Migration is booming, with a net inflow of over 69,000 migrants (125,000 gross arrivals) over the past year, according to Statistics NZ data. That’s putting pressure on housing and infrastructure. But when you look at the fuller picture, including the number of permanent resident approvals (the aim of which has not really altered from 45-50k per annum), the story does appear less alarming. A German au pair, for instance, doesn’t have the same impact on the property market as a permanent resident. New Zealand’s economic and political credentials currently look pretty good. Because of that, we don’t believe net migrant inflows are going to cool aggressively any time soon, in the absence of policy intervention. Skill shortages will worsen as the population ages, so New Zealand needs to import labour. However, it is questionable whether current policy settings have got the ‘mix’ right and are achieving the desired outcomes. Sub-par GDP per capita growth is telling, as is the mismatch between reported skill shortages and the skill sets of arrivals. It is also odd that more foreign students are heading into Private Training Institutes as opposed to Universities. In short, there are aspects that suggest the migration framework, and the application of the rules, could be in need of adjustment.

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