Measuring Migrants7 Dec 2021

This year the Government tasked the NZ Productivity Commission to “investigate and recommend immigration settings that are fit for the future”. The Commission recently released its preliminary findings and recommendations and has invited feedback from the public to inform its final report in April 2022.

We can appreciate that “measuring migrants” as far as their “productive benefit” to New Zealand is concerned can, in part, help inform the wider discussion on future immigration settings. However, the approach of the Productivity Commission seems to be all-encompassing and has taken a “bottom-up” approach as opposed to a big picture “top-down” approach.

What is apparent from the report, and also from New Zealand’s historically “knee-jerk” changes in immigration policies, is that there is no clear long-term strategy for New Zealand immigration. Looking at immigration policy, we don’t know what the Government wants from immigration, or what they think about population growth, or what they think works for New Zealand. The report notes that the New Zealand immigration system is quite adaptable and that this is a good thing, but the lack of any clear long-term goals, and the economic principles upon which the plan to achieve these goals is based, is a fundamental issue needing to be addressed at the outset.

Immigration in New Zealand is by and large a positive thing - it enriches the lives of those in New Zealand, includes the benefits of greater social diversity, increases cultural capital and associated intangibles that better places New Zealand in the globalised market, expands the national skillset and knowledge base, and fills significant workforce gaps in crucial industries. However, we cannot avoid the reality that ageing populations are a huge concern worldwide, with fewer taxpayers eventually needing to take care of more former-tax-payers. New Zealand’s population growth is slowing and immigration is the obvious (and only?) way to combat this trend, apart from attracting New Zealanders to come home.

Furthermore, it is broadly accepted that population growth drives economic growth, however, the Government, and the report, do not promote population growth as in, and of, itself a good thing for national economic growth. Instead, population growth is mostly framed in the report as something which creates pressures on public services and infrastructure. It seems incongruous that the 65-page report dedicates two small paragraphs to the reality of a future in which fewer taxpayers are taking care of more former taxpayers, when common sense would indicate this should really be the primary driver of any long term immigration focus.

It is unwise to assume the demand by migrants to come to New Zealand is insatiable and that New Zealand has the luxury to “pick & choose” who it wants. High house prices, high cost of living, low wages, lowering education outcomes and increasing social unrest and crime are all increasingly weighing on New Zealand as an attractive migrant destination.

The Productivity Commission and the Government need to think very carefully about many factors in deciding how to reset New Zealand’s immigration policy for the future – the current report is not the best start.

Link: First published in Waikato Business News November/December Volume 29: Issue 11 2021, page 12