New Zealand Immigration’s ‘stink reputation’ among migrants could hinder the country’s ability to attract top overseas talent amid growing global competition, warns an economist.

The comments from New Zealand Initiative chief economist Dr Eric Crampton come off the back of recent headlines about a woman with four children, who are New Zealand citizens, being denied a residency visa.

While this story made the news, it’s only one of a number of issues that have again made immigration a big talking point in the lead-up to this election.

Massive worker shortages across numerous industries have led to calls for more immigration, but on the other side of the debate, there are concerns about infrastructure capacity.

Crampton tells The Front Page podcast that the immigration system in New Zealand is leaving many migrants frustrated.

He says that any effort to improve immigration policies needs to start on the administration side, given the long wait times and uncertainty that migrants often face.

“When you start treating people like that by not processing applications or sitting on them for a while, you get a very bad reputation among migrants – especially those who have choices of places where they want to live,” says Crampton.

“There’s a global race for talent. Places like Canada are sharply increasing migration and New Zealand now has a pretty stink reputation. Fixing that would be a good place to start.”

A major problem with immigration policy is that it’s often dictated by public sentiment and what politicians think voters want rather than what’s right for the country.

“Whenever you are in a downturn, people start seeing migrants as competitors for our jobs or wages,” he says. “And if the housing market is broken, voters see migrants as coming in and stealing the house that they might have bought. That builds a toxic environment for the politics around migration so that whenever there’s the slightest pressure, the government is tempted to clamp down.”

Crampton says the real challenge here is getting longer-term settings right, and that this must include a consideration of infrastructure and local government policies.

Any discussion about immigration in this country is always framed in the context of the capacity of our infrastructure to meet the needs of an increased number of people.

Crampton says much of this comes down to the fact that councils have been unable to properly invest in infrastructure for decades.

“Most of the tax revenue benefits from migration go to central Government, while the costs are being left with local governments. Councils don’t know how to fund and finance the kit that they need to accommodate growth, while central Government will often tell them to please accommodate it.”

Crampton says that if infrastructure development is set to keep pace with population growth, there needs to be a shift in the way that revenue is managed.

“We need to start thinking about revenue-sharing mechanisms, so that when a city council or region does very well and contributes a lot more to central Government revenues, that they get a taste of that back,” says Crampton.

So what does a solid immigration policy look like? How can we ensure our infrastructure is properly funded? What impact does immigration have on our wages? Should New Zealand’s refugee quota change? And what can we learn from the experiences of other countries?

Listen to this episode of The Front Page podcast for the full discussion about how to get the immigration balance right.