Brian Rudman: Cunliffe should leave migrant-bashing to Peters

Labour leader David Cunliffe Photo / APN

Labour leader David Cunliffe has tried just about everything to put a dent in the Government's poll ratings without success. He's now dipping into Winston Peters' murky bag of tricks and started pointing the finger at migrants as the cause of our woes.

He wants to cut back from projected migration levels of over 40,000 in "total flows" to the "zone of between 5000 and 15,000".

He wants "enough new migrants to fill our skill gaps but not so many that it overwhelms our housing market or the ability of our schools and our hospitals to cope". In the case of hospitals, he seems to be forgetting that without migrants as staff at all levels, they would gradually grind to a halt.

At least he's stopping short of the New Zealand First proposal that migrants spend their first five years in purgatory in Wanganui or Ruatoria or some other remote outpost before being allowed into the big smoke of Auckland, where most migrants want to live.

What is confusing is that Labour has already put its finger on the base cause of the housing crisis - or non-crisis if you listen to Prime Minister John Key - and come up with a programme to deal with it. It is promising to build 100,000 affordable new houses in 10 years.

This is hardly rocket science. It's the sort of thing governments in Australia and Europe have been doing for years. But it's a new concept here.

Sure, it won't solve the problem of Auckland's over-heated property market overnight. But it will finally start addressing an issue that predates the latest spike in migration figures, one caused mainly by a sudden drop in New Zealanders leaving on long-term trips, and an increase of Kiwis returning home.

But instead of hammering away at the benefits of their housing policy, Mr Cunliffe has been unable to resist a scratch of Mr Peters' favourite itch. The latest 3 News-Reid Research poll suggests why. It showed that 62 per cent of voters want tighter restrictions on immigration, including 84 per cent of NZ First supporters, 68 per cent of Labour voters and even 58 per cent of Greens.

To his credit, Mr Key has resisted the mob, telling 3 News that "New Zealand is a country that has been built on migration. We've done very well out of it and I think we should be very cautious about taking knee-jerk steps".

The latest Census figures underpin his comments. Last year, 25.2 per cent of Census respondents - more than one million - were born overseas. By far the biggest quota came from England (215,589), followed by China (89,121), India (67,176), Australia (62,712) and South Africa (54,279). Auckland was home to about half these new New Zealanders, with 517,182, or 39.1 per cent, of the city's population born overseas. And for the rest of us, all roads lead back to a migrant or two on the genealogical charts.

Virginia Chong, the president of the New Zealand Chinese Association, calls Labour's policy "scaremongering", pointing out the obvious that the answer to rising house prices is to build more homes.

It's what Mr Key says, too. Unfortunately, he expects the market to perform its magical tricks and miraculously provide. After more than a decade of soaring house prices, it seems obvious the sainted market needs a helping hand.

Last October, Reserve Bank Deputy Governor Grant Spencer told the Property Council that the relentless climb in house prices well pre-dated the recent upsurge in net migration. Between 2000 and 2007, he said, house prices in New Zealand more than doubled. Then, after a small decline from a 2007 peak, they were rising rapidly once more. Auckland prices, for example, were 26 per cent above their previous peak. "Looking back, the building of new homes in Auckland has been weak for many years. A significant number of new homes were built in Auckland between 2002 and 2005 when overseas immigration into New Zealand was strong. However, the rate of new building slowed dramatically in 2005, as immigration flows moderated, and has remained low since."

He said that relative to population growth, Auckland has "the lowest supply responsiveness in the country".

In December, Reserve Bank researcher Chris McDonald suggested the unexpected increase in net immigration last year was likely to be reflected in a 7 per cent increase in house prices. However, he added the rider that "the strong relationship between migration and the housing market is not necessarily the result of migration itself. Factors that are not included in the model may be causing house prices to increase at the same time as migration". For instance, an inflow of migrants might result in an initial price increase of just 1 or 2 per cent, and that was enough to trigger another round of inflationary buying and selling by locals.

While the boffins from the Treasury and the Reserve Bank play with their models, trying to pin down the economic pluses and minuses of immigration, my suggestion is to just look about you. What a drab and monotone - well, brown and white - backwater Auckland would be without the inflow of new citizens, increasingly from our near North, who have settled here in recent times. Other parts of the country haven't been so lucky. It's their loss.

Without migrants, our hospitals, about which Mr Cunliffe frets, would be so short of staff, there'd be patient queues stretching around the Auckland Domain. The All Blacks wouldn't be world champions, and my favourite band, the Auckland Philharmonia, would be but a pale shadow of its present self. And goodness knows where we'd dine out.

Debate on this article is now closed.