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Posted by Iain on July 23, 2021, 2:01 p.m. in New Zealand Politics
There’s an old saying that actions speak louder than words.
A few weeks ago the New Zealand Government announced with it must be said, muted fanfare, that the days of high levels of inward migration were over. Employers needed to get used to less access to global labour and start finding New Zealanders to fill the thousands of vacancies being advertised every week. That is, whether or not those New Zealanders wish to be found. Or work. Employers would need to train and up skill those that are here and not rely on foreigners.
Migrant groups, those already in New Zealand and people looking to move here felt marginalised and picked on. New Zealand is increasingly being viewed as less welcoming to migrants in the markets we at IMMagine work in. While we reassure the world that much of this is simply political posturing that comes with the risk we are seen to be telling people what they want to hear and not what they need to know - something we have built our reputation on over thirty years.
So what actions has the government taken since it announced this so called immigration 'reset'?
A closer examination reveals something quite different to the rhetoric.
Vague in detail at the time beyond suggesting a new ‘direction of travel’ which would see fewer work visas being made available to those at the lower skills end of the spectrum the Government has taken two concrete steps since then which completely contradicts what was announced in that speech.
Within two weeks the Government announced a blanket extension to all those in the country who hold Holiday Working Visas and Seasonal Work Visas (filling temporary and casual horticulture and agricultural roles for the most part). The sort of occupations where workers are often lower skilled and are paid at the lower end of the spectrum. Strike one.
Last week the Government announced that essential skill work visas for those earning under the median wage will be allowed to remain in the country for two years from the current one. A doubling in the amount of time the very people the ‘reset’ speech announced we do not want any longer can remain in the country. Strike two.
Reinforcing the ‘don’t mistake politicking for reality’ message last week the Deputy Prime Minister said that the government was not talking about ‘turning immigration on its head’. Strike three.
In a classic judge-me-on-what-I-do-and-not-what-I-say these three announcements reflect a very different economic reality to the trending political narrative and migrant markets should sit up and take note. The reality is our politicians are, when it comes to immigration at least, full of hot air.
It is a case of labour market reality smacking them in the vote chasing face. The reality is our economy is strong and expected to grow by 5.5% this year and 3.8% next, our GDP is higher than it was before we had heard of Covid, unemployment is 4.6% (and expected to continue falling) effectively meaning we cannot go much lower (given there’s a percentage of the population incapable or unwilling of working). Inflation over the past year has increased to 3.3%, the Reserve Bank has stopped its bond buying programme and has signalled interest rates will shortly have to start rising. Already some of the high street banks are moving to increase their deposit and lending rates.
As the border restrictions continue to starve the local economy of valuable skills and labour that we simply do not have locally the Government has no choice but to encourage those it said a few weeks ago it didn’t want to stay here, to please please please stay longer!
The reality is simple. The political hot air is not anti-migrant per se, it is about infrastructure pressure and house prices, but the government has painted itself into something of a corner. Nothing more and nothing less. We have never as a country produced all the skills we need and that in part is because who can ever know for sure what an economy will need in five, ten or twenty years time? In the meantime we equally subsidise those wishing to study sports science, marketing and law as much as we subsidise IT and Engineering despite not being short of the first group but being desperate for the second. Perhaps as a sign of the real future the Government has chucked $340 million at ‘free’ apprenticeship training but therein lies the rub.
It takes four years to train a welder, a carpenter, an electrician. It takes 4-5 years to train an engineer, nurse or teacher. Six years a Dentist or Doctor so even if the Government was serious about some vague new ‘direction of travel’ and even if we see some sort of ‘reset’ with some actual detail (don’t hold your breath), it will take years before we can rejig our education system to encourage young people to make different career choices. There seems little appetite for increasing incentives on the young and unemployed to up skill and train (if they are capable of it).
And can we force someone who wants to study sports science or marketing to become a Civil Engineer, Teacher or Software Developer anyway?
At the same time with their international border largely closed in Australia to all but a relatively small number of permanent residence holding migrants, many recruiters there are now in New Zealand actively poaching staff (and vice versa) . I heard of a story a couple of weeks ago where a young software developer in New Zealand earning $85,000 had apparently been offered $200,000 to move to Australia. The New Zealand employer matched it. Good for the developer, not so good for the consumer of whatever it is that company produces.
This week one of my own clients who had accepted (against my advice) a job two years ago paying $60,000 has just been offered $107,000 and is being interviewed for another role which will pay even more. He cannot believe how many companies want to interview him and what they are willing to pay.
So, our Government can starve employers of the low, medium and highly skilled as it is doing now through not processing offshore based visa applicants but that doesn’t help employers fill vacancies as the more highly skilled locals play musical chairs for more money.
Once international travel resumes and our population is largely vaccinated (by the end of the year apparently) we are going to be vulnerable to our own skilled workforce heading overseas again for adventure, global experience, opportunity or more money. We simply have to replace them and that is where our Government’s words will not be matched with its action - because it cannot afford to.
That inflation is now the highest it has been since the GFC bounce back is in part being fuelled by salaries increasing. Australia represents a clear and present danger in terms of attracting people to move over there for more money. They too are desperate with a strong economy and low unemployment.
We are in a global competition for skills and pay packets must reflect that as part of the solution to attracting and retaining talent.
So next time you hear any Minister of Immigration or Economic Development or even the Prime Minister herself making noises about restricting immigration, cutting numbers and making life more difficult for migrants to get into or remain in New Zealand, judge them on what they do, not what they say.
Believe me it will be a different story.
Until next week
Posted by Iain on March 2, 2018, 7:56 p.m. in New Zealand Politics
If you think New Zealand is different to where you come from - it is. Sometimes for the better and sometimes not. This week's blog is an example of how we are the same, or at least that we are stupid enough to elect the same sort of people...
I know it’s a stupid question but why do Politicians make promises they know they cannot deliver? We now have the President of South Africa confirming a new policy of land confiscation without compensation. At least, that was the headline. The small print suggested that they might, maybe, some land, some time. The political message was sent to the supporters of the ANC and those more radical that the government intends redistributing land but knowing that would be tantamount to economic suicide and most voters don’t read the fine print, a second, less headline grabbing message was sent to the world of don’t sweat it, we aren’t planning on becoming Zimbabwe.
Can they deliver both?
Although thankfully nothing in NZ is ever as radical as land confiscation, we have the bizarre situation in New Zealand with our mixed-member proportional representation system whereby the party that received the greatest number of votes in the election late last year with 44% does not form part of the current Government. in the last weeks before the election the parties in Parliament were polling something like National 46%, Labour 32%, Green Party 8%, New Zealand First 7% and a few others on less than 5% (in New Zealand if you don’t win a constituency seat you must get 5% of the vote to return to Parliament). On election night the polls more or less reflected those numbers with the four big parties splitting the votes pretty much as predicted.
What no one imagined would happen was that the three ‘losing’ parties (legitimately) got together and said none want to work with the biggest and formed their own government. Nothing wrong with that — in the end it is all about getting to 50% and they did it.
My problem is less with the outcome, however bizarre and unexpected, as what those three smaller parties did to attract votes.
All were making all sorts of wild promises of what they would do if they were part of the next Government.
This included, among other things, “slashing immigration” by up to 80% (NZ First), cutting immigration by between 20,000 and 30 000 people (Labour, traditionally very pro-immigration), a promise to build 100,000 “affordable” houses within 10 years (Labour) along with a promise to provide free university education initially in year 1 from 2018.
Although in a mixed-member proportional representation system any party can shack up with any other, it was incomprehensible to most voters that the National Party, receiving 44%, would not be part of the next Government.
While I’m sure the three ‘losers’ were very happy, they made such outlandish promises to try and increase their votes, all those pigeons are now coming back to roost and there are lots of pigeons and a lot of pigeon poop.
Anybody with more than three brain cells would have known that any promise to build 100,000 affordable houses across the country within 10 years, and 50,000 of those in Auckland, was either deluded or a liar. We’ve had a skill shortage in construction-related trades and other occupations (such as Architecture, Civil Engineers, QSs and so on) for many years and we still have a housing stock deficit so how could you promise, with a straight face, to build all these houses over that time frame while at the same time slashing immigration numbers?
We have now had virtually 9 years of unbroken growth, record rates of net migration and an economy which is 25% bigger today than it was nine years’ ago. It was widely estimated that we were at least 20,000 skilled workers short before the election yet those other political parties promised to build all these houses while at the same time cutting back on immigrants. That clearly isn’t going to happen (see previous update) and it’s interesting that Auckland house price values have begun their upward trajectory again, after taking a brief respite around the time of the election.
It has also now been revealed that within two years New Zealand is going to be 3,000 Teachers short of what will be required to cope with population growth and retiring Teachers. Teacher trainee numbers are down 40% on five years ago and continue to trend down. None of this should be news to any politician because the workforce is known to be ageing, Teachers retire and of course, there is a degree of churn as well.
It is a problem that was not hard to identify.
The new Government recently had the chance to put this critical skill back on the Long Term Skills Shortage List that was just updated but chose not to. Being on that list might have attracted a few more Teachers to these shores as they some could potentially secure residence without needing a job first — although every good, fluent English speaking teacher should qualify for residence if they can get registered here, there are still many that won’t come without residence first. When political parties campaigned on cutting/slashing immigration numbers one of your first moves could never be to encourage certain occupations to move here or you’ll look like idiots or liars.
To be fair, part of the problem that the Government inherited a situation where Teachers’ salaries have not kept up with salaries in other sectors. The most a Teacher can earn in New Zealand in the public system is NZ$ 71,000.00 per annum or thereabouts which if you are outside of Auckland is not a bad income at all and is indeed liveable, even for a single person. In Auckland however, a graduate and single Teacher who begins on around $50,000.00 is going to struggle if they have aspirations for home ownership for example. If a Teacher is married and there is a second income coming in, then Auckland becomes a very viable option for those Teachers, young or old.
I should add that there are other allowances which Teachers can be paid if, for example, they take on management-level responsibilities and we have one client from South Africa currently in New Zealand working as a Teacher earning around NZ$ 95,00.00. She is definitely the exception and the school has pulled out all the stops to ensure it was worth her while to stay.
The previous Government did put in place a relocation allowance, paid retrospectively to foreign teachers or kiwi teachers returning home of $5000. Too little, too late.
Earlier this week the Minister of Education said the Government doesn’t have an “inexhaustible bucket of money” to pay Teachers more! Could have fooled me.
You seem to have promised billions of dollars not yet in the nation’s bank account for everything else!
We now have the first year of tertiary education being free, which has cost the good folk of NZ NZ$2 billion this year alone. The cobbled together Government seem to have the money for that but in terms of needs and wants, that was a well intentioned but cynical promise to attract younger voters, no more and no less. While we might all like University to be free, they could probably double Teachers’ salaries and still have NZ$1.5 billion left over for the greater subsidisation of tertiary education than the 75% we currently do.
But no, they made a ‘promise'.
We will now also see confirmation of the lies that were told about slashing immigration. The Deputy Prime Minister, whose party attracted around 7% of the popular vote and who every 3 years stands on a platform of cutting immigration by 80%, once again managed to convince a minority of (pretty stupid) people that this time round he wasn’t telling bald-faced lies.
The three party Government has run with the Labour Party’s election manifesto which is to cut 20,000 – 30,000 International Students from coming to New Zealand each year. No talk of cutting skilled migrant quotas or investors or Parents, only international students as I have written about before.
A Treasury Report out this week indicated that decision will remove from the economy at least NZ$260 million per annum and probably a lot more. Many of those students had work rights, i.e., they could work up to 20 per hours per week, so they were filling many of those lower-skilled casual jobs that we simply do not have enough people here to fill, especially in retail, hospitality, agriculture and horticulture. So not only has this “cut” had a direct impact on the nation’s income but even more than that, we have got around 10,000 fewer people per year in the country available to local employers to fill roles that, as I say, there aren’t enough New Zealander to fill.
We have a very charismatic and I have no doubt, very nice, young Prime Minister that many people have taken a shine to. The first 100 days of this new Government has seen any number of reviews and enquiries launched (I always wonder what these Politicians do while they sit in opposition for 9 years in terms of planning and research) and I suspect within the next 12 months they’re going to regret an awful lot of the hollow promises they made that if they had any integrity, they would admit they were never going to be able to deliver.
But, sigh, that isn’t how politics works in any multi party democracy.
I’m not sure if (NZ) voters will ever learn but I note with a degree of relish that NZ First, the party that polled a pretty miserable 7% on election night but still effectively chose our current government (and their Leader appointed himself Deputy PM) is today polling 3.5% — not enough to get back into parliament.
I’d hazard a guess half those that voted for this party expected they’d enter into coalition with the National Party and are showing their displeasure ‘if an election was held today'. One can only hope that they remember that in 2020 when the election circus comes to town once again.
Perhaps the lies and half truths Politicians tell are not forgotten by all of the people all of the time.
Until next week...
Iain MacLeod, Southern Man
Posted by Iain on June 15, 2017, 5:10 p.m. in New Zealand Politics
This week the major opposition party, Labour, released their immigration policy.
I can only hope that this set of politicians understand a lot more about economics, health and education than they appear to know about immigration or they clearly take the voting public for fools.
Having promised in recent months to ‘slash migration numbers by tens of thousands’ what did they actually ‘slash’ in terms of the current resident visa targets?
Zero. Nada. Nothing.
They aren’t complete idiots. They know we have a skills mismatch between the jobs being created and the skills we are creating locally – in a nutshell, we simply do not produce enough teachers, IT specialists, engineers, tradies and construction related workers among many other occupations to meet demand. So how do we find them?
They haven’t touched the Investor category which is odd for a party of the workers who seem to think people get rich by waking up in the morning.
Their focus has been to suggest they are going to slash migrant workers.
What have they promised?
The only problem with that plan is that the current Government has already raised the bar on which level of course international students should do to secure graduate work visas at the end of their study. This announcement takes things a small step further but the message has already been received by the international student market. As a result, over the past year the number of international students coming to study here has already taken a dive, particularly from India (the greatest source of these students). So, Labour’s promise is one already being acted upon by the current government.
The new constructions worker visa is an admission that we do not create enough of these skills locally which is quite true. It is designed to complement another ridiculous promise made by this party which is to build 100,000 houses over ten years. We are in the middle of the biggest building boom since WWII and we could still only build 6,000 houses last year in Auckland and that’s the private sector at work, not bumbling public servants trying to organise it.
I always asked who do these politicians plan will do the building if they want to build 10,000 houses a year. If you need anything major done on your house today (as I do), you wait months for carpenters, electricians, plumbers......so we need a lot more of these types of migrants, not less.
There is another reason why this new policy will fall flat on its face. The Labour Party has a fish hook - albeit well intentioned - for every construction worker a company is given permission to hire from overseas, they must employ a local apprentice. I applaud the sentiment.
Can they explain where these apprentices will come from? Today, Government subsidises the training of apprentices and we still don’t have enough young people willing to take up a large percentage of the training opportunities already in place. Recent stats show that 74% of them never complete their training. Yet construction related workers in particular can expect to earn between $60,000 - $80,000 a year on average. Outside of Auckland (or with a partner who is also working in Auckland) this is not bad money after 3-4 years of training.
Please tell us Labour Party, what’s the plan to get these young unmotivated men and women off their couches, away from their Playstations and out into training? Carrot or stick? We know that the carrot of upskilling and meaningful work has not worked in areas like Northland and the East Cape where youth unemployment runs as high as 25%. Plenty of apprenticeships for them in those parts if they want them...and we do have a good national bus system if they wanted to move to another city where these opportunities abound.
Just as I called out the Government with their recent self-proclaimed ‘toughening up’ and ‘raising the bar’ skilled migrant changes of a few weeks ago that also simply do not stand up to scrutiny, I am interested to learn if we can expect both the major parties - which between them can expect around 65% of the popular vote come September - to shortly release some form of social welfare reform policies?
Once, when we had people who wanted to work but there were no jobs for them, there was not much the politicians could do. Not anymore. Through this year and the next two the Government’s officials are predicting another 150,000 jobs being created in this country. Over the past five years several hundred thousand new jobs have been created.
We need immigrants because we often don’t have the skills locally to fill so many of these jobs.
Which is exactly why with both major parties are promising getting tough and raising the bar and one promising this week to ‘slash’ migrant numbers – neither actually has any intention of doing so.
What both have done is to recognise the ‘tsunami’ of international students looking for residence that some of us were warning the Government about two years ago which has been addressed – by the National Party government. Who should get no praise for fixing a problem they created...
What is clear is numbers of students coming here is falling and the smart ones will choose courses at a higher level that will lead to helping us to alleviate skills gaps, but any way you slice it, that will translate into fewer people chasing those 27,000 skilled migrant places each year.
Those of you living here who might be about to vote for the first time and who might think either party is seriously contemplating cutting skilled migrant numbers, both parties have now released their policies and both have confirmed, in effect: neither want to cut a single visa from their residence programmes.
Given we so badly need so many skills, why would these politicians do anything but give the appearance of 'slashing numbers' gibven they know full well we need every skilled migrant we can lay our hands on?
Until next week.
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