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In the Mouth of the Dragon

Posted by Iain on Aug. 23, 2019, 3:46 p.m. in Politics

 

I'm about to board a plane home after a very busy seven days in Hong Kong with my colleague Paul, where for obvious reasons interest in migration to New Zealand and Australia has exploded in recent weeks.

Naturally, many people here are extremely afraid of what the future holds for them. They should be. The reality of what awaits in terms of personal freedom has perhaps finally dawned on the people of Hong Kong and that is the reason that hundreds of thousands are now out on the streets protesting every weekend, for the most part peacefully, demanding a different future to that written by the political elite of Hong Kong and China.

I have found even those who have decided to leave Hong Kong are for the most part highly supportive of the brave Hong Kongers who are willing to fight for a different future foisted upon them by a cowardly British government in 1997.

I have to say it is all very sad and although I am helping people to leave I too am filled with great sadness for what I'm seeing here.

As someone who comes from a country where I can think what I like, say what I like, criticise those in power that I might not believe serve the best interests of the country or the people without fear, I know and appreciate the fact that I have a freedom that I have always taken for granted. To see others losing that is not pretty.

The younger people of Hong Kong have always felt they had the same freedom even if it was only as long as China allowed it. The generation that now wish to start families or who have young children have also largely taken that freedom for granted. It wasn't meant to end for another 20 years or so. I suspect they really never thought that it would end but when the government tried to pass a law which meant that these people, even people protesting, could be extradited to China, they realised the future had arrived.

They have lived a life of political and thought freedom with access to the likes of Facebook and Instagram and all those modern social media platforms where they can discuss, organise and if they wish, dissent.  Sadly, those days are very much numbered.

And increasingly they are rushing to the exits but starting to realise that just because they may wish to leave doesn't mean that Australia or New Zealand wants them. To most the doors are firmly locked. They are trapped. And the trapped, I suspect, will fight.

Hour after hour this week we have been explaining the realities of New Zealand and Australia's immigration policy settings and the challenges involved in securing skilled employment in New Zealand or having English language ability good enough to enter Australia. I think it is fair to say many of those we've consulted with who are the cream of the crop in Hong Kong in terms of education and skills were somewhat chastened by the realities of the process of entering one of these countries.

How different this is from South Africa. We continue to be rushed off our feet in that market as tens of thousands of people rush for the door but as they do so at least the South Africans are free to criticise the government along the way and exercise their democratic right to speak out against those that they may not agree with (at least for now). They are in effect economic refugees and because of their linguistic and cultural similarities to the dominant cultures in New Zealand and Australia they are for the most part warmly welcomed and their passage in is less bumpy than it's going to be for so many Hong Kongers.

That is not to say that the people of Hong Kong are not welcome in these countries, only that the challenges of meeting the strict entry criteria are going to be greater for them than for many coming from countries like South Africa or the UK.

I think one thing that is not understood very well by Australians and New Zealanders is how people from Hong Kong are culturally a very good fit for both countries primarily because of the fact that these people were raised and educated in a society very much based on the British model, as is ours; their education system largely mirrors ours, their institutions are very similar, their business practices familiar, their values are similar thanks to our shared ‘British’ history. There is no doubt in my mind they are a better "fit" for countries like New Zealand than some of the others from around these parts. I do hope that New Zealanders and Australians will recognise this when Hong Kongers come knocking on the door seeking job opportunities and a chance of building new lives in countries with similar values to theirs.

Hong Kong is going to get messy. There is no way China can allow the city to go its own way. If the people of Hong Kong are given the freedoms that they are demanding then 10 km away the people of Shenzhen in China might want the same thing. That could easily then spread to Guangdong which is spitting distance from Hong Kong and then I suspect like a fire, ‘freedom’ demands may spread right across China. While I'm not sure that the people of Hong Kong can expect very much help from the free world, especially the United States of America, there is no doubt now that the Americans realise that Hong Kong is a wedge that they can start driving into the heart of China. It is a very dangerous game to play because China cannot let that happen but the people we are consulting with in Hong Kong may well get stuck in the middle and let us not forget, they are people, not pawns in some international trade or ideological war.

Hong Kong is in the mouth of the dragon and the dragon is not going to spit it out. It is going to crunch it between its mighty teeth.

While most people from Hong Kong will have to stay here because they won't qualify to migrate somewhere else I repeat my plea particularly to those employers of New Zealand who are desperately short of a lot of skills to consider applicants from Hong Kong. These are highly skilled people with even more motivation to work hard and build lives for their families. As a general rule our clients do speak a very high standard of English but there is no doubt that some of them are not fluent but that won't stop them doing their jobs and contributing.

Given the values that New Zealanders hold dear and which we share with the majority of people in Hong Kong, New Zealand has much to gain by giving these people are helping hand.

I hope we start welcoming them because they are going to need our help.

Until next week...

 

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New Zealand 'values' test for migrants

Posted by Iain on Oct. 5, 2018, 3:08 p.m. in Politics

Last weekend NZ First, the smallest but most powerful of the three parties making up the New Zealand Government proposed at their annual conference, making immigrants and refugees declare their belief in New Zealand values.

This is the fringe party that every three years campaigns on ‘slashing’ immigration and secures between 5-7% of the popular vote. Every three years for over 20 years. However, as predictably as the sun rises in the east, when they are in a position to actually influence the numbers of immigrants entering the country…..nothing changes. This reflects the reality that less bigoted political heads prevail. It is not rocket science - as a nation we simply do not produce all the skills we need to maintain the economy and therefore we simply have to supplement those we do produce with a lot from overseas. In part, it’s how the Government has the taxes to pay the pensions of these grumpy old white people that keep being seduced by the ‘too many migrants not like us’ lines trotted about by NZ First’s cynical leadership.

I am constantly in awe of the Leader of this small party (currently our deputy Prime Minister) that he can stand up in front of the good people of New Zealand every three years, make this empty promise and the same small group of people seem to believe he will actually do something about ‘all these immigrants’ coming to infect us with their ‘values’ and vote for him (because no one has ever heard of any of the other MPs he drags along on his coat tails).

At the top of their wish list in terms of the New Zealand values they wish to test and to which they insist all newcomers adopt, is ‘tolerance’. Migrants should not come to New Zealand and bring their ‘ways’ with them. Migrants are welcome so long as they agree to become just like us - which doesn’t much sound like the definition of tolerance to me. The irony was seemingly lost on most of them. 

It did get me thinking about just what our values are and whether they are any different to those held by those that decide to move to New Zealand.

I don’t think there is any doubt that tolerance is a key value of New Zealanders and that is why, as our country becomes ever more ethnically, culturally and linguistically diverse we have never yet seen a protest against migrants or their ‘values’  in our streets. There has never been a march about curbing (permanent, I am not counting temporary workers and international students) immigration from its current modest levels. I’d suggest that confirms we are genuinely tolerant and to that I’d add, overwhelmingly welcoming of immigrants and the significant majority view immigration as being a positive force. If I wasn’t so tolerant myself of other’s views, I might be inclined to mock them for their hypocrisy.

If indeed migrants are forcing their religion, language and whatever other ‘values’ we don’t share, down our throats, it doesn’t seem to be bothering us terribly. In a good election, NZ First gets 7% of the vote. The other 93% reject everything they stand for.

There is little doubt any bill along the lines of a national values test that came before Parliament would not get very far. If it made it to the floor of Parliament I think we’d spend several years debating just what that test should cover. Who defines national values?

It would raise an interesting discussion point - what are our values as New Zealanders? Are they significantly different from those that seek to migrate to our country every year?

I do think tolerance of others is high on our values list and I’d add to that, freedom of thought, freedom of religion, freedom to pursue whatever lifestyle floats your boat if it does not do harm to others, equality of the sexes and equal access to education, health and social services irrespective of background or birth, in order to allow each individual the opportunity to reach their potential, live a safe, peaceful and fulfilling life.

I’d question anyone who thinks those of you sitting offshore reading this and in the process of moving to join us could think your values any different. 

I’d put it to anyone that votes for NZ First and who thinks our lives are being irrevocably changed (presumably for the worse) by immigrants that they should spend a little bit of time talking to a few of them about what their values are. They move to New Zealand precisely because they share or want to share our values and if they come from a country where they are not free to exercise them, they migrate so they can exercise them. 

That is why New Zealand, and Auckland in particular, is possibly the most peaceful and harmonious of cities anywhere on the planet. When you consider that around 43% of the 1.7 million people that call Auckland home, were not born in New Zealand, I believe that says a whole lot about our ‘values’ and it says an awful lot more about the values of those that migrate and settle here. I am not yet inclined to eat the neighbour’s dog and nor do I feel pressured to become a Muslim or Christian or to ban gay marriage.

I marvel that notwithstanding the incredible change that has taken place over the past 30 years in terms of the ‘who’ we are, we all seem to get along just fine. If the 350,000 ethnic Chinese that live in Auckland felt differently I guess we’d have a few issues - but we don’t. Or if the 185,000 ethnic Indians, or the 75,000 South Africans wanted to have a crack at changing my values, there might be trouble, but there isn’t. Because they don’t. 

If the recent arrivals' values don’t square with ours, they go home or move somewhere else. Simple as that.

When a migrant displays values at odds with the majority they are quickly slapped down as one migrant from India found out recently when asking for and accepting bribes to grant drivers licenses. In my own industry there is a major investigation going on involving (migrant) employers exploiting migrants from their own country. They will get what’s coming to them. They are however a minority. A small minority. Values have a way of influencing behaviors.

Those that do not share our ‘values’ will feel the full force of the law, as they should. 

I firmly believe any ongoing suggestion in New Zealand of some national values test will gain little traction because, simply put, there is scant evidence one is required or would do any good.

Continuing to run very deeply in the veins of the 93% of us who did not vote for NZ First, is a realisation that in the end all humans are essentially the same, we all want the same things - we might look different, we might worship different Gods, speak a different language around the dinner table but in our DNA we are the same. Overwhelmingly my values are my neighbour’s values. It makes little difference if the neighbour was born in New Zealand or migrated to New Zealand.

Those that suggested at the NZ First conference that we should start applying a ‘New Zealand values’ test are going to have a very hard time finding too many of us that don’t already think that those that have chosen to move to our country, already share or want our values.

If they didn’t want what we value, they wouldn’t want to move here, let alone stay. 

Until next week

Iain MacLeod, Southern Man

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Is Our Multi Party Democracy Really Superior?

Posted by Iain on May 25, 2018, 4:23 p.m. in Politics

"Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time..."

This famous quote is attributed to Winston Churchill but, apparently, he was quoting someone else. Doesn’t matter who said it really, it is a view cherished in the liberal west and where I come from in NZ, but one I’d suggest is as much about faith as it is about social and economic outcomes.

This morning, I stood in front of the remains of a B52 bomber, lying rusting in the small lake it crashed into, having been shot down over Hanoi in December, 1972, in one of the United States last-ditch efforts to try and force the communist north to the negotiating table (the US having pretty much lost the war by that point already). It got me thinking about political systems and how we in the west - so blindly, or arrogantly - think our system is better than these one-party States. If nations are not ‘democratic’ and multi-party, many in the west feel the need to ‘help’ these nations become so – the Americans in particular have long chanted their mantra which a lot of others view as more ‘imperialist’ and certainly, one suspects, less about spreading the ‘good news’ about American style democracy and more as self-serving BS.

I come from a liberal democracy where we also delude ourselves that our vote gets us the kind of Government that the majority of people want. Here in Vietnam they get to vote for one party only. They don’t choose the Government.

Last year in our Mixed Member Proportional voting system, no party got 50% of the vote (they never do in NZ). We ended up with an electorally legitimate but hardly representative Government, when the three losing parties teamed up to hold a slim majority. They told themselves the people had voted for change but, obviously, the people had done no such thing. They are a Government cobbled together with three sets of policies on everything;so no one voted for what we now have. It was a Government formed of the results of each person’s vote. The largest party only got one vote in every three cast at the election but their policies have dominated post election – put another way, two out of three people did not vote for their policies but we are largely getting them anyway. That’s democracy?

As always happens in our political system it has meant no one in NZ is actually getting what they voted for. Inducements (cough cough, ‘policy concessions’) were given to the smallest of the parties to win them over in coalition talks. This included $1 billion a year toward who knows what regional development projects and another billion or so toward boosting foreign aid and Diplomatic activities...that’s pretty precious lolly that would have gone a long way to paying teachers and nurses the salaries they deserve and is not what any of the three parties had as part of their manifestos – so it is certainly not what people had voted for.

Yet we attack one party states for doing the same sort of thing. 

We consider that in communist or one party states people live without freedom and because they don’t get to choose their leaders from different parties, only one, that they must be unhappier than us but are they really any worse off than we are in countries like NZ or Australia? Over the ditch, they too have a coalition Government made up of two parties. You only have to look at the US to seriously question the merits of a two party system when neither can actually make it work. Italy is about to get probably its most bizarre Government ever (and that’s saying something). 

Is our political system really superior in terms of the economic outcomes produced in countries like Vietnam or dare I say it, China? Here in Vietnam they talk about five-year economic plans – our politicians think only in terms of the next three as that’s when they might be voted out of office and/or need to jump into bed with some political party they cannot stand so every decision is about not offending too many political opponents. It makes for timid Government and in this fast changing world, now more than ever Government needs to be strong, agile and able to make bold far reaching decisions. 

Instead, every three years we get irresponsible promises (like last year's cynical policy of making the first year of university free at a cost of $2 billion a year, when the state already picked up the tab for 75% of the true cost anyway). That was a lot of money promised that could have gone to hospitals, schools, increasing the salaries of Teachers and Nurses and making doctors’ visits for children cheaper – something now on hold...)

We think our ‘freedom’ to choose on all sorts of levels makes our system superior. I am increasingly doubtful.

Having been in Hanoi for a week I think the traffic is a good example of how wrong we might be. We perceive countries like this to be hamstrung by rules, regulations and centralised planning. On the roads it appears there are no road rules and you feel you are taking your life into your hands when in the traffic or crossing any road on foot. You quickly learn when crossing a road on the hoof however that what would turn the Police Commissioner in NZ deathly pale, when you relax and walk slowly into the stream (actually, 'river' might be a better term) of traffic, a strange thing happens - people ride and drive around you. I haven’t seen anyone get run over. Lots of parping horns but that it seems is to let other drivers know you are overtaking them and possibly in your blind spot. It isn’t anger or impatience.

I’ve seen a popular tee shirt for the tourists which says ‘Green light I go. Amber light I go. Red light I go’. Counter intuitively, it seems to work – motorbikes outnumber cars by probably fifty to one yet everyone, without anger or rancour, just get where they need to go – and in good time which is the amazing thing.

Where I come from we have speed cameras, police with radar guns, parking wardens and more road signs and speed limit signs than you can shake a stick at (in fact I often spend more time whilst driving on the open road in NZ trying to work out what the speed is through this valley, round that corner, up that hill - than watching the road – all apparently designed to control what we do in order to keep us safe). 

We, who are supposedly free in New Zealand, actually appear to be the ones constrained by endless rules and regulations. And don’t start me on Australia! Even worse there.

Around the fringes of the old parts of Hanoi and criss-crossing the new suburbs springing up like mushrooms everywhere is a very first world road and public transport system (irony upon irony for a communist state, a lot of it is public private partnerships; something in NZ our current Government is desperate to avoid as some sort of capitalist evil) and I believe that there is an underground if not underway, then planned.

These guys have a transport plan they are executing out to 2030 and a ‘vision’ out to 2050. In countries like this they tend to just get on and do it and do not concern themselves with being re-elected in three years’ time.

I am sure along the way there are injustices and there are victims but if they can keep corruption and bribery out, then I suspect economically these one party states might be a superior system to our own where everything takes forever to get planned and executed because everyone has a right to voice their opinion, file an objection, have their day in court and cause delay after delay. In the modern global economy, you snooze you lose.

I am not saying this place is perfect. Far from it and I haven’t been here long enough to become an expert.

Of course, counter balancing my own thoughts on all this is the world has just as many failing or failed one party states, like South Africa which has become crippled by its inept and corrupt, but wonderfully democratic and freely elected, ANC Government in what is a multi- party democracy. I should also add Venezuela to that list as well as less than a shining example of a one party success story.

There is no doubt one party states face the challenge of not becoming complacent and corrupt but in an increasingly globalised economy of which countries like Vietnam are firmly a part, the people are not willing to be left behind by those of us living in the ‘rich’ west and I suspect their political leadership know it.

Plenty of people have forsaken western style democracy in exchange for material gain – Singapore being the best example in this region – it is in effect a one party state, benign to a point, but a one party state nonetheless. It might be one of the most sterile and dull cities on the planet but it has lots of shopping malls, few people go hungry and is undeniably prosperous. The people effectively decided to trade in true multi-party democracy for an ever higher standard of living (just not quality of life, I’d argue, which I’d suggest might actually be falling). 

Vietnam tried to hold on to its communist ideals far longer than the neighbouring Chinese but once these guys saw how ‘Communist’ China was transformed (through being ‘Socialist with Chinese characteristics’ – translated – the little guy will have no real political power but we are going to become a rich country by joining the consumerists, and letting go of the foundations of communism), the Vietnamese were in, boots and all.

I’m not advocating for one party States as I appreciate no system is perfect. However, when I spend time in places like Asia where there is such a strong work ethic, a strong sense of family, a level of respect for older people, a sense of looking after one’s own and a keen responsibility by families to look after each generation without constantly expecting their Government to solve all their social and economic problems as we do in our socialist capitalist democracies, I really do wonder if Churchill (or whoever really did utter that famous quote initially), got it right.

Until next week...

Iain MacLeod, Southern Man


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Property Ban on Foreigners

Posted by Iain on Oct. 27, 2017, 2:31 p.m. in Politics

Politics is at its heart all about sending signals.

Let me send one.

The two largest parties in the current Government both campaigned on cutting migration. In one case, ‘slashing immigration numbers by 80%’ and in the other, by cutting it by ‘20 000 – 30 000’ per year. 

The Party that campaigned on slashing numbers by 80% knew its ridiculous demand would never survive coalition negotiations with only 7% of the vote and knew those that vote for them were too stupid to realise it.

The other, the Labour Party, made clear before the election, and since, that their policy has won the day and that net migration would be cut by 20,000 – 30,000 a year.

Both parties played on an ignorance of what the statistical definition of an immigrant is.  It is not someone with permanent residence. An ‘immigrant’ is someone who suggests on an arrival card at the airport that they “intend” staying for 12 months or more even if they are a 14 year old Singaporean going to school here for 12 months, a young German on a two year Holiday Working Visa, or any other Temporary Visa holder who has no pathway to Residency and a permanent stay.  Most of us would tend to define an immigrant as someone who comes here to settle permanently, right?  That’s not the definition of a migrant.  This definition confusion was exploited to the max in the election campaign.

The Prime Minister made clear a few days’ ago, even before she was sworn in, that her Immigration policy is the one the new Government will follow and that of the Deputy Prime Minister, who promised to slash immigration by 80%, has died a natural death (as it does every 3 years).  The new Government said and continues to say it is going to stop some international students enjoying a pathway to residence. That is going to be the largest contributor to the 20,000-30,000 'cut'.

Furthermore (and please social and mainstream media take note) the Prime Minister confirmed that they are not cutting the number of Resident Visas under their Immigration Programme.  We can expect the same number of Resident Visas to be granted to skilled migrants, parents and investors over the next 12 months as we have over the last 12 months, the 12 months before that, 5 years ago and 10 years ago.

Let me say it one more time -  New Zealand is not cutting the number of Resident Visas being issued under the new Government!

What does all that have to do with the so called ban on foreigners buying local property? 

The Government had to offer something to those people who thought they were voting for a cut in Permanent Resident Visas and they’ve done this by a proposed “ban” on some “foreigners” buying “existing” residential houses. 

They have variously signalled that only citizens, Permanent Resident Visa holders and Resident Visa holders who are or intend living in New Zealand will be allowed to buy ‘existing’ properties. They have indicated that anyone who does not intend or is not living here will be forced to sell when they leave.

Think about enforcing that for a moment...

You hold a permanent resident visa and live here and after ten years you accept a job in Switzerland for three years. Will you be told to sell the family home? Do you no longer ordinarily live in this country?

Or you normally live in NZ on a PRV and your dear old mum gets sick in Johannesburg/London/Beijing – take your pick. You need to rush to South Africa/UK/China to be with her while she undergoes many months of treatment. Will you need to sell your house? Will you be forced to? Have you left the country? 

What say you and your wife both have resident visas and have jointly owned the house for the six years you have been living in New Zealand? You go to look after your Mum and your wife stays….do you still have to sell the house? 

Who decides? The Department of Foreigners with Homes? An army of bureaucrats?

And if you receive a letter telling you, you must sell the house and you jump on a plane in Switzerland and come rushing back to New Zealand, how long must you be here for these state functionaries to decide you are once again living here (if indeed you ever actually officially left...).

It appears this ‘ban’ does not extend to those wishing to buy off plans and/or buying an empty section/plot and building a house on it (the argument being it adds to the housing stock).

Like all these stupid ideas administered by stupid civil servants there will be smart lawyers and Accountants out in the real world finding perfectly legitimate structures to get around it.

It’s hard to see what they plan on achieving beyond throwing a crumb to those who think temporary or permanent ‘migrants’ have caused our rapid house price inflation and who like to blame migrants for every country’s ills.

Australia did something similar many years ago and house prices there, particularly in Sydney and Melbourne, have gone through the roof.  It would tend to suggest in Australia that foreign buyers had little impact on the value of houses within the market.

I would suggest there is little evidence here that New Zealand will be any different.

Over the past two years the Reserve Bank had already put in place measures to dissuade non-Residents from buying property.  They did this primarily by demanding that foreign buyers have a New Zealand bank account, provide a New Zealand taxation number and a tax number from their home country.  

In addition to that, an effective Capital Gains Tax being applied on investors turning over property has led to property values in Auckland over the past 12 months stagnating and in parts, slightly falling.  The median price is Auckland is NZ$850,000.00 (roughly US$500,000.00).

I’d wager the reason for this is not foreigners buying up all our houses, it is the actions of the Reserve and Retail Banks. People are squealing all over town that banks won’t lend them money. Nothing like slowing down a property market by not lending money without resorting to foreign buyer bans.

“Banning” foreigners from entering the market makes for a nice headline when you are running for office.

In truth, and I am not denying we have a problem with the affordability of houses in Auckland for some people, the real problem seems to be the cost of getting building and resource consents, delays and red tape at City Council level and an ever-increasing cost of actually building houses.  In part this is driven by a shortage of immigrants, not an oversupply, as the Construction industry is thousands of skilled workers short of what is required. This has put significant upward pressure on incomes in the sector and naturally, that feeds through to the cost of buying a house.

Oh the irony!

I predict that this ban, as it might turn out to be in the end, will have little effect on anything.  

What it does do however, to appease the 7% of those that voted for the one political party said it wanted to slash immigration by 80%, is make New Zealand appear to be increasingly anti-immigrant.

The Government needs to be very careful how this is perceived and reported  internationally when it knows it needs every one of the 27,000 skilled migrants targeted each year. If the Government is to have any chance to build half of the 100,000 ‘affordable’ houses and the public train and tram systems across this city and the upper North Island that it has promised, it needs every single skilled immigrant it can get.

Use of the words ‘ban’ and ‘foreigners’ in the same sentence is not the smartest way to achieve that.

Until next week…


NZ First & Labour: What Does the New Government Mean for Immigration?

Posted by Iain on Oct. 19, 2017, 10:40 p.m. in Politics

A few minutes ago the Leader of the NZ First political party - which gained a little over 7% of the popular vote in elections two week ago - announced it is forming a coalition with the Labour Party and the coalition will be supported outside of cabinet by the Green Party. 

Already my inbox is filling up with ‘What does it mean for my chances of moving to NZ?’ emails.

Without wishing to sound like the aforementioned political leader, if you read my blogs you’ll know that my view has been (and nothing has changed with this announcement today):

  • There will be no significant change to skilled migration policies or targets. In recent years the economy has created around 60,000 mainly skilled jobs each and every year. We simply do not produce the skills locally to fill them. These Politicians know that only too well, and the country desperately needs these skills to enable the new Government to fulfil its promises.
  • International Students are going to get the knife between the shoulder blades. Again. The Labour Party made clear in their manifesto just before the election they intended raising the bar on what courses international students will have to do to be eligible for graduate work visas at the end of their study and if they find skilled employment, resident visas. 

Today the Leader of NZ First all but confirmed my suspicions as he ‘anointed’ the Labour Party and their Green Party sidekicks. Don't be too concerned if you are highly skilled but be very worried if you are in NZ studying or planning on doing so.

Those applying to study in New Zealand are defined as ‘migrants’ and all the hot air coming from New Zealand First in recent years that we are being overrun by foreigners was clearly bogus and played on a wide mis-understanding as to how ‘migrants’ are defined. NZ has become a very popular place to study but it is quite true that at least half those coming to study were using it as a spring board to try and get residence. Some got it, most did not.

People were confused that students and many work visa holders were considered as ‘migrants’. I think most of us think of migrants as people moving permanently to a country - not those coming to study for 2-3 years or have working holidays for a year or two.

That is the reason we have had ‘record’ numbers of migrants - tens of thousands of international students. Not permanent residents.

That ignorance has been exploited election after election by NZ First. 

What the public has never been told by this politician is that the numbers of resident visas being granted every year has not changed. Not this year, not last year, not five years go. In fact, skilled migrant resident visas have also fallen as the Government pushed up ‘pass marks’ for skilled migrants in order to deal to the problems it created by promising international students a pathway to residence.

The Labour Party which forms the biggest bloc in the new parliament has always been pro-immigration.

It is insightful that the Leader of NZ First at his Press Conference confirmed that New Zealand continues to need and welcome skilled migrants, does not want low skilled ones and that international students should be coming to study. Which is precisely what the outgoing Government recognised — just too late electorally which was a bad miscalculation on their part. They have paid the price for seeming to have no solutions to population driven house value increases and infrastructure pressures - particularly in Auckland.

So watch for announcements in the next few weeks taking aim squarely at reducing pathways to residence for international students in order to take the heat off skilled migrants. That is a good thing as it should then allow pass marks to fall and those that can contribute most to the country will continue to be welcomed.

My pick is the new Government will leave the pass mark at its current historical high for a few months to carry on the (bogus) message of ’toughening and tightening up’ message. Then it may well fall back to levels where the current target of 27,000 skilled migrants and their families might be met. In the meantime it’ll be spun as ‘quality over quantity’.

Foreign buyers will be limited from purchasing of existing residential property but that is common in many countries. My pick is we will follow Australia's pathway of allowing foreign buyers to buy sections and build. Maybe.

Potential skilled migrants in my view should sleep well tonight.


Tales from the Labour Market

Posted by Iain on Sept. 22, 2017, 10:39 a.m. in Politics

As the election campaign draws to a thankful close (we are all exhausted and have wind burn from the hot air), the polls continue to swing wildly – I have never seen anything like it. It either means the polling techniques are not reflecting what is really going on out there in the real New Zealand or New Zealanders are having doubts about sticking with the status quo or going for ‘change and hope’. Right now the pendulum has swung back toward ‘steady as she goes’.

On the immigration front we continue to hear from clients fearful after all the rhetoric from various political quarters about cutting back on immigration.I predict with great confidence that neither of the major parties that are going to form the largest grouping in Parliament have announced any cuts to their residence programmes and in particular family, investor or skilled migrant categories. So relax!

The country needs skilled migrants and the major parties are smart enough to know it. I can only think of one that isn’t that smart and the fly in the ointment is he is looking likely to hold the balance of power after tomorrow. Given he has, even now at the 11th hour, not explained which categories of migration he will cut ‘drastically’, I remain certain he is all hot air over immigration – or at least would never bring down a Government he is part of, over it. Already net migration is falling as the government has cut off the number of international student visas being issued and blocks many international graduates from being able to secure a resident visa.

It is pretty clear that all sensible politicians acknowledge New Zealand’s local labour market simply cannot provide the skills in the many areas employers require right now.

This week the Ministry of Business, Innovation and Employment released the latest job vacancy figures and it continues to show strong job growth running strongly. In the past two years the economy has produced 180,000 jobs. When you consider there is only around 2.3 million people of working age that is pretty spectacular.

Job creation hasn’t paused for breath despite the election uncertainty. The major points of interest in the latest release were:

 

  • Over the past year, online vacancies increased by 10.0 per cent.
  • Vacancies increased in all eight industry groups in August 2017. The largest contributors were construction and engineering (up 1.3 per cent) and information technology (up 1.0 per cent).
  • Vacancies increased in seven out of eight occupation groups. The largest increases in August were for machinery drivers (up 2.0 per cent) and technicians and trades (up 1.0 per cent).
  • Vacancies increased in four out of five skill levels in August. The biggest increases were in unskilled (up 1.0 per cent), followed by semi-skilled (up 0.7 per cent) occupations.

 

Vacancies increased in all ten regions of the country over the month, with the biggest increase in Nelson/ Tasman/ Marlborough/ West Coast.

What is quite clear however, and has only been a minor talking point in this election, is how to lift productivity and real wages for all. While many occupations are seeing real and substantial increases in earnings as businesses fight to attract and retain skilled staff, at the same time much of our increased GDP growth in recent times has come about through population growth and consumption. Incomes are up, after accounting for inflation by 1.7% a year or 13% since 2009. The top income earners (most of our clients are up over 25% in the same period). Not bad, but per capita GDP growth is pretty flat. 

I definitely think employers need to start thinking a whole lot smarter on so many levels but in particular about migrants.

Employers continue to identify lack of skills as being one of the most significant barriers to doing smarter, bigger and better things. Ironically in the middle of the biggest construction boom in decades, construction is actually slowing down right now...companies cannot find the labour to plan, design or build.

A trip to Singapore or South Africa with us would quickly solve most of their skills needs.

Thankfully some recruiters are starting to see the benefits of relationships with us. We are now working closely with a local recruiter that is crying out for Quantity Surveyors, Surveyors, Construction Project Managers, Construction Site Managers and the like.

We have also recently entered into a preferred supplier arrangement with Auckland’s (and quite possibly New Zealand’s) biggest IT recruitment company. After years of holding out on me, they now recognise that if they don’t more actively get their clients to consider employing migrants they are going to have a diminishing flow of candidates to offer them. Understanding that we are able to get work visas pretty quickly and we only refer people genuinely committed to the move who have retained us and are close to getting on the plane to come over, means they don’t need to worry about ‘supply’. 

I am looking forward to running some focussed campaigns in our major markets to try and help those in IT and Construction find employment.

The shortages extend far beyond IT, Engineering, Trades and Construction however.

The Teacher shortage has become so acute that last week an education lobby group proposed:

 

  • Writing off student loans of teachers who commit to placement in Auckland schools and other hard to staff areas for three years
  • Reducing class sizes in low decile schools by 2020,
  • Reducing time spent on "over-assessing children" to meet national standards
  • Lifting teacher pay
  • Investigate making affordable housing for key public sector employees a priority in Auckland housing projects

 

No mention there of recruiting more teachers from offshore or lobbying Government to get Teachers back on the Long Term Skills Shortage List! I remember less than 5 years ago the Ministry of Education lobbying to have the occupation removed from this list which meant NZ lost out on potentially hundreds of teachers. To be fair no one really foresaw the difference in economic conditions in 2017 over 2012 in the final days of the GFC (which meant many teachers stayed in their jobs when they might otherwise have left) but where is the plan to encourage schools to take on more fluent English speaking teachers from overseas? We can help with those as well.

We were approached a couple of week ago by a Recruitment Specialist who had been asked to assist a company recruit 40 Electricians offshore to assist with building the latest 50 story tower going up in downtown Auckland.

I said I am sure we could help source these guys but I wanted to know what the pay was. I was told that they wouldn’t pay the highest in Auckland. I asked then how the company intended stopping those we might be able to source jumping ship once here for another $5, $10 or $20 per hour? Because some would...so pay top dollar up front and you’ll make the exercise worthwhile.

Frustratingly, we continue to have sector leaders of the economy bemoaning the lack of skills yet I am amazed how many will not pay migrants top dollar and or who won’t consider migrants at all (‘no work visa, no job’).

I guess it is always easier to complain than to do something about it.

The labour market is in rude health if you are an English speaking, culturally compatible migrant and you are able to negotiate your way through the old ‘chicken and egg’ routine of employers wanting work visas but not being able to get a work visa without a job. Or you are a client of ours with the support, advice and tips that go with it...

Until next week...

Southern Man

Iain MacLeod


The Winds of Change

Posted by Iain on Sept. 8, 2017, 5:13 p.m. in Politics

The latest polls in the lead-up to elections in 3 weeks’ time suggests we’re headed for a change of Government. They say a week is a long time in politics but 3 weeks must feel like eternity for the ruling party. They were cruising to a 4th-term victory (virtually unprecedented in New Zealand’s political history). They’re now in 2nd place behind a resurgent centre-left Labour Party.  

Since electing a 37 year old professional politician who appears to be very nice and charming but with little real-world experience, the Labour Party has surged in the polls from around 23% to 43% today and it looks like they’ll form the next Government. 

Not wishing to show my political biases as I’ll vote for anyone with a good enough economic and social plan, New Zealanders seems to be more interested in a ‘vision’ without too much of a plan (Labour) than a good plan and a failure to explain the vision (National). However, you will likely be more interested, I suspect, in what the impact on immigration policy could be if we end up with a Labour-led and centre-left Government.

As I have written about before and I have no reason to believe differently today; you’ll see little to no change to Skilled Migrant or Investor policies after the election. The Labour Party, when they released their immigration policy 8 weeks ago, did not cut a single visa from the residence programme. They are certainly going to take an axe to international students being offered a pathway to Residency and they will take some of the pressure off ’numbers’ needing a roof over their head once they get here.

A change of Government might be a good opportunity as well to have some fresh eyes on a Skilled Migrant policy that some might argue, is not delivering as well as it could be.

The Skilled Migrant Category is designed to attract to New Zealand those skills that we cannot produce in sufficient quantities ourselves. Owing to strong economic growth in recent years (ironically, thanks to the National Party’s planning), New Zealand has seen an almost unprecedented increase in population caused not through the granting of more Resident Visas than last year, the year before or 10 years ago, but through more New Zealanders staying put at home rather than leaving and tens of thousands coming home, particularly from Australia but also further afield.  Many of these have settled in Auckland creating an affordability problem as prices have gone through the roof.  It has also led to a housing shortage.

As a result of demand to build more, quickly, we have accute skills shortages in the Construction field. These factors all feed into one another.

It is a complicated issue to be sure but increasing the supply of skilled labour is a big part of the solution.

Not even the National led government has recognised that and has done a poor job of explaining the importance of using carefully controlled and focussed immigration as part of a solution.

It is insightful that in the last year or so, 193 000 Work Visas were granted by Immigration New Zealand. The overwhelming majority of these (around 160 000) were youngsters on Working Holiday Visas (no pathway to Residency), partners of New Zealand citizens or residents and international students transitioning from study to work (and if they’re lucky, for a minority, residence) along with seasonal workers in the horticultural sector (no path to residence).

Only around 32 000 Work Visas were granted under the Essential Skills policy – these are your Carpenters, Plumbers, Engineers, School Teachers, Software Developers and so on.  Of that 32 000, roughly 8 000 were first-time Work Visa holders (the rest were Work Visas being renewed).  Of that 8 000, a little over 2 000 were Constructions workers.

That would suggest to me that there needs to be a greater effort at understanding by the policymakers of what occupations will be in demand in the immediate future at any given time. Getting people here on Temporary Work Visas is an awful lot easier than trying to get those skills through a Residency programme, given the time that elapses between a family deciding to move to New Zealand permanently, then being able to prepare, lodge and process the necessary paperwork, selling up their homes and relocating - a process that generally takes 18 – 24 months.

Essential Skills Work Visas in theory should allow the labour market to be a little more “nimble”.

It would seem, however, we are failing; particularly in the area of Construction. Christchurch alone is still 5 000 Construction workers short, yet their work programme is starting to wind down. I don’t know what the numbers are for Auckland but it would be at least that many and if you added Tauranga and Hamilton as the other major growth hubs in the North Island, you’d probably see a shortfall of perhaps 15 000 – 20 000 Construction-related workers that are required. 

This has real implications for building costs. Capacity is clearly constrained, the number of houses being built versus building consents being issued is actually falling now, and there is no doubt that the rapidly-spiralling cost of building is directly proportional to the lack of available skills. I am hearing of carpenters in Auckland now earning $100,000 a year as sub contractors.

Perhaps a new Government might put a little more effort then into Skill Shortages Lists and policies which better reflect the needs of the economy in the shorter term. Perhaps it is worth considering issuing Work Visas to people in certain occupational groups who have excellent English, excellent health and are of good character, who are suitably qualified without a job so they might come here and use that Work Visa to find a job (rather than perpetuate this chicken-and-egg stupidity that continues to exist in New Zealand where employers want applicants to have Work Visas but the applicant can’t get the Work Visa without the job).

I have not read anything in the Labour Party Manifesto, however, that suggests they’d even considered a deal like this and so I fear with a change of Government - particularly with regards immigration - we will continue to have growth constrained by lack of skills, employers in the Construction sector will continue to bemoan shortages and consumers will continue to pay forever spiralling costs. I’ve always maintained that a sound skilled immigration policy should be central to any NZ Government’s economic policy.

In recent years it has been increasingly recognised as pivotal but I still can’t help concluding that immigration is so often seen as an add-on to economic policy; not a central plank of it. 

I see nothing that’ll change that in the near future, irrespective of where this wind takes us.

Until next week...


Immigration Changes After the Election

Posted by Iain on Aug. 25, 2017, 7:20 p.m. in Politics

I have been asked a few times in recent weeks what I think will happen to NZ immigration policy settings following the national elections in a few weeks’ time.

I wish I knew; but it is possible to make a few educated guesses.

Today the polls (which it has to be said are incredibly volatile and indicate a change of Government is possible with a Labour party (centre left), Greens (left of left and environmental) and NZ First (an effective one man loony populist party of largely disgruntled old white people) coalition, given they are collectively polling in the high 40 percents. Not enough to govern, however.

The biggest party in Parliament, National (centre right), has seen its support fall from 47% about a month ago to 43% today. It has ruled for the past 9 years with a number of small parties (1 to 3 seats, largely single issue). At least one of those looks set not to return to Parliament.

If things stayed the same as today’s polls indicate then NZ First has said (as it always does) it will hold talks with the largest party in the Parliament once the votes are in. If history is any judge they will form a Government with National.

NZ First is, by and large, a single-issue party and that single issue is immigration. With our housing shortage in Auckland (pushing up prices) and increasingly congested roads this ‘blame migrants for everything’ has found greater support four weeks out from polling day than usual.

NZ First wants to ‘slash immigration’ to 10,000-15,000 people a year but as is typical of populist wind bags we are none the wiser as to which particular immigration categories we can expect to see slashed.

I have tried very hard in recent weeks to find out just which categories of migrants this party wants to slash.

Strangely for a party so rabid about it the media never seems able to pin their wily old leader down; I do wish they would try a bit harder. I for one would love to know.

What we do know is that they will apparently seek to cut the number of work visas being issued and introduce tougher labour market tests for employers wishing to import the skills they need. More effort will need to go into filling vacancies locally, which would be fine if local employers could find people willing to be trained. 

You still have the issue of what to do while you are training up these young people. You can’t train someone to have ten years of experience to fill the jobs being created without, well, ten years of experience.

So that party is clueless and playing to a small group of New Zealanders who, if we have to have immigrants at all, want ones that were just like the old ‘ten pound pom’ from the 1960s and 1970s. ‘We aren’t racist but more like us. People that will fit in’ (whatever that means...).

The Labour Party has made their position clear: stick with current numbers of skilled migrants - partners of Kiwis and Investors - because, quite simply, they are smart enough to recognise that we need them. They intend raising the bar on the types of courses international students need to do if they wish to access a possible pathway to residence at the end of their study. That I have no doubt will cut numbers drastically as I have written about before. In my view, no bad thing if it frees up places for those with the experience in the skill areas we need.

The National Party has already played its hand – they recently raised the bar on what courses international students can do to access a pathway to residence and over the past year we have seen significant falls in the numbers of, in particular, Indian nationals coming to NZ to study. They are trying desperately hard to keep alive an export education industry that employs 35,000 people and generates revenues in the order of $3 billion a year. I am not sure they can continue to have it every which way. What they clearly recognise is that we have real skill and labour market shortages (not always the same thing).

What both the major parties agree on and it is reflected in their policy stances is that we need the skilled migrants in at least the numbers we are currently getting. Our unemployment rate continues to tick down (currently around 4.8%) and the number of skilled jobs being created continues to grow (around 60,000 a year). We simply cannot fill these with Kiwis.

Employers squealed loudly enough with the recent proposed work visa salary thresholds the Government promptly dropped the lower salary band to $41,000. This was pragmatic and reflects serious labour market shortages. Or at least avoding having to be to force New Zealanders to work as house keepers in hotels and wait tables in restaurants and cafes - something our young people in regional NZ seem often to have an averion to.

My pick is if we have a National-NZ First coalition after the election you will not see any significant changes to the numbers of skilled migrants or investors in terms of annual targets. The leader of NZ First might publicly rail against current levels of migration but as the Australian economy improves, fewer New Zealanders come home from there, more start to drift back to Australia and fewer Aussies emigrate to NZ, the pressure on numbers will start to ease.

As we have already seen there is a cooling of interest in studying in NZ and every international student who says on arrival that they ‘intend’ staying 12 months or more is an ‘immigrant’ statistically so the heat will come off the current record numbers over the next two years.

The leader of NZ First surely knows this which I suspect is why he doesn’t ever tell us exactly which categories of ‘migrants’ his party would slash. 

Naturally their leader will take credit for tis cyclical cooling and I suspect the sort of people that vote for him (think Trump supporters – thank God we only have around 10% of our population that think 1970s NZ was the ‘dreamtime’ as 1970s America was theirs) won’t realise that the changes National has already put in place this year will start to pull the numbers down in future years.

So my bet? 

Do not expect any radical changes to current targeted numbers of investors or skilled migrants (around 28,000 per annum). Unless NZ First wants to prevent Kiwis bringing their foreign-born partners and children home to live here, you have to imagine those numbers cannot be cut. Parents have already more or less been cut to the bone. 

So, where’s the room to move?

Holiday Working Visa numbers could be cut but that is only going to exacerbate labour market shortages particularly in tourism and hospitality at a time inbound tourism numbers are in the millions and growing by 8% a year. Cutting back on the number of these dished out might force NZ employers into trying harder (if that is possible) to train our own youngsters into these lower level skilled jobs. Again, as I have written about before, Government needs to find a ‘stick’ to get these youngsters off their backsides for that to have any real chance of success. I am not sure any political party has the appetite for that.

That leaves international students which could be further cut.

The alternative is we can try and live with lower economic growth, a lower tax take, less money for funding our three sacred social pillars – taxpayer funded health, education and social security.

Do not expect anything radical, irrespective of who forms the next Government.

Until next week...

Iain MacLeod

Southern Man


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