Foreign money: Immigration’s not the issue you thought it was

Vincent Heeringa on why immigration is crucial for the New Zealand economy.

The biggest non-issue issue in New Zealand politics is immigration, which is amazing when you consider how much of an issue it is overseas. 

In the USA, Mexicans and Muslims are the two hot words in the presidential primaries; they’re helping to fuel Donald Trump’s meteoric rise from reality TV star to Republican front-runner. In Europe, the ‘refugee problem’ is threatening to displace German Chancellor Angela Merkel from office and is dividing the EU along ideological – and geographical – borders. In the UK, immigrants are a key source of discontent among anti-EU voters.

I barely need to mention Australia, where anti-immigrant rhetoric is easy to find on Facebook feeds and Sydney trains. “Australia for Australians!” I saw on a bumper sticker in Queensland. The Australian disdain for immigrants has encouraged the draconian crackdown on non-Australian residents with criminal records. It also led to a mind-boggling sting last year in which Melbourne police planned to stop ‘foreign-looking’ people and ask for ‘their papers’. The action was cancelled only after students swarmed police stations and saluted like Nazis. 

Over here, immigration barely rates a mention. According to a rolling poll by Roy Morgan, less than one percent of New Zealanders consider immigration as an important issue. The economy, poverty and the environment dominate our list of worries.

In the 2014 election, pundits expected immigration and its twin sister, Auckland housing, to be a defining issue. Some even predicted the demise of the National Party in key Auckland electorates. In fact, the government strengthened its lead in central Auckland and National had its best result since 1951. By contrast, voters punished Labour when it clumsily identified Chinese immigrants as the source of the housing problem.

What makes it especially remarkable is that migration is at record highs. Just last week, Statistics NZ released figures showing that we reached a record of (seasonally unadjusted) 68,100 migrants in the April 2016 year. "This is the 21st month in a row that the annual net gain in migrants has set a new record. Before this period, the record was a net gain of 42,500 migrants in the year ended May 2003," it said. And, get this, it was more than four times greater than the average net gain recorded over the past 20 years. Four times!

The numbers keep defying predictions. Treasury Secretary Gabriel Makhlouf is typical of most economists when he said in February: "If you'd asked me six months ago, I would have said we were forecasting a fall in net migration, and now we're postponing [the fall]. It’s just carrying on far longer than we expected.”

That’s a lot of Chinese, Indian and Aussie accents without so much as a ‘bloody foreigners’ bumper sticker in sight.

Why?

Why aren’t political parties making more hay from this sun-shower of opportunity? Why don’t we have an anti-immigration rump in Maoridom? Why hasn’t someone credibly made the connection between immigrants and Auckland housing? Why don’t we have a ‘they’re taking our jobs’ campaign going on?

The idealistic part of me thinks that New Zealanders are simply better than all that. The outcry about Labour's aforementioned ‘Chinese buyers’ stunt gladdened my heart. So does the ratepayer-funded Diwali festival and the Chinese characters on my local ATM. I love that I see every shade of skin at the Mt Albert Pak n’ Save and that Lydia Ko is as much ‘ours’ as Richie McCaw.

I suspect, though, that the real reason is in the numbers. Three actually. 

750. That’s how many refugees we take each year. Flap-all by European or US standards. And there’s no evidence boat-loads of starving masses are heading our way soon. We simply don’t have a refugee problem.

1700. That’s the net gain of migrants from Australia. This year is the first in many years that more Kiwis came home than left for the Lucky Country. Ausssie is the country that really matters here. Total number of Ausie mirgants in the last year was 25,000 compared to China (11,700), Philippines (5,500) and South Africa (3,000).

$3.7 billion. That’s our annual trade deficit. It’s at the highest level in six years and will grow as dairy prices slide. It’s symptomatic of an economy that’s borrowing more than it makes – so we need immigrants to prop us up. They bring money for houses and business. They create demand for services and new sofas. They increase the tax take and they’re filling the coffers of Auckland Council with parking fines. Foreign students (part of that net gain figure) are paying for our universities and fund the grocery bills of their homestays.

We congratulate ourselves on our innovation and creativity but without immigrants our economy would be screwed.

That’s the issue.

This article has been updated since its publication in paper and ink to reflect new data.