Reopening the immigration discussion

Reopening borders will not be a cure for New Zealand’s sub-par productivity rating, says a new report by the Productivity Commission.

The report, Immigration – Fit for the Future, says immigration is “neither the cause of, nor solution to, New Zealand’s productivity woes”. It notes that New Zealand’s productivity ranks below the OECD average and Kiwis – and immigrants – work harder and longer to achieve a similar level of GDP growth to other OECD countries.

The Productivity Commission recommends the Government publish a clear policy statement that would clarify the objectives of our immigration system. This would enable immigration settings to be aligned more effectively with key fiscal policies and targets for population growth, the report says.

While noting that, on average, immigration is not driving down wages or causing local workers to lose jobs, the report found that our immigration system currently uses tools “that may suppress wages, job creation and productivity”.

Case studies from the dairy, construction, aged-care and software industries show a “mixed picture” of negative and positive outcomes for the economy, with access for business to skilled and unskilled labour offset by substitution of local labour and disincentives to training Kiwi workers.

Commission Chair Dr Ganesh Nana says immigration policy needs to be considered alongside housing, infrastructure, education, transport and communications if it is to be integrated effectively into New Zealand’s future. The “absorptive capacity” of the country to give immigrants and locals a good life must be increased if we are to “nurture human capabilities”.

“The Commission’s core recommendation is for the Government to more effectively manage absorptive capacity together with migrant inflows to ensure consistency with expected population growth,” he says.

Read the full report at productivity.govt.nz