Immigration is the economy, stupid!

  “It’s the economy, stupid” is a phrase coined by Bill Clinton's campaign strategist James Carville in 1992, highlighting that voters prioritize their personal financial situation over all other issues. In New Zealand, immigration has been the driver of economic growth.

  Liam Dann is right that the data does not support the panic. But he is missing the bigger story: under MMP, immigration is the policy that pays for the votes.

  Liam Dann’s latest NZ Herald column makes a clean case that immigration has become a “political football” — that net migration has collapsed, immigrants prop up our hospitals, and culture-war framing borrowed from overseas does not match what New Zealanders actually worry about.

  What he misses is why politicians keep kicking the ball anyway.

  The answer is MMP.

From electorates to the party vote

  Under First Past the Post, the major parties had teams to gerrymander electorate boundaries and focus campaigns on marginal seats. State houses went up in safe Labour electorates that National wanted to flip — or in marginal National seats Labour was hunting. The best hospitals, roads, and schools followed the swing voters.

  It was that cynical.

  MMP changed the maths. From 1996, both major parties had to know who voted for them across the whole country, not just on the swing-seat map. They had to find the marginal voter, not the marginal electorate. And then design policy to buy them — because politics, at its most honest, is about taking money from people who will never vote for you and giving it to people who might.

Two playbooks

  Helen Clark figured it out first. Interest-free student loans, announced weeks before the 2005 election Labour nearly lost to Don Brash, pushed her over the line by buying a tertiary-age cohort. Working for Families was working-class welfare repackaged as middle-class tax relief. Together they built a coalition that lasted three terms.

  National’s playbook was different. Convert tradies from PAYE employees into contractors and subcontractors. Once you are writing your own cheque to IRD each quarter, you vote blue. That was the point. Stack a housing boom on top, and the base looks after itself.

  When property prices and household debt could no longer carry GDP growth, John Key opened the immigration tap — calling record net migration “a vote of confidence in New Zealand” — and the so-called “housing crisis” arrived shortly after.

The waves, and the resentment

  The first wave was predominantly Chinese and South African. The second — and most recent — was disproportionately Indian and Filipino.

  This is where Dann’s neoliberal economics frame goes quiet. Immigration is discrimination. It is a country deciding who it wants to be part of it.

  The numbers do not lie. Pacific Island migrants earn, on average, below the average wage. Migrants from elsewhere earn above it. All migrants, on average, work longer hours and earn more than Kiwis receiving any form of government assistance — including Working for Families. They pay more for housing. They invest more in the country.

  So the average Kiwi family squeezed by the cost of living might feel a flicker of resentment toward someone who arrived last year and is already doing better than they are.

  That flicker is the political asset.

The repackaging

  Both major parties responded to MMP arithmetic by recruiting Indian and Asian MPs and building ethnic branches inside their caucuses. ACT and the Greens have followed. None of this is an accident. It is the party vote doing what the party vote does.

  New Zealand First understands its base — older, regional, predominantly Pakeha — and has built a small but durable franchise on the annual immigration argument. That is the Winston Peters business model. Dog bites man. Shane Jones warning of a “butter chicken tsunami” under the India free trade agreement is the same product in a new wrapper.

  What is actually new is that National and ACT — the parties whose policies created the demand for immigration to fuel growth — are now repackaging the consequences in soft language. ACT’s citizenship test. Luxon’s pre-Budget speech choosing “social stability” over the business community’s “bottom line”. Brooke van Velden quizzing new citizens on the Bill of Rights Act.

  It is the political equivalent of a builder selling you the renovation to fix the damp he caused when he built your bathroom.

  NZ First will not attack its coalition partners. It will attack the result.

It is the math, not the issue

  Dann is right. Net migration is at a decade-low (Covid aside), skilled workers are leaving for Australia, and fertility has hit 1.55 — the lowest on record. The case for a steady, strategic immigration policy is straightforward.

  But strategic policy is not what MMP rewards. MMP rewards a coalition that can split a vote three ways and still hold 61 seats. And that means immigration will be relitigated at every election — not because it is the issue, but because it is the math.

  Immigration is the economy, stupid. It is also the arithmetic of power.