Terms and conditions surely?

With various media reports around – and numerous annoyed locals –  about Wellington public transport operators failing to deliver contracted services (cancelling services) because they haven’t (note the choice of word) recruited and retained sufficient drivers, perhaps it is time to haul up from the archives a couple of posts I wrote early last year on these and related issues.  Those posts were focused on bus drivers, while the latest stories feature both buses and commuter trains.  I see that, once again, there is talk of overseas recruitment.

This was my first post, sparked by reports that one company was wanting to recruit abroad to fill its vacancies.


What prompted this post was the story this week about a bus company – Ritchies –  wanting immigration approval to recruit foreign bus drivers.  Bus drivers don’t make the list MBIE released of occupations for which there were more than 100 (so-called) Essential Skills visas issued last year, but these occupations were some that did.

Essential skills visa approvals 2016/17
Truck Driver (General) 400
Winery Cellar Hand 396
Waiter 345
Sales Assistant (General) 320
Personal Care Assistant 289
Massage Therapist 259
Baker 231
Painting Trades Worker 220
Builder’s Labourer 185
Kitchenhand 181
Fast Food Cook 118
Farm, Forestry and Garden Workers nec 116
Bar Attendant 102

On the face of it, such roles don’t seem notably more (or less) taxing than being a bus driver.  It is a responsible role, but not one requiring huge amounts of skills or training (according to the story I linked to above 6 to 8 weeks training suffices).    It isn’t the sort of role one naturally thinks of when officials and ministers talk about skills-focused immigration programmes.

The case Ritchies make is that they can’t find locals –  New Zealanders, or people already here –  to fill new roles.

Auckland Transport awarded Ritchies Coachlines the contract to run buses on the North Shore from September.

But the company said so far it had not been able to find enough drivers locally and had asked Immigration New Zealand if it could bring in 110 of them from overseas to plug the gap.

And I’m sure that is correct.  If you pay low enough wages, it is hardly surprising that people with other New Zealand options aren’t lining up to work for you.

At least on the union’s telling

“The problem with Ritchies is that they pay over a dollar an hour less than the industry so their retention rates are minimal. People get trained up then they’ll go to other bus companies where the rates are better. Again Ritchies brings it upon themselves.

On the face of it, it looks like another case of a service contract won largely on the basis of (assumed) low labour costs.

The company more or less acknowledges the point

Mr Todd said the company would continue trying to recruit locally but only had until late June before it would need to look overseas for drivers including in Fiji, Samoa and the Philippines.

He admitted the $20.20 an hour it paid drivers would be difficult to get by on in Auckland but said this was the budget it had to work with.

“Lets face it, any job in the world, if you pay enough, you’ll get people to do it but…those costs will have to be passed on.”

I don’t really see the specific company as the bogey-man here.  They are operating in an environment –  bidding for public contracts –  where the overall level of funding seems to implicitly rely on access to very cheap labour (in this case, according to the company, from Fiji, Samoa, and the Philippines –  the jobs presumably not being attractive to bus drivers from the advanced world, since New Zealand is now a low income advanced country).

The same goes, more or less, for some other public-funded industries. Rest-homes, for example, rely heavily on immigrant labour from poorer countries: the existing level of rest-home subsidies constrain their options pretty severely.  No individual firm has a great deal of market power.  But the overall market is nonetheless skewed by policy choices successive governments have made about access to immigrant labour to fill what are mostly quite modestly-skilled roles.

It is why we need not small tweaks at the margins –  should or shouldn’t bus drivers (waiters, kitchenhands, or whatever) be on the approved list – but an overhaul of the entire immigration system.

But as part of that we should:

  • establish a strong presumption against use of unskilled immigrant labour (which mostly –  although not entirely –  competes with and tends to drive down returns to domestic unskilled labour), and
  • get ministers and officials out of the game of determining which specific roles people can and can’t hire short-term immigrant workers for.

To that end, I’ve argued previously for a system in which Essential Skills visas are granted on these terms:

a. Capped in length of time (a single maximum term of three years, with at least a year overseas before any return on a subsequent work visa, with this provision to apply regardless of skill level).

b. Subject to a fee, of perhaps $20000 per annum.


And this was the follow-up post from a couple of weeks later.


In a typical market, there aren’t sustained physical shortages –  the price adjusts.  If in this case the price (driver wages) wasn’t adjusting –  if anything there was a suggestion Ritchies would be paying less than the previous operator –  it suggested the plan was to close the gaps another way (bringing in more relatively unskilled people from abroad.)    Ritchies has moral agency in that –  they made a choice to bid that way, and should live with the consequences if it doesn’t work (if, for some reason, MBIE turns down their application to bring in relatively unskilled workers from abroad).   But I didn’t want to focus on the individual company, since they are responding to incentives set up by various arms of government –  Auckland Transport offering the contracts, and even more so MBIE (as part of the New Zealand government) in making immigrant labour relatively readily available for what are really quite unskilled roles.    And it isn’t as if Ritchies is the only company operating this way.   Another operator has won most of the bus routes in Wellington, to take over in July, apparently operating on very similar assumptions about access to new immigrant labour.

I had some comments directly from people involved in the industry, on both sides.  In substance they were making quite similar points.  As one observed, demand growth (in this case for bus drivers) can always be met by expanded capacity (immigration) or higher prices (or wages).  They went on to argue that the ability of some companies to import drivers meant they won contracts, and that it was as clear a case of immigration driving down wages as you could find.

Of suburban driver jobs, I observed last week

It is a responsible role, but not one requiring huge amounts of skills or training (according to the story I linked to above 6 to 8 weeks training suffices).    It isn’t the sort of role one naturally thinks of when officials and ministers talk about skills-focused immigration programmes.

One driver confirmed that training story noting that his employer

…took me on with just a car licence. They spent about 8 weeks training me up and paid for the costs of getting a heavy traffic licence and a P endorsement (essentially a “fit and proper” test.)

In terms of (price-based) evidence of labour market pressures, this driver observed that over five years or so his basic hourly rate has increased by only around 1 per cent per annum (if so, that would be less than the average rate of CPI inflation, so a reduction in real wage rates).

There seem to be a variety of ways to spin the story as to how much bus drivers are being paid, and what the new entrants (Auckland and Wellington) are offering or planning to offer.   …..[But] there doesn’t really seen to be much dispute that the new operators –  claiming an inability to find sufficient local labour –  are not offering drivers more than the current operators.  Indeed, the general sense seems to be that pay for equivalent effort would be less than at present.

And in a typical, well-functioning, market, when demand exceeds supply –  and not just for a day or two  –  the price of the product or service in question will rise (not fall).   Quite how much the rise will be will depend on the elasticities of supply and demand –  maybe a lot more potential drivers would emerge for slightly higher wages (or maybe not), and maybe bus patronage would drop away sharply with slightly higher fares (wages are by far the largest component in bus company costs) or maybe not.  But you wouldn’t expect to see the relevant price –  bus driver wages –  under downward pressure when there is incipient excess demand for drivers.

(It is not as if the outgoing operators have had abundant labour.  As one correspondent noted “Go wellington have about 340 drivers for the current contract but even with huge active recruitment and training from scratch they only get 100 new per annum which is as many as they lose”.)

In fact, the way the bus driver labour market exists seems to be possible only because our governments –  present and past –  have opened up a channel through which supply can be increased, at or below the current price.  Open up incipient excess demand at current –  or lower –  than prevailing wages, and then get in workers on a (so-called) Essential Skills visa.

Bus drivers aren’t an occupation that appears on the official “skill shortage list” (if they were there would no further labour market test involved for any firm wanting to hire foreign labour).  Occupations such as bricklayers, plasterers, bakers, and jockeys are on the list.   But not being on the list doesn’t mean bus companies can’t hire foreign drivers.  There are just more hoops to jump through –  which is why employers who think they might have multiple vacancies (like the bus companies) are strongly urged (by MBIE) to seek an “approval in principle”.

MBIE’s employer guide is here.   You’ll see that for unskilled or modestly skilled jobs, part of the required test is to check with WINZ as to whether there are New Zealanders seeking work they can refer to the employer.   Bus drivers are in that category…….

That looks mildly encouraging.  You can’t just offer the minimum wage (for a job in New Zealand typically paying $5 an hour more than that) and expect to get your approval in principle to bring in foreign workers.   But if your wage contract is a little different from other operators (perhaps base rates are a bit higher, but other payments are lower?)  or even if you can find one other company somewhere in the country paying the same overall rate, you have to wonder (based on total numbers approved if nothing else) how rigorous MBIE is in enforcing the test.  And why, for example, it isn’t given more prominence in their guide to employers?

Because, you see, MBIE is really keen that firms hire foreigners.    In fact, they have whole website pages devoting to extolling the virtues of immigrant labour –  so much so that one has to wonder whether they really see themselves working in the interests of New Zealand citizens.    Employers are told

“Hiring migrants is a great way for you to maintain and grow your business”

And then the first item under that “Why hire migrants?” employers are told

Migrant workers can do more than just fill a gap in your staffing. They bring with them an international perspective and connections, provide support to up-skill local employees, add diversity, and generally can help businesses to stay ahead of their competition.

The “international perspective and connections” being oh so important for bus drivers, bricklayers, or even the cafe or retail managers or aged care nurses (occupations topping the work visa approval list).    There is no hint for example that there might be any disadvantages –  eg lower returns to New Zealanders in similar occupations, or the simple fact that, in aggregate, migrants add more to demand pressures (including for labour) than they do to supply in the short-term.

If we are going to have government officials administering something like a mass market Essential Skills visa scheme, and deciding who does and doesn’t get approval, surely a key aspect of any labour market test should be something along these lines?

“has the effective wage or salary rate for this occupation risen materially faster than wages and salaries more generally in New Zealand over the past couple of years?”

If not, how can you seriously use the term “skill shortage”?    Even if wages in a particular occupation have risen faster than the norm, it takes time for locals to respond and shift occupations, so one wouldn’t necessarily want to jump at the first sign of a bit of real wage inflation in a particular occupation, but if after a couple of years the pressures were persistent then some sort of Approval in Principle for temporary migrant labour –  at wages at or above those now prevailing in the domestic market – might make some sense as a shock absorber.  But MBIE seems perennially averse to markets adjusting in ways the generate higher real wages, even though that outcome is one core part of what we look for from a successful economy.  Successive Ministers of Immigration –  from both main parties –  seem to buy in to the story, and believe that central planning by them and MBIE bureaucrats is going to work better than the price system.  It wasn’t a good system in the Soviet Union, and it isn’t here.

I can’t see a reason why we should be giving Essential Skills visas for suburban bus drivers, and we shouldn’t be creating a system where firms are encouraged to bid in the expectation that they can use that system, rather than pay a market-clearing wage for New Zealand resident workers.

More generally, I don’t think there is particular merit in a system in which officials are picking and choosing which firms can and can’t hire short-term workers.   As I noted in my previous post I favour something along these lines

To that end, I’ve argued previously for a system in which Essential Skills visas are granted on these terms:

a. Capped in length of time (a single maximum term of three years, with at least a year overseas before any return on a subsequent work visa, with this provision to apply regardless of skill level).

b. Subject to a fee, of perhaps $20000 per annum.

If an employer really can’t find a local hire for a modestly-skilled (or unskilled) position, they’d be able to get someone from overseas, but only by paying (to the Crown) a minimum annual fee of $20000.  It is pretty powerful incentive then to train someone local, or increase the salary on offer to attract someone local who can already do the job. If you can’t get a local to do a job for $40000 per annum, there might well be plenty of people to do it for $50000 (and still cheaper than paying the ongoing annual fee for a work visa employee).

There are lots of operational details that would need to be refined, but as a starting point it seems like a pretty attractive system.  In the current situation, if bus companies really can’t find New Zealanders to drive, they could hire foreigners, but would have to pay an additional annual fee to the Crown of $20000 for each approval (but also wouldn’t otherwise have to jump through bureaucratic hoops, legal fees etc).  I’d be really surprised if there were any bus drivers then on Essential Skills visas or –  reprising the list from my previous post – kitchenhands, waiters, or massage therapists.  But, you never know.   If the market price adjusted that much that it was still better to hire a foreigner, that price adjustment might be a pretty compelling argument for a rather more genuine “skill shortage” than what we have now.

Perhaps in the end, MBIE won’t allow the bus companies to hire immigrant labour to fill the vacancies.  I’d welcome that, but the bigger issue isn’t any particular role, but how the system as a whole is designed and operated.

That’s the end of the extracts from last year’s posts.  There are lots of words there, but surely the bottom line is that for any modestly-skilled occupation for which there isn’t a sudden totally unexpected change in demand (and the number of people wanting to use public transport just doesn’t fluctuate that much), persistent “shortages” tell you more about the wages and other terms and conditions being offered than they do about any real sense of unavailable labour?  People will typically pursue the best opportunities available to them.  Make bus (or train) driving somewhat more attractive –  which is what the market signals are suggesting should happen –  and some more people will be interested in, perhaps even keen on, driving a bus or a train.

And lets not allow the immigration system to be used to avoid responding to domestic labour market signals, especially in non-tradables parts of the economy.  There is a place for immigration –  a reasonably generous approach to refugees, and an openness to some really highly-skilled people who might want to settle here (probably quite a small modest number given distance, modest income relative to other advanced countries, and the revealed preference experience –  only a small proportion of our actual migrants have been particularly highly-skilled).

(And, to be clear, the overall wage effects of high immigration are ambiguous, in part because in aggregate immigration boosts demand more than supply in the short run, and there are repeated waves of migrants, and thus repeated short-runs.  I am not one of those arguing that immigration policy is driving wages systematically down.  This post is about the impact in specific localised markets, and even more about the rules regarding labour market tests.)

37 thoughts on “Terms and conditions surely?

  1. “Four out of every 10 appeals against Immigration New Zealand decisions have been upheld – leading immigration advisers to wonder if even more people may be missing out on residence because of flawed assessments.

    They were not able to cut down student numbers or visitor visas, so they started pinpointing specific fields on the resident applications like chefs, IT support and retail store managers. There was a 62 percent increase in Immigration New Zealand appeals in the 2017-18 year – the highest in its history at 1927.”


    Unfortunately not that easy to try and get rid of immigrants.


    • My bedridden mother’s Thai cleaner/caregiver with NZ residency just got married. Her husband would join her soon from Thailand. She also had the task this week of training 4 new immigrant recruits, a multinational mix of 2 indians, a Samoan and a Tuvaluan.


      • She also related how difficult it was to force feed a dementia patient as they forget how to feed themselves. The time allocated is 2 hours for each meal. 2 hours for breakfast, 2 hours for lunch and 2 hours for dinner. Add the cleanup and you have more than 1 whole person to look after a dementia patient.


  2. Essential skills, “Garden workers”, “waiters”, “sales assistants”, v little skill required in the list that you have posted,



    Jock Allison,

    9 Arthur Street,

    Dunedin, 9016


    Phone : 64 3 4772903

    Cell Phone 64 21 363337

    email : jock.allison85@gmail.com


  3. Drug testing knocks a lot of Kiwis out of this type of job. Changes to H&S rules to make directors liable brought in lots of extra drug testing. A lot of drug users countered this by changing from cannabis to P as stays in your system only 2 or 3 days vs a month – but maybe those users didn’t think they should be driving 50 people around.

    You could increase wages but the capacity for ratepayers to subsidise public transport users in finite I guess. They are already paying $5 for what should really be a $10 fare.

    Liked by 1 person

    • Agreed, increasing wages really is not a option. The government/Council has to either provide subsidised transportation or people just stop using public transport if the price is too high and get back into their cars. Personally I find public transportation a nuisance because they have fixed routes. Outside of that fixed route you would still have to use your car. In order to make it worthwhile to customers who are inconvenienced you have to price sufficiently low enough to attract people that are outside of that fixed route. Given the low density of most of our suburbs, it is essential that the price is low due to the nuisance factor which constraints wages.


  4. I so appreciate the analysis and effort you put into this critical issue, Michael. Absolutely nothing to add except how extremely frustrating I find it that none of our politicians are backing New Zealanders by way of sorting out our appalling record of harmful government interference in the labour/employment market.

    Liked by 2 people

    • The respective National and Labour governments are intervening due to Michael’s regular rants but the reality is wages have to be constraint for a private company to make a profit. Public transport prices can’t rise because cars are simply still a much cheaper option. Fixed transport routes in public transport creates a nuisance factor. There is a cost attached to that nuisance factor.

      The other option is a expensive taxpayer public transport system.


  5. I agree with you. Two thoughts. 1) bus driving would be a more specialized skill than truck driving? The latter being on the essential skills list, but not the former. Seems odd. 2) I think I saw one article saying transdev train drivers were leaving for more pay at kiwirail.


    • Not sure about your (1). Rather different job – bus drivers have more personal interaction, and so you probably need to like people. Checking back on some old emails, apparently very few people move from truck-driving to bus driving, partly because the latter is typically less well paid.


  6. ” bus drivers have more personal interaction, and so you probably need to like people ”

    If you use public transport then you know there are plenty of bus drivers who HATE the riders. Not always without justification either.

    Liked by 1 person

  7. I read your article with every paragraph getting a nod of approval and the sheer stupidity of our current immigration system making me too angry to write coherently. So I waited a couple of hours and fortunately Katherine Moody has contributed the reply that was inside me but with her clarity and without my cursing.

    I do hope the comments stick to the subject of low skilled / low wage immigration rather than go off at a tangent about the relative skills of specific jobs and the funding of public transport. [I did that last year when you last mentioned Richies].

    My daughter is a graduate social work team leader who also has mangement experience with youth justice and she lives and works in Auckland North Shore. Despite being the best paid family member (way more than the $20.20ph for bus drivers) for financial reasons she is seriously considering applying for work overseas; so last week I checked UK work visas for her and immediately came across this:-
    “” Can I work in the UK in a low-skilled position? There are currently no UK work visas available for low-skilled jobs in the UK for non-EU/EFTA nationals as these positions are filled by UK and EU/EFTA nationals. This may change as a result of Brexit if labour shortages emerge. When the points-based system began in 2008, there were plans to issue Tier 3 UK work visas for low-skilled work but this has never been implemented.””
    So for the last 11 years the Uk has issued no low-skilled work visas. What does the UK know that MBIE doesn’t?

    When working in Papua New Guinea my employer paid a work visa fee that was equivalent to the annual salary for two local teachers. What does PNG know that MBIE doesn’t?

    Even Saudi Arabia is now making an effort to get its citizens into non-government jobs. What does our Labour party lead government want – for NZ to become like Qatar with a sub-class of conspicous 3rd world immigrants doing the menial jobs?

    Liked by 1 person

    • “What does our Labour party lead government want – for NZ to become like Qatar with a sub-class of conspicous 3rd world immigrants doing the menial jobs?”

      Hasn’t it been that way for decades now across much of the West, Britain included?

      It’ is already like this in Auckland – bakers, taxi drivers, couriers, bank tellers, security guards. And now construction, council workers, ,police, AA roadside mechanics, real estate agents…

      London is less than 50% white now.

      “So for the last 11 years the UK has issued no low-skilled work visas. ”

      How many refugees have they accepted? How many EU passport holding immigrants are in London? How much chain migration has occurred? How much illegal immigration is there?

      “Despite being the best paid family member (way more than the $20.20ph for bus drivers) for financial reasons she is seriously considering applying for work overseas”

      Drive along some of the residential roads on the North Shore after hours, its like a car yard. 5+ cars parked up on many front lawns and drive ways – lots of Fastway, UPS vans etc. That’s how the immigrants do it. Even living in a slum house here in NZ is like winning an international lottery compared to the hell back in their homelands.

      Liked by 1 person

      • I am from the UK and have family there. 25 years ago I lived (happily) in a London suburb over 90% recent Bengali immigrant. I was on holiday in Bradford last year. I certainly do not recommend UK immigration nor come that PNG as an ideal that should be copied entirely. My point was even they realise low wage immigration has associated difficulties.

        The degree of ‘whiteness’ in London or elsewhere doesn’t bother me; what deeply troubles me is the associated rorts and corruption, the second less deeply troubling aspect is the negative impact on our economy of too rapid a rate of immigration – much the same people coming more slowly would solve that. My final gripe is low wage immigration as an attack on typical working class Kiwis; I have the impression of NZ society becoming ever more stratified.


      • Bob Atkinson > “25 years ago I lived (happily) in a London suburb over 90% recent Bengali immigrant”

        25 years ago London wasn’t minority white natives.

        25 years ago London didn’t have a knifing and acid attack crime wave.

        25 years ago, London was way more affordable.

        25 years ago, London was much, much less like a 3rd World international bus terminal.

        Bob you strike me as a typical Boomer, entirely self centered and desperate to virtue signal your hypocritical Liberal “I dont see color!” morality.

        I bet you had absolutely nothing to do with those 3rd Worlders except in a very superficial and condescending way. I bet you live safely within a white majority enclave now.

        You say yourself the suburb was 90% black – so much for integration. Just former English populated suburbs filled up with 3rd Worlders. Love to see the education, welfare, crime stats for a 90% black London suburb.

        Multiculturalism = Tribalism.


  8. “the overall wage effects of high immigration are ambiguous, in part because in aggregate immigration boosts demand more than supply in the short run, and there are repeated waves of migrants”

    Yes, this is the central economic rational for mass immigration from 3rd World countries. With rapidly aging and collapsing populations, the OEDC faces strong economic deflationary pressure from declining consumer demand. Mass immigration helps to counter this.

    I think NZ population would be shrinking annually if immigration wasn’t running white hot.

    Just take a look at Japan, an insular, xenophobic island tribe, experiencing a huge population colllapse and now into its 3rd “Lost Decade” of economic growth. Takes very few immigrants and almost zero refugees.

    So its not just that Kiwis are avoiding low pay, low status jobs, the reality is there are less and less of us “natives” around to actually do those jobs, even if the carrot/stick were big enough.

    It would be a fun experiment just to steadily ramp up bus driver wages to that of a senior software engineer 120K. I’m sure CV submisisons would surge but probably not as quickly as might be thought.

    And then the problem would only shift and other fields like waiter or baker would empty out.

    The underlying force of an aging shrinking labour population is still at play.


  9. Actually, without material non-citizen immigration New Zealand’s population would be pretty flat. There are plenty of advanced countries with flat or falling populations that are doing just fine in economic terms. Actually, Japan does reasonably well too – richer and more productive than us.

    Liked by 1 person

    • “Actually, without material non-citizen immigration New Zealand’s population would be pretty flat.”

      A fertility rate of just under replacement level, so yes slow decline.. Before 2008, fertility rate much lower. Same problem though. Remember the Boomers are retiring in droves now, a rapidly aging population. Plus our economy is predicated on non stop expansion. Impossible to do with declining or rapidly aging population.

      “There are plenty of advanced countries with flat or falling populations that are doing just fine in economic terms.”

      No they aren’t, all OECD countries are afflicted with one kind of severe debt burden or another and it is only getting rapidly worse.

      ” Actually, Japan does reasonably well too – richer and more productive than us.”

      [ Fun fact: Japanese buy more adult diapers than baby diapers these days.]

      Japan has a 250% government debt ratio to GDP, more than double USA – and every one freaks out about USA debt.

      Yes Japan got rich back in the day, so yes it can suffer 3 “Lost Decades” without everyone ending up living under a bridge ( so far ).

      But everything they have done to restart their economy has failed.

      Same across the OEDC.

      Japan and EU running negative interest rate policy for years now.

      USA will follow soon with negative interest rates . US is already furiously back pedalling on Quantitative Easing.

      The resulting growth in inequality has lead to the rise of popullism both right and left, and growing internal and regional conflict.

      The future is more and more QE and NIRP until the whole thing derails.


      • Michael Reddell > “Net gen govt debt in Japan is about 130% of GDP and the comparable US number is about 80%”

        Sorry but your use of NET govt debt to try and paint a rosier picture is very naughty of you.

        Loaning money to your self is smoke and mirrors. Just like all the other tricks that have been pulled by our technocratic Globalist overlords – QT, NIRP, ZIRP.

        Those ex soviet bloc countries you mention in your linked article are:

        A) Coming off a VERY low base.
        B) Probably been getting a lot of EU funds in one form or another.
        C) Get lots of other favours from USA/NATO because Russia.

        Its interesting why you don’t believe a rapidly aging, shrinking or at least stagnant consumer population has no meaningful drag on our modern economies, being as they are, predicated on infinity growth.

        Nearly all the growth in the West the last few decades has been artificial – massive ramp of debt in one form or another as a substitute for declining economic.

        Resulting in accelerating inequality – assets like share and property portfolios through the roof, worker bees wages flat or declining in real terms ( so get them to take on massive debt – mortgage, cars, education, holidays )

        = Reoccurring economic crisis, growing international conflict, surging populism.


      • Sorry double negative in my post above^

        “why you don’t believe” should be “why you believe”


    • Japan also allocates one nurse to 90 dementia patients with the brutality and abuse of basic human rights ie tying up dementia patients immobile for weeks with the regular use of sedatives. Unfortunately we can’t. Kindness as at the core of this Labour government as per Jacinda Arderns regular publicity stunt.


      • I just can’t grasp the adult -v- diaper being resolved by immigration argument. The number of elderly people stays the same. Possibly being retired influences me to see things differently. In the developed world and even the developing world the number of people living longer lives is increasing; this should celebrated. In NZ and probably many other countries the elderly are organising themselves into retirement villages if they can afford it, into U3A groups and my leisure centre is full of them. They are also working. Monday my bathroom floor was fixed by a 75 year old Kiwi with a young Syrian immigrant assistant. My wife works for an accountant who carries a gold card. So long as superannuation is not means tested there will be ever more elderly working Kiwis. Most charity shops would close without their retired volunteers – I know many in their eighties – it may be unpaid but it is a serious contribution to NZ.
        This is an argument I know I will win. It might take time but eventually even the youngest reader of this blog will get old and discover life after 65 is not all bad. Of course it may be hard to find the special medical treatments they may need because all the beds will be filled with today’s immigrants.


      • Dementia is a major and growing health challenge. It estimates there has been a 29% increase in numbers of people with dementia in five years – from 48,182 people in 2011 to 62,287 in 2016. It is predicted 170,212 people will have dementia by 2050.

        The costs associated with dementia are estimated to have increased by 75% – from $955 million
        in 2011 to $1,676 million in 2016. In today’s dollars, this could be more than $2.7 billion by


        Bob, not too sure what you are arguing over. I am just giving you the facts. Hard cold reality. Healthcare is the fastest growing industry in NZ and it will need people. Lots of them. We are afterall a caring society.

        There is an easier option. We just with kindness forget to feed them and they just die quietly of starvation. My dementia aunt just passed away in Sydney a week ago. The rest home in Sydney forgot to feed her and she died of starvation. Sad but true.


      • Although the number suffering from dementia is increasing it is due to us living longer. Alzheimer’s and other forms of dementia are reducing per capita for the elderly – probably better knowledge of how to delay it by physical and mental activity, pills that control high blood pressure and maybe the reduction in smoking. So we do have a growing problem but it is not growing as fast as was anticipated only a decade ago.
        I accept there is a problem and no imminent medical solution; however the solution you propose of bringing in more immigrants can only be a temporary solution. We cannot simply double our population every couple of generations to resolve caring for dementia issues. In Qatar they may solve it by not granting citizenship so those caring nurses and their families have to return to their home country when they retire. That is unacceptable in NZ at present and if it was implemented it would be difficult to get 3rd world nurses to work in NZ at our current wage rates.
        Immigrant nurses might resolve the problem if I develop dementia in the next 10 years; it might resolve it for you in the next 25 years but it simply cannot be a long term solution. And as other OECD countries overtake NZ in terms of wealth then it will become ever more difficult to find foreigners willing to come here.
        It would be easy to say ‘Ok we will let in the nurses but stop everyone else’ and get our immigration problem resolved but one exception would be the thin edge of the wedge.

        However like you I have a great appreciation of the people who do this work. I have an American nephew who married a Filipino nurse and it would be very difficult to find a better person (currently an assistant professor of Nursing). I’d be happy to see Filipino care-givers working in NZ if and only if they were paid as ‘skilled’; I’m sure my friend Jo a 100% New Zealand nurse who specialises in caring for the extremely elderly would be very happy to see pay rates increased too.


      • Bob, before you comment perhaps consider reading the article and checking the definition of dementia.

        What is dementia?
        Dementia is an umbrella term used to describe a group of diseases that affect how well our brains
        work because of progressive damage to brain cells.

        Alzheimer’s disease is the most common form of dementia.

        Other forms of dementia includes Vascular dementia, Fronto-temporal dementia


      • GGS – I’ve read your article and it tells me nothing I didn’t know before. As you say dementia is mainly Alzheimer’s and damage to blood vessels in the brain caused by blood pressure and heart problems. I’ve good reason to know about the problems of blood pressure. It is the improved survival rates for our main killers cancer and stroke and infectious disease that allows so many to live long enough to develop dementia. Recent advances in identifying high blood pressure is reducing one of the causes of dementia but as Scientific American recently reported despite vast investment there has been virtually no advance in treating Alzheimer’s. The scientists do believe that by the time the problem is detected the brain is already seriously damaged so they are currently concentrating on early detection.

        Where we agree is there is a big problem. And we agree it is getting bigger. Where you and I disagree is how to handle it: you seem to think all we can do is buy ever more carers from abroad; I would prefer more money spent on increasing wages for Kiwi carers and of course more effort at supporting the most significant carers: the immediate family.

        It is a pity we are wasting our time disagreeing when most of our politicians are concentrating on far less important things such as new taxes and measuring diversity.


  10. The immigration problem isn’t a new problem. It has been around for 10 years (or more). Yet nothing is done. The needs of the lobbyists and employer groups get their way. While the employer groups become richer the corresponding damage to society continues unabated

    Read between the lines of the Ritchies case. They bid for a contract at levels that is dependent on recruiting drivers at a lower level than the previous contractor. That is unsustainable slavery. So they bleat to INZ to get a dispensation to recruit from Fiji, Samoa and Tonga.


    These temporary new recruits will end up dossing down in 3 bedroom houses in Otara, packed with 21 people to a house. Ritchies are transferring wealth out of the poorest to the richest. What are they trying to prove?

    What isn’t measured is the damage to our society

    Liked by 1 person

    • Not to worry, communist comrade Jacinda Ardern’s new CGT will take wealth from the “have” and give it to the “don’t have”.

      The majority on the Working Group has recommended one of the most aggressive capital gains taxes in the world. Sir dummy Michael Cullen’s group was supposed to deliver ‘fairness’. Instead, he’s given rather racist taxes and something Kiwi taxpayers should fear.

      Any notion of fairness has been flagrantly disregarded by the Working Group. It fails most Fairness tests.
      As expected, the Group is proposing a full-scale capital gains tax, among other measures such as environmental taxes.
      The only assets excluded from the proposed capital gains tax are small family homes and art
      Commercial property, businesses, publicly listed shares, and every other type of enterprise will be slammed by this tax:
      • Capital gains will be charged at 33% for the majority of taxpayers – one of the most punitive capital gains tax regimes in the world, and more than twice the rate proposed by the Labour Party at the 2011 and 2014 elections.
      • There will be no inflation adjustment – even paper gains will be hoovered up by IRD.
      • Revenue neutrality only applies for the first five years: while the group proposes changes to income tax thresholds (see below) most of the revenue from a capital gains tax is forecast to be collected after five years — after ‘revenue neutrality’ has expired.
      • ‘Valuation Day’ is imminent: taxpayers will be forced to value their assets within five years, or must rely on rough and ready evaluations (such as rateable value for land).
      Even though the Government explicitly ruled out taxing the family home, properties larger than 4500m2 will in fact be taxed. The message to regional New Zealand is that their lifestyle blocks, farms, and semi-rural properties don’t deserve the protection given to Wellington and Auckland penthouses and townhouses.

      Maori Iwi-owned businesses will pay a racist discounted rate (17.5 percent, compared to 33 percent for other businesses).



    • I think Mr Reddell’s argument is that immigration has been failing NZ for seventy years not ten. That would include my own arrival in 2003. You are right that the greater diversity of immigrant origin recently is gambling that we can absorb them into a single NZ society.


  11. 1) The Regional Councils set the fare levels – the bus operators cannot raise fares to reflect labour or other costs

    2) The capital and maintenance costs of the buses the operators run are pretty much fixed, that only leaves labour cost as the variable

    3) The tenders are heavily weighted towards price, with limited quality attributes

    4) Its a race to the bottom with those with lowest labour costs being able to bid the lowest prices

    5) The tendering system needs to be changed to possibly state a minimum wage level and to ensure that the operators actually have the staff on-board when they bid

    Liked by 1 person

  12. Hi Michael,

    Thanks for another great post.

    Have you ever taken a look at the GSP per capita (and other relevant metrics) of Australian states that have had lower population growth than others (say South Australia and Tasmania) and how they compare to states that have had high population growth?

    The states with high population growth certainly seem to get most of the attention in the business press – does their per capita performance back this up?


    • The comparison doesn’t work quite so well as one across countries, as individual states don’t control their immigration policies. That means that both Australians and immigrants face the choice of where in Australia to settle or move to. On average, they will tend to gravitate towards the higher income places – places attract people because they are richer, not necessarily becoming richer because they attract more people.

      I haven’t looked at the peripheral state numbers for a while (might try to next week) but bear in mind that Australia is almost a more dramatic version of the story I tell about NZ. The highest GSP per capita is actual from western Australia, and Sydney and Melbourne GDP per capita estimates are not higher than those of the country as a whoie (consistent with a story that the wealth is mostly mineral and the the big cities are really either service centres (where all the lawyers etc are) or derivative to that wealth. It is hard to think of really successful big Australian branded companies (any more than NZ ones), of the sort that typically arise in cities.


  13. I think both I and other commentors have drifted away from the point. Which I interpret as when the govt or its agencies award contracts they should be influenced by many factors other than just price. For example the financial state of the applicant company – otherwise there would be a risk of a half-completed hospital or bridge. Other factors might include paying staff the living wage, climate change impact (say choice of new power station), labour conditions in foreign countries manufacturing items (for example sourcing police uniforms from Bangladesh). There is no limit to the factors that our govt on our behalf should be considering.

    The point of this article is to ask about sourcing of workers. If an applicant for a contract is assuming immigration approval then it should be discussed. There is still a debate as to whether immigrants improves NZ as claimed by some economists or add strain to our economy and lifestyle as claimed by other economists but it is a question worth asking just as we would ask about source of supply of materials (for example using imported or timber).


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