Lloyd Burr: Labour's KiwiBuild immigration pickle

Kiwibuild construction building housing (Getty)
Labour wants migrants for KiwiBuild - reporter Lloyd Burr calculates how many they’ll need (Getty / file)

OPINION: The Labour Party will open the gates to more skilled migrant tradespeople in order to implement KiwiBuild - that's 100,000 new houses over a 10-year period.

How they plan to do this while reducing net migration to around 25,000 is up in the air - the party says it'll all be revealed in its immigration policy.

Housing spokesman Phil Twyford is on the record saying he'll "bring in electricians, plumbers and carpenters from overseas" for KiwiBuild, to fill in the shortfall in the local workforce. Just how many, he won't say.

I've done the numbers, and it shows Labour is in a real pickle. It will need tens of thousands of skilled migrants each year to build enough houses to ease the housing crisis.

That's a problem for a party that wants to cut net migration by tens of thousands.

Here's a breakdown.

The Status Quo

There are 245,600 people in the core construction workforce, of which 58 percent or 143,500 work in the residential construction sector.

There are no figures on how many new houses are completed each year, with MBIE saying consents are the best way to show the growth of dwellings. (Problem is, you can't live in a consent - however Stats NZ says 86 percent of consents are built within 9 months, and 100 percent within two years).

Over the last year there were 10,199 new housing consents issued in Auckland, which makes up a third of the 30,626 nationwide total.

Housing and Workforce Forecasts

The Government forecasts 94,200 new residential dwellings in Auckland between 2015 and 2021, part of the nationwide prediction of between 150-180,000 in that period.

The workforce cannot meet that need and will need to grow massively to keep up, especially given there's already a huge shortage.

MBIE estimates there'll be around 32,400 new building, construction and utility-related jobs between now and 2020.

That's an average of 10,800 additional workers each year.

The main trades training organisation BCITO can pump out up to 2500 local trade qualified workers every year. This covers 14 trades areas.

The Skills Organisation covers most of the remaining trades areas - its latest figures show it pumped out 2049 electricians, 434 plumbers, and 82 roofers in 2015.

It takes the total number of Kiwis who can be trained locally for the workforce to an estimated 5056 each year.

That means there will be an additional housing workforce shortfall of 5744 each year for the next few years.

How many skilled migrant tradespeople do we currently let in?

We already have a shortfall that is filled with migrant labour.

Between July 2015 and June 2016, 7455 visas were issued or reissued to foreigners for jobs across 63 different occupation areas that fit into the housing, construction, and utility categories. .

Between July 2016 and now, that figure sits at 6584 visas.

Average those out, and it's 7019 each year.

KiwiBuild

Labour predicts KiwiBuild will create 5000 new jobs at its peak over a 10-year period.

That's an average of 500 new jobs each year to build around 27 new homes every day for ten years.

Phil Twyford says this scale of production can be achieved with just 5000 workers by factory-building the houses, and outsourcing to companies like Mike Greer Homes.

The government claims KiwiBuild would need far more workers, and estimates an additional 46,000 people would be needed over ten years - that's an average of 4600 workers a year.  

The Numbers

Without taking KiwiBuild into account, New Zealand will need an additional 5744 skilled migrant tradespeople each year to build 30,000 new dwellings annually.

Those numbers increase when KiwiBuild is taken into account.

Using Labour's estimates, the number of migrants increases to 6244 each year.

Using the Government's estimates, that number is 10,344 per year.

Remember, this is in addition to the current housing workforce, which already depends on an average of 7019 migrants.

Therefore:

  • Total migrants needed for the current housing forecasts: 12,763 per year
  • Total migrants needed for current forecast + KiwiBuild (Labour estimates): 13,263 per year
  • Total migrants needed for current forecast + KiwiBuild (Govt estimates): 17,363 per year

Labour's Pickle

Leader Andrew Little wants "net migration of 20-25,000". It's currently 71,333. That means a cut of between 46,333 - 51,333.

When you take the number of additional migrants needed for housing, Labour will need to cut net migration by somewhere between 52,577 - 61,677.

The 13,263 migrants needed for housing (17,363 using the government's figures) cannot be touched because they're needed for housing.

That's despite a promise from Mr Little to "go after work visas". That's around 43,025 people, and as I've pointed out before, many are difficult to cut unless you want to seriously disrupt diplomatic ties, and migrant-reliant sectors.

He also wants to cut thousands of student visas for "low quality courses (but didn't specify which ones). That's a dangerous plan for a sector that's worth $4.28b and rising.

Can Labour pull it off?

Labour's plan for immigration is already difficult to pull off without upheaval from those who rely on migrants.

That plan is made even more difficult by its promises for housing, which will see the number of skilled migrants increase from around 7029 a year, to at least 13,263 a year.

Unless I'm missing something, something doesn't add up.

It's a policy pickle that will end in pain.

Lloyd Burr is a political reporter for Newshub.

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