No more “black box decisions”, says Productivity Commission after analysing the effect of immigration settings on the efficiency of New Zealand’s economy
It’s time for Immigration New Zealand to stop making its decisions behind closed doors.
That’s the advice from the Productivity Commission, following an inquiry into immigration settings to assess whether the country is over-reliant on overseas labour - an issue that has come into sharp relief over the past two years of border closures.
The Commission made a series of 24 recommendations aimed at moving New Zealand’s immigration policy from reactive and short-term to a longer-term approach.
Chief among these was requiring the Government to institute an Immigration Government Policy Statement (GPS), obliging it to set a clear strategic direction for immigration policy and notify the public how the demand for visas would be managed.
Commission chair Dr Ganesh Nana said immigration policy was currently made in a “black box, shielded from the public scrutiny and robust policy assessments required of most other policies”.
Increasing New Zealand’s level of productivity requires long-term thinking by both Government and business, which the reports says is at odds with the current immigration system, “reactive to short-term and sometimes conflicting priorities”.
The recommended policy would require the Government to commit to immigration settings over pre-announced time spans, with both the length of resident intake periods and the criteria for visas frozen.
This would allow for more certainty and clear-eyed planning from both Government and business - something that’s been difficult to achieve in the unpredictable days of Covid-19.
"A GPS would have improved the transparency around the Government's recent immigration rebalance announcement, by including how policy changes would affect the expected number and composition of migrants and the planning range for residence visas," said Nana. “It would have explained how its objectives in immigration related to its other objectives for education and training, and investments in infrastructure overall.”
Other recommendations for immigration settings made by the Commission include more engagement with Māori on how to reflect Te Tiriti o Waitangi in immigration policies and institutions, stronger links between education and training policies and immigration settings, and improving the prospects of local workers to prevent job displacement instead of halting immigration.
Immigration adviser Katy Armstrong said a change to an overarching policy would be good news if more than lip service was paid to the recommendations.
She noted that although the preliminary reports from the Commission on immigration were already out, the existing rebalance of immigration settings had paid them little heed.
“We are into the 170th or so change in immigration policy since the pandemic,” she said. “We have reached a real low point in terms of transparency - we have example after example of policy made on the hoof, without meaningful consultation and hence lacks true legitimacy.”
However if the immigration system is in need of change, the pandemic itself might have finally provided a ripe opportunity. The inquiry could be considered a silver lining of the pandemic, as it provided a chance for the Government to reflect on a set of rules upon which much of the country’s economy and society hinge.
In a letter to the Productivity Commission establishing the inquiry in April of last year, Finance Minister Grant Robertson wrote that “the disruption caused by Covid-19 has provided us a rare and unique opportunity to focus an inquiry on an area that makes a significant contribution to New Zealand’s labour market, culture and society – immigration settings”.
The inquiry should allow the Government to optimise immigration settings and take a broader view considering the impact immigration has on the labour market, housing, infrastructure and the natural environment.
Due to New Zealand’s heavy reliance on migrant labour, the country’s immigration settings were a powerful lever with which to wield economic change.
In this case, the inner workings of Immigration NZ affect how finely-tuned this country's economy can become.
The inquiry found while the economy has grown strongly over the past two decades, productivity performance, or how efficiently the economy turns labour or capital into goods or services, never hit the same pace.
Data published by the Commission last year showed while there was a massive explosion of productivity around the world over the past century, New Zealand has experienced comparatively less productivity growth since World War 1 and now has one of the least productive economies in the OECD.
All but four countries - Mexico, Chile, Greece and Turkey - had both fewer hours worked per person in employment and more output per hour worked.
And with productivity having a stronger correlation to real wage increases and therefore improvements in quality of living, the Productivity Commission was tasked with finding a way to work smarter, rather than just harder.
A preliminary report by the Commission already highlighted the role immigration has played in supporting population growth.
But it relied on temporary migrant workers - and that raised potential volatility and economic uncertainty in the case of borders being closed.
Now the Commission’s recommendations seeking to lift productivity are largely targeted at Immigration New Zealand.
