Immigration: Can be good, isn’t always

The comments by Auckland University Ananish Chaudhuri that immigrants are a gain not a drain need qualification. It is certainly not universally true and would be better phrased as immigration can provide a gain, rather than implying that is always the case. 


A couple of issues are relevant – quantity and quality. Too much of a good thing chokes infrastructure, floods labour markets, and strains integration processes. Bit skills are critical. I agree with Ananish re the trends in low cost labour and casualization of work being in large part independent of migration, but there is little to no benefit to New Zealanders from us importing lowly skilled labour – as has been the effect of the government’s decision to feed the foreign education sector with wannabe migrants.

Citing the work by BERL which notes immigrants pay more tax net than the average New Zealander, cannot be used as proof immigration is good, as Mr Chauduri does. Of course overall they do, because they’re in the workforce where as a considerable number of New Zealanders are not – children and retired. For that work to be useful in the context he is using it, one would need to look at the overall lifetime contribution from migrants compared to those born here. 

John Key’s National government has had a simple growth strategy – boost volumes everywhere and let’s just assume that this actually lifts the incomes of New Zealanders. So more tourists, more immigrants, more cows, more damage to waterways, more emissions etc. The underlying assumption that per capita income and well-being must lift as a result, is soft at best; in 2015 GDP per capita actually fell. Certainly the Government’s strategy hasn’t stopped inequality from soaring to even greater rates.

Immigration needs an overhaul. In particular, the awarding of so many points to those already ashore (primarily to boost our increasingly dodgy foreign education sector by providing foreign students a back door to residency) deserves scrutiny. What’s the point of opening the spigot to hordes of low skilled migrants?

The international evidence tells us immigration can provide a small positive effect on the incomes of citizens of the host country. The important word is “can”. For that to happen, the skill levels have to be right and the overall numbers do as well. Mr Chauduri should have acknowledged those provisos.



Showing 10 reactions

  • bob Atkinson
    commented 2017-04-08 10:32:21 +1200
    Steve: I do not want to confuse two issues: I believe we should reduce immigration but that is certainly debatable. The second issue is our dept of immigration is massively incompetent and that is not debatable other than to suggest that it is not because of the honesty or the ability of the staff but it is caused by giving them impossible tasks. To demonstrate this incompetence ask any immigrant at random about their own experience.
    One task we have given to the department of immigration is to measure skills. When my application was processed as an IT professional I was asked for evidence of competence with SQL and Web-design – the former I couldn’t do despite haveing trained staff in SQL and the latter I had no experience but attended an evening class in Glenfield – 3 two hour sessions and they gave me a certificate. The same month Air New Zealand sacked it’s aircraft engineers and moved maintenance abroad but months later the department of immigration had Aircraft Engineer on its list of skills needed. OK that was a dozen years ago but why have 6000 tour guides been approved, why do some ethnic restaurants need a new immigrant manager every few months – maybe because they are only a source of cheap low grade staff willing to work for less than a New Zealander.
    You are correct about the ‘bell curve’ of abilities that a well run immigration policy needs but it is handled by the family of the prime immigrants. In my own case along with my IT skills I brought my wife and her four children. My wife is in many ways better qualified than myself and two of our children are now graduates but in total we comprise a small bell-curve in a single family.
    Steve – I agree with everything else you wrote.
  • Kate Tyson
    followed this page 2017-04-08 10:14:36 +1200
  • Steve Cox
    commented 2017-04-08 09:55:32 +1200
    Britain went all Brexit with one of the factors being immigration. And their immigration was running at about 1%. NZ’s is about 1,5%. So are we creating a possible scenario for a backlash? Winston is certainly hoping so.

    The Greens at one point thought NZ’s population should not exceed 4.5 million. On less land area Great Britain has a population 60 million greater than ours. So we can pack in as many immigrants as we want.

    Are we a rock star economy? If we accept the claim that immigrants punch above their weight then this 1.5% may be contributing 2% to our GDP growth. Take that off what we are achieving in GDP growth (3.?%) and it doesn’t look all that flash. High immigration is “cooking the books” as far as GDP growth is concerned.

    Bob – your idea of basing immigration on pay rate is interesting, but I would tweak it into a bell curve. We don’t want the under-paid but nor do we want the over-paid (is the CEO really worth a multi-million dollar salary?).
  • Janet Hyde
    commented 2017-04-08 09:05:18 +1200
    We only need more infrastructure because of more people and those people are eating more food that we would otherwise export and use this surplus income from to pay for any infrastructure we wanted to improve. We need to be talking about what is a sensible sustainable population level for New Zealand, and the fact that we do not need to reach that tomorrow !
  • bob Atkinson
    commented 2017-04-08 08:03:21 +1200
    Having just read Jason Krupp’s NZIER report I’m not impressed. It appears to repeat the same complaint Garth Morgan has about Prof Chauduri – it is comparing apples with oranges.
    It also resolves everything to GDP which admitted important is not the only story. So when it argues “more people” pays for “more infrastructure” something seems wrong – where is any mention of quality of life.
    And however clever the maths it is hard to ignore the fact that Lebanon with its giant influx of well educated immigrants is suffering but Korea or Taiwan or Finland or Iceland without many immigrants are doing well economically and socially.
  • bob Atkinson
    commented 2017-04-07 17:23:06 +1200
    25 years of very high immigration and NZ consistently sliding down the OECD league of countries.
    And appallingly going up the list of countries with slavery!
    High skill immigration is OK but it is impossible to create a skill list that actually works – so it should be restricted to high levels of pay – if the employer isn’t willing to pay high then you are not really needed. Removing the low paid immigrants would mean higher wages and better training for unskilled Kiwis.
  • Jason Krupp
    commented 2017-04-07 16:58:09 +1200
    NZIER research found gently raising the rate of net migration, by an extra 40,000 people each year over a 10 year period, increases GDP per capita by almost $410 each year, even after accounting for the inflationary impact. Used bi-variate vector auto-regression, to back it out:
  • Oliver Krollmann
    followed this page 2017-04-06 17:45:01 +1200
  • Janet Hyde
    commented 2017-04-06 16:34:37 +1200
    8 years ago a very skinny, baby faced 17 yr old Indian boy from Mumbai arrived on my doorstep to look at a small farm flat I had for rent. I knew he could not afford it on a mechanical apprentice’s wage and that he would be unlikely to get a flat mate so far out of town. I took pity on him because I doubted anyone would give him a spot to live and he became my first and only boarder for two years.
    He was Christian and English was his first language so he fitted OK.
    Little did I know that I was helping his family realise an ambitious plan. Already there was a sister who had previously arrived in Auckland and was studying a tourist type course and worked as a hotel receptionist, a job that almost any New Zealander could have done, just as his was.
    Eight years later both are still here and their parents can live in New Zealand.
    Was I wrong to feel a bit tricked?
    Also is it a coincident that the student loan scheme was introduced (1990 approx) about the same time they started selling our tertiary education to overseas students?
    I do believe that national homogeneity suffers if too many immigrants are let in. There is evidence of this now in many countries especially where immigrants retain a worldview that is at variance with their adopted country. We should act before it’s too late and our peaceful and pleasant country, our way of life is destroyed .
  • Steve Cox
    followed this page 2017-04-06 13:34:06 +1200