Opposition, employers, SMEs, hospitals, farmers & schools make crisis pleas for opening of migration taps, but without discussing whether (or how) to 'build it before they come' (rather than never)
It’s been a slow moving train wreck of continuing to grow our population faster than almost any other OECD country, but at the same time refusing to spend on infrastructure to support that population growth.
At first it was barely noticeable, but as the deficit n investment grows we see more and more impacts. Sadly most politicians have such a short term outlook they don’t seem to care
Interesting ‘The Kaka’ this morning Bernard. I can’t see any bi-partisan deals being agreed atm though ahead of next years election and a change of government. I’d like to see you make comment on increasing housing affordability, poverty reduction and the role of government bureaucracy inhibiting desired change.
Thanks Kevin. Yes. I'd bet on no deals, but ever hopeful of something more positive. We achieve none of the housing affordability, poverty reduction and climate aims (although neither National or Labour have affordability aims because they're too dangerous) without solving the infrastructure funding issues. Same story. And the bureaucrats are masters of using the friction in the system to avoid change. So easy to wait out the minister until someone more in tune with your own views comes along. All this creates a bias to the status quo.
There’s a lot think about in this. But I’d comment that light rail down dominion road would be much cheaper than the tunnel all the way route. The big plus is that light rail eliminates a LOT of busses from the centre city. But it can and should be done much cheaper than the gold-plated option currently on the table.
I said it yesterday. We import low wage workers which lowers the cost to employers. NZers are not willing to accept those low wages so they bugger off overseas. Because NZ now doesn't have enough of that occupation group, we import more low wage workers. Rinse and repeat.
A recommendation: - set the base wage for police, ambulance, fire, nursing and teaching at the same amount. Which stops the undervaluing of nursing and teaching because they are predominantly female roles. And stops a sector from underpaying their staff to meet a budget, rather than getting the budget they should be receiving to do their job.
I love the equal base pay idea from a social justice perspective, but here are some figures: 57,000 nurses in Aotearoa. 64,000 teachers. 13,000 cops. One reason wages are kept so low in nursing and teaching is that every cent you allow in raises gets multiplied by very large numbers. Successive governments have quietly gone along with the idea that teachers and nurses are the low-value replaceable cogs that keep our enormous education and health machines rumbling forwards.
Labour is not exactly winning hearts and minds of NZ voters with their restructure of the Health sector! But I also struggle to see how Nationals policy of open borders for hiring health workers without paying them more is going to fix much either. Surely we will still lose health workers in huge numbers over the Tasman due to cost of living and wage disparity issues unless we pay them more?
You'd think. The idea is to bring in health workers from lower wage countries to replace the ones we lose, I guess? Treading water at best, which isn't great when you start from the position that we're drowning.
'Pressure is building to breaking point, powered by signs everywhere of usually reliable essential services breaking down (suspended elective surgeries, school holiday flight cancellations, shortened shop and cafe hours, construction delays and building materials shortages, an age care sector near collapse), and growing fears of a wage-price spiral that worsens the inflationary cost-of-living crisis.'
Maybe I'm stupid, but there seems something terribly flawed in a society, or economic structure, that cannot function effectively without endless immigration. Okay, bring in another 500,000 people to do the work that cannot now be done. Then what have we? A larger population, so more services underprovided, with the need for yet another 500,000 people. We've been doing this for decades; we're up to 5,000,000 inhabitants. Where do we stop? 10 million? 20 million? 100 million?
Can we not design a self-sufficient steady state that needs only to replace the people who emigrate?
You need a birth rate/replacement rate at around 2.4-2.6 per couple. Most of the West is at or under 2 so popn shrinks or you import your future. With an aging popn you bankrupt yourself without cuts in health/pension costs as a country without a growing working age popn
Alternatively you create an environment where people want to have more kids which requires affordable housing, fully funded mat leave, pre school paid for from 1-5 with much lower staff to kids ratios and schools that teach children to read, write, etc and pry some sort of universal baby bonds/kiwisaver and people still may not have the extra kids so immigration is easier and cheaper
I agree with both your replies. We must vote for a Government that will assure that environment where people want more kids. No sign of that from either our present Government or Opposition. Even if we achieve a child-friendly environment it seems it will be difficult to maintain a balance of young people working to sustain old people requiring support: some immigration will be needed to restore that balance, but not the masses we have welcomed in the past, which seems to be what the National Party and the business community would like to see again.
However, is dependence on any kind of immigration an answer? If that's good for us, it is good for every other country. Because the birthrate is declining everywhere (except, apparently, in Africa, India, and the Philippines). And so it should: world population is predicted to peak at 10 million, and the planet is dying from our predation and our rubbish. Surely we must look for a smarter solution to our labour shortages than looking for an endless supply of baristas, builders, and aged-care nurses from overseas.
Birth rate actually declining everywhere and even India is flirting around replacement rate. The world economic “growth is all” system is ill prepared for this demographic shift.
Population trends are THE topic that doesn’t get enough attention in the popular press. Immigration will solve for a few decades, but guess what happens by the second generation? The immigrants stop having kids too! Unless you keep them poor. Makes you think…
One of the key problems is that many of the low wage jobs are filled by people with high demands on these core government services health housing education and policing - and so the problems compound rather than resolve. We need to look at lots of job creation work that has arisen over the past several decades - every time a regulation is promulgated a whole new industry pops up to exploit it - think health and safety - look at all the road cones out there now - we got by with a fraction of those ten years ago - no one can sneeze now without consulting an expert. In much of regional NZ you have to import the expert from one of the main centres because there is not enough work in the regions to support local providers so it gets ever harder and more expensive to do things in the part of NZ that actually produce the goods. NZ is getting strangled by ever increasing overheads and bled by regulations that are increasingly being crafted by the beneficiaries of those regulations not some impartial central government agency - look no further than 3 waters to see a program that is being entirely driven by vested interests rather than impartial fact based policy. Many of the jobs are being created to employ the ever increasing population - rather than the other way around - and do we really need a cafe on every corner, run down dairies all over the suburbs, a bottle shop on every block and rafts of additional landlords and "investors"?
Facts. especially in regard to the H&S. It's an unsustainable and unsatisfactory situation. Once upon a time, back in the 'good old day's' like pre 1987, this country did some incredible things with a small number of incredible, practical people with 'hand's on' commonsense. That's all gone now or these people are sidelined & considered not worth listening to (being they actually might have a workable solution). Not suggesting a full return to the 1970's era of Govt. run railways and the M.W&D, but I think a model similar to what the NSW State Govt. has would be a reasonable compromise. Currently, N.Z. can't build or engineer anything properly anymore, and there is a lot of wastage that keeps me in a role as a Consultant analysing and reporting on why things went wrong, which is then ignored. Rinse and repeat.......... if we actually turned out a good number of properly trained 'blue collar' folk's doing proper apprenticeships (that takes 4-5 years), then a lot of immigrants wouldn't be needed to do the jobs we once did very well 35 years ago. Our Govt. needs to actually step up and confront this shocking skills deficit it has engineered.
actually MOW and Railways and NZED were filled with really capable people they only got the really bad reputation once Muldoon started using them to sop up the unemployed - the unions also didn't help - indeed they became so obstructive that they almost directly provided a justification for Roger Douglas's reforms. No doubt there were some duds but they usually got relegated to some dark corner of the office. We are missing them now - Government has no one to turn to for advice who doesn't have a vested interest, a nest to feather or an agenda to push. I'm an old guy who worked on power schemes - we had some really great engineers and capable workers. MOW got a reputation for guys leaning on shovels but only need to drive past road works anywhere to still find that happening. If we went through the economy and shucked out the unnecessary on make-work we would find plenty of capable workers. Problem is we have raised a generation who all want to tell other people what to do and how to do it - and poor immigrants who are prepared to put up with that to get out of what ever unpleasant circumstances they come from. We kid ourselves that people come here because New Zealand is wonderful they come here because where they were is much worse - its not so much people want to be here it is just that they don't want to be where the were and being a bunch of lazy/clueless buggers we are happy to exploit them.
I totally feel the same way. The MOW actually was a first class Govt. training ground for a generation of what often turned out as highly skilled and very clever people who did things properly; because they were trained to a standard - an acceptable standard not a price. This country has lost it's way in roading and engineering over the last 30-35 years because we haven't trained anyone to replace these people who are now in their 60's and 70's It pisses me off actually. No country can simply solve it by importing low quality, cheap and not properly trained labour with so called 'qualifications'; that's why we have a crisis with things like huge budget blow outs on large projects and roads bleeding and water pumping through the subbase as is common. How would I know? Because I've been involved in roading for over 37 years in N.Z. (and internationally) and it's actually shameful that a once proud industry has degenerated to such an unacceptable level of incompetence. We now have interest groups dictating poor policy and flawed ideas to NZTA who foolishly submit and allow costly escapades such as abandoning established best practices and materials in favour of 'green' initiatives which do not work. Proverbs 26: ''As a dog returns to it's vomit, so fools repeat their folly''. Rinse and repeat..........
If you want to be really alarmed I was in visiting Michael Woodhouse a while back and discussed the housing crisis and RMA reform when the idiot started to go on about how he thought NZ should be aiming for a population of 25 Million - I gave up on him at that point. But he will not be alone inside the National Party.
Great to hear your take on modeshift and how a potential deal could be struck. It is the most cost effective/speedy solution by far and great to hear your voice join the chorus here (excuse the pun) after a few others have weighed in (great series of articles in the Dom Post/Stuff on this recently).
I sure hope some kind of deal could be struck here but agree I am an eternal pessimist and doubt it. National would need to give up a pretty powerful attacking point of theirs going into the election so they'd need some big carrots from Labour/Greens I'd think. But here's to hoping and you laid out the case well (let's hope Luxon and Ardern are Kaka subscribers).
P.S. - Not sure I agree with your comment on "un-electable". Maybe you'd have more votes that you'd think if you or someone willing to call out Aotearoa's real critical issues and offer serious solutions rather than tired talking points threw your hat in the political arena. I get the (albeit un-substantiated) feeling there are more people out there sick of politicians who only listen to focus groups and want real leadership than the pollsters might think. At least enough for a new minor party, one would hope.
Surprised you haven’t included any mention of the REINZ HPI figures for June. It showed that prices are rapidly retreating and are now down around 9.5% from the peak in just 7 months.
To put it into context this is the NZ HPI plotted against some recent housing corrections. All of them aligned by first month prices went negative.
Thanks Ryan. Sorry, got a bit swamped yesterday morning. I'm travelling in Auckland so a bit less time. REINZ figures came out 9am on Weds so it wasn't quite so fresh yesterday morning. I'll have a closer look today. Great chart! Did you make it? We'll see on the soft/hard landing thing. I'd prefer a hard one. Can you put into that chart what the 08/09 one looked like for NZ. Things were looking bad when prices were down 10% by early 09, but then the RBNZ intervened to lend the banks $4b cheaply and it slashed rates. I suspect we'll see some sort of intervention if we get much past that 15% mark, either political or Reserve Bank. In particular, National plans to reverse the interest deductibility moves and the brightline test extension. There would also be a freeze on infrastructure funding, which restricts housing supply to take the downward pressure off prices. I suspect prices will be bouncing hard by late next year as interest rates fall and expectations rise of a National win.
I'm glad to see you on this Bernard. If you could, I'd love to see you put the acid on Immigration about their shameful statistical shambles. When I wanted data on immigration to make a submission to the Productivity Commission, I got fixed spreadsheets, nothing interactive that's actually useful (they have a few and they are trivial). One way to get rational discussion about immigration is to have the numbers. They should be on the Immigration website in some detail, updated at least monthly. We could see approvals by category, the long lag to arrivals and various useful sub-category calculations ('student work visas', the cafe working/fruit picking lot as under 30 or whatever, etc). This is not competitive stuff, it should be out there. We pay millions for them to assemble a database and they are too miserable and perhaps incompetent to display it in ways that the public could use.
We currently have a natural births minus deaths growth of about 25k a year. If we had a net growth in immigration (ie, work visa requiring arrivals minus departing NZers) of the same, that would be 50k, or about 1%pa. It would require a rolling estimate total for departing NZers, as that can be very volatile and large at times, but it is definitely do-able over a five year average, which is all one can do for labour market 'planning' anyway. So we might be getting 50k visa-requiring immigration over time as we bled 25k NZers a year, almost all to Australia.
The diaspora NZ has showing alongside Ireland in your graph is 80% in Australia, whereas Ireland's is no longer mostly in Britain. The rest of ours is dominated by the UK (maybe 40%) but spread around a lot - over 20k in the US. But this is absolutely normal and not a function of failure here. We have, ex-Australia, a diaspora of no more than 3%. Australia's is about 2% according to one of their Govt websites. Ours is understandable in that context.
We should be talking about net migration (departing NZers included) whenever we discuss this and using the best possible estiimates/real data to guide the discussion.
Yes Bernard, that's what I said is not much good, certainly not good enough to find out what's really going on. It's what's loaded into it that counts and this is very limited.
We are forever in this perpetual race to the bottom. There is so little between Red and Blue that it really doesn’t matter who you vote for the outcome will be the same! There is no courage among any of the main parties just a hole lot of bluff and blunder!! Sad, we have such a great country!!
There have been exceptions and we do have some policies and institutions that have done OK over the years. Our publicly funded health and education systems (which for a time in the late 1980s and early 1990s were no sure things) are a major reason why we have this great country. And also why so many migrants want to come. We've failed horribly on housing and productivity, which I think are closely linked, but done ok in other areas. 'It depends' is often the answer on this one.
Unemployable and unelectable you may be, if you say so. But these ideas, so excellently expressed this morning, need to be available to the electorate as a whole. Without wishing any threat to your independence and assuming there will be no bipartisan acceptance of these ideas before the election I would love it if you could drive more political coverage of these ideas. In the meantime I am supporting TOP which if it attained a much improved election result could be some sort catalyst for change. Are you able to give comment on Raf Manji or the party policies generally.
Thanks Graeme. I'll have a crack at getting the coverage through interviews and questions in news conferences and the like. I plan to do lots of political interviews next year with all parties. Particularly once they have their election policy platforms. I tend not to try to make broad statements about parties or politicians overall. It all depends on the politician, the policy and the particular situation involved. cheers
Crikey you are on a roll this week Bernard. Yet another very thought-provoking discussion. I think Labour have made noises about setting an NZ Inc immigration policy and you would have thought that with the majority they hold would have felt emboldened to roll something out. Unfortunately the polls say "don't you dare" and for that reason I am pessimistic like you of any long term planning or bi-partisan approach
Yes. Sadly, there is no alternative (TINA) is the word cloud that darkens every debate. Glad I could throw something different out there for others to chew on.
Why are our infrastructure costs always underestimated? I assume smart people who do these things all the time are well aware of probable inflation, changes of scope, unexpected problems, etc. but the estimate is always well under. It will cost $2 billion... ends up $3.5B. These aren’t small errors. Is it a political motivation? It doesn’t matter if we under estimate the cost cause we’ll pay no matter what and if we estimate the real cost it will get shot down and never happen?
Having spent a large mount of my life at senior levels of local government it is quite normal -everyone with a vested interest in a project does their level best to get a commitment using numbers that are patently false - the old story - it is far easier to apologise after than fact!
Thanks @darkhorse, appreciate you answer! But now I’m sad my guess was on the money 🥲 does that not create a negative feedback loop of then telling people it’s over budget, which makes the public think the organisation is useless with money and over spends because the experts said it would cost half as much. That in turn reinforces the need to give low estimates because everyone assumes it will be handled poorly and costs will blow out? Surely a bit of ‘a million deaths are a statistic’, no one has any idea what $5B is vs $10B, both are massive amounts of money, so just say the real cost. There’s no conceptual module for what $10B is, just that it’s more than $5B and less than $15B haha
Thanks Alex. Treasury will be able to look through the conceptual module and say no because of what those numbers do to the debt track. It's always about the debt track.
Great question. I tend to go for the 'cockup' theory over the 'conspiracy' theory when I have a choice. Blowouts don't always happen. For example, the Wellington Convention centre is being completed on time and budget this year. But I agree, these projects are often scary and moveable feasts. If that Christchurch Stadium cost blows out again, we'll all be able to hear the boos and the hisses from the South Island.
Hi Bernard the discussion needs to also consider whether this population driven growth is even economically viable - many of these "jobs" actually require substantial supplementary state support for health, education, policing and housing. The infrastructure costs per additional unit of population is about $200,000 if using the current estimates of underspend on infrastructure as a guide. Then there is the "housing effect" Population growth that has not been met with a concordant increase in housing supply has been the leading cause of increases in the cost of housing which has had a hugely detrimental effect on NZ society and the national economy. The depressant effect that low wage immigration has had on wages generally is a leading cause of societal distress and crime. Most of the jobs migrants are filling are not net contributors to national wealth and wellbeing. These hidden costs are actually nothing other than a direct subsidy to those employers who rely on cheap labour and at least when Muldoon applied subsidies they were transparent and they also were targeted at increasing exports where as the present subsidies on labour do nothing more than increase costs n society and increase consumption/demand for imports. NZ is one foot and mouth outbreak away from being the next Cuba - our collective wealth and well being is still completely dependent on what we export and how much we get for it - and that hasn't improved substantially in either nature or relative value in thirty years even though our population has doubled in that time.
Thanks darkhorse. Excellent points. I'm curious about the $200,000 figure. Is that back of the envelope on the $200b infrastructure figure quoted above? The Productivity Commission did a good job of challenging and documenting the various thoughts on the economic value of migration. It concluded it didn't necessarily drive down wages or improve (or weaken) productivity in a major way. It did conclude it wasn't a solution for sustainable growth. The report from May was quite good and backed up by a bunch of research. https://www.productivity.govt.nz/inquiries/immigration-settings/
Hi Bernard - yes a simple extrapolation $200b/1 Million population increase from my experience most communities in NZ that have static populations and viable economies aren't too troubled by maintaining their infrastructure.
Interesting thing about that population chart - NZ net migration has never been higher than over the last 10 years. Pretty much since the GFC. To the extent people 'vote with their feet' NZ is doing something right! In spite of the ballooning real estate and other ills.
Thanks Duane. It's true big inward net immigration is some sort of vote of confidence. But the net emigration we're seeing now is the vice versa. We also should remember the 'back-door' effect where people come here to get residence with the plan to bounce into Australia. I suspect this is the fear factor that actually stops any meaningful improvement in the pathway to citizenship for New Zealanders in Australia.
Thanks Bernard. This is an important debate for New Zealand to have. I'd support opening it up.
Thanks Bill. Will do.
It’s been a slow moving train wreck of continuing to grow our population faster than almost any other OECD country, but at the same time refusing to spend on infrastructure to support that population growth.
At first it was barely noticeable, but as the deficit n investment grows we see more and more impacts. Sadly most politicians have such a short term outlook they don’t seem to care
Thanks Bernard! I wish the Government would listen to this and come out transparent with their plans not as they pretend to be but in a real way.
Here's hoping.
And i support opening up for everyone
Any chance you are going to start the Kaka Party and run for Prime Minister as you are the only one talking common sense at the moment.
Interesting ‘The Kaka’ this morning Bernard. I can’t see any bi-partisan deals being agreed atm though ahead of next years election and a change of government. I’d like to see you make comment on increasing housing affordability, poverty reduction and the role of government bureaucracy inhibiting desired change.
Thanks Kevin. Yes. I'd bet on no deals, but ever hopeful of something more positive. We achieve none of the housing affordability, poverty reduction and climate aims (although neither National or Labour have affordability aims because they're too dangerous) without solving the infrastructure funding issues. Same story. And the bureaucrats are masters of using the friction in the system to avoid change. So easy to wait out the minister until someone more in tune with your own views comes along. All this creates a bias to the status quo.
For what it’s worth my answer to the question should this be opened up to non-subscribers will always be yes😁
Thanks Bart.
Oh and if I need to pay more to make that possible and for Bernard to have a nice holiday sometime then that’s fine too. Cheers Bart
There’s a lot think about in this. But I’d comment that light rail down dominion road would be much cheaper than the tunnel all the way route. The big plus is that light rail eliminates a LOT of busses from the centre city. But it can and should be done much cheaper than the gold-plated option currently on the table.
I said it yesterday. We import low wage workers which lowers the cost to employers. NZers are not willing to accept those low wages so they bugger off overseas. Because NZ now doesn't have enough of that occupation group, we import more low wage workers. Rinse and repeat.
A recommendation: - set the base wage for police, ambulance, fire, nursing and teaching at the same amount. Which stops the undervaluing of nursing and teaching because they are predominantly female roles. And stops a sector from underpaying their staff to meet a budget, rather than getting the budget they should be receiving to do their job.
I love the equal base pay idea from a social justice perspective, but here are some figures: 57,000 nurses in Aotearoa. 64,000 teachers. 13,000 cops. One reason wages are kept so low in nursing and teaching is that every cent you allow in raises gets multiplied by very large numbers. Successive governments have quietly gone along with the idea that teachers and nurses are the low-value replaceable cogs that keep our enormous education and health machines rumbling forwards.
Agree. But no longer so replaceable. Took a pandemic to expose this. This is going to be painful.
Labour is not exactly winning hearts and minds of NZ voters with their restructure of the Health sector! But I also struggle to see how Nationals policy of open borders for hiring health workers without paying them more is going to fix much either. Surely we will still lose health workers in huge numbers over the Tasman due to cost of living and wage disparity issues unless we pay them more?
https://www.national.org.nz/nationals-plan-to-solve-critical-healthcare-worker-shortages
You'd think. The idea is to bring in health workers from lower wage countries to replace the ones we lose, I guess? Treading water at best, which isn't great when you start from the position that we're drowning.
'Pressure is building to breaking point, powered by signs everywhere of usually reliable essential services breaking down (suspended elective surgeries, school holiday flight cancellations, shortened shop and cafe hours, construction delays and building materials shortages, an age care sector near collapse), and growing fears of a wage-price spiral that worsens the inflationary cost-of-living crisis.'
Maybe I'm stupid, but there seems something terribly flawed in a society, or economic structure, that cannot function effectively without endless immigration. Okay, bring in another 500,000 people to do the work that cannot now be done. Then what have we? A larger population, so more services underprovided, with the need for yet another 500,000 people. We've been doing this for decades; we're up to 5,000,000 inhabitants. Where do we stop? 10 million? 20 million? 100 million?
Can we not design a self-sufficient steady state that needs only to replace the people who emigrate?
You need a birth rate/replacement rate at around 2.4-2.6 per couple. Most of the West is at or under 2 so popn shrinks or you import your future. With an aging popn you bankrupt yourself without cuts in health/pension costs as a country without a growing working age popn
Alternatively you create an environment where people want to have more kids which requires affordable housing, fully funded mat leave, pre school paid for from 1-5 with much lower staff to kids ratios and schools that teach children to read, write, etc and pry some sort of universal baby bonds/kiwisaver and people still may not have the extra kids so immigration is easier and cheaper
I agree with both your replies. We must vote for a Government that will assure that environment where people want more kids. No sign of that from either our present Government or Opposition. Even if we achieve a child-friendly environment it seems it will be difficult to maintain a balance of young people working to sustain old people requiring support: some immigration will be needed to restore that balance, but not the masses we have welcomed in the past, which seems to be what the National Party and the business community would like to see again.
However, is dependence on any kind of immigration an answer? If that's good for us, it is good for every other country. Because the birthrate is declining everywhere (except, apparently, in Africa, India, and the Philippines). And so it should: world population is predicted to peak at 10 million, and the planet is dying from our predation and our rubbish. Surely we must look for a smarter solution to our labour shortages than looking for an endless supply of baristas, builders, and aged-care nurses from overseas.
Birth rate actually declining everywhere and even India is flirting around replacement rate. The world economic “growth is all” system is ill prepared for this demographic shift.
Population trends are THE topic that doesn’t get enough attention in the popular press. Immigration will solve for a few decades, but guess what happens by the second generation? The immigrants stop having kids too! Unless you keep them poor. Makes you think…
One of the key problems is that many of the low wage jobs are filled by people with high demands on these core government services health housing education and policing - and so the problems compound rather than resolve. We need to look at lots of job creation work that has arisen over the past several decades - every time a regulation is promulgated a whole new industry pops up to exploit it - think health and safety - look at all the road cones out there now - we got by with a fraction of those ten years ago - no one can sneeze now without consulting an expert. In much of regional NZ you have to import the expert from one of the main centres because there is not enough work in the regions to support local providers so it gets ever harder and more expensive to do things in the part of NZ that actually produce the goods. NZ is getting strangled by ever increasing overheads and bled by regulations that are increasingly being crafted by the beneficiaries of those regulations not some impartial central government agency - look no further than 3 waters to see a program that is being entirely driven by vested interests rather than impartial fact based policy. Many of the jobs are being created to employ the ever increasing population - rather than the other way around - and do we really need a cafe on every corner, run down dairies all over the suburbs, a bottle shop on every block and rafts of additional landlords and "investors"?
Facts. especially in regard to the H&S. It's an unsustainable and unsatisfactory situation. Once upon a time, back in the 'good old day's' like pre 1987, this country did some incredible things with a small number of incredible, practical people with 'hand's on' commonsense. That's all gone now or these people are sidelined & considered not worth listening to (being they actually might have a workable solution). Not suggesting a full return to the 1970's era of Govt. run railways and the M.W&D, but I think a model similar to what the NSW State Govt. has would be a reasonable compromise. Currently, N.Z. can't build or engineer anything properly anymore, and there is a lot of wastage that keeps me in a role as a Consultant analysing and reporting on why things went wrong, which is then ignored. Rinse and repeat.......... if we actually turned out a good number of properly trained 'blue collar' folk's doing proper apprenticeships (that takes 4-5 years), then a lot of immigrants wouldn't be needed to do the jobs we once did very well 35 years ago. Our Govt. needs to actually step up and confront this shocking skills deficit it has engineered.
actually MOW and Railways and NZED were filled with really capable people they only got the really bad reputation once Muldoon started using them to sop up the unemployed - the unions also didn't help - indeed they became so obstructive that they almost directly provided a justification for Roger Douglas's reforms. No doubt there were some duds but they usually got relegated to some dark corner of the office. We are missing them now - Government has no one to turn to for advice who doesn't have a vested interest, a nest to feather or an agenda to push. I'm an old guy who worked on power schemes - we had some really great engineers and capable workers. MOW got a reputation for guys leaning on shovels but only need to drive past road works anywhere to still find that happening. If we went through the economy and shucked out the unnecessary on make-work we would find plenty of capable workers. Problem is we have raised a generation who all want to tell other people what to do and how to do it - and poor immigrants who are prepared to put up with that to get out of what ever unpleasant circumstances they come from. We kid ourselves that people come here because New Zealand is wonderful they come here because where they were is much worse - its not so much people want to be here it is just that they don't want to be where the were and being a bunch of lazy/clueless buggers we are happy to exploit them.
I totally feel the same way. The MOW actually was a first class Govt. training ground for a generation of what often turned out as highly skilled and very clever people who did things properly; because they were trained to a standard - an acceptable standard not a price. This country has lost it's way in roading and engineering over the last 30-35 years because we haven't trained anyone to replace these people who are now in their 60's and 70's It pisses me off actually. No country can simply solve it by importing low quality, cheap and not properly trained labour with so called 'qualifications'; that's why we have a crisis with things like huge budget blow outs on large projects and roads bleeding and water pumping through the subbase as is common. How would I know? Because I've been involved in roading for over 37 years in N.Z. (and internationally) and it's actually shameful that a once proud industry has degenerated to such an unacceptable level of incompetence. We now have interest groups dictating poor policy and flawed ideas to NZTA who foolishly submit and allow costly escapades such as abandoning established best practices and materials in favour of 'green' initiatives which do not work. Proverbs 26: ''As a dog returns to it's vomit, so fools repeat their folly''. Rinse and repeat..........
spot on!
and its almost too late to fix it
If you want to be really alarmed I was in visiting Michael Woodhouse a while back and discussed the housing crisis and RMA reform when the idiot started to go on about how he thought NZ should be aiming for a population of 25 Million - I gave up on him at that point. But he will not be alone inside the National Party.
25m…as long as they’re all Irish, French or South Africans. Mass migration should at least help the ABs.
Ha! Argentina too. Huge numbers of Argentinians come. Would do wonders for the All Whites too. Along with the Brazilians on Waiheke.
Great to hear your take on modeshift and how a potential deal could be struck. It is the most cost effective/speedy solution by far and great to hear your voice join the chorus here (excuse the pun) after a few others have weighed in (great series of articles in the Dom Post/Stuff on this recently).
I sure hope some kind of deal could be struck here but agree I am an eternal pessimist and doubt it. National would need to give up a pretty powerful attacking point of theirs going into the election so they'd need some big carrots from Labour/Greens I'd think. But here's to hoping and you laid out the case well (let's hope Luxon and Ardern are Kaka subscribers).
P.S. - Not sure I agree with your comment on "un-electable". Maybe you'd have more votes that you'd think if you or someone willing to call out Aotearoa's real critical issues and offer serious solutions rather than tired talking points threw your hat in the political arena. I get the (albeit un-substantiated) feeling there are more people out there sick of politicians who only listen to focus groups and want real leadership than the pollsters might think. At least enough for a new minor party, one would hope.
Surprised you haven’t included any mention of the REINZ HPI figures for June. It showed that prices are rapidly retreating and are now down around 9.5% from the peak in just 7 months.
To put it into context this is the NZ HPI plotted against some recent housing corrections. All of them aligned by first month prices went negative.
https://imgur.io/Ln6xCot
It does really make the “soft landing” narrative, and predictions of total falls topping out around 15%~ look increasingly dubious
Thanks Ryan. Sorry, got a bit swamped yesterday morning. I'm travelling in Auckland so a bit less time. REINZ figures came out 9am on Weds so it wasn't quite so fresh yesterday morning. I'll have a closer look today. Great chart! Did you make it? We'll see on the soft/hard landing thing. I'd prefer a hard one. Can you put into that chart what the 08/09 one looked like for NZ. Things were looking bad when prices were down 10% by early 09, but then the RBNZ intervened to lend the banks $4b cheaply and it slashed rates. I suspect we'll see some sort of intervention if we get much past that 15% mark, either political or Reserve Bank. In particular, National plans to reverse the interest deductibility moves and the brightline test extension. There would also be a freeze on infrastructure funding, which restricts housing supply to take the downward pressure off prices. I suspect prices will be bouncing hard by late next year as interest rates fall and expectations rise of a National win.
I'm glad to see you on this Bernard. If you could, I'd love to see you put the acid on Immigration about their shameful statistical shambles. When I wanted data on immigration to make a submission to the Productivity Commission, I got fixed spreadsheets, nothing interactive that's actually useful (they have a few and they are trivial). One way to get rational discussion about immigration is to have the numbers. They should be on the Immigration website in some detail, updated at least monthly. We could see approvals by category, the long lag to arrivals and various useful sub-category calculations ('student work visas', the cafe working/fruit picking lot as under 30 or whatever, etc). This is not competitive stuff, it should be out there. We pay millions for them to assemble a database and they are too miserable and perhaps incompetent to display it in ways that the public could use.
We currently have a natural births minus deaths growth of about 25k a year. If we had a net growth in immigration (ie, work visa requiring arrivals minus departing NZers) of the same, that would be 50k, or about 1%pa. It would require a rolling estimate total for departing NZers, as that can be very volatile and large at times, but it is definitely do-able over a five year average, which is all one can do for labour market 'planning' anyway. So we might be getting 50k visa-requiring immigration over time as we bled 25k NZers a year, almost all to Australia.
The diaspora NZ has showing alongside Ireland in your graph is 80% in Australia, whereas Ireland's is no longer mostly in Britain. The rest of ours is dominated by the UK (maybe 40%) but spread around a lot - over 20k in the US. But this is absolutely normal and not a function of failure here. We have, ex-Australia, a diaspora of no more than 3%. Australia's is about 2% according to one of their Govt websites. Ours is understandable in that context.
We should be talking about net migration (departing NZers included) whenever we discuss this and using the best possible estiimates/real data to guide the discussion.
Thanks Clive. Have you seen or used this? https://mbienz.shinyapps.io/migration_data_explorer/
Yes Bernard, that's what I said is not much good, certainly not good enough to find out what's really going on. It's what's loaded into it that counts and this is very limited.
We are forever in this perpetual race to the bottom. There is so little between Red and Blue that it really doesn’t matter who you vote for the outcome will be the same! There is no courage among any of the main parties just a hole lot of bluff and blunder!! Sad, we have such a great country!!
There have been exceptions and we do have some policies and institutions that have done OK over the years. Our publicly funded health and education systems (which for a time in the late 1980s and early 1990s were no sure things) are a major reason why we have this great country. And also why so many migrants want to come. We've failed horribly on housing and productivity, which I think are closely linked, but done ok in other areas. 'It depends' is often the answer on this one.
Unemployable and unelectable you may be, if you say so. But these ideas, so excellently expressed this morning, need to be available to the electorate as a whole. Without wishing any threat to your independence and assuming there will be no bipartisan acceptance of these ideas before the election I would love it if you could drive more political coverage of these ideas. In the meantime I am supporting TOP which if it attained a much improved election result could be some sort catalyst for change. Are you able to give comment on Raf Manji or the party policies generally.
Thanks Graeme. I'll have a crack at getting the coverage through interviews and questions in news conferences and the like. I plan to do lots of political interviews next year with all parties. Particularly once they have their election policy platforms. I tend not to try to make broad statements about parties or politicians overall. It all depends on the politician, the policy and the particular situation involved. cheers
Crikey you are on a roll this week Bernard. Yet another very thought-provoking discussion. I think Labour have made noises about setting an NZ Inc immigration policy and you would have thought that with the majority they hold would have felt emboldened to roll something out. Unfortunately the polls say "don't you dare" and for that reason I am pessimistic like you of any long term planning or bi-partisan approach
Yes. Sadly, there is no alternative (TINA) is the word cloud that darkens every debate. Glad I could throw something different out there for others to chew on.
Why are our infrastructure costs always underestimated? I assume smart people who do these things all the time are well aware of probable inflation, changes of scope, unexpected problems, etc. but the estimate is always well under. It will cost $2 billion... ends up $3.5B. These aren’t small errors. Is it a political motivation? It doesn’t matter if we under estimate the cost cause we’ll pay no matter what and if we estimate the real cost it will get shot down and never happen?
Having spent a large mount of my life at senior levels of local government it is quite normal -everyone with a vested interest in a project does their level best to get a commitment using numbers that are patently false - the old story - it is far easier to apologise after than fact!
Thanks @darkhorse, appreciate you answer! But now I’m sad my guess was on the money 🥲 does that not create a negative feedback loop of then telling people it’s over budget, which makes the public think the organisation is useless with money and over spends because the experts said it would cost half as much. That in turn reinforces the need to give low estimates because everyone assumes it will be handled poorly and costs will blow out? Surely a bit of ‘a million deaths are a statistic’, no one has any idea what $5B is vs $10B, both are massive amounts of money, so just say the real cost. There’s no conceptual module for what $10B is, just that it’s more than $5B and less than $15B haha
Thanks Alex. Treasury will be able to look through the conceptual module and say no because of what those numbers do to the debt track. It's always about the debt track.
Great question. I tend to go for the 'cockup' theory over the 'conspiracy' theory when I have a choice. Blowouts don't always happen. For example, the Wellington Convention centre is being completed on time and budget this year. But I agree, these projects are often scary and moveable feasts. If that Christchurch Stadium cost blows out again, we'll all be able to hear the boos and the hisses from the South Island.
Hi Bernard the discussion needs to also consider whether this population driven growth is even economically viable - many of these "jobs" actually require substantial supplementary state support for health, education, policing and housing. The infrastructure costs per additional unit of population is about $200,000 if using the current estimates of underspend on infrastructure as a guide. Then there is the "housing effect" Population growth that has not been met with a concordant increase in housing supply has been the leading cause of increases in the cost of housing which has had a hugely detrimental effect on NZ society and the national economy. The depressant effect that low wage immigration has had on wages generally is a leading cause of societal distress and crime. Most of the jobs migrants are filling are not net contributors to national wealth and wellbeing. These hidden costs are actually nothing other than a direct subsidy to those employers who rely on cheap labour and at least when Muldoon applied subsidies they were transparent and they also were targeted at increasing exports where as the present subsidies on labour do nothing more than increase costs n society and increase consumption/demand for imports. NZ is one foot and mouth outbreak away from being the next Cuba - our collective wealth and well being is still completely dependent on what we export and how much we get for it - and that hasn't improved substantially in either nature or relative value in thirty years even though our population has doubled in that time.
Thanks darkhorse. Excellent points. I'm curious about the $200,000 figure. Is that back of the envelope on the $200b infrastructure figure quoted above? The Productivity Commission did a good job of challenging and documenting the various thoughts on the economic value of migration. It concluded it didn't necessarily drive down wages or improve (or weaken) productivity in a major way. It did conclude it wasn't a solution for sustainable growth. The report from May was quite good and backed up by a bunch of research. https://www.productivity.govt.nz/inquiries/immigration-settings/
Hi Bernard - yes a simple extrapolation $200b/1 Million population increase from my experience most communities in NZ that have static populations and viable economies aren't too troubled by maintaining their infrastructure.
Interesting thing about that population chart - NZ net migration has never been higher than over the last 10 years. Pretty much since the GFC. To the extent people 'vote with their feet' NZ is doing something right! In spite of the ballooning real estate and other ills.
Love the snail.
Thanks Duane. It's true big inward net immigration is some sort of vote of confidence. But the net emigration we're seeing now is the vice versa. We also should remember the 'back-door' effect where people come here to get residence with the plan to bounce into Australia. I suspect this is the fear factor that actually stops any meaningful improvement in the pathway to citizenship for New Zealanders in Australia.