The recent devastation caused by Cyclone Gabrielle in New Zealand has highlighted the urgent need for the country to loosen its strict immigration restrictions. The widespread damage caused by the cyclone has led to billions of dollars of damage to infrastructure, including roads, bridges, rail, electricity, water, and telecommunications. The rebuild and recovery process will require a massive amount of resources, with both central and local government seeking more funding for capital works.

However, the impact of the hit to the household and business sectors is the hardest to gauge in the medium-term sense. Many thousands of people are still displaced, and there will be a significant number who will not be able to use their houses ever again. The balance sheet of the household sector has been hit, and for those who are uninsured, the impact will be permanent. Even for some of those who are insured, the wait to get a fix will be intolerable.

With such a massive and ongoing demand for workers and capital spending, New Zealand’s major labour shortage and general capacity constraints have become a major concern. The country is already experiencing supply shocks and the negative impacts on supply and the immediate price increases arising from the destruction of crops, farmland, and transport disruption have further heightened inflationary pressure.

It is crucial that New Zealand considers loosening its strict immigration restrictions to attract the necessary workers needed for the rebuild and recovery process. This would help ease the labour shortage and provide the necessary skills needed to rebuild infrastructure and support households and businesses affected by the cyclone. Loosening immigration restrictions could also provide a much-needed boost to the economy, as it could create jobs and generate revenue for the government. In the long run, this could help offset the economic damage caused by the cyclone and create a more resilient and sustainable economy.

John Kenel
Assured Property