An economist is warning a threatened clampdown on migration numbers after this year's election could knee-cap Kiwi businesses overnight.
In a new report, Gareth Kiernan from Infometrics says New Zealand depends on foreign workers for its future growth.
Olga Kocheskova says moving here from Moscow has given her a new sense of enthusiasm for work that must boost business and the economy, and she says there are many more like her.
Ms Kocheskova is one of 70,000 migrants who come to New Zealand each year.
"New immigrants they come in and they have that light in their eyes ..want to do something, want to achieve something," she says.
Here's what economists warn could happen in an immigration clampdown:
- Businesses would try to retain staff so they'd end up paying them more.
- The businesses would then pass that cost on to consumers by pushing prices up.
- That inflation could force the Reserve Bank to push up interest rates.
- Higher interest rates mean it's harder for people to pay their mortgages.
Mr Kiernan says that while a swing up in immigration has caused problems, cutting immigration would bring problems of its own.
"Yes, it will start to alleviate some of those housing shortage problems over the medium-term but you're also going to create a whole lot of other economic imbalances on the way down.
"For us it's a bit of a softly-softly approach trying to find a middle ground bringing migration back slowly so that businesses aren't kneecapped overnight in terms of that supply of labour."
The Immigration Minister denies Gareth Kiernan's accusation that the surge in migration has been badly managed.
Michael Woodhouse says: "No I don't agree with that at all. The growth in migration is in the place we need it most - it's in construction, it's in horticulture and viticulture."
Labour say its plan to cut migrant numbers by 20,000 to 30,000 a year is not a clampdown.
"I'm very clear - we will reduce immigraiton numbers, we have to - we can do that looking at students coming in on student visas doing low quality courses - that's not helping anybody," says leader Andrew Little.
Clampdown or not, net migration is expected to gradually ease over the next five years.
Newshub.
