New Zealand Opposition Flags Immigration Curbs Ahead of Election

New Zealand’s main opposition Labour party indicated it may curb immigration to ease pressure on housing and health as it prepares for elections in September.

“New Zealand is well served when we get enough new migrants to fill our skill gaps, but not so many that it overwhelms our housing market,” Labour leader David Cunliffe told TV3’s the Nation on May 17. He noted that his party aimed for an annual intake of 5000-15,000 immigrants when in office, while the current government is looking at 41,000-42,000. “That is just too much.”

Prime Minister John Key’s National Party is campaigning for a third term in office at the Sept. 20 election with a message of sound financial management as the economy rebounds from recession and a series of devastating earthquakes in the South Island city of Christchurch. Labour is proposing tax increases for the highest income earners and new tools to control inflation, as well as the immigration curbs.

New Zealand’s net permanent immigration reached 31,914 in the year through March, the highest level in 11 years, government data showed April 23. Cunliffe said demand caused by higher immigration would force New Zealanders to pay higher interest rates on their mortgages.

“Immigration flows should be managed into the sweet spot that supports business growth but doesn’t overwhelm our society’s opportunity to integrate those people or our schools and hospitals’ ability to cope,” he said.

Auckland Heat

House prices in Auckland, New Zealand’s biggest city, climbed 15.2 percent from a year earlier in April, the Real Estate Institute said in a statement on its website on May 12.

Finance Minister Bill English, in a separate interview on May 17, said immigration intake had been steady for some time, what has changed is “a sharp reduction” in the number of New Zealanders leaving the country.

“It’s part of a growing economy,” he said. “It’s a measure of success with the economy that more New Zealanders decide to stay home.”

English’s May 15 budget projected the first surplus in seven years and raised the possibility of future tax cuts. In the document, Treasury raised its forecasts for gross domestic product growth, predicting it will accelerate to 4 percent in the year through March 2015 from 3.4 percent a year earlier.

Interest rates are shaping as a central theme for the election. Reserve Bank of New Zealand Governor Graeme Wheeler has raised rates twice this year after they were kept at a record-low 2.5 percent for three years to help fuel the economic recovery.

Election Pledge

The ruling Nationals had 47.6 percent support in a Fairfax poll of 1,011 people this month compared with 29.5 percent for Labour. Labour could still oust the government if it forms an alliance with other opposition parties such as the Greens and New Zealand First.

Labour said last week it would post budget surpluses, reduce debt and lower the jobless rate to 4 percent by late 2017, without providing further details. Last month it proposed using a national pension savings program as an additional tool for controlling inflation, arguing it would reduce the need for interest-rate increases and lead to a lower exchange rate.

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