A question for Steven Joyce

A reader pointed me to an article on the NBR website in which Science and Innovation Minister [isn’t there something wrong when we even have a government “innovation minister?]  was quoted as telling a business audience yesterday that:

more migration is the only way to bridge the current skills gap for ICT companies in New Zealand.

and

“That’s one of the reasons I’m leery of calls to halt immigration – apart from the fact there’s not much reason to because of the economic gains,” he said.

In the last fifteen years, we have had huge waves of immigration,  under both governments, and yet there is not the slightest evidence of economic gains accruing to the New Zealand population as a whole.  Tradables sector production per capita has gone nowhere in fifteen years, productivity growth has been lousy, and there is no sign of any progress at all towards meeting Mr Joyce’s own government’s (well-intentioned but flawed) exports target.

And yet the Minister’s answer is even more immigration.

My simple question to Mr Joyce would be along the lines of “what evidence can the Minister point to suggesting that the very high rates of immigration to New Zealand in recent decades have done anything to lift productivity in New Zealand, or lift the average per capita incomes of New Zealanders?”.

MBIE officials and Ministers of Immigration talk of immigration as a “critical economic enabler”, but in the papers they released last year, there was nothing remotely akin to evidence that the programme has enabled anything very much –  we have a bigger New Zealand as a result, but no evidence that it is a richer or more economically successful one.  Mr Joyce and the other MBIE ministers have huge resources, staff and budgets, at their disposal.  Surely they should be able to point to clear demonstrated economic gains for New Zealanders as a whole from such a large government intervention.  Our non-citizen immigration programme is already one of the largest (per capita) in the world.  Citizens might reasonably ask for evidence that such an outlier programme has benefited them before considering calls from Ministers for “even more immigration”.

In the last 100 years of New Zealand economic policy history there has been a weird disinclination to trust New Zealanders and their ability to take on the world and succeed themselves.  The Labour Party from 1938 put in place huge protective barriers, as if we could only prosper by turning inwards and producing everything from tennis racquets, TVs, and cars here just for the domestic market.  It took decades to unwind that policy.  And for the last 25 years, National and Labour governments have seemed discontented with the New Zealand population, and the skills, energies and expertise of our own people, turning instead to large scale immigration programmes as some sort of enabler/transformer.  25 years on, there is no more evidence that this unfortunate experiment has been much more beneficial to New Zealand than the protective barriers of earlier decades (or for that matter the Think Big programme of an earlier rather-too-interventionist National government).

But perhaps Mr Joyce can point us to the evidence that guides his interventions?

9 thoughts on “A question for Steven Joyce

  1. Maybe the reply would point to low inflation, low interest rates relative to history, record high stock market levels and of coursre, booming house prices: especially the ones near nice beaches…..

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    • With respect to booming house prices and a booming stock market then perhaps the retort would be that the policy is working as intended i.e. keeping wages low and increasing the gains to capital. Rather than any pretence to wider economic gains for the benefit of New Zealand as a whole.

      But then I remind myself that I am perhaps far too cynical…..

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      • Unfortunately if we had a rockstar economy, the RBNZ would have be pushing for higher interest rates to try and dampen any economic activity. The only reason we have declining interest rates is because Dairy prices have fallen and farmers are suffering. The NZ economy is still growing at a rate of 2% even with a decline of 50% on Dairy prices. If that sector started to improve then you can guarantee the OCR would be back up around 6%. New Zealand entrepreneurs have been beaten up over the years that their natural response is that it is better to be safe than to be sorry ie risk adverse.

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    • With climate change leading to rising oceans, if you have a beach property, I would suggest to sell it. The first to rise would be the insurance policies before oceans rise. Once insurance is withdrawn then the banks would not lend on those properties. Either pray for a government bailout in future or simply get out.

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  2. if so, it would be a singularly unconvincing response. Last I looked our OCR was 200bps above the US, about par for the course over 25 years, especially once one allows for how inflation expectations have fallen

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  3. Bankers require continuous expansion of their Ponzi scheme to provide the interest on money created out of thin air (though the strategy that worked for centuries has come unstuck in recent times, so they have depressed interest rates or even pushed them to negative).

    Corporations require continuous expansion of sales/markets to fuel increased profits and commercial growth.

    Governments act as agents of banks and corporations. The easiest way to get instant expansion of the lending base and the consumption base is immigration.

    All government policy is now geared to ignoring the medium-term and long-term consequences.

    In this ‘world gone mad’, steady state and sustainable are unacceptable, bordering on obscene.

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  4. Once upon a time organisations like the Post Office trained people as technicians who later went into the ICT industry, and universities taught an applied science (Computer Science).

    Over the last twenty years all technical apprenticeships have disappeared and universities have moved to offering “information” degrees with the result that most people starting in the “ICT sector” have none of the knowledge or skills they need. This holds true whether they’re an immigrant or a NZ school leaver.

    The real problem is what “ICT skills” are isn’t understood by Ministers or policy analysts.

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