Cut immigration, cut the economy?

Labour's immigration cuts will need to be carefully considered if the economy's not going to suffer as a result, according to a population expert.

Leader Andrew Little will on Monday reveal the party's long-awaited immigration policy. In the past he's talked of cuts of up to 50,000 people - bringing immigration down to around 25,000 from the present record high of 72,000.

"That 70,000 net inflow of migrants - we cannot continue to do that. It has to be tens of thousands less than what we're doing at the moment," Mr Little told The AM Show in April.

Both the Prime Minister and Massey University population expert Paul Spoonley say if the cuts aren't done carefully, the economy will grind to a halt.

"Big parts of this economy are going very well - tourism, hospitality, IT, horticulture, construction of course going flat-out," Bill English told The AM Show on Monday.

"In these sectors we're close to full employment… they just can't get the people to get the job done. If you want houses for people we're going to need skilled workers to build them. If you shut them down, you won't get the houses."

"It's going to have a huge impact on our economy," says Prof Spoonley. "Is he willing to put the economy in jeopardy to go with the populist position?"

The largest visa category is for skilled workers, at about 44,000 in the last year. Labour doesn't appear to be targeting them, with reports Monday's announcements will focus on low-skilled workers and students in education below the level of a bachelor's degree.

Prof Spoonley says this could put one of New Zealand's biggest export markets at risk.

"Are you going to put in jeopardy one of our biggest industries, export education - $4.4 billion, 30,000 jobs? … I can't see where they're going to be cut."

Labour's policy is also expected to include a 'KiwiBuild Visa', bringing in more construction workers to support the party's planned investment in housing. But bringing in extra construction workers means bigger cuts elsewhere if the party's to meet its targets.

Though Prof Spoonley agrees current immigration numbers are a bit high, immigrants themselves should not be blamed for the lack of housing.

"The lack of investment in infrastructure in Auckland is an historic thing, not a recent thing. All immigration has done is underline what has been a longstanding issue for Auckland - a lack of planning and investment."

Something the Government hasn't done yet is give solid preference to immigrants willing to live anywhere in the country but Auckland. 

"In Canada, up to half of the points that are allocated for approval to get into the country are allocated by regions," says Prof Spoonley.

"Why don't we have a much more active recruitment and approval system that includes the regions?"

According to Immigration NZ's website, working outside of Auckland is worth 30 points. To get a skilled migrant work visa, applicants need at least 160 points.

Mr English says immigrants are already starting to settle outside of Auckland without any tinkering with the point system.

"We see the flow happening - you see it in the demand for the housing, you can see it in that people are actually just showing up - migrants, they're picking up the jobs. This economy's creating around 10,000 jobs a month at the moment. It's probably about as fast as it's ever done."

Mr English also believes immigration has peaked, and won't get any higher. Statistics suggest he could be right, with strong year-on-year growth between 2012 and 2015, but figures largely flat since then.

Net immigration statistics.
Net immigration statistics. Photo credit: Statistics NZ

Prof Spoonley says many employers are already struggling to find workers, and rely on immigration to keep the wheels turning.

"Employers [are] advertising and not getting applicants… don't blame immigrants."