On Hosking On Immigration

A brief engagement with Hosking - because it provides an opportunity to discuss this developing argument and issue a bit more broadly....

Hosking (NZ Herald Opinion 11 May 2017) justifies permanent annual immigration inflows of 70,000 because “half are New Zealanders and Australians” and because they are needed to fill job vacancies. However his accompanying economic analysis misses the mark because he ignores two other inflows which are essential to an understanding of the nation’s simmering discontent. 

The first inflow he ignores are the 200,000 people who were issued temporary work visas in the year ending June 2016 - almost 30,000 more than the year before. While individual workers and students may come and go, the temporary overall resident population level has increased sharply putting further pressure on accommodation and transport infrastructure. Just because these guys are designated "temporary" doesn't mean they don't - as a whole - have similar demands as "permanent" immigrant.    

Professor Spoonley says New Zealand now has the highest inflow of workers and new residents of any OECD country. (Good on you - Mike - for including Spoonley in your opinion - albeit selectively.)

The second inflow which must be factored into any analysis of NZ’s changing economy is the unprecedented investment level of foreign capital finding safe haven in our relatively unregulated property market.

Immigration and foreign capital go together. Their combination is transforming cities like Brisbane, Vancouver, Sydney and Melbourne. And Auckland. The differences lie in how these different countries are responding. The pent up demand for what these cities offer (including safety, security, high quality education, health services etc) among the burgeoning middle classes of India and China in particular is enormous. Even suggesting this demand can be met by increasing supply (of houses for example) is ridiculous. The pattern of NZ's immigration has changed as the world's wealth distribution has changed. Immigration from UK and Australia is steady, but actual demand from India and China has risen sharply and potential demand from those countries is gigantic.

It is easy to dismiss popular concern about immigration as xenophobia. However the absence of race riots in Auckland whose population now includes 40% born outside New Zealand suggests attitudes of tolerance and acceptance of cultural diversity among locals. (Btw - similar statistics now describe the populations of Vancouver, Sydney and Melbourne - far out-stripping the same measure in London.) 

What can’t and shouldn’t be ignored are the social consequences of a combination of unprecedented and sharp annual increases in NZ’s actual population and of unregulated foreign investment in property. This unmanaged combination might be good for the national economy and the property industry, but comes at a considerable cost to resident communities.

You can have too much of a good thing. 

Even Hosking might concede that.