Forecaster calls to reassess NZ's immigration policy goals
Gareth Kiernan (pictured above), chief forecaster and director at Infometrics, has highlighted how New Zealand's unprecedented migration surge since mid-2022, adding 110,000 working-age individuals, is a symptom of deeper economic challenges.
In an opinion piece first published on Stuff, Kiernan said the influx, largely a response to the labour market disruption caused by COVID-19, has filled vacancies across various sectors, facilitated by the government’s Green List.
Rethinking immigration policy
With New Zealand grappling with housing affordability and infrastructure issues, Kiernan suggested it’s time to evaluate the medium-term goals of immigration policy and what constitutes sustainable immigration levels.
“Having rectified the imbalances caused by the pandemic, the focus must now shift to what medium-term goals immigration policy is trying to achieve,” Kiernan said, advocating for a more nuanced approach to immigration that considers the nation's economic and social fabric.
Kiernan critiqued the “immigration reset” announced by the previous government in May 2021, noting its lack of detail and failure to address labour shortages effectively. He argued that the policy was overly optimistic about reducing dependency on overseas workers without considering the realities of the labour market and the economy’s needs.
Productivity and sustainable growth
Highlighting the importance of improving productivity and incomes, Kiernan pointed to automation and AI as potential solutions for reducing reliance on low-skilled labour. However, he noted the challenges in training and re-skilling the workforce to meet future demands, exacerbated by disruptions in the tertiary education sector.
“Amid this malaise, as long as incomes in New Zealand remain 25-30% below those in Australia, we’re fighting a losing battle to retain our best and brightest anyway,” Kiernan said.
Last year’s record 257,000 arrivals overshadowed the unprecedented 123,000 departures, a 43% increase from the late 2010s average and exceeding the outflow seen during the 2011/12 Global Financial Crisis, Christchurch earthquake, and Australian mining boom, Infometrics reported.
Migration as a symptom
Kiernan concluded that migration trends are symptomatic of deeper economic issues within New Zealand. He called for a focus on utilising domestic resources more efficiently to address the root causes of economic malaise, rather than viewing migration as a quick fix.
“Ultimately, migration is only a symptom of the problems we face as a country," he said, emphasising the need for comprehensive strategies to foster sustainable economic growth and improve living standards.
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