewed cynically by the public.”
    It’s one thing to say people support keeping the borders shut because of Covid19 but, will that support remain behind a permanent reset at a lower immigration intake? I completely agree it is needed Leith but, those interests (ie: The business and property lobbies) were the same interest groups that mobilized against Labor at the last election when they tried to reform NG and super tax. With the pro-LNP Murdoch press behind them they crushed Labor in what was meant to be an unlosable election. Our failure to reward meaningful reform at the ballot box (even if it was a bit ham-fisted) last time means we can hardly expect the same this time.
    Anyway, it doesn’t matter. These days there is always a salient (and dare I say, fabricated) reason not to vote for a progressive reform agenda. So we will continue to be served up this small target centrist rubbish until the wheel breaks.

  7. TailorTrashMEMBER

    Albo will answer that question as soon as he has finished his mug of cocoa and his nice digestive biscuit.