Liam Dann: Labour and Nats missing the mark on worker shortage

Shortage of international workers is the immediate concern for business. Photo / Michael Craig

OPINION:

In a rare lucid tweet last week, the world's richest man Elon Musk affirmed his political sanity by declaring: "I support the left half of the Republican Party and the right half of the Democratic Party!"

The idea of falling in an unrepresented gap between party political extremes is very relatable to me.

Musk followed that up with a less relatable tweet about buying Manchester United.

He says that was a joke. Nice one Elon.

In New Zealand politics there is one key area where policy debate seems to be falling through the gap in a broader ideological scrap.

The skills shortage is the biggest issue facing business this year. It is also one of the biggest issues facing the whole economy.

It's feeding the biggest issue: inflation.

While it's a better problem to have than mass unemployment and business failure, it still contributes to recessionary risk.

If businesses really can't get staff then they just have to do less business.

That limits the capacity for economic growth in the productive part of the economy.

It's an issue where we don't seem to be getting any clear pragmatic policy on either side of the political fence.

I think the Government is getting it wrong on immigration.

I understand the theory of the immigration reset policy.

After a decade of very high immigration, it makes some sense to try for a more targeted policy.

But in practice, this is a very tough time to be overhauling the policy.

And it could cost us.

As former National leader Simon Bridges (in his new role as Auckland Business Chamber) boss) pointed out last week, the worker shortage is a global phenomenon.

But that just means we're in an even more competitive race to attract talent.

Skilled migrants can pick and choose from the US, UK, Canada and Australia. They will inevitably flow to where the policies are most welcoming.

On a purely administrative level, the opening and closing of borders and the complexity of the pandemic mean Immigration NZ is already stretched.

It is struggling to effectively implement the policy and to process the visa applications that businesses desperately need to be cleared.

Meanwhile, I also think National's latest policy moves on the labour shortage miss the mark.

National's deputy leader Nicola Willis touched on the immigration issue last week at the party conference.

But National decided that the star of its policy announcement show was a plan to get tough on dole bludgers.

Leader Christopher Luxon announced that (with some social support in place) it is prepared to cut the benefits of those it deems work-averse.

That would include those currently in the Jobseeker Support – Health Condition or Disability category.

Critics on the left have been quick to call this dog-whistle politics and argue it ignores complex social issues under pining long-term benefit dependence.

But that's not why I think the policy focus is unhelpful.

Getting tough on beneficiaries is ideological, not pragmatic - it is not the solution employers are looking for.

It may play well to National's more conservative base - although it could just see them scrapping over votes with Act.

If National - under its new leadership - wants to stand-up as a champion of economic growth it needs to sharpen its focus on immigration and hone its policy. Photo / Mike Scott

I certainly do hear a lot of angry voices complaining about benefit numbers being too high, despite the low unemployment rate and the obvious worker shortage.

Some people have headed off down a rabbit-hole of blaming Stats NZ data.

Others feel Labour's softer policy approach has effectively allowed dole bludgers to sneak onto the Health and Disability benefit.

It's true those numbers did rise sharply through 2020 and 2021 - perhaps something socially disruptive happened in those years, who can remember?

To be fair, Jobseeker Benefit numbers are still higher than 2017 - although they are trending back into line with the unemployment data.

Regardless, I'm not hearing many employers argue that what they need is more unqualified, socially disengaged, possibly mentally-ill workers on the payroll.

It's a difficult point for the left to make - because its not very politically correct - but I'll say it: many of the people National is talking about are unemployable.

If you've successfully shifted across to the health and disability benefit on the basis of mental illness then you probably do have a few issues, whether you're faking or not.

It's kind of a self-fulfilling prophecy.

As much as we should aim collectively to help these people improve their mental outlook and engage with the world, it shouldn't fall to already stressed business owners to manage the rehabilitation process.

Labour Party policy holds that a long period of sustained low unemployment will help gradually shift the dial.

It's great that basic jobs on a reasonable wage are available for those who decide that they want to make a change.

But that's the long game and business needs help now.

New Zealand needs business to keep firing across this difficult patch in the economic cycle.

For the Government it's not just a case of appeasing business owners - who are probably unlikely to be Labour voters anyway.

Immigration can help us avoid recession and speed the path back to higher levels of growth in the coming years.

That might require softening of Labour's policy reform for a while. It certainly means more resources and attention for the embattled workers trying to process Visa applications.

And if National - under its new leadership - wants to stand-up as a champion of economic growth it needs to sharpen its focus on immigration and hone policy that will help business compete internationally for the workers it actually needs.