More migrants would benefit all

Last updated 13:45 10/02/2014

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Raising net migration by 40,000 people a year would boost the economy by almost $410 a person per year over 10 years, the New Zealand Institute of Economic Research (NZIER) says.

More migrants would benefit the economy in several ways, including providing businesses with new skills and helping them grow, the institute said in its report titled Migrants Increase Our Incomes.

More immigration would also increase innovation and competition while lowering the average cost per person of expensive infrastructure such as motorways, NZIER said.

NZIER senior economist Dr Kirdan Lees said the report drew on economic, immigration and populationfigures since 1945.

The figure of 40,000 net migrants was chosen as a baseline for the study because it was significantly higher than the average net annual immigration flow of 15,000 that New Zealand has experienced over the past 12 years.

Lees said the present government target of 135,000-150,000 immigrants over three years did not take population outflows into account and appeared to be "driven much more by perception of what is politically tenable than economics".

Lees acknowledged that politically, there was "no easy time to increase immigration".

"In bad times migrants are seen as taking jobs and increasing unemployment even though there is little evidence that immigrants negatively affect either the wages or employment opportunities of New Zealand-born workers," he said.

"In boom times some worry about the pressure immigration seems to put on housing, infrastructure and publicly-funded services like schools and healthcare."

But Lees said NZIER's research showed that immigration raised incomes above any requirement to boost infrastructure.

"The real question is improving flexibility in infrastructure," he said.

"If it is poor it needs fixing, not sheltering."

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- Fairfax Media


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