Indian Newslink August 1, 2016 Digital Edition

AUGUST 1, 2016
12 VIEWLINK
Demand remains incessant to spiralling prices
The English Fortnightly (Since November 1999)
Issue 351 | August 1, 2016
Vulnerability of migrant
workers hits new low
Labour Party Policy Council Member Priyanca
Radhakrishnan has a point.
An increasing number of migrant workers subsist under
despicable working and living conditions, which is
no less or more than slavery.
Short of being physically beaten, their life, if reports are to
be believed, is on the brink of collapse, belying the fairness for
which New Zealand is renowned the world over.
Priyanca’s article, ‘Exploitation of migrant workers tantamount
to slavery’ under Businesslink is a must read.
Exploitation of migrant workers and international students
is nothing new in countries, which depend on migration for its
economic progress. Britain, America, Canada, Australia and New
Zealand have laws that prescribe minimum wages, working and
living conditions and rights of migrants on work permits.
Silent sufferers
Yet, they suffer in silence a variety of atrocities- working long
hours, accepting less pay, often by cash, allowing their employers
to evade tax and even immigration laws.
They suffer in silence to avoid loss of jobs, and worse,
deportation.
A large number of them come from India and most of them
are exploited by employers of Indian origin.
We not only need good laws but also their effective
enforcement.
We need laws that are responsible but humane.
It is a pity that many migrant workers falling a prey to exploitation
do not have their papers in order. In essence, they arrive
here on visit visas, hoping that their employers or agents
would regularise and legalise their stay.
Robust process
There is no argument against a smart, quick and efficient immigration
regime, and strengthened border controls. There
cannot be any cry against tightened curbs on hiring of illegal
workers, requiring most businesses to verify employees against
an electronic database of those allowed to work.
But there is a need for a regime that is tough on erring employers
- those exploiting the helpless situation of migrant
workers and international students.
Such a regime would also educate foreigners on their rights
and the ways and means of redressing their grievances.
Abuse elsewhere
Though questionable, New Zealand could seek little comfort
in hearing that the condition of migrant workers under reference
here is far better in this country than it is in nations which
depend on foreign workers to fill most job vacancies.
An Economist leader said that Sweden and Norway, where
migrants can use public services, claim welfare benefits and
bring in dependents, admit relatively few purely economic
migrants.
“This trade-off is visible even within the European Union,
where the recent accession of 12 relatively poor eastern
European countries has sparked a debate about migrants’ rights
to welfare,” it said.
About two years ago, David Cameron, Britain’s former Prime
Minister, clashed with his Oxford contemporary Radek Sikorski,
Poland’s Foreign Minister.
Mr Cameron wanted to exclude recently arrived European immigrants
from welfare and public housing.
“If Britain gets our taxpayers, shouldn’t it also pay their benefits?”
Mr Sikorski asked.
Britain’s exit from the European Union is likely to change the
equation.
Bilateral Agreements
Elsewhere the movement of people is increasingly regulated
by bilateral agreements and diplomacy.
David McKenzie, a Lead Economist of the Development
Research Group at the World Bank said that since a diaspora
can help poor countries develop, sending states must try to protect
the rights of migrant workers without making them such a
burden as to be unwelcome.
Receiving countries weigh their national interests, real or
perceived, against international obligation calculations vary
from country to country.
Back to the home turf, New Zealand should have a better system
of immigration, screening of migrant workers, and more
importantly, a stringent legal system that does not fail to punish
those exploiting migrant workers.
No one should be allowed to live or work here illegally. On the
same count, no one should be allowed to misuse and exploit migrant
workers and international students.
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Nathan Saminathan
Since October 2013, the
Loan-to-Value (LVR)
Restriction has been in
place but there is no respite
on rise in property prices.
There are reasons why we are
in this situation.
When the global financial crisis
hit in 2007, most the builders
went broke or became decimated.
Since then, we are building
few thousand houses annually,
whereas demand, which was
about 10,000 ten years ago has
registered a sharp rise.
One may recall that a number
finance companies went bust.
They were funding builders
on short-term basis. When some
builders went into liquidation,
some finance companies folded
up due to poor cash flow. New
Zealand suffered low level of construction
activities for about four
years.
Earthquake recovery
Christchurch earthquakes created
building activities.
The government relaxed its immigration
policy to boost economic
activities. There was a
huge increase in the number migrants,
peaking to 68,000 during
the year ending December 2015.
Migrant numbers have been
steadily rising since 2011. This
created more demand for houses
against a heavy shortage of houses,
especially in Auckland. At the
same time, we suffered paucity
of skilled workers in the building
industry.
Consent for new houses to
meet the ever-growing demand
for houses has not been forthcoming.
The restrictions posed by
the Resource Management Act in
obtaining building consents and
the reluctance of the Auckland
Council in releasing more land
compounded the problem.
Joint efforts help
It is heartening to note that the
Council, Reserve Bank of New
Zealand (RBNZ) and the Central
government are now working to
solve the problem.
Although the Council continues
to restrict fresh land for house
construction until appropriate
infrastructure is in place, its
‘Unitary Plan’ will see more houses
built within restricted areas.
RBNZ took its own action
through LVR to restrict investors
from buying houses.
Contempt of Court appeal fails
Supplied Content
In a recent judgement, the
High Court declined an application
by the liquidators
of AK Group 2006 Limited
(in liquidation) for holding
Director Satwant Singh in contempt
of Court.
The application had been filed
by the liquidators following a
non-compliance of the orders of
the High Court passed last year
directing the respondents to produce
records of the companies
In the course of hearing the
proceedings against four respondents,
the Counsel for
Satwant singh raised an issue
However, this did not help in
preventing rise in house prices.
The earlier restriction of
30% equity was easily overcome
with the increase in value of the
houses.
There is now 40% deposit requirement
in place targeting investors
and foreign buyers. The
new regulation, which came into
force in October 2015, will make
sale of property within two years
taxable.
The requirement of foreign
buyers to obtain IRD numbers
has not helped to restrict demand
on property.
Figures released last fortnight
show that the number of building
consents issued was 13,000 units.
This will go a long way to alleviate
housing shortage. To meet the
current demand, we need 40,000
new dwellings.
The government is willing
to fund up to $1 billion for
infrastructure.
Cause for concern
I am really concerned that ordinary
New Zealanders cannot
afford to buy a decent house for
less than $500,000.
I do not think this is right. I believe
that the ultimate responsibility
rests with the Central
Government.
Currently, only 66% of New
that the consent orders passed
in July 2015 were without instructions
and knowledge of his
client.
The Court agreed that this issue
required determination and
therefore the application against
Satwant Singh was adjourned
to another date, while two other
directors were held in contempt
of Court orders and directed to
pay penalties.
Before the hearing of the matter
against Satwant Singh, the
liquidator filed another memorandum
seeking to introduce
two affidavits of other respondents
into evidence.
Zealanders own homes, down
from 75% a few years ago. I will
not be surprised if the gulf between
those in their homes and
those in rented properties widens,
triggered by inaction of the
government.
There are three areas in which
the government, the Auckland
Council and RBNZ can help to alleviate
the situation.
Further action
The government should reduce
the number of migrants until
we have the resources including
appropriate infrastructure are
available.
The Council should fast tract
the process of issuing building
consents and the Unitary Plan.
RBNZ should help in converting
the shortage into surplus by
restraining further cuts in interest
rates. We need a cooling
period.
Providing more houses to meet
the growing demand is easily
said than done.
But I remain confident.
I know that patience always
has its rewards.
Nathan Saminathan is an Authorised
Financial Adviser and
Director, Mortgage Masters
based in Auckland. He is also
featured in our Real Estate &
Mortgage Special in this issue.
Editor’s Note: In the 20 years to 2011, total housing and consumer loan debt increased
around six-fold in dollar terms. As a ratio of household disposable income, the percentage
at June 2011 of 147% is about two and a half times that of 58% at March 1991.
Through the mid-2000s, household debt grew strongly, at an average annual rate of
over 14% in the five years to June 2007. The rate of growth slowed sharply from 2007,
averaging well under 4% per annum in the four years to June 2011. This deceleration
in the rate of growth of household debt arrested the growth in the debt to income
ratio from 2007. Falling interest rates have been the main driver of falling interest
servicing as a percentage of disposable income from 2008 (Source: Reserve Bank of
New Zealand).
Gurbrinder Aulakh, the
Counsel for respondent Satwant
Singh, opposed the introduction
of this new evidence stating it to
be pre-mature and irrelevant to
the proceedings.
At the hearing held on July
21, 2016, the Court heard from
the counsel for the liquidators,
and Mr Aulakh for respondent
Satwant Singh and from the
counsel who was alleged to have
no instructions.
Following this, Justice Heath
held that Satwant Singh was not
in contempt of the Court orders
and the application of the liquidators
thus fails.