We shouldn't forget immigration is cyclical, too

by The Listener / 27 April, 2017
Photo/Getty Images
Was it really just five years ago that New Zealand was lamenting its net migration loss? The fact that, at exactly this time in 2012, celebrities such as Neil Finn were pushing for New Zealand to attract enough residents to raise the population to 10 million is as hard to believe now as it was impossible back then to imagine that by 2017, large migration gains would be seen as a problem.

The relatively quick turnaround is worth bearing in mind because – like recession and growth, or low or high interest rates – it is hard when living through the top or bottom of a cycle to see change coming. How many times has a disbelieving younger generation heard their parents or grandparents recall that their own mortgage rates were once 21%? History shows the peaks and troughs pass – dairy prices, for instance, are heading up again after a two-year slump in which it was projected – wrongly – that farm failures could hit 44%. Cycles are unpredictable. And there is no reason to assume that current immigration will be any different.

That does not mean the short-term consequences are not sometimes painful. The rapid pace of Auckland’s population growth – with the city growing by 121,000 people, the size of Tauranga, in the past three years and a reported 800 new vehicles registered per week – is well beyond comfort levels. Getting through a whole audio book during a week of commuting on Auckland’s Northern Motorway is no consolation for traffic congestion. Straining urban infrastructure is made even harder to cope with through the very act of fixing it. The disruptions of new tunnels, motorways and rail feel, at times, worse than the problems they are trying to fix.

These problems will pass. The under-investment in infrastructure since the 1960s that is fuelling house prices and shortages will be remedied. What is likely to be permanent, however, is the population’s changing ethnic make-up. Once only Maori, then predominantly Maori and European, now it is Maori, European, Pacific and Asian.

The diversity is growing. The top five source countries for work visas last year were the UK, Germany, Australia, South Africa and the US. It is unrealistic to expect such a relatively quick demographic transition not to create unease.

Yet debate about the “Goldilocks” size of New Zealand’s population is not new. The very things that lure Kiwis overseas – higher wages, specialist job opportunities, bigger markets and more vibrant cities – go hand in hand with larger and denser populations. But, equally, there are arguments for the population to remain small, particularly for the protection of Maori culture and preservation of the environment, to avoid assimilation problems, and simply because the downsides of being small are more manageable. Even those New Zealanders who never set foot on a sparsely populated beach like to think the experience awaits them one day.

Economists generally agree that, with some exceptions, immigration is beneficial globally. Immigration tends to have a rising-tide effect and New Zealand’s economic growth – predicted to be 3.5% this year – is testament to that. But politicians have a hard sell in election year because locals do not necessarily see where skilled or diligent immigrants are creating businesses that bring jobs – and even if they do, they may resent it.

Nor do the Aucklanders stuck in traffic see the unskilled migrants who are helping to make agricultural exports profitable. Longitudinal research shows immigrants’ children become more prosperous than their parents. And along the way, they become more Kiwi than their parents, too. But it takes time and in a short, three-year election cycle, this is anathema.

Polls suggest that, rightly or wrongly, a majority of New Zealand voters do not feel that immigration has benefited them. Accordingly, as of last week, three of our four major political parties had abandoned the sales pitch for immigration. The Government’s two rounds of minor adjustments, including tightened work-visa criteria and family repatriation numbers, will do little to curtail numbers overall.

However, a more significant change may be that Australia’s lights will brighten again, increasing that country’s allure. Even with Australia’s proposed citizenship changes, its higher wages have appeal. At that point, New Zealand will be reminded that the problems of being a country that a lot of people would like to move to are not as demoralising as being one that a lot of people want to leave.

This article was first published in the May 6, 2017 issue of the New Zealand Listener. Follow the Listener on Twitter, Facebook and sign up to the weekly newsletter.

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