Growth in the name of immigration

Finance
with Don Fraser
Fraser Farm Finance

It seems that the Government is happy to have very open borders, bringing in 70,000 people annually because it keeps growth in the economy.

That is probably true, but there are some serious distortions appearing.

I also appreciate that these figures include Kiwis returning home to New Zealand – and a caveat here is that if the world turns grumpy there will be a massive rush back ‘home' for all of those with a Kiwi passport.

Let's consider some of the issues.

Say 70,000 people is a city the size of Invercargill arriving every year. Unfortunately a lot of the ‘foreign' immigrants come from overseas cities and immediately want to go to Auckland – and not rural communities – increasing all sorts of pressure there.

Say 70,000 people also want cars, there is a commensurate number of new and used cars on our already clogged-up city roads. I think there are 167,000 new cars coming onto our roads this year. Are they crushing the old ones that fast?

Pressure (side head)

Infrastructure – the pressure on roading, schooling, hospitals and all associated social services is immense. This is all a big cost to the Government, but I guess the spending on all those facets is considered ‘growth' to the economy. And, of course, they will be borrowing the money.

Crime – it must be difficult to vet everyone properly who comes into New Zealand, but it sounds like there are a number of less-than-desirables arriving and setting up crime cells and undercover gangs.

Labour – it is clear the vast majority of young people are working their butts off and making a huge contribution. Clearly there are a few who are on drugs – quote Bill English – but you have to admire those who are young and hard at it with house, families, businesses or working hard paying taxes to help run this country.

Rapid growth – we know in commerce and business that managed growth is essential.  Grow too fast and your need for new capital exceeds your cashflow. New Zealand, of course, is borrowing rapidly to fund this growth. But debt is debt, whichever way you look at it, and which generation will repay it?

Concerning (side head)

Housing – we own some storage units in Waihi and every other person asks if they can live in one as they have been displaced from their existing accommodation. This repetitive question is very concerning. Council may even consider well fitted 40' containers as accommodation with a “licence to occupy”. Social housing they call it because of the displaced peoples.

Now I have raved on long enough here and I am not against immigration. It is, however, putting immense pressure on all parts of our society and infrastructure. New Zealand has to borrow to fund this growth and whilst our debt ratios are fine, debt is debt.

In summary, immigration is good for an economy. Managing the numbers seems very important so as not to overload our systems and society. It may be that the public will vote against the present government, who seem to know better than we. If the public vote against the present government will the other parties have a different view anyway? 

And – the footnote is – one can understand immigrants wanting to come and live in this amazing food-producing paradise safe at the bottom of the world.

Disclaimer – These are the opinions of Don Fraser of Fraser Farm Finance. Any decisions made should not be based on this article alone and appropriate professional assistance should be sought. Don Fraser is the principal of Fraser Farm Finance and a consultant to the Farming Industry. Contact him on 0800 777 675 or 021 777 675. A disclosure document is available on request.

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Silhouetted sunrise on July 14th. Photo: Janet Hetherington

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