Steven Joyce defends immigration numbers, says housing prices won't be affected

Minister of Finance Steven Joyce has brought some serenity to an otherwise anxious immigration debate in New Zealand by saying that "overall we have got right immigration numbers," and "there isn't much upside in the housing market at the moment."

Seemingly, a widely-perceived causal linkage between historic net immigration and the heated-up housing market, particularly in Auckland, has been at the centre of the current immigration debate prompting many political parties to call for a massive purge of immigration numbers by "tens of thousands."

The Minister was speaking earlier today at THE AM SHOW on Newshub about the latest report of International Monetary Fund (IMF) on New Zealand economy.

The IMF report has rated the New Zealand economy as strong, however suggesting that record immigration could re-ignite the housing market.

The report is also recommending new taxes to cool "housing speculation" - another topic of interest for the opposition parties.

The Labour Party has consistently criticised the government for its perceived inability to stop speculation in the housing market, particularly from overseas-based investors, which according to them are one of the main reasons for shooting up of housing prices.

However, the Minister categorically denied any plans to bring speculation taxes, stating that the measures introduced so far like bright-line test and LVRs are doing well in keeping housing market under control.

The bright-line test involves a special tax when residential land is purchased and sold within two years. It does not apply to a person's main home.

"Auckland house prices over the last eight months with both bright-line test and LVRs have been flat to falling," the Minister said.

Similarly, denying any further ammunition to the detractors of the government on what is beginning to be perceived as an "open door immigration policy," the Minister asserted that "overall we have got the right numbers."

"When you look at [what bodies like] IMF and Moody reviewing New Zealand economy says that one of the reasons why NZ is growing well and adding jobs is because companies are able to hire skilled workers both domestically and offshore.

"That's quite important otherwise that growth will occur somewhere else," the Minister asserted.

Allaying growing fears among some quarters, that increasing number of the incoming skilled workforce from offshore might be contributing in pressurising the infrastructure, the Minister pointed out that "it's about a balance."

"[infrastructure] things have to be built at the same time.

"The fact of the matter is that the New Zealand economy is performing one of the best in the OECD countries.

"The Aussie budget came out last night and if you put the two countries side by side then we are getting a stronger growth, a more employment growth and a low unemployment rate and one of the reasons for that is we can add more skilled workforce in our economy," the Minister said.

Nevertheless, it is another matter that despite this assertion by the Minister, the government has recently raised the bar for all prospective immigrants to an "unrealistic" income threshold of $49,000 annually to be eligible to gain residency as a "skilled worker" in New Zealand.