Too Many Migrants?
Since our borders reopened in the latter part of 2022, New Zealanders have become somewhat obsessed with annual migration numbers, or at least they have become the focus of many a media article, particularly over the last 12 months. In the years before Covid, most people wouldn’t have had the foggiest clue how many migrants we welcomed each year, whether we have a target of migrants to aim for or more importantly what that all meant for the economy and society.
Nowadays if you ask the average New Zealander any of the above, most of them will be able to recant the last three net migration numbers, concerns over whether there is enough housing, education and hospitals and that Immigration New Zealand is juggling thousands of applications, with the floodgates seemingly open.
It has become a part of our national discussion and a key focus for news media, particularly as issues around our beleaguered Work Visa system continue to also grab column inches in the mainstream papers.
For those looking to move here, all of these statistics have a very different meaning and I have been asked more than once, in recent weeks, whether we have enough space. I don’t think the individual asking that question meant literal space, but rather, will we be closing the doors at some point, because the inn is full. Its a good question and a fairly topical one, given that migration, the global war on talent, and economics are trending in pretty much every news media you can find. So let’s take a look at what it does mean, particularly if you are aiming to be one of those new ‘migrants’ in the near future.
A Numbers Game
Our statistics often leave out vital details, namely differences between who is here permanently and those on shorter stays.
The Devil in The Detail…
Whenever the media reports on our net migration numbers (net meaning the difference between those coming and those leaving), they tend to highlight a single headline number - total arrivals, less total departures. That number is then calculated on a monthly basis and a yearly running total. In recent months that number has been up around 130,000, give or take a few thousand. For a country with five million people that is a big number. However it is that headline number that creates part of the problem, because it records those who plan to be here for 12 months or more. Apparently that threshold (12 months) is an international standard, but given the increased mobility of people, 12 months is hardly a measure of someone “migrating”. In fact many of the people included in the stats that make up the headlines, are here for a good time, not a long time. They wont be buying houses, using healthcare (or even have access to it) or putting kids in school. A more granular review would be useful here, and whilst the statistics bear that out (if you dig deep enough), it would be the point of another post. The message here is that headlines and headline numbers are one thing, but they aren’t useful in explaining the entire picture.
Yes, many of the people arriving will stay for several years and work, and some will be here permanently but when you are considering how this all stacks up for the country, the availability of public services, jobs and housing, those granular details are really important. To plan ahead, you need real numbers, not click bait.
One of the key flaws in our planning is that we dont really have one and because of that, we get very caught up in these big numbers. If we had a population plan, then we would be forced to pay attention to who is here permanently, versus who will be here for a few years and leave. We don’t have any such plan and so like a possum in the headlights, we stare incessantly at the big shiny headlights, usually until it is too late. We also under-report on the fact that whilst people arrive, people also leave, with many New Zealanders, heading to Australia or even further afield. Those are skills we need to replace obviously and the bigger that number is, or the more it grows, the bigger the questions should be as to why.
This strange fascination as to migration numbers, clouded by a very narrow threshold of what constitutes a ‘migrant’ means that our economists, policy advisers and politicians zero in on whether we have too many (or when it swings back, too few) migrants - that then leads to a knee-jerk reaction on visa settings, to try steady the good ship NZ from supposedly tipping over.
Is There Space Left?
Obviously no country has infinite space. It is more a case of quality over quantity.
How Many Is Too Many?
When the previous labour Government opened the borders as we all shook off the masks and had our fourth, fifth or sixth dose of Covid vaccine, they also introduced a new, uncapped, Skilled Migrant Category. Seemingly the previous Government either knew that numbers would reduce by virtue of the way the policy was designed or simply didn’t care (my guess is the former). The new SMC system would lead to fewer applicants, but arguably many of a higher quality. However ironically in the background, they literally opened the floodgates to temporary workers, increasing the maximum time on a Work Visa from three years to five. In the last 18 months we have seen record numbers of temporary workers enter New Zealand, many taking up relatively low skilled roles. This was largely in response to pent up demand for labour, post-Covid, however it was also a symptom of a Government obsessed with public image, desperate to keep media and PR light, avoiding claims of slowing down the economy and labour market. Many of those lower-skilled migrants have no pathway to Residence and here for a finite period.
New Zealand as a country had very similar discussions as the ones we are having now at the time of the global financial meltdown and back then we were also lamenting the issue of too many new arrivals. Admittedly not to the same degree as now, but the general sentiment was the same.
Successive Governments have talked, ad nauseum about reducing employers reliance on temporary workers, raising the bar and brining in only the best and the brightest. All have largely failed. Don’t get me wrong, we still get some great people here, but the focus of most our migration resets, rebalances, and rejigs have been on filling gaps in the lower skilled labour market.
The simple fact is we do have too many migrants, at the lower end of the skill spectrum. We don’t need more labourers, waiters, or retail managers - we have surplus locals to fill those roles, if they were sufficiently incentivised. However we will never have enough skilled, productive migrants who add to our ability to grow. The engineers, teachers, doctors, nurses, ICT professionals and so forth. There will always be some lower skilled roles that we need to fill from offshore, but they are few and far between - drivers and carers being two occupations, that the last Government focused on and rightly so.
What is missing in our ability to drive this goal and be ambitious about who we attract is the lack of a clear population plan (policy) that would then allow us to plan for the required infrastructure to support those migrants. Of course to build that infrastructure we will likely need migrants as well, but there are ways to do that, without necessarily giving people a five year ticket to be here.
We do have space, and for those with the right skills, there are still plenty of opportunities here, but longer term we need to focus less on the quantity of migrants and pay more attention to the quality.
Rules, Rules, Rules
It is as predictable as time, when migrant numbers go up, the likely consequence is that rules will change.
What Does This Mean For the Rules?
Our newly anointed Immigration Minister (Erica Stanford) will now be realising that shouting from the opposition side of the debating chamber is vastly different to being the one steering the ship. Not only has she had to deal with the complete circus that has become the Accredited Employer Work Visa, but now she will be tackling the media frenzy over our headline migration numbers. The test for our new Minister will be whether she resorts to a knee-jerk reaction to slow the numbers or realise that there is a difference between quality over quantity. To be fair, our Work Visa system needs reigning in, because it has failed on many fronts, but that shouldn’t mean we slow down the flow of those who are skilled and that will help to grow and build the economy and the country.
Perception however is important (particularly to politicians) and if we go back to those headline numbers, what people see is not the difference between Residents and Workers, but simply everyone turning up at the airport. If we continue to report on migration numbers, by simply clocking in everyone here for 12 months, which then leads to economists and statisticians running around their offices clutching at their pocket protectors, in a state of hysteria - could the reaction be to just slow it all down?
I suspect cooler heads will prevail, and if history is anything to go by, we will be here in two years time (or less) wondering where all the people are. Remembering also that we have a good number of people who leave NZ and those are skills we have to replace, the fact that roads don’t engineer themselves, hospitals dont rise out of the ground each spring and we haven’t yet invented an AI primary school teacher, skilled migrants will remain a core staple of our migration program.
We have experienced the effects of a closed shop before and it was not pretty. Several decades ago we closed the doors entirely for six months and it took a lot longer than that to recover. Migrant markets are hard to win, but easy to lose and we cannot forget that there remains a significant global fight for good talent. As more people discover they have options now and as remote working continues to expand, NZ would be foolish to take itself out of the race - particularly for a country this small.
A colleague recently asked me, what I would do if INZ ever sorted themselves out or alternatively if the Government closed the doors and my reply was simple…twenty years later, myself and the superb people I work with are still helping people to secure new lives in this great little piece of the world.
Until next week.
