Fran O'Sullivan: Forget immigration, let's talk wages

Labour leader Andrew Little's pledge on Herald Focus to stop "tens of thousands" of immigrants strayed too much into Winston Peters' territory, writes Fran O'Sullivan. Picture / Michael Craig

The Government's latest tweak to its immigration policies does nothing to alleviate the real issue: the urgent need to step up investment in house builds - particularly in Auckland; step up investment in infrastructure and take more steps to move New Zealand to a higher-wage economy where people can actually afford to live in our prime commercial city.

These are the issues that should be at the centre of this year's election campaign.

Not the claim and counter-claims that have already emerged about just how much immigration should be curbed to relieve internal pressures.

Andrew Little's pledge on Herald Focus to stop "tens of thousands" of immigrants coming to New Zealand strayed too much into Winston Peters' territory.

There was no detail. Who would be in? Who would be out?

How do you curb immigration by "tens of thousands" without impacting on economic sectors which are dependent on immigrant workers?

Filipinos in our dairy industry. Chinese workers in our tourist spots. Irish builders rebuilding earthquake-devastated Christchurch.

They are essential to NZ's economic prospects.

Key sectors would take a dive without their input.

We shouldn't demonise them.

But a rational discussion does not fit with dog-whistling politics.

Little was right to take a whack at the Government's latest change to its immigration policy.

But there is a political risk when "immigrants" - much like the "Chinese" investors at the centre of Labour's claims over who was behind speculation in the Auckland housing market - find themselves the focus of blame-storming rather than the failure of policies to collar the issue.

The Labour leader is of sufficient vintage to remember the Bob Dylan song, I Pity the Poor Immigrant, which exposed the mixed feelings many have about immigration (including immigrants themselves).

It is a dual-edged sword.

But it is not out of keeping with the move back towards nationalistic sentiment which has been unscrupulously stoked in Europe and the US. Arguably there is one positive outcome from the Government's policy tweaks.

That is to reset expectations among both workers and employers over what constitutes a fair pay rate.

New Zealand is still a relatively low-wage economy.

Many would have been surprised at the low pay threshold currently set for just who constitutes a skilled worker - just $45,000.

From August 14, those seeking skilled migrant visas will have to show that their employment contract values them at more than $49,000 a year.

This is roughly equivalent to $25/hour.

That expectations have been set so low should not surprise.

Former Labour Finance Minister Michael Cullen was quite open about the fact that New Zealand was in fact a low-wage economy. It was those low wages which helped to mop up the unemployed when it came to dealing on the jobs front. Those after higher wages could always go to Australia.

But if New Zealand is to evolve as a highly skilled economy it needs to set the bar higher, and pay decent wages which will also spur employers to take initiatives to drive greater movement on the productivity front.

This requires a major reset of the NZ economy - not simply using immigration to spur economic growth, then screwing the taps down when the cost of running things too hot becomes a political negative.

Where Labour is on point is with addressing the "Future of Work".

If this fosters debate on the skills New Zealand needs to build a strong, innovative and highly developed economy that will be a positive.