New Zealand goes cool on migrants when ‘needed most’

Bloomberg

On the waterfront of New Zealand’s largest city, a Chinese developer is building a five-star luxury hotel aimed at wealthy tourists. One hitch: there’s not enough local workers to finish it.
To help complete Auckland’s NZ$200 million ($138 million) Park Hyatt hotel on time, Beijing-based Fu Wah International Group has been forced to fly out 138 carpet layers, painters and carpenters from China. The need for foreign labor means the government may struggle to reduce immigration as much as it pledged when it rode to power seven months ago.
Prime Minister Jacinda Ardern’s coalition wants to tighten visa controls and has said net arrivals could plunge by as much as 30,000 a year from 67,000 now. While that may be politically popular in a nation where immigration has been blamed for surging house prices, low wage growth and traffic congestion, the government needs foreign workers to carry out a NZ$42 billion plan to build new homes and transport infrastructure over the next five years.
“It’s not just pure demand, but scarcity of talent and expertise to deliver the work,” said Hamish Price, an Auckland-based recruiter who helps coordinate a building industry program to attract global workers. “Some of that talent has not been developed in New Zealand and needs to be brought in from overseas.”
If immigration levels hold up, that has implications for the economy that policy makers will need to grapple with. Higher-than-expected arrivals could push up house prices, consumption and residential investment, the Treasury said in this month’s budget when flagging risk scenarios.
That may result in stronger inflation and faster interest-rate hikes.