THE NEW ZEALANDERS THE NEW NEW ZEALANDERS WHY MIGRANTS MAKE GOOD KIWIS RACHEL HODDER JASON KRUPP RACHEL RACHEL HODDER JASON KRUPP FOREWORD BY MENG FOON As I know from first-hand experience, and as this report shows, migrants come here, contribute to our economy and, most importantly, become part of our community. I welcome The New Zealand Inititiative’s contribution to the debate on New Zealand’s immigration policy. I hope the authors’ optimistic and positive message of migration gets heard. We live in paradise, even in Auckland. THE NEW ZEALAND INITIATIVE Foreword, Meng Foon $25.00 ISBN: 978-0-9941365-8-9 • print The New Zealand Initiative PO Box 10147 978-0-9941365-9-6 • online/pdf RR32 Wellington 6143 © The New Zealand Initiative 2017 Published by: The New Zealand Initiative PO Box 10147 Wellington 6143 New Zealand www.nzinitiative.org.nz Views expressed are those of the authors and do not necessarily reflect the views of The New Zealand Initiative, its staff, advisors, members, directors or officers. ISBN: 978-0-9941365-8-9 • print 978-0-9941365-9-6 • online/pdf RR32 Typeset by The Little Design Company and cover design by Mollica Sokhom Printing arranged by True North New Zealand Ltd THE NEW NEW ZEALANDERS WHY MIGRANTS MAKE GOOD KIWIS RACHEL HODDER JASON KRUPP FOREWORD BY MENG FOON 2017 The New Zealand Initiative is an independent public policy think tank supported by chief executives of major New Zealand businesses. We believe in evidence-based policy and are committed to developing policies that work for all New Zealanders. Our mission is to help build a better, stronger New Zealand. We are taking the initiative to promote a prosperous, free and fair society with a competitive, open and dynamic economy. We develop and contribute bold ideas that will have a profound, positive, long-term impact. TABLE OF CONTENTS ABOUT THE AUTHORS V ACKNOWLEDGEMENTS V DISCLAIMERS V FOREWORD 1 EXECUTIVE SUMMARY 3 INTRODUCTION 5 CHAPTER ONE: FICTIONS AND FACTS 7 GOOD ENOUGH 7 SPILL-OVERS 8 EXPLOITABLES 9 BY THE NUMBERS 11 INWARD AND OUTWARD 11 ARRIVALS 11 AU REVOIR 13 SKILLS TO PAY THE BILLS 13 FOREIGN AFFAIRS 14 CONCLUSION 15 CHAPTER TWO: THE NEW ZEALAND WAY 17 A QUESTION OF NATIONAL IDENTITY 17 ROAD TO RADICALISM 18 FORTRESS NEW ZEALAND 2.0 18 THE DANGER WITHIN 19 GOOD GARDENING 19 KIWI YARDSTICK 20 CONCENTRATED CONCERNS 21 WE DO NEED AN EDUCATION 22 KIWI CONVERSION 23 CULTURAL DILUTION 24 CONCLUSION 25 CHAPTER THREE: POPULATION PRESSURES 27 HARD TARGET 27 HOUSING 27 INFRASTRUCTURE 29 FISCAL DISCIPLINE 30 AGEING GRACEFULLY 30 CONCLUSION 33 CHAPTER FOUR: IT’S THE ECONOMY, STUPID 35 ECONOMISTS LOVE IMMIGRATION 35 WHY DO THEY LOVE IT SO MUCH? 35 THE VALUE OF THE INDIVIDUAL MIGRANTS 36 ONLY LET THE BEST ONES IN? 37 IT’S A TWO-WAY STREET, LET’S KEEP THE TRAFFIC FLOWING 45 AGGLOMERATION – BIGGER IS BETTER? 38 BENEFITS OF DIVERSITY 45 MACRO IMPACT AND HOW WE MEASURE IT 38 A RADICAL IDEA 46 REDDELL HYPOTHESIS 39 CHAPTER SIX WHAT TO MAKE OF IT? 40 POLICY RECOMMENDATIONS 49 IMPLICATIONS FOR POLICY 40 POLICY OPTIONS 49 A SIMPSON’S PARADOX? 41 CLASSIC EXCLUSIONISTS 49 LABOUR MARKET EFFECTS 41 COSMOPOLITANS 50 JOBS 41 FREE-MARKET EXPANSIONIST 50 WAGES 42 NATIONAL EGALITARIANS 50 EVIDENCE 42 WHAT WE GET RIGHT 51 CONCLUSION 44 POTENTIAL AREAS TO ADDRESS 51 LOW-HANGING FRUIT? 52 GIVING BUSINESS MORE OF A SAY 52 CHAPTER FIVE: THE CASE FOR OPEN ARMS 45 LEVIES 52 IT’S A TWO-WAY STREET, LET’S KEEP THE TRAFFIC FLOWING 45 BILATERAL AGREEMENTS 53 BENEFITS OF DIVERSITY 45 SPONSORSHIP 53 A RADICAL IDEA 46 CONCLUSION 55 BIBLIOGRAPHY 57 CHAPTER SIX: POLICY RECOMMENDATIONS 49 POLICY OPTIONS 49 CLASSIC EXCLUSIONISTS 49 COSMOPOLITANS 50 FREE-MARKET EXPANSIONIST 50 NATIONAL EGALITARIANS 50 WHAT WE GET RIGHT 51 POTENTIAL AREAS TO ADDRESS 51 LOW-HANGING FRUIT? 52 GIVING BUSINESS MORE OF A SAY 52 LEVIES 52 BILATERAL AGREEMENTS 53 SPONSORSHIP 53 CONCLUSION 55 BIBLIOGRAPHY 57 ABOUT THE AUTHORS JASON KRUPP Jason has been a Research Fellow at The New Zealand Initiative for three years, having worked on local government, resource use, charity, urban planning and housing policy. Before joining the think tank, Jason worked as a business and finance reporter in Hong Kong, New Zealand and South Africa. Most recently he wrote for the Dominion Post and Fairfax’s Business Bureau, where he was chiefly responsible for covering electricity, equity and currency markets. Jason has a degree in journalism and a post graduate business diploma from Rhodes University. RACHEL HODDER Rachel Hodder joined The New Zealand Initiative in July 2016. She has a PhD in economics from the University of Canterbury where she previously lectured courses in game theory, econometrics, and labour economics. ACKNOWLEDGEMENTS The authors wish to acknowledge and thank all those who have generously provided their time and expertise to assist with this report. In particular, we wish to thank Richard Baird, John Gibson, Ian Kuperus, Kirdan Lees, Jacques Poot, Michael Reddell, Carrie Stoddart-Smith and all other anonymous reviewers. We also wish to acknowledge the helpful comments and advice received from representatives of Business NZ, MBIE, Treasury, GEN, and members of the New Zealand Initiative. The authors are solely responsible for the views expressed in the report and any errors or omissions. DISCLAIMERS Access to the data used in this study was provided by Statistics New Zealand under conditions designed to give effect to the security and confidentiality provisions of the Statistics Act 1975. The results presented in this study are the work of the author, not SNZ. The results in this report are not official statistics, they have been created for research purposes from the Integrated Data Infrastructure (IDI), managed by Statistics New Zealand. The opinions, findings, recommendations, and conclusions expressed in this report are those of the authors, not Statistics NZ. Access to the anonymised data used in this study was provided by Statistics NZ in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Statistics Act 1975 are allowed to see data about a particular person, household, business, or organisation, and the results in this report have been confidentialised to protect these groups from identification. Careful consideration has been given to the privacy, security, and confidentiality issues associated with using administrative and survey data in the IDI. Further detail can be found in the Privacy impact assessment for the Integrated Data Infrastructure available from www.stats.govt.nz. THE NEW NEW ZEALANDERS V FOREWORD I come to a premise that we are all immigrants to this at roads, rivers, streams and flood ways. I got a good beautiful country of New Zealand and we are here perspective and understanding from Owen. to make this country a great place to live, play, work I was duly elected in 1994 and did two terms as a and call home. councillor. I ran for Mayor after my second term on My Dad is from Taishan, Guangzhou, whose family the council and lost by only a few votes – I thought saw the Japanese invading China; he could hear the I did well under the circumstances. I was elected as cannons going off near Taishan. Mayor of Gisborne in 2001 and have been the Mayor ever since. Soon after, they moved to Hong Kong to seek refuge. It was an easy decision as they had heard so much I was keen on learning languages and Māori was no about the cruelty of the Japanese invasion. exception. I had also learnt some Welsh, Irish and Italian from my customers – I was fascinated with Mum was born in Hong Kong. An only child, she the dialects and tongue twisters. was brought up by her auntie. My auntie, my dad’s oldest sister, immigrated from China to Gisborne in Māori was my passion. Fifty percent of our 1937. She married and they started a market garden customers were Māori – coming from the East Coast, cooperative with other Chinese people. Turanga flats and Wairoa. Most of them spoke to me in their dialect. We all worked hard. I remember we did a bit of work This gave me a great foundation for the role I have before school. Dad picked us up in his Bedford truck today. I didn’t plan to have this extra string in my at noon from school, we ate lunch in the truck, and bow, it just happened because of my interest in did some work till 1pm when Dad took us back to languages. school. Bang on 2.30pm, he was waiting for us and we would work to about 10pm. Being 50% Māori, my Te Reo has definitely helped our whole community in participating, I was driving the tractor at 8 years of age. When acknowledging and understanding issues from a Principal Pax Kennedy said we needed to be 12 years Western, Eastern and Māori world view. of age to drive a tractor, Dad’s response was that he didn’t know what he was talking about. Having been in business also gives me the ability to manage the finances well for our community. So you can see that we worked in our family business helping our parents. We were told to work Gisborne has given our family a great opportunity towards no work. Hence, whenever we saved some to participate in all aspects of life – there are no money we would buy property and land. boundaries in what area one wants to make a contribution to. This was our life – save hard, invest wisely. As I know from first-hand experience, and as this We bought a shopping centre called the Kaiti Mall in report shows, migrants come here, contribute to our 1988, and built some more buildings on the 5-acre lot.