The great conundrum of the New Zealand economy was in full view yesterday -- strong economic and jobs growth, but with stubbornly low wage growth and unemployment stuck near 140,000 and over 5%.
Depending on your point of view, it's either a major achievement that the economy is generating annual jobs growth of almost 6% with average wage growth at a six-year low of 1.3%, or a major failing that the economy can't seem to soak up the unemployed, particularly the 91,000 people aged 15-24 who were not in education, employment or training (NEET) in the December quarter.
The circle is being squared at the moment with record high net migration, which is both helping the economy grow overall and adding to the housing and infrastructure pressures in Auckland.
It is also shaping up as the major election issue with opposition politicians targeting the Government's pro-migration polices as both substituting for New Zealand workers (and depressing wage growth) and stressing infrastructure and housing affordability beyond breaking point.
Bill English was forced to defend the high migration yesterday after official figures showed yet another record high net migration figure -- again defying official predictions of the end of the migration boom.
Statistics New Zealand reported yesterday a record-high 71,300 migrants arrived in net terms in the 12 months to December, with 8,446 in raw un-seasonally adjusted terms in the month of January. In adjusted terms, the 6,460 who arrived in net terms in January was a record high and the fifth consecutive month over 6,000. A net 34,660 people migrated to Auckland in the year to January.
The fastest growth in new migrants over the year came from France, Germany, the Netherlands and South Africa. Migration from India slowed after the crackdown on student visa fraud. The turnaround in net migration to and from Australia has accounted for 40-50% of the increase in the last four years.
Student visas fell 3,567 or 12.8% over the year to January, but this was more than offset by a 4,230 or 11.1% rise in work visas and a 2,589 or 18.3% rise in migrants with residence visas. The number of New Zealanders and Australians migrating to New Zealand rose 1,660 or 4.6.
Anecdotes of drug use preventing employment of locals
English was challenged about the use of migrants to fill jobs, rather than the unemployed in general and young NEETs in particular.
English pointed to anecdotal evidence he was hearing two or three times a week from potential employers that drug use was a factor preventing the hiring of Kiwis.
"One of the hurdles these days is just passing a drugs test," English said.
"Under workplace safety, you can't have people on your premises that are under the influence of drugs. And a lot of our younger people can't pass that test," he said.
"It's a very common discussion. It's not exceptional at all these days. I've heard it in most industries."
English said the migration boom was a good problem to have and he saw the current migration settings at about the right and balanced levels. He said he did not think it would become an election issue and he pointed to an inevitable turning of the cycle.
'Mindless, unfocused mass migration'
Winston Peters gave an early and strong flavour of how he sees the record high net migration factoring into the debate ahead of the September 23 election.
He said the migrants were turning up to use hospitals and motorways and to demand housing that was not there.
They were also displacing local workers, he said.
"Only this morning a caller to Radio Live told of going for a job in Christchurch. The employer asked the painter why would he employ him when he could take on two Malaysians for the same price?," Peters said.
"Migrants are undermining Kiwi workers, who should not have to compete with Third World wages and conditions," he said.
"The cost of mindless, unfocused mass immigration is a drain on this country and no amount of apologists can undermine these facts."
While you were sleeping...
Donald Trump previewed his speech to Congress tonight, saying in a statement it would include a 10% or US$54 billion per year increase in military spending, which would be paid for by cutting foreign aid. (Washington Post)
Have a great day