Fickle migration policy risks damaging our future prosperity
By Phil O’Reilly.
Immigration has long been one of the most contested policy areas for New Zealand.
Our immigration policy swings around from being highly permissive to quite restrictive, depending on the political mood. Frequent changes to our pathways to residency and citizenship for new migrants and their families have often been criticised by migrants and potential migrants to New Zealand.
That policy confusion is not costless to us and the potential damage it does to our reputation and competitiveness is highlighted by a recently published OECD report on immigration.
That report (International Migration Outlook 2023) shows us that migration from the developing world to the developed world has reached all-time highs. The report suggests high employment and labour participation rates for migrants and growth in both permanent and temporary migration. Humanitarian admissions are also increasing. Several countries are increasing their labour migration targets. Across OECD economies almost 80% of migrants are economically active.
Some of this increasing migration is due to the Covid impact of borders closing and then re-opening, but increasingly it is being driven by other, longer term issues.
At the top of that list is the issue of ageing populations in the developed world. An accepted solution is continued migration from elsewhere, not just to keep those economies growing and prosperous, but also to help pay for the cost of ageing populations including medical care, superannuation and the welfare state more generally.
Countries that are unable to attract new migrants over the next several decades are likely to face real challenges with depopulation, sluggish growth and reduced prosperity as a result.
New Zealand would do well to learn from this. The recent OECD report should be a clarion call to us to have a much better and more consistent national conversation about the important role that migration plays, not just in plugging current skills gaps but in providing for domestic growth and prosperity for the future. Other countries are working that out and they will increasingly attract the best migrants, to our detriment.
We have a bad habit in New Zealand of thinking that we are somehow uniquely attractive to migrants and that we should think about migration as some sort of rationing exercise. In the meantime, our policy settings change so frequently and so significantly that the very migrants that we want to attract will find the more stable and open migration policies of competitor economies like Australia and Canada much more attractive for them and their families.
To make matters worse, many migrants who go through the hoops of applying for jobs and then residency in New Zealand over the years have found New Zealand to be an expensive place to live, often with lower wages than those paid in other countries.
Simply put, we need to change our attitude to migration. We need to think of migration as a national benefit for us, not just today but also increasingly over the next 20 to 30 years as the New Zealand population ages and we need to keep up the growth and resulting taxation that will help to pay for current New Zealanders’ health and retirement needs as they age.
That is not to suggest a completely open door: far from it. But it is to suggest that we should take account of the growth and prosperity that migrants bring us. The potential for new migrants to start new businesses with new connections back to their home nations. The benefits that increased diversity brings to New Zealand including better connections internationally and a more globally focused New Zealand.
We can all come up with the negative views that migration exacerbates existing infrastructure deficits, but there is at least as much an argument to say that those new migrants will help build new infrastructure and finance it through their taxes over time, contributing to a more successful country, just as generations of New Zealanders have done before them.
The recent OECD report demonstrates that every other country that looks like us is competing hard for migrants because they realise that their continued long term national success depends on it.
We need to respond by having consistent, open migration settings through political cycles, so that the best and brightest of the world can easily make the choice to come to our country and build a future here. That will benefit everybody.