The Kiwi Labour, Green, and New Zealand First coalition

by on October 21, 2017 at 12:25 am in Current Affairs, Economics, Political Science | Permalink

Eric Crampton makes many good points, here is one of them:

But that gets us to one of the risks: the intersection of Labour, Green and New Zealand First’s core beliefs is distrustful of markets and of foreigners. I can’t see how we get anywhere close to the proposed 100,000 houses built in any reasonable time without allowing foreign workers, materials, capital and expertise to help.

New Zealand’s Overseas Investment Regime already makes us the most restrictive in the OECD. Any land adjacent to a reserve must go through the screening regime, and it will be tough to ease that back under the current coalition. Heck, even New Zealand’s Fletcher Construction has to jump through Overseas Investment Act hurdles because it has foreign shareholders. New Zealand First has proposed cutting immigration numbers substantially, and Labour and the Greens have been very sympathetic to that view. The incoming government has also signaled an intention to re-negotiate trade agreements to allow banning non-residents from buying houses. If supply issues are appropriately addressed, the ban does no good and could backfire if it prevents foreign investors from building houses here to rent out.

Vernon Small offers a more pessimistic take.

1 Doug October 21, 2017 at 12:50 am

> I can’t see how we get anywhere close to the proposed 100,000 houses built in any reasonable time without allowing foreign workers, materials, capital and expertise to help.

There’s two simple responses, that I think your median “Kiwi deplorable” would give here. Number one is if NZ does have to bring in workers, why not preferentially bring in from culturally similar countries. NZ only has 4.5 million people and is situated under the teeming masses of 2.5 billion South and East Asians. With unrestricted population flows it will inevitably be assimilated into Greater China.

Prior to the 1980s immigration policy changes, Anglophone and Western immigration was heavily favored. Shouldn’t ipso facto New Zealand prefer an immigrant from Manchester or Colorado than one from Harbin or Madras? We’re not talking about huge numbers, surely NZ can find enough workers from culturally similar countries. Because otherwise if the current policy continues, there won’t be anything functionally approximating New Zealand in a generation. Your value system may not assign that a negative valence, but the vast majority of New Zealand’s electorate does.

Second is that New Zealand is a tremendously high trust society. That’s why it regularly features as the least corrupt nation on Earth. It’s immigration policy reflects this attitude, and is in turn being abused by the current crop of immigrants, the majority of whom are coming from quite low trust societies. NZ immigration is quite generous about allowing residents the ability to bring their relatives, and providing the full bulk of their generous welfare system to everyone who comes.

The result being that a lot of children, elderly and infirm are being imported from China and India, and making use of NZ’s healthcare, schools and university without paying into the system. Some families are even so egregious, that they buy a house in Auckland, the breadwinner stays in China, and the grandparents and children go. The net impact is a tremendous fiscal drain on the government, inflated housing prices, and little to no contribution to economic productivity.

2 david October 21, 2017 at 2:09 am

Labour would instantly veto discrimination by national background – to illustrate, its manifesto promises more war refugees as an offset for reducing skilled economic migration. Likewise, you can hardly expect the party channeling conservative Maori anti-immigration impulses to buy into the moral superiority of white New Zealanders.

The winning formula for anti-immigration sentiment at the ballot box has been to explicitly drain it of its ethnocultural aspects and instead emphasize the secular impacts on jobs, infrastructure, ecology, etc.

And last, even white Kiwis are distinctly non-enthusiastic for imperial nostalgia for a supposed community of white nations. Watch an Anzac Day memorial sometime.

3 Old Guard October 21, 2017 at 12:01 pm

“The winning formula for anti-immigration sentiment at the ballot box has been to explicitly drain it of its ethnocultural aspects and instead emphasize the secular impacts on jobs, infrastructure, ecology, etc. ”

Well, NZ First did worse at the ballot box than did the European populist parties. I think most of us can agree that 1488-tier stuff is unhelpful, but so too is pretending that it’s all about economics, surrendering on issues of race and national identity. If they end up reducing the immigration of Chinese doctors so they can increase the immigration of rapefugees, then what’s the f****** point?

4 Millian October 21, 2017 at 5:58 am

Is it because culturally similar countries aren’t interested in NZ wages? I mean, if I migrate, I’m chasing the dollars, not the scenery.

5 25 year old Kiwis don't stay.. October 21, 2017 at 7:33 am

good post Doug. Lotta Kiwis in London, David….

6 Engineer October 21, 2017 at 9:02 am

One aspect that I seldom see discussed is the optimum population number for the immigrant receiving country. Is it best for New Zealand to have 3 million people, 4.5 million, 20 million, or some other number?

Japan’s 126 million population is projected to decline to well under 100 million (83 million by 2100 by some estimates). Is that a bad thing? Its about the population in 1950.

https://www.washingtonpost.com/news/worldviews/wp/2016/02/26/its-official-japans-population-is-drastically-shrinking/

For the US, I’ve not seen any credible argument that our current 316 million is insufficient in any way. Its certainly considerably more crowded now than with the 213 million we had in the dark days of 1970. One might argue that there is some minimum size for a viable nation-state (Quebec? Catalonia? Scotland?) but no one seems to think Norway’s 5 million (3 million in 1950) is below that critical mass.

7 GoneWithTheWind October 21, 2017 at 10:43 am

New Zealand’s biggest problem is big government. What they need is far less government and far more citizen’s rights. They don’t “need” immigrants BUT they are going to get them and when they do it will change NZ for the worse. Maybe not tomorrow or next year or next decade but eventually China will overwhelm NZ and Australia and enslave or make refugees of those who live there today and fail to understand China’s global agenda.

8 Art Deco October 21, 2017 at 12:10 pm

Viability is not the question. Iceland is viable. The question is do you have a critical mass to perform sophisticated functions domestically. That would be research universities, university medical centers up to common standards for occidental countries, a full service bourse &c. New Zealand, Norway, Singapore appear to have these things, so a population of 4.2 million with a productive capacity to generate $180 bn in goods and services each year would appear to be adequate.

New Zealand’s tfr is about 2.0. They do not have much of a fertility deficit, so having 2,000 or 3,000 immigrants a year would be adequate. You can shape the immigration stream by requiring adolescent and adult aspirants to pass a written and oral proficiency test in English, by placing the test centers in English speaking countries, and by limiting applications from problem countries to mother-father-children sets (or older married couple sets).

9 roberone October 21, 2017 at 1:22 am

Couldn’t agree more. Although Labour and NZ First want to decrease immigration in total – no mention of revising the settings as to where immigrants actually come from.

10 Alex October 21, 2017 at 3:27 am

I think this is putting a US slant on nz immigration. They have a far higher immigration rate than the us and even Australia (another very high immigration country). There are in fact limits to how well you can disperse the gains from high immigration to a resident population, which is why both Australia and nz growth looks far weaker on a per capita basis. And while interstate immigration may drive us house prices more than external immigration, the reverse is true for Aus/nz. This is sensible policy which takes the ground from the hard right (yes, I know they’re in the coalition, but they will have a moderated policy which doesn’t reflect country origin); this is something one nation watchers could note.

11 Millian October 21, 2017 at 6:15 am

It’s hard to rebalance an economy away from housing when you promise a huge expansion of housing. Construction is a low-productivity industry in the labour factor; many houses need many hands! Unfortunately, it is also an industry with low transferability of skills once the demand is over. NZ will not be the first small economy to stimulate demand for housing for a few years, then wonder what to do with the workers. NZ’s population trajectory seems to have been really similar to Ireland’s, so I wouldn’t say that migration has been inherently unsustainable. However, the NZ population is more overwhelmingly concentrated in Auckland and the major urban areas, so this may lead to a different perspective, if NZ housing policy is basically about rationing access to a very scarce set of agglomerations.

12 JMCSF October 21, 2017 at 7:03 am

The construction industry seems as ripe as any for disruption by automation and AI.

I don’t anticipate to see much automation in this cycle but I am optimistic in the future – cutting down labor and other costs would go a long way to providing more affordable housing.

13 Just Another MR Commentor October 21, 2017 at 7:36 am

No that won’t happen. Its another pipe dream.

14 dearieme October 21, 2017 at 7:08 am

Construction labour in NZ may be infinitely employable if earthquakes keep knocking down parts of the housing stock.

15 Careless October 21, 2017 at 9:05 am

So to get 100,000 houses built, they advocate letting in >100,000 immigrants?

Lose money on every transaction, make it up on volume?

16 American October 21, 2017 at 10:20 am

+1

17 Hwite October 21, 2017 at 9:43 am

“We need foreigners to be brought in so that they can build houses for all the foreigners that need to be brought in.”

Maybe think about the demand side?

18 American October 21, 2017 at 10:19 am

This will be interpreted with glee by the pro-immigration libertardians and libertardian-lites like Tyler and Alex. If only those deplorables would shove off, join the “statist” side and stop bothering us? Well, they did, and now you’ve lost with a Labour-led government in New Zealand. Funny, glee in losing, but that is the cuck’s way.

I’m generally pro-market and pro-trade, and it’s been disappointing to see populist right parties embracing socialist policies, like Le Pen in France. But it’s also entirely understandable. As the upper middle class has become ardently antinationalist, right-wing populist parties are given a choice between retaining their traditional pro-capitalist stances which alienate the working class while upper class voters will never consider voting for them(I am of course speaking of averages here), and thus becoming permanently irrelevant, or appealing to working class voters and making a breakthrough, as Le Pen did in France, in some areas that were former strongholds of the Communist Party.

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