Blaming the Auckland housing bubble on immigrants is like saying 'cars are too expensive in New Zealand because the Chinese are buying all our cars.’
It fails to correctly define the real problem - which is affordability, not immigration. The average wage can no longer buy the average house.
And it blames the wrong people for the wrong problem. Don Brash on TVNZ’s Q&A programme this morning said the housing bubble can be explained by a simple story of supply and demand; too many migrants means too many people for too few jobs and too few houses. Therefore reduce the number of people coming here and you’ll fix all our problems.
As if you can fix the problems in the New Zealand economy by reducing it. What a paucity of vision that reveals.
While the rules of supply and demand still apply, you can’t look at that in isolation.
Other parts of the economy are transformed as a result of migration too: for example 60 per cent of new migrants come in under the skilled migrant programme. These are IT specialists who feed the insatiable appetite for talent from some of our new high tech companies; they’re engineers who help re-build Christchurch, scientist and more. IT companies like Xero in Wellington would probably relocate out of New Zealand if they couldn’t get the skilled employees they need to grow. They can’t even wait three years for New Zealanders to graduate. They need to grow now.
Other New Zealand companies are more likely to invest, grow and increase their productivity if they know they’re going to get the staff they need. That’s even true in low-skilled industries like horticulture and wine, where the RSE (Registered Seasonal Employers) scheme gives employers a reliable work force from the Pacific for the picking season. That predictability means they create more permanent jobs for New Zealanders when the Pacific Island workers return to their villages.
New migrants contribute nearly $2 billion each year to the New Zealand economy. International students contribute about $2.3 billion.
Our immigration settings are pretty much on the right track; we ask ‘what does New Zealand need?’ not ‘who wants to come here?’. Our immigration staff go out and actively recruit people for high skilled jobs. They don’t just want people to fill jobs, they want people who create jobs; investors, entrepreneurs who want to work and live here.
Networks like KiwiConnect in the Wairarapa – a bunch of new migrants who love this country and want to support New Zealand to grow (including people like James Cameron) connect up overseas money with start up companies here. They believe New Zealand is only a few years away from being an incubator for new ideas to solve some of the tough global problems, from energy supply to new technology.
Looking at immigration through the lens of supply and demand only tells you part of the story. It doesn't measure where immigration is helping us grow.
Shamubeel Eaqub's 'F bomb' on Q&A this morning (he said Winston Peter’s should stop scaremongering about immigration and ‘get @X!# real’) reveals the frustration of this polite, well-spoken economist at the stupidly around the immigration debate in New Zealand.
Don Brash is right. New Zealand needs to do something about its low productivity, its stagnant wage growth, and the housing bubble in Auckland. That’s not an immigration problem – that’s a political problem. New Zealand needs a government prepared to do much more to back innovation and support entrepreneurs with the best ideas.
The Left in New Zealand isn’t showing principled leadership either. The Labour party should look to the Trade Union Congress (TUC) in Britain and see how the Left there has responded to immigration in the European Union; they see the free movement of people as a progressive balance to the free flow of capital.
In the spirit of brotherliness, they embrace immigration and spend their energy pushing for decent work conditions and minimum wages for every worker in Europe. They see growth and trade as the best pathway to higher wages and social progress. The demand a seat at the table when EU leaders talks trade or immigration, and they get one.
What they don’t do is trade on people’s fear of immigration or make lists of people with ethnic sounding names and blame them for a housing crisis. When the left finds itself agreeing with Don Brash, it’s time to ask – what was the question again?