There has been some silly nonsense published in various overseas publications about the change of government – all that on top of things like the Wall St Journal‘s weird pre-election suggestion that Jacinda Ardern was some sort of Trump-like figure.
I’ve written about some egregious examples of ill-informed commentary here. There was, for example, Nick Cater’s piece in The Australian praising the reformist nature of the previous government, the outperformance of the New Zealand economy, and specifically John Key and Bill English who “stand as inspiration to the rest of the developed world in these anxious and volatile time”. And then, more recently, there was the Washington Post column by an Auckland-based American lifestyle journalist who sought to convince his readers that the new government was controlled by the far-right. It was a case, we were told, of “Ardern may be the public face, it’s the far right pulling the strings and continuing to hold the nation hostage”.
Sure we are small and remote and not of that much objective significance to the rest of the world. But the scope for really badly-informed commentary is still a bit of a surprise: in both cases, it seemed, involving the authors projecting onto New Zealand what they wanted to see, and causes they themselves wanted to champion (in Cater’s case, genuine reform from the centre-right government in Australia, and in Ben Mack’s case probably a desire for something well to the radical-left of what any party in Parliament stands for).
Another example of detached-from-reality commentary turned up yesterday on Forbes magazine’s website, by an American investment adviser/commentator named Jared Dillian. I’d never heard of him before, but apparently he has a following in some circles, and is clearly willing to speak his mind. By the look of his new article on New Zealand, doing a little basic research first might help though.
His article has a moderate enough headline, New Zealand, An Economic Success Story, Loses its Way. In fact as a headline in 1960 it would have been spot-on. Without the constraints of magazine editors, his message was then amped-up when he tweeted out the link to the article, under the heading “New Zealand commits pointless economic suicide”.
I probably wouldn’t have bothered writing about it, but TVNZ asked me to go on this morning and comment on it, and preparing for that involved reflecting a bit more (than the piece really deserved) on where he was wrong and why.
I suspect the author must have been raised on some mythology about the 1980s reforms, which (rightly) got a fair amount of attention internationally then and for a decade or more afterwards.
There is the gross caricature of the pre-1980s New Zealand economy for a start (“most of industry was nationalized”, “extraordinary levels of government debt” [well, not much more than half – as a share of GDP – current debt levels in the US]). And then the claims about the subsequent period that are utterly detached from any sort of data: “New Zealand is a supply-side economic miracle”, “New Zealand enjoyed unprecedented economic growth”, “it became one of the richest countries in the world”.
All this in a country which over the last 30 years has had one of the lowest rates of productivity growth of any advanced country – none at all in the last five years – and which looks set to be overtaken by Turkey and such former communist states as the Czech Republic, Slovakia and Slovenia. We’ve just drifted slowly further behind most of the rest of the advanced world. Numbers of those leaving fluctuate cyclically, but over the post-reform decades we’ve had one of the largest cumulative outflows of our own people of any advanced country in modern times.
But what of the suicide note that Dillian appears to believe the new government’s policy agenda represents?
Top of his list is any changes to the Reserve Bank Act. He is, clearly, a big fan of the Reserve Bank and of New Zealand’s lead role in introducing inflation targeting. That’s fine, and reasonable people can differ on whether there is a strong case for change, and the extent to which possible changes (details yet unseen) might change substance (as distinct from appearance/style). But Dillian apparently knows already.
At 4.6%, unemployment is already low, but she wants to take it well below four percent, for starters. She would rather that the central bank tolerate higher levels of inflation in order to get unemployment lower, risking all that the RBNZ has achieved over the years.
A bit of basic research would have told him that the government has repeatedly indicated that they will not be seeking to give the Reserve Bank a numerical unemployment target, and that they recognise that other structural measures are needed if unemployment is going to be sustainably lowered very much further. And in his press conference a couple of weeks ago. Grant Spencer “acting Governor” of the Reserve Bank didn’t exactly seem to think the baby was about to get thrown out with the bathwater. If he did think so he could easily have said; after all he is retiring in four months’ time. And the Bank had one of their friendly foreign academics, on a retainer from the Bank, out making pretty reassuring noises the other day too. As he points out, the rhetoric from the government talks of modelling the Reserve Bank’s goals on those used in Australia and the United States – central banks which, mostly, behave much the same way our Reserve Bank does when it is following its current mandate.
It isn’t just goal changes that worry Mr Dillian.
She also wants to include an external committee in the RBNZ’s monetary policy decisions, which will certainly give the bank a more dovish tilt.
When central banks as diverse as those of the UK, Australia, Sweden, the United States, Israel and Norway include external members on their monetary policy decisionmaking committee, it is difficult to take seriously the suggestion that moving to such a committee will “certainly” make New Zealand monetary policy more “dovish”. What it may, perhaps, do is reduce the risk of the sort of false starts we’ve twice had to put up with from successive Governors this decade.
Then there is the forthcoming legislative ban on non-resident non-citizens buying existing residential properties.
New Zealand has, by anyone’s measure, one of the biggest housing bubbles in the world. Banning foreign ownership of property sets the country up for a possible real estate crash.
Set aside for the moment the question of whether the market is a “bubble” (I don’t think so, on any reasonable measure) but somehow adopting the same policy as Australia has had for years is suddenly going to fix our housing market problems. If only.
What of immigration?
Ardern also opposes high levels of immigration, along with her coalition partner, Winston Peters. It is set to drop dramatically. Immigration, especially skilled immigration, has been a big contributor to economic growth over the years.
Actually, the Labour Party policy, which will be the government’s immigration policy, does not change the number of non-citizens annually given the right to live here permanently by even one person: the target remains at 45000 per annum (or around thre times per capita the rate in the United States). Official policy supports continued high rates of immigration. On immigration, Winston Peters won nothing beyond the rather limited, one-off, changes that Labour has proposed.
But, yes, really rapid increases in the population, driven by net immigration numbers, have greatly boosted headline GDP over the last few years. Meanwhile, per capita real GDP growth – surely the metric that matters rather more – has been pretty anaemic at best. And – have I mentioned it before? – there has been no productivity growth at all in the last five years.
Dillian ends with two final predictions. Having heralded our high rankings on some of the economic freedom indices, he now asserts that “New Zealand will probably lose its status as one of the most open, free economies in the world”. Frankly, that seems pretty unlikely. As I’ve shown previously, on the measure he appears to cite our score has been pretty flat for 20 years now, through the ebbs and flows of the policy changes put in place by both National-led and Labour-led centrist governments.
Perhaps this government will prove different, but on the evidence to date – the published policy programmes – there isn’t much sign of it.
And what of Dillian’s final prediction?
It seems likely that New Zealand will experience a recession during Ardern’s term.
As it is now seven years (or eight, depending on how you count these things) since the end of the last recession, any detached observer would have to think there is a non-trivial chance of a recession in the next three years. Periods of expansion don’t typically die of exhaustion, but New Zealand has never gone 10 years without a recession of some sort or other (and although some Australians like to boast of their 25 year run, in fact even they have had an income recession in that time – a sharp correction in the terms of trade in 2008 for example). Our modern history is a small sample of events, but it wouldn’t be too surprising if something went wrong in the next few years.
Of course, most – but not all – of our recessions have had a significant international dimension to them. And that is still probably our greatest area of vulnerability in the next few years – some shock, or series of shocks, arising out of insufficiently-weighted (or priced) areas of vulnerability, accentuated by the fact that most other countries now have little room to use fiscal policy for counter-cyclical purposes and almost none to use monetary policy (most policy rates being very close to, or below, zero). When the next foreign recession hits it is going to be difficult for other countries’ authorities to respond effectively.
Could we mess things up ourselves? It is always possible – and monetary policy mistakes are among the possibilities – but even if you think the new government’s policy platform will reduce potential growth (or potential productivity growth) and even if there is some sort of “winter of discontent” fall in confidence next year, it is difficult to see what in the current mix of proposed domestic policies would tip New Zealand into recession. Lower headline GDP growth seems quite possible, but was also likely if the previous government had returned to office.
Dillian’s story seems to rest on the forthcoming “housing crash” and cuts to immigration. But if net migration is a lot lower in the next few years than it has been in the last few that is most likely to be because the Australian economy – our largest trading partner – is doing better. Policy itself is designed to maintain a high average net inflow of non-citizen migrants (and is the poorer for that). As for housing, unless/until land use laws are substantially liberalised, the idea of a crash in house prices is just a scary fairy tale – and were land use laws to be substantially liberalised, it would be more likely to be a force for good – including allowing some productivity gains – than one that would drag the economy down (tough as some of the redistributive consequences might be for some people). Among our good fortunes is that if demand does look like weakening materially, the Reserve Bank still has a fair amount of room to cut interest rates – not enough probably, but more than almost all other advanced countries.
All of which Mr Dillian could have found out with the slightest amount of digging. If there is a “suicide” dimension to economic policy in New Zealand, it is the wilful blindness of successive governments led by both main parties, who keep on doing much the same stuff, and either believe they’ll get a different and better (productivity) result, or who just don’t care much anymore.
51 thoughts on “Committing pointless economic suicide?”
Michael, we all know this was written as a puff-piece for Forbes as click-bait for his right-wing base.
The decline of quality journalism is one of the great losses of our time.
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He is clearly capable of doing better when he tries. I don’t agree with all of this recent piece of his
but it has much more substance, and reason, than the NZ piece.
Perhaps Forbes concern is that we are the last bastion of Muslim exclusion and that is about to change with Jacinda Ardern pushing the 2000 high risk unvettable Muslim refugees a year and our new Green Muslim MP Golriz Ghahraman wanting 5000 high risk unvettable Muslims a year.
Once upon a time there were serious, well edited journals with a variety of accurate, carefully researched think pieces and there were rags. Now there are rags.
But what does a respectable media outlet do? Disruption, technology, changing social mores, busy lives have taken a toll.
RE future recession:
There is also the question mark hanging over how many homeowners are over-stretched and would not be able to cope with one of the income earners facing a spell of unemployment. Particularly in Auckland. That would really exacerbate a small hiccup in the global economy. Mortgagee sales, etc.
And let’s be clear: National – not Labour – would be responsible for such a recession.
It is really not a National or a Labour thing. This is a property thing. Lets be clear on this issue. The last 50 years statistics indicates that the recent price rises is not outside of the Normal distribution after you take out inflation as the inflation factor used to include land prices before the 1990s. Our economists wrongly bring in Net Disposable Income as a factor but this metric does not factor in overseas income and banks do not lend any money if you cannot show written evidence that you have the income to service the interest plus principle repayment terms.
The next recession will be engineered by the RBNZ as they have done in the last 2 recessions.
Yes, distributional effects could be quite significant for some people. At an aggregate level, our ability to cut the OCR by perhaps another 250 bps, and the “collapse” in the exchange rate that would follow our interest rates falling to or below world levels, would provide a considerable buffer. But (much) more so to the regions than to Auckland.
(I’d give Labour and National joint “credit” for such outcomes – to a first approximation the previous Labour and National govts followed much the same policies in the relevant areas. Time will tell whether this lot is different)
RE National vs. Labour responsibility:
IMHO we must expect our policy-makers to adapt, particularly when it comes to guarding against recessions and financial crises. The right policy settings for 1999-2008 may differ to those of 2008-2017.
Indeed. And thus one of my criticisms of the last few years is that NZ has made no progress towards removing the obstacle that the near-zero lower bound poses in dealing with the next recession. At one level, blame rests primarily with the RB, together with Treasury. But the Minister of Finance has overall responsibility – English did nothing, Joyce did nothing, and there is no sign that Robertson recognises the issue/failure and is doing anything about (illustrated, in part, by his continuing deference to the Board around the appointment of a new Governor).
To be fair none of our economists even agree on what the issues are let alone how to resolve it.
Michael, our interest rates have fallen to or below world levels. We track a 17-Country TWI weighted basket of swap rates. NZD 1y1y forward is around 2.35% while TWI weighted swaps are now 2.15%… and it looks like the spread compression is going to continue.
nZD has more-or-less lost its ‘catty currency’ status. Add in a reduction in issue of NZGB’s – which will see a net outflow of foreign capital from New Zealand bonds – the resumption of supply to NZ Super, the fall in dairy, rise in oil, changes in immigration and housing and it’s surprising NZD has held up as well as it has.
Interesting. thanks Peter
Hopefully our monopoly banks start to lose the excuse that swap interest rates are high and therefore the local interest rates need to be higher. There has been a little downward pressure on retail mortgage rates but more cosmetic drops than real. Kiwibank just quoted for me 4.30% one year fixed and 4.40% 2 year fixed which is around 0.30% lower than most of the other large banks.
Michael there seems to be all sorts of nonsense and misinterpretation going on about our new Coalition government. My small effort to maintain some degree of clarity is to write an article which mostly just quotes from the Speech from the Throne what the government’s housing agenda is. Maybe some readers will find that useful.
View at Medium.com
Not much of a coalition government when the Labour Government has go and beg and to rely on the National Party in Opposition benches to get a very important landmark legislation like the TPP through parliament.
The second paragraph on the housing related material in the Speech from the Throne is about removing zoning restrictions and providing infrastructure financing.
“This government will remove the Auckland urban growth boundary and free up density controls. New developments, both in Auckland and the rest of New Zealand, will be able to be funded through innovative new financing methods like infrastructure bonds. This government will also give Auckland Council the ability to implement a regional fuel tax.”
The Washington Post recently wrote an article titled -The Left Reconsiders Zoning.
It is good to see New Zealand’s progressive leftwing parties (and whatever NZ First considers itself to be) are leading the pack in this regard. Hopefully reforms in NZ can be successfully implemented.
Liberalising zoning is also affecting the epicentre of restrictive zoning for the last 70 years -London.
The 1947 Town and Country Act, which in a sense nationalised developmental rights from all landowners by the UK Labour party. This urban development system was reformed but not abolished by Conservatives/Churchill in 1951 by removing the accompanying betterment tax (which due to its high rate had virtually stopped all urban development) thus ensuring capital gains benefits went to the highly rationed group of localised landowning monopolists who gain developmental rights or to the remaining urban land owning group who benefited from a larger uplift value resulting from land supply for new housing being more inelastic than it could have been. https://www.ft.com/content/0f72b534-9ccb-11e4-971b-00144feabdc0
In the last year or so in London a local ‘Yes in my Backyard’ organisation https://www.londonyimby.org/ has formed with the purpose of finding a culturally acceptable formula for removing restrictions on building houses in London, to make land supply be more elastic. LondonYimby have a well research report detailing their proposals, titled -Yes in my Backyard, How to end the crisis, boost the economy and win more votes. https://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/598c03c5be6594815d7741c5/1502348236073/John+Myers+-+YIMBY+-+Final.pdf
Their main proposal is that individual streets, given a 2/3 majority, could negotiate the power to give themselves upzoning rights. This is not too different from a proposal of mine where I argue in NZ we would benefit from neighbours being able jointly negotiate away the setback and shade plane restrictions on their common boundary. https://www.greaterauckland.org.nz/2017/08/29/legalising-perimeter-block-housing/
I was wondering when Sir Michael Cullen would show up as a senior advisor to the Finance Ministry and to Grant Robertson and lo and behold, today Sir Michael Cullen has been appointed to lead the Tax(Wealth Transfer) Working Group in the study of our our new Wealth Transfer Tax regime from a Income Tax regime.
It is definitely looking more and more like a Helen Clarke Labour Government. I wonder if the Foreshore and Seabed Act will be reinstated?
The author is a proclaimed libertarian;
but not really, when it doesn’t suit :-).
I’ve found that of the friends/relations of mine in the US who are ‘sticking by Trump’ regardless his incompetence, have what appears to me to be a kind of jealous animosity toward NZ – as for whatever reason they think we live in a socialist state that is sure to fail at some stage – and meanwhile (because we are a socialist state) denies us basic, capitalist freedoms (right to privacy, right to bear arms etc.)
I was speaking with a cousin the other day about the recent mass killing (the one in the church in Texas) and linked him to this article as a means to explain how gun control works here;
And that persons with any history of mental illness or domestic violence (both of which were traits the Texas shooter had) would be highly unlikely to get a gun licence here because of the rigorous screening. To him, that kind of very personal screening was a huge invasion of privacy.
Point being, I think the author of this article is in the same mold – lost all objective rationality in pursuit of an libertarian ideology…. when it suits.
I think the other strand is a belief in some circles that NZ was actually some sort of free market, low tax, economic success story, an advert to everyone (incl the US Congress) of how to do rigorous economic reform (and Eric Crampton’s point about ‘outside the asylum’ – while often well-founded – is that vein). If we are seen as recanting – eg the importance of Ardern’s line about “failures of capitalism”, if the beacon of Anglo hope is abandoning the faith, what hope is left.
Yes, that’s an interesting alternate (and completely opposite) perspective of who/what kind of state we are.
But to the Crampton’s of this world (e.g., the studied political philosopher/commentators – of which my cousin is definitely not one) we would have achieved that nirvana if only the reforms were allowed to run their [libertarian] course. It’s an interesting proposition – if NZ – the beacon of neoliberalism/liberalism – reverses course, what state is left to hold up the ideological dream? I hadn’t thought of it that way.
Indeed had the author of this article dug a little deeper, he would see that the Lab/NZ First government is planning to implement ‘make work’ programs – something he argues for in the above linked article. My thought is that the old classifications of political ideology don’t serve us well these days and we need to think more along these lines;
Click to access es4cefpg6ifj1.pdf
Privacy in the USA
Kate, Wonder if your cousin uses Facebook and Twitter and Google
Five (5) years ago for some reason I can no longer recall, I wrote a program to examine each day the tracking cookies being deposited on my network. 5 Years ago it was benign to moderate. Today it’s a tsunami. An avalanche. They are watching you. I clean them down at least once a week. Last week, after 3 days of slack vigilance I found 4780 tracking cookies. I don’t use Facebook. Never go there. But Surprise, surprise, there was a bunch of tracking cookies from Facebook. WTF.
Yes, I had to laugh on his comment on that one – there is no such thing as real privacy anymore, his government and its three-letter agencies in conjunction with the private sector having seen to that. Watched 20/20 last night (a program on the Vegas shooter/shooting) – it will never come out what the government will actually know about that individual and his every movement and transaction over the last decade.
The voice of sanity, as usual. Thanks for the analysis, Michael.
A few typos
I suspect the author must have BEEN raised on some mythology about the 1980s reforms,
Lower headline GDP?? seems quite possible, but was also likely if the previouS government had returned to office.
Here’s Mike Hosking’s NZ Herald piece today on the same subject
In case you didn’t know
Immigration and Foreign buyers are what’s keeping NZ afloat
Thanks This conviction that the country can only survive with lots – perhaps even more – immigration is depressing. Sometimes simply self-interested, but usually the problem runs deeper than that. I don’t usually watch breakfast TV but waiting for my own interview this morning i saw Paul Spoonley running the line that the America’s Cup made it important that, at very least, we kept up the immigrant numbers. Who, he ask, would build all the facilities otherwise. As ever, he forgets these people are people – not weather-proof machines – that need housing, and all the associated physical capital, themselves. I guess he is a sociologist, but there is really no excuse now for people commenting on this stuff to forget all the demand people add.
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At the risk of repeating myself for the umpteenth time …
The only reason this type of tripe can get legs is the absence of accurate information
New Zealand does the mushroom-country and vacuum-thing really well which enables people like Spoonley and Hosking and all the other intellectuals to write epistles as long as your arm – and get away with it – because there is no ability to fact-check anything – such as the real-value contribution of migrants and the real-costs
It’s all in the data – one day – in 10 years time you will reflect back on this and say – geee – he was right
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I guess I don’t entirely agree, because the real economic impact of migration is debated, and up for grabs. A lot of the international literature suggests net gains from immigration, but little of that research is location specific, and none of it is NZ specific. But people rarely change their minds because of a compelling empirical paper.
I think a much bigger problem in NZ is the weakness of public debate more generally, overlaying the problem in most of the West more generally of a strong ideological elite commitment to immigration as “a good thing”. I was listening to a podcast with Jonathan Haidt this morning, who made the point that it has become akin to a religious dogma (you could tell in the Spoonley interview that the presenters were strongly that way inclined).
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Iconoclast: did you actually say Mike Hosking is an intellectual! If so I think I will claim that titletoo but what do we now call people like Katherine Moody? Super-intellectual?
If Paul Spoonley means designing high tech racing yachts then he is correct there is only a very small number of engineers with the appropriate expertise and it would take many years to train one from scratch. Of course the majority are New Zealanders and that is why other countries borrowed our experts.
On the other hand if Paul Spoonley wants experienced builders to knock up sheds to put yachts in then there are 3 solutions:
1. move NZ builders from other projects – by offering more money
2. train a new supply of builders – my son has been working as a building apprentice for 6 months – increase salaries and more school leavers will follow in his footsteps rather than start their free university courses studying sociology.
3. the immigrant solution – I have a good friend who is an experienced builder; he moved to Brisbane last year and is earning way more than he did in Auckland (rents lower too). So Paul Spoonley is suggesting NZ takes experienced builders from poorer countries – but poor countries really need their experienced builders (I’m thinking of PNG specifically).
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Bob, Mike Hoskings has loads of practical common sense which sometimes intellectuals are sadly lacking in.
Here is the link to your interview on TV One Michael. It is nice to put a face and voice to the writing : )
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Sometimes I wonder if there are strings being pulled by certain entities to get articles like this and the Washington Post article published. Subterfuge takes many forms and it is easy to feed human insecurities. Not a conspiracy theorist, just saying…
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“” who made the point that it has become akin to a religious dogma (you could tell in the Spoonley interview that the presenters were strongly that way inclined) “” .
1993, I lived in east London when Stephen Lawrence was murdered for little more reason than being black and waiting for a bus. And at the nearby London Hospital was a young Indian who had been beaten up in a racist attack resulting severe brain damage. Now I’ve just read an article in Wired about the racial murder of Srinivas Kuchibhotla in Kansas. There is no doubt that the world contains some people without any compassion or sense of humanity. And there is some weird balance between the evil they do either as members of ISIS or as wicked loners like Anders Behring Breivik. So I can fully understand why presenters tread very carefully – they only have to trigger a single lunatic to cause a disaster.
However every country does have a immigration policy and therefore every country needs to be able to defend it rationally. This is particularly true when as with NZ we have an extremely high rate of immigration and it is clearly associated with exploitation and corruption.
It is possible to discuss immigration calmly and what I have discovered from this blog-site is that even when the immigrants were predominately from the UK (speaking much the same language with a rather similar culture [just strip out the UK obsession with class]) it made no difference to the NZ economy – just a gentle decline.
It does seem rather obvious that successful immigration may depend on the quality of the immigrants. Those who believe in immigration as a universal good [for example this article in the Economist http://www.economist.com/news/finance-and-economics/21718873-whatever-politicians-say-world-needs-more-immigration-not-less?fsrc=scn/tw/te/bl/ed/ ] have to explain why Jordan and Lebanon haven’t beome massively wealthy with so many Syrian refugees. Common sense says reasonable numbers of the right immigrants. NZ is failing on both counts.
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The only reason immigration is showing up as a lower skilled work force is that they tend to be regularly replaced, ie the older ones leave and the younger ones come in as replacements. Also without tourism then you would not any need for these foreign workers. Lets just get rid of this $11 billion tourism business??
“New Zealand’s tourism industry is a ($11)billion-dollar earner for the country, and it’s set to increase with an industry goal of growing total tourism revenue to $41 billion a year by 2025.
One in every five dollars of export earnings is tourism related, with 188,000 people directly employed in tourism and 332,000 indirectly. That’s one in every eight jobs reliant on the tourism industry.
“If we’re going to have more immigration restrictions, where are those workers going to come from instead? If we can guarantee that there are going to be more suitable New Zealand workers instead, than as a country we’ll cope with having fewer migrant workers but if there’s no major shift in that then we’re simply not going to have people to do the jobs and that will have a serious impact on our industry.”
You have a point but if all immigrants were tourism related then we would find virtually none in Auckland. How do other tourist orientated countries manage without our immigration rate? When I lived in Inverness Scotland the population tripled with tourists in summer but I cannot remember immigrants (this was 50 years ago) being required.
Of course Auckland has a massive influx of tourists. 2.8 million tourists fly directly into Auckland Airport. 19 million people move in and out of Auckland Airport. All the largest hotels are in Auckland. So you reckon no tourists? Bob, Have you visited Auckland? We regularly have 5 level cruise ships with 3,000 tourists looking at Shed 10 a symbol of our great architectural heritage. Every day I eat in a different restaurent for the last 12 months. Started a new hobby ie try out every Restaurent in Auckland. I am still spoilt for the choices available. Food from every part of the world is available in Auckland. I have had so many tourists ask for directions I am thinking of charging.
Bob, our definition of a immigrant is not the same as a definition of a migrant. Actual migrant is only 15k a year. The rest of the 125k are international students, foreign workers and returning and returning New Zealanders.
2.8 million tourists come and then they go. Since most migrants live and work in Auckland maybe tourists spend the majority of their holidays in Auckland. And you claim only 15,000 migrants actually stay in NZ. So how is our population growing so much faster than other OECD countries?
Bob, the total immigrants for a year ie 12 months is around 125k of which gross arrivals of migrants on a residency visa is only 15k a year. That number of gross arrivals has not changed much for the last 30 years. But the rest of the immigrants numbers come mainly from International students, foreign workers and returning New Zealanders have increased dramatically making most of the 125k gross immigrant arrivals a year.
NZ is a migrant country. Migrants have been coming for more than 160 years now at one stage representing 80% of the population at the peak after the NZ Land Wars and killing off the local Maori inhabitants through war and disease. Currently the migrant levels have dropped to around 25% of NZ population.
Put a sock in it GGS. “Between 1997 and 2006 real wage rates in tourism and hospitality have declined 24.5%” Tourism professor AUT on Insight RNZ. Mass tourism is being fostered for property developers, banks etc.
JH, not too sure why you find it unusual to see service wages fall? The local NZ shareholders and a huge number of the owners of these Tourism type businesses are Maori Iwi who benefit from the lower wages in the industry. There are 3 ways to increase margins and profits. You either increase productivity or you lower costs or you increase prices. As we are still a long way off from a viable service robot, lowering wages is the fastest way to increase profits. With global inflation close to zero, increasing prices is also too difficult.
Doesn’t matter what wage you are paying when your workers can’t get accommodation;
“Try to get a job in Queenstown and the first question is “Have you got a confirmed place to live?” Answer no and most employers will show you the door, provide directions to the airport bus and say bad luck.”
Bob Atkinson – Reference your link upthread to the Economist Article
“Among economists, there is near-universal acceptance that immigration generates huge benefits. Inconveniently, from a rhetorical perspective, most go to the migrants themselves”
Same finding from Australian Productivity Commission
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Virtually by definition immigrants get a benefit otherwise they wouldn’t come or like my Turkish neighbours have children here and then return (a benefit for the kids to have dual nationality).
So from a global perspective immigration is great and as the Economist article explains the poorer the country of origin the greater the benefit. IMO for a country poorly selected immigration hits the poor and the low paid worst and if anything rewards the upper middle class who of course make the decisions about immigration.
For balance google “”Norway is hard on migrants – but tough love works | The Spectator””
Also virtually by definition local New Zealanders also get a benefit otherwise new immigrants would not be allowed to come.
Assuming our government always acts rationally for the benefit of all local New Zealanders.
My reading is they want cheap workers to operate supermarket checkouts and make coffee and of course to increase population for the benefit of property investors. I hope you are right and I am just too cynical.
There are only 200k property investors and in comparison there are 1.2 million house owners. There are still significantly more homeowners than there are property investors. Therefore it is a red herring to blame property investors. Anyway the 40% equity on LVR has severely restricted property investor buying activities.
The previous National government acts on behalf of the majority of voters(47%) and tries to balance the wishes of minority support partners(4%), of course tough luck to the 49%. With the new Labour/NZF/Greens coalition government made up of a hotch potch of losing parties means that the minority government now acts on behalf of a minority of people.
And surely there is something wrong in the accounting. Are the improvements in the lives of individuals matched by the economic measurements? Substitute “immigration” for “development” (remembering policy should start with consideration for those who own the nation and it’s lifestyle)?
Just thinking about Japan. 1. Apartment was on outskirts then inskirts 2. Family came to visit NZ. Child played on lawn (nice section but modest house). Child cried on entering family apartment. 3. Asked rhetorically about “what if you were rich – what would you buy?” young Japanese man casually replied “this” (modest house surround by lawn an garden).
“Also virtually by definition local New Zealanders also get a benefit otherwise new immigrants would not be allowed to come.”
Please, this is the same specious argument you’re known for. If a New Zealander kidnapped people and sold them into slavery, then you could (also speciously) argue that New Zealander’s benefit.
No one disputes that there are specific parties in New Zealand that benefit from mass immigration, but they benefit at the expense of other New Zealanders. It is very much an example of privatizing the profits and socializing the losses, i.e. profiting personally from immigration-related rorts and leaving the rest of society, who did not partake in the windfall, to bear the social burden.
[…] was about to “commit pointless economic suicide”. I wrote about his column here (various other people had a go too). Like others, I was pretty dismissive: perhaps, as Dillian […]