That "average" inevitably masks the times and places where it does have negative effects. But rather than restricting immigration, the commission argues that the better approach would be to improve access to education and training, through active labour market policies like apprenticeship subsidies.
"The Government should require the new workplace development councils to report on how demand for migrant labour and skill gaps are informing their training priorities, and should provide additional funding for education and training providers to respond to skill gaps," the commission says.
New Zealand's population grew rapidly in the decade before Covid-19, especially the second half of it, the majority of that growth coming from net immigration rather than natural increase (births minus deaths).
The commission cites research, albeit from 2016, which concluded that "visa-controlled immigration into New Zealand, and specifically into Auckland, in the recent past has had a relatively small impact on house prices compared to other demand factors such as the strongly cyclical changes in the emigration of New Zealanders, low interest rates, investor demand and capital gains expectations."
Even so, the commission acknowledges that the population shock of the 2010s exacerbated existing pressures on housing supply and public infrastructure including hospitals, schools and other public services.
It noted the Infrastructure Commission's recent estimate of an infrastructure gap — what should have been built but was not — north of $100 billion.
The Infrastructure Commission also found that infrastructure provision is less responsive to population growth now than it has been in the past and more expensive to provide than in many other countries.
"These issues are not caused by immigration and will need to be addressed regardless of New Zealand's immigration settings," the Productivity Commission says.
Since the 1990s, immigration policy has not been required to consider the country's absorptive capacity — what is needed to ensure successful outcomes for both new migrants and existing residents — in decisions about how many and who are allowed to enter the country. That is asking for trouble.
So a key recommendation among the 24 the commission makes is for there to be a Government Policy Statement (GPS) on immigration.
It would describe:
● What the Government considers New Zealand's absorptive capacity to be (based on a range of indicators).
●Where and how short-term immigration flows are likely to put additional pressure on that capacity.
●And how the Government intends to invest to expand capacity (if needed) to align it with expected population growth over the medium to long term.
A GPS would reduce the risk that decisions taken today, which seem beneficial, create negative effects later. That often occurs in public policy, the commission says, because governments typically have short time horizons, with few incentives to consider the long-term consequences of their actions.
"Such trade-offs can also occur when one arm of government, in responding to short-term demands, is not required to consider the impacts on other government policies or longer-term objectives."
The present Government talks of "rebalancing" the immigration system with an emphasis on reducing the inflow of low-skilled migrant workers.
The new accredited employer work visa, replacing six temporary work visas, will limit employers' access to migrants if they would be paid below a wage threshold, currently proposed to be the median wage, though there are already calls for exemptions to that.
The commission in principle prefers a price signal (wages) to reliance on an occupational skill shortages list. But it still regards a wage threshold as a blunt tool, ill-fitting the diversity of firms and their use of migrant labour.
Skill shortages lists are highly prone to lobbying from employers who want occupations on the list or from worker representatives who want occupations off the list so wages can rise, the commission says.
So it recommends the list be reviewed regularly and occupations removed by default unless interested parties provide sufficient evidence to justify their continued presence.
"Occupations that have not shown sufficient labour market reactions (such as wage movements), have high turnover rates, or a continued reliance on temporary migrants should not remain on [skill shortages lists] indefinitely."
Commission chairman Ganesh Nana said much of what the Government had announced so far about rebalancing immigration related to temporary visas.
But immigration policy also needed to be much clearer about the likelihood that immigrants arriving under a temporary work visa will be able to progress to achieving resident status.
The process has two steps: the first when employers select migrants for a temporary visa and the second when the Government selects for residence.
"[A] disconnect can arise from an uncapped temporary visa process feeding into a capped number of residence approvals," the commission says.
"Over time, this has meant ongoing excess demand for residency by people who meet the entry requirements and become part of the EoI [expression of interest] pool. This has resulted in long queues, uncertainty and frustration for migrants about attaining residence."
It recommends that every year the Government should revise the threshold for entering the EoI pool and also enable applicants to continue to accrue points, selecting applicants from the pool with the highest points first.
Publishing the points ranges of successful applicants would emphasise that minimum thresholds for considering applications should not be taken as the targets for selection.
Speeding up processing and increasing the certainty of visa status, including rights to residence and recognition of foreign qualifications for highly productive and highly paid workers would be good too, the commission believes.
