Immigration Politics Turns Upside Down in New Zealand Election Campaign

By Ben CollinsFeaturesDow Jones Newswires

WELLINGTON, New Zealand--A tightening election race in this U.S. ally has its roots in anxiety over immigration and the rise of a leader who wasn't even her party's first choice when campaigning began more than a month ago.

New Zealand voters will go to the polls on Sept. 23 to decide whether Bill English's National party should remain in government after nearly nine years or be replaced by the opposition Labour Party headed by Jacinda Ardern, a 37-year-old former president of the International Union of Socialist Youth.

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A recent voter poll put support for Labour at its highest level in more than a decade--at 43 points, while the National Party fell to 41 points. It raises the prospect of an upset win for Ms. Ardern, who succeeded Andrew Little as leader of the center-left party at the start of August, when it lagged behind Mr. English's conservatives by more than 20 points. It has also made the prospect of a hung parliament more likely, which would thrust smaller parties like the populist New Zealand First into the role of kingmakers.

Ms. Ardern's rapid ascent owes much to tapping into growing unease about affordability, particularly among young voters, and feeding off a global backlash over immigration.

Economic growth in New Zealand--a member of the Five Eyes spy network, which also includes the U.S., the U.K., Australia and Canada--has outpaced other developed nations in recent years, yet many people say they aren't benefiting. At the same time, record house prices--fanned by low interest rates and demand from new migrants--are putting property ownership out of reach.

Annual net migration is at a record high. It hit 72,400 in the year to July, fanning criticism that the center-right National government, which has held power since 2008, has fueled economic growth with this influx. While GDP accelerated at 3% in the year through March, GDP per capita grew by less than 1% and had even contracted late last year.

Ms. Ardern wants to cut the annual net migration figure by up to 30,000 people a year to help more New Zealanders find work and own homes, as well as to take the pressure off infrastructure--especially in the commercial capital Auckland, which is often clogged with traffic.

A recent analysis from the Economist Intelligence Unit found Auckland and Wellington--two of the country's biggest cities--had become as expensive as Shanghai, China's priciest city.

"Housing poses something of an Achilles' heel for the government because it's been in power for nine years and hasn't really been able to get to grips with the problem," said Raymond Miller, a political scientist at the University of Auckland.

While many commentators, including Prof. Miller, think it is likely the National Party will hold on to power in a minority coalition with NZ First, Ms. Ardern's policies, such as outlawing letting fees--one-off payments tenants make when renting homes--as well as providing free tertiary education, are finding favor, especially with younger voters, who are in the thrall of what the local media has dubbed "Jacindamania."

"It goes beyond personal appeal and she represents a growing mood for change," Prof. Miller said.

Mr. English and other critics have questioned how cutting immigration levels would help, when the country is already suffering a skills shortage. Capacity pressures in the construction industry are one of the biggest handbrakes on the country's economy, they say.

The National Party recently unveiled its own curbs on migration, including pay thresholds designed to keep out unskilled migrants who compete with locals for lower-paid jobs.

"What's driving migration is the strength of the economy," Mr. English said in a recent debate. "If that changes, it will slow the economy down, the houses will not get built."

Ms. Ardern wasn't immediately available to comment, while Mr. English didn't respond to a request to comment.

Ms. Ardern also wants to tackle another big election issue, the environment, with a levy on the commercial use of water, then use this money to clean up the country's waterways. But the government and farming groups claim that this could cripple the country's agriculture industry, which is the backbone of its economy.

New Zealand markets itself to international tourists as "100% pure," but a rapid expansion of its dairy industry has endangered its clean, green image. Seven out of 10 of its monitored rivers are potentially unsafe for swimmers, according to a government report and the damage threatens to pit the nation's two biggest exports--dairy and tourism--against each other.

(END) Dow Jones Newswires

September 04, 2017 06:41 ET (10:41 GMT)