1493275453022 - This is what we know about how record migration affects traffic, schools, housing and the economy in New Zealand

This is what we know about how record migration affects traffic, schools, housing and the economy in New Zealand

Net migration, yet again, hit a record high this week.

In the year to March, 71,900 more people arrived than departed for a long-term stay.

It’s fuelling a furious political debate.

Auckland’s motorways are jammed, schools are overcrowded and housing supply is in crisis. All of which can be traced back to surging migration, we’re told.

But can it, really?

GRIDLOCK

There is no question Auckland is taking on significantly more migrants than it has in the recent past.

The country’s largest city has seen a net gain of 112,000 migrants in the past five years. 

In the past 12 months, there’s been a gain of about 36,000 migrants, up by 14 per cent on the previous 12 months and 550 per cent on 2012. 

These figures are based on the intended destination people give to immigration when they arrive in New Zealand. 

The impact of all these extra people is being felt across Auckland’s transport network. 

Data from the Transport Agency between 2011 and 2015 shows average daily traffic counts at 300 of the 565 sites in the city increased by at least 10 per cent in that period. 

Fifty sites saw increases of more than 50 per cent. None of this captures the impact of the past two years. 

The Transport Agency recently said congestion in the city is growing at a rate of 2.4 per cent per year and the number of cars in the city is growing at a faster rate than the population.

Until 2014, monthly bus journeys were typically somewhere between four and five million. Now, it’s between five and six million.

A PLACE TO LIVE

The average house price in New Zealand is currently more than $600,000, in Auckland the figure is now over $1 million. 

Does the blame for this lie with the influx of immigrants?

A 2014 Treasury report which looked at the impact of immigration, seemed to suggest it was a factor.

“Migration, in conjunction with sluggish supply of new housing and associated land use restrictions, may have had a significant effect on house prices in New Zealand,” it said.

However, that report also pointed out that confidence in the economy drives up house prices and net migration at the same time.

In other words, when the economy is performing well we would expect both net migration and house prices to increase, even if they had no impact on one another.

CLASSROOMS AND LECTURE THEATRES

Since 2015, stories of schools bursting at the seams have become more frequent. At the same time, it’s become more common to hear migration blamed for the problem.

The national school roll increased by 2.7 per cent between July 2014 and 2016, following about a decade in which the total number of students enrolled in New Zealand schools barely moved.

Over the same two year period, the biggest increases have been in Waikato (4.2 per cent), Bay of Plenty (4.1 per cent) Canterbury (3.8 per cent) and Auckland (2.3 per cent). Looking just at the last year, the increases in these regions have been between 1.2 per cent (in Auckland) and 2.4 per cent (in Bay of Plenty).

These regions are all among the fastest growing in New Zealand.

New Zealand also had a net gain of 2065 qualified teachers in the two years to March 2017. 

Almost 24,000 immigrants came to New Zealand on student visas in the year to March 31, 2017, continuing an ongoing rise in recent years. 

The industry earned New Zealand $3.8 billion in foreign exchange and contributed $4 billion to GDP in 2015, according to an Infometrics report.

JOBS

The old saw about “immigrants stealing our jobs” has been around for decades. Probably centuries.

The theory goes that if the skills of immigrants are substitutes for the skills of existing workers, they increase competition for jobs, drive wages down and unemployment up.

The counter is that immigrants create new jobs by increasing demand for goods and services – buying stuff.

So what’s the verdict in New Zealand?

An MBIE report that looked at the impact of temporary migrant workers found an increase in temporary migrant employment in the decade to 2011 had little impact on the employment of New Zealanders overall.

New Zealand’s approach has been to take in skilled migrants in areas where there is a shortage and admit low-skilled workers on a temporary basis to work in industries such as agriculture. 

THE ECONOMY

Isolating the impact of immigration on the economy is difficult because many different factors affect the economy.

A 2014 report by Treasury concluded the positive economic impact of two decades of immigration had been “modest”.

“New Zealand’s economic performance has not been transformed. Growth in GDP per capita has been relatively lacklustre, with no progress in closing income gaps with the rest of the advanced world, and productivity performance has been poor,” the report said.

An OECD study, also from 2014, says that while positive net migration grows total GDP, it had – at best – a small impact on economic growth per capita.

“One study that looks at the impact of migration on economic growth for 22 OECD countries between 1986 and 2006 demonstrates a positive but fairly small impact … on economic growth,” the report said.

So while New Zealand’s economy is growing and net migration is increasing, correlation does not equal cause.

The evidence suggests that whatever other benefits migrants might bring, a sudden and significant increase in economic performance is not one of them.

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