In today's email we dig into Labour's "not too hot and not too cold" migration policy.
1. In the middle
Labour announced its migration policy yesterday in a middle ground somewhere between New Zealand First's 85 percent cuts and the Government's tweaks to the status quo.
Labour hopes to appeal to voters concerned about the pressures on infrastructure and housing, but who are also nervous about the economic effects of a much sharper slowdown in population growth and a divisive debate over race.
The detail of the policy shows it has tried to find a 'Goldilocks' position: not too hot and not too cold. It may just have worked, given the benign initial response from the likes of Business New Zealand, Federated Farmers and the Auckland Chamber of Commerce.
The plan largely avoids slashing migration in a way that would hurt the highest value parts of the economy and alienating core Labour supporters who worry it will be tarred with the same brush as New Zealand First.
Little was keen at his announcement in Auckland to portray the plan as all about reducing pressure on infrastructure and housing, rather than being about race and ethnicity.
2. Pain focused on PTEs
Most of the cuts fall on the private training establishment (PTE) sector, which has been ramped up in the last four years with the help of promises that international students could work during and after study. This sector was essentially gifted pathways to residence to boost export revenues. It worked, but generated a swathe of migrant abuse and low quality export education.
There are few votes to be lost by focusing the pain on a sector that has been accused of bringing in students with the promise of 20 hours work a week and a chance of becoming a permanent resident, rather than delivering degree level courses that students use when they return home.
Several of the PTEs have been shut down in the last year because of concerns over fraud, and migrant advocacy groups say the sector has made it easier for local employers to pay students less than the minimum wage and not pay holiday pay or sick pay.
Labour would remove that pathway to residence for students if it was in Government, mostly by limiting the work visas available to international students doing sub-degree level courses at PTEs, both while studying and in the year after studying.
Labour said these changes would reduce net migration by between 15,000 to 22,000, which would make up most of the 20,000 to 30,000 reduction in net migration. It estimated this would reduce education export revenues by $70 million a year out of the $4.5 billion a year currently earned by schools, universities, polytechnics and PTEs.
A Labour Government would stop issuing student visas to courses below a bachelor's degree that were not independently assessed by the Tertiary Education Commission (TEC) and the New Zealand Qualifications Authority (NZQA) to be of high quality. It said international students studying at below bachelor's course level would only be able to be work if the work was approved as part of the course.
It would also limit the ability of students to receive a one year work visa after their study was finished. Only students graduating with a Bachelor's degree or higher would be able to get such a visa.
3. A regionalised list
Separately, Labour would strengthen the work test for work visas so they were not be used for jobs New Zealanders could do. It would also regionalise the skills shortages list so workers coming in on the visas could only live and work in areas with a skills shortage.
It would remove the skilled migrant category bonus points awarded for studying and working in New Zealand and standardise the age points to 30 for everyone under 45.
It estimated the removal of student visas for non-approved courses and stopping sub-degree level students from working while studying here would reduce net migration by 6,000 to 10,000, while removing the ability of sub-degree level graduates to work for a year after graduating would reduce migration by 9,000 to 12,000.
This would mean more than two thirds of the cuts would land on the international education sector. Labour would not cut the Registered Seasonal Employer, working holiday or Pacific migrant quotas, which keeps its supporters in Pacific communities happy and reduces the potential pain for the agricultural sectors.
The changes to work visa skills testing would reduce migration by 5,000 to 8,000. There were 44,000 work visas issued last year. Labour would also introduce a KiwiBuild Visa to hire skilled tradespeople, which would be over and above the 7,000 or so skilled construction tradespeople migrating each year. Up to 1,500 Kiwibuild visas would be available to employers paying a living wage and taking on an apprentice for each overseas worker they hired.
4. Economic slowdown?
Little said he did not expect the migration changes would reduce economic growth, as unemployed New Zealanders would take up the vacant roles and productivity would improve.
"This will ease the pressures on New Zealand, and on Auckland in particular. Without these changes, 10,000 more houses would be needed each year and up to 20,000 more cars would be on our roads," he said.
Prime Minister Bill English said Labour's changes would shut down the export education sector and hurt economic growth.
"A 30,000 reduction in migration right now would stall the economy. It will deprive businesses of the skills they need to make the investments they want to make to grow New Zealand," he said.
English also argued that targeting students would not ease the pressure on Auckland housing and transport.
"If the main target is students, they don't actually buy houses and not a whole lot of them have cars and most of them go back to the country they came from when they have finished their studies. So it is not going to have the impact they claim," English said.
5. A benign reaction
The reactions from business groups were more positive. They appeared relieved that the planned cuts on work visas were not bigger, and that the pain had been focused on PTEs.
Business New Zealand welcomed the move to encourage higher skilled migration into the regions and to create the new Kiwibuild Visa. CEO Kirk Hope described the policy on international students as a "logical approach," but warned it could affect export earnings.
Federated Farmers said it was heartened by Labour's policy, which will focus more on reducing student numbers in Auckland than reducing numbers of dairy workers from the Philippines in Southland.
"We support the regionalisation of skills shortage lists and would work with Labour to ensure provision for key dairy farm positions where there are demonstrated shortages," Federated Farmers Dairy Spokesman Chris Lewis said.
Auckland Chamber of Commerce CEO Michael Barnett also welcomed Labour's regionalised skills shortage list, which he had called for previously.
He also described the removal of loopholes and backdoors for residency for students and their families as a plus.
6. Taskforce reports
Newsroom's Co-Editor Tim Murphy covered the release yesterday of the report of Auckland Mayor Phil Goff's Taskforce on Housing, which sets out 31 recommendations to ramp up housing supply in Auckland.
Tim focused on the key recommendations:
forming a plan to keep a "higher baseline of overall housing delivery across boom-bust cycles" - to keep on building in the down times as much as the good times
looking at 'value capture' targeted rates on areas or properties which benefit from re-zoning by the council or from publicly-funded infrastructure nearby
planning bigger, faster joint venture building programmes on publicly-owned land
using some of the government's $1 billion Housing Infrastructure Fund money (kept separate from the council's own books to avoid going into too much debt) to put in facilities in new housing areas
tidying up the Council's consents system to have one-point of contact, senior staffers involved, and one code of practice.
For the sake of full disclosure, I was the facilitator for Mayor's Taskforce sessions so I haven't reported on the recommendations. Here's the full report, which I do think is well worth a read.
Bill English described the Taskforce's recommendations yesterday as constructive.
"Some of those things are underway and they want them pushed a bit further," English told his post-cabinet news conference, referring in particular to the Housing Infrastructure Fund.
"It helps us understand, for instance, why councils are a bit cautious about building infrastructure ahead of demand, and how they charge for it, and who actually makes the decision, and what trips those decisions," he said.
"So it’s a very useful conversation of getting us all on a common set of understandings about how this stuff works, which I think sets a very good platform for the larger scale planning reform we have talked about."
7. Open to targeted rates
English was particularly open to the Taskforce's recommendation of using targeted rates to capture the uplift in value due to rezoning decisions, which in turn would help Council pay for new infrastructure.
"They have got the capacity for value uplift rating. That's pretty tricky I am told trying to calculate it but in principle, yes, and it's great to see this report covering so much ground," English said.
However, English again ruled out sharing of GST revenues or any rebate of GST on Council rates, but appeared open to other ideas around congestion charging.
"Some of them would in the past have been regarded as a bit controversial, but I think everyone would see as the kind of issues you need to dig into to make all this process work, so we are happy to work along with them because most of it would be a strong overlap with central Government."
8. Should we tax tourists?
One of the hottest topics around at the moment is whether tourists should pay directly for the extra infrastructure now needed to cope with close to 5 million tourists a year within five years.
Newsroom's National Affairs Editor Shane Cowlishaw has taken a deep dive into the pros and cons of a tax on tourists at the border.
Labour, the Greens, the Parliamentary Commissioner for the Environment, Local Government New Zealand and much of the Tourism industry would prefer an upgraded levy on tourists at the border, but the Government and Treasury are opposed.
Here's Shane's piece in full on Newsroom Pro, which includes details from Treasury advice obtained under the OIA.