Newsroom Pro's 8 things: Business confidence bouncing back; Migration failing to fall

In today's email we looked at the latest stats on migration and business confidence, and asked whether 16 year olds should be able to vote.

1. Net migration at seven-month high

There were fears late last year that a change of Government would slow economic growth as a slump in business confidence and an expected crack-down on migration hit investment and population growth.

But four months on, it's becoming clear that's not happening.

Business confidence has bottomed out and is rebounding, while migration is staying stubbornly above 70,000 on an annual basis. It even seems to be rising again early in 2018 having appeared to have peaked in the middle of last year.

Net migration rose to a seasonally adjusted seven-month high of 6,210 in January from 5,780 in December. Student visa numbers from India and China were down from previous years because of tougher English language rules and crackdown on fraudulent agents, but student visas from South Africa and Korea rose sharply.

The net number of New Zealand citizens migrating to Australia was virtually unchanged at 30 in December from January, but non-New Zealand citizen net migration rose to 6,180 from 5,800 the previous month. The unadjusted net number of migrants rose to 8,577 in January and was only just below the 8,609 seen in January 2017. The old idea that the net migration high is due to fewer New Zealanders leaving for Australia is no longer true. It has barely changed in the last year and net migration remains up near record highs because of non-citizen migration, mostly of those on temporary and work visas.

The Government has yet to act on its promises to tighten up on work visas for lower skilled temporary work visas or to remove work rights for students at sub-degree levels. The Government is continuing policy work, with the decision on students delayed until after October. If these two measures are further delayed, watered down or reversed, there is a risk of tension growing between Labour and New Zealand First.

Labour's rhetoric on tightening migration has softened since the election as it faces calls from many employers and export educators to keep the status quo. It has been able to rely on a 'natural' decline from the record high 6,370 seen in seasonally adjusted terms in June last year to say the pressure is easing. Prime Minister Jacinda Ardern's tone on migration has been much softer than her predecessor Andrew Little or that of her deputy Prime Minister Winston Peters.

But another rise in migration and delays in tightening the rules around temporary workers and students could drag migration back onto the political agenda with potentially divisive consequences for the coalition.

2. Business confidence rebounding

ANZ's monthly survey of business confidence has found the slight rebound seen in January has extended and accelerated through February.

The survey indicates the post-election slump in wider business confidence seen around the uncertainty of the election and government formation was a temporary phenomena.

Business' confidence about their own activities also fell around the election, but not nearly as much and not into net negative territory. It has also rebounded in January and February, albeit by not as much (because it didn't fall as much to start with).

There remains a gap between wider confidence and own-confidence, but that has been a pattern during Labour Governments as business owners see the general economic situation being worse generally than their own situation. Those perceptions are much closer together during National Governments.

The survey also reinforced expectations of flat inflation and interest rates.

"There were few signs of incipient inflation pressure in the survey," ANZ's Sharon Zollner wrote.

"Inflation expectations and pricing intentions both eased. While we believe firms are facing cost-push pressures, it remains a difficult environment for pushing through price increases, outside of the construction sector," she said.

3. Should 16 year olds be able to vote?

I have a 15 year old daughter and definitely think she would be informed enough to vote. She certainly has plenty of opinions with which to vote on.

Children’s Commissioner Andrew Becroft continued his push for greater involvement and consideration of children in the political process yesterday, telling a select committee a quarter of the New Zealand population are being shut out of debate.

Becroft says every piece of legislation should be subject to a “child impact assessment”, while he has also called on politicians to consider giving 16- and 17-year-olds the right to vote.

Speaking to Parliament’s social services and community committee as part of the annual review process, Becroft said his office “boxed above its weight in calling attention to children’s issues”, and had successfully campaigned for the inclusion of 17-year-olds in the youth justice system.

“While that won’t be perfect and solve every issue, it will be a better outcome for 17 year-olds than the adult system, of that I’m utterly convinced.”

Becroft wished he had the courage to push for the inclusion of some 18- and 19-year-olds with disabilities, special needs or developmental issues.

Here's Sam Sachdeva's full article on Newsroom Pro, where it was published first yesterday.

4. Students don't want to train for farming

Newsroom's National Affairs Editor Shane Cowlishaw follows education and covered the select committee appearance yesterday by Tertiary Education Commission CEO Tim Fowler.

Shane reported for Newsroom Pro yesterday that Fowler told MPs on the education and workforce select committee that education in the agricultural space was unappealing to students.

“I have to say, one of the problems we do have in the agricultural space is it’s almost a branding issue. Primary industries, agriculture is not well liked by the young folks these days,

“Whether it needs to be called something completely different like land and ecosystem or something I don’t know, but we’ve got a job of work there because we desperately need people to go into this particular sector.”

The commission spent $108 million a year in the area out of a budget of $3.3 billion, something Fowler described as a major problem considering how important the industry was to New Zealand.

Improving the information and advice available to high school students about the opportunities available to them and potential salaries would help, he said.

“I keep saying if I could spend $200 [to] 300 million on agriculture I would but we need to do something about the demand side of that."

See more in Shane's full report on Newsroom Pro, which also looked at the debate around fees-free education.

5. Paying Chinese workers below the local rate

Newsroom's Teuila Fuatai reports today that a Chinese development company planning to fly in 200 overseas tradies for an Auckland hotel build is prepared to pay only three-quarters of the normal hourly rate - with further deductions to workers' pay for travel and accommodation.

The news is the latest development in the Fu Wah Auckland Park Hyatt Hotel build, which hit headlines earlier this month after the company said it needed 198 temporary workers from China to complete the fit-out stages of the project by deadline.

Fu Wah, which formally submitted its application to Immigration New Zealand two weeks ago, pointed to the labour shortage in local trades as justification.

At the time, fears regarding equitable pay and working conditions for the overseas workers - an ongoing, and cross-sector problem associated with imported labour in New Zealand - were raised.

Since then, Fu Wah has communicated with the Council of Trade Unions, and a meeting has taken place between the company’s lawyer, former Alliance MP Matt Robson, and E Tū - the union which represents between 1200 and 1500 construction workers. As part of the application process, Immigration New Zealand consults with the CTU, Worksafe and the Labour Inspectorate.

In the meeting between E-Tū and Robson last week, Fu Wah laid out a proposed hourly pay rate of $25 for workers. Deductions for the workers’ travel and accommodation arrangements would also come out of their wage, said Joe Gallagher, the national industry coordinator who attended the meeting on behalf of E-Tū.

“Depending on what the role is, the average pay for someone like a tiler or a commercial painter [for the fit-out stages of a job] would be about $32 per hour - and you’d charge more if you were a qualified builder. It could be up to $55 depending on what you were doing," Gallagher said.

“When you bring people in on temporary work permits, they’re much more open to exploitation because they want to make some money and they tend to come from low-wage economies. If there aren’t proper standards in place, managing pay and living conditions, then the quality of the work suffers - which we’ve seen before,” he added.

Both Gallagher and Sam Huggard, the CTU national secretary, said the proposed contract from Fu Wah was “unacceptable”.

“This is really where the rubber hits the road with migration, with firms saying they cant find local workers, yet aren’t paying anywhere near the going rate," said CTU national secretary Sam Huggard.

See Teuila's full story on Newsroom.

6. Coming up...

Foreign Affairs Minister Winston Peters is delivering a speech to Australian think-tank The Lowy Institute in Sydney on New Zealand's role in the Pacific later today. Peters' speech precedes the arrival of Prime Minister Jacinda Ardern on that side of the Tasman.

Ardern will meet her Australian counterpart Malcolm Turnbull in Sydney on tomorrow, before the pair take part in the Australia New Zealand Leadership Forum with a delegation of ministers and business representatives in tow.

Newsroom's foreign affairs and trade editor Sam Sachdeva is accompanying Ardern and will report on the events from over there.

7. One fun thing...

Trumpworld and the White House has seemed surreal ever since he was elected, but here's a reminder of how strange it is.

An unnamed White House official told Axios yesterday there was tension between Jared Kushner and Chief of Staff John Kelly after Kelly refused to allow Kushner to keep getting top secret briefings on an interim basis because his full security clearance has not been granted.

This was how the official framed it: "“Javanka [Jared and Ivanka] and Kelly are locked in a death match. Two enter. Only one survives.”

With friends like these...

8. Today's political links

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