Grow baby grow

November 8th, 2013 at 9:00 am by David Farrar

James Weir at Stuff reports:

The economy will grow almost 4 per cent next year, helped along by a strong population gain from surging immigration, according to Westpac Bank’s latest predictions.

The bank has upgraded its forecasts for this year slightly to 2.8 per cent, followed by growth of 3.8 per cent next year.

The economy had moved beyond the recovery phase and into solid expansion this year, despite the brief but intense drought last summer. 

It was set for a big burst in the second half of this year, with a “remarkably swift” turnaround in milk production in the last few months. 

At times like this I recall how the Green Party climate change policy is to shoot around one in five cows. Okay they don’t literally say shoot, but they clearly say they want a reduction in the number of cows.

That meant growth was shaping up to be well above 1 per cent for the September quarter, Westpac says in its latest Economic Overview.

Hiring intentions have also risen as companies become more confident and Westpac is forecasting unemployment to fall to 5 per cent by the end of next year.

That would be great.

Job prospects in New Zealand and Australia are the key driver of migration. As the job market softens in Australia as the mining investment boom passes its peak, more New Zealanders are coming home and fewer are leaving for Australia, Westpac says.

A double win.

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50 Responses to “Grow baby grow”

  1. Allyson (41 comments) says:

    This is dreadful news for the trash talking doomsayers that are the Labour party in NZ.

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  2. Longknives (4,384 comments) says:

    Yes but the Gweens will argue it is only us ‘Rich Pricks’ (people who get off their arses and work for a living) who are seeing the benefits of this Economic growth. Where is the economic benefit to those who choose not to work??

    * Speaking of ‘redistribution of wealth’- By the look of the Greens Co-leader lately she could ‘redistribute’ half the contents of her refrigerator and feed four poverty stricken families in South Auckland for a year….

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  3. Harriet (4,495 comments) says:

    National should brand it KiwiResults in dot point format – and sell that to Labour’s lofo voters! :cool:

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  4. alloytoo (429 comments) says:

    @Harriet

    That’s quietly brilliant.

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  5. flipper (3,524 comments) says:

    The market IS softening in Australia……

    I have a sister in law who lives and works in Melbourne . She is employed by Bosch, the German tool/appliance company …… well is/will be until Mid December.
    At that point the whole of the Bosch stock/ parts/ service centre (which also covers New Zealand) will be moved to Manila.

    Australia is now experiencing the chill draft of a non-mining (well, sort of) driven economy.

    See where the f/wits in the red melons and Cun*liffe would take New Zealand ????
    The media will certainly ignore the problem.

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  6. Manolo (13,297 comments) says:

    NZ has a large group of people encompassing bludgers, no-hopers, loafers and losers-in-life who will join forces with those whose only objective is to redistribute wealth, i.e., the socialist Labour Party.

    Add to that dreadful mix the callow youth, conned by the Luddites to believe is their duty to defend Mother Gaia from the evils of progress.

    The danger is the sum of these two groups might be greater than the productive sector of the population and may attain political power. Therein lies the problem.

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  7. Harriet (4,495 comments) says:

    “…..Westpac says in its latest Economic Overview….”

    What Westpac doesn’t say in its latest Economic Overview:

    Kiwirail is basicly broke.

    Kiwibank keeps getting bailed out.

    Kiwipost is basicly broke.

    And now the nation and it’s government is going to rubbish itself again in the international business community, in particular the banking and insurance markets, with Kiwiassure – a ‘product’ that is contrary to international practise?

    What’s Westpac selling the dollar for today?

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  8. Nostalgia-NZ (4,896 comments) says:

    I’ve been anticipating that as the good economic news continues that Labour’s purchase on the electorate before the next election will slip. Of course it is still the ‘did not votes’ that matter. Yet on the other hand there is an argument that the Nats might win by default because of an improving economy – simplistic really when considering they have been at the helm through the stormy years, held firm to a sound economic policy and not blinked, so hard to take the evaluation of good leadership from them. In the course of something new I’ve been doing for awhile I have casual conversations from time to time with farmers and others in the rural support industry during which I’m exuberant of how once again farming has shown itself to be the backbone of the New Zealand economy, so cheers to them.

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  9. radvad (661 comments) says:

    This news will make Norman even grumpier.
    It also brings some truth to Cunliffe’s rhetoric in his conference speech. “The life of every kiwi hangs in the balance” he pompously announced. There is increasingly some truth in that but not in the way he was thinking.

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  10. Yoza (1,513 comments) says:

    New Zealand’s growth is, more than likely, being driven by China’s and Australia’s stimulus programs. At some stage these countries, along with the likes of the US, the U.K. and, to a lesser extent, Japan will stop printing/dishing-out money, and then we will be forced to witness how effective our exporting sector actually is.

    If those markets tighten up suddenly we may very well end up holding the record for the largest stockpiles of milk powder in the history the planet. Regardless of whether we continue under a National or Labour regime there will come a time when we will no longer be able to afford to pay for the illusion of neo-liberal “success”.

    New Zealand’s economic growth is unsustainable as it is founded on turning our rivers into toxic drains to support dairy farming and allowing foreign mining corporations to loot our natural resources while financial corporations bribe the population with temporarily cheap loans.

    These North Korean style ‘Good News!’ stories should only increase anxiety amongst any who have the temerity to scratch the surface of the façade.

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  11. Ross12 (1,143 comments) says:

    The other thing that needs to be pointed out very sharply to Norman & co is that the big money printing exercise by some large economies has failed miserably. It was intended to produce GDP growth and inflating away the debt. But they are still looking for any green leaves. All they see is increased debt. To think Norman and Berl wanted us doing the same thing.
    I call still recall seeing Nana from Berl on TV saying he did not see anything wrong with money printing.

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  12. wreck1080 (3,719 comments) says:

    This is great news — but, bare in mind it is based on milk prices and the christchurch earthquake.

    I would like to see the economy diversify further.

    That cash is swishing around the economy and boosting everything.

    I still think the RB has been too slow to raise interest rates. The housing price thing could turn ugly.

    Sure, people always say it’ll never happen because Auckland is different …maybe so, maybe not. Don’t people always say things like that before housing bubbles burst?I recall the dotcom bubble? — people were saying IT had transformed the economic rules and old rules need not apply. Certainly in hindsight the old rules did apply.

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  13. NK (1,060 comments) says:

    Yoda – how is the head office of the Green Party today?

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  14. alex Masterley (1,489 comments) says:

    Yoza,
    Been out in the wild recently?
    Go and see the work farmers are doing to protect riparian boundaries from stock damage and to protect streams and rivers from effluent.
    Strange as it may seem to you but apart from the odd idiot farmers prefer clean water to dirty so are making a concerted effort to improve water quality.
    This work is supported by the courts who are heavily fining those few idiots who treat their waterways as dumps.

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  15. slightlyrighty (2,496 comments) says:

    Yoza.

    Our biggest export is foodstuffs. People can and do defer purchases of large durable consumer goods such as cars, TVs and other consumer electronics, and appliances. We don’t export those. We export food.

    You can’t defer purchases of food. It is one of the more recession proof commodities. The mineral export sector had softened as the manufacturing industry pared back in the face of softening demand. As demand grows, so will the mineral market, but we have weathered the storm, and better than most. We are well placed to benefit from the growth as the global economy recovers.

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  16. Manolo (13,297 comments) says:

    Only saboteurs can desire the weakening of NZ’s dairy industry, backbone of our economy.
    So, the Luddites who attack farming are plain terrorists and enemies of our nation.

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  17. Jack5 (4,565 comments) says:

    Time to break out the champagne? Yeah, right.

    NZ current account deficit for the March year, $9.5 billion, the biggest for five years, international dairy prices now falling, and Kiwis now returning from Australia. NZ dollar could lift further on rising interest rates if the bank forecast is on track, and this would soften effects of a likely good season for milk output.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11152215

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  18. NK (1,060 comments) says:

    Yes, the sky is falling, Jack. Be careful not to be hit by it. Are you friends with Yoza by any chance?

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  19. Allyson (41 comments) says:

    Thats the spirit Jack. Trash talk our economy down to a level where socialism looks good.

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  20. Nostalgia-NZ (4,896 comments) says:

    A mention on coal and steel. It’s a market that always comes back, steel being the oldest recycling practice of all. While it is very tough now, fat is being trimmed off across the board. While it took longer to happen the downturn in coal and steel was always going to come, everything was overpriced and long term its good that a shake out has happened, perhaps in the future the present generation will be more mindful about both debt and having levers to slow down production and costs at the earliest signs.

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  21. hmmokrightitis (1,506 comments) says:

    Just from my own personal experience, Ive spoken and transacted with: boat dealer, trailer manufacturer, euro car service, sports gear wholesaler, recruitment firm (IT sector) over the last 2 weeks, and asked the question: hows business?

    Every single one has talked about how good things are at the moment, and how things have been building up nicely. Spoke to bank economist mate of mine, and he (not from Westpac) concurs – next year is going to be big. Christchurch has paused in between demolish and build, and the rest of the economy is building up nicely as well.

    From our experience (small niche IT consulting firm) weve gone from 10 to 15 humans since January. $ Turnover has doubled this year over last. And of those 5 newbies, 3 were coming back from Australia – 2 of whom had gone over in the last 18 months.

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  22. Jack5 (4,565 comments) says:

    Allyson (11.11) and NK (11.08). What the fuck is wrong with you?

    Can’t you have a debate about figures and facts? Do you think you can wish the economy into fairy land?

    hhmokrightitis (11.15): You are right that things are buoyant at the moment, but as a small export-dependent nation, the economy inevitably follows our international trade fortunes.

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  23. gazzmaniac (2,317 comments) says:

    Jack5 what the fuck is wrong with you?

    Can’t you accept that the country might actually be doing well, and be happy about it? Do you really think socialism is better, despite the evidence to the contrary?

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  24. NK (1,060 comments) says:

    NZ current account deficit for the March year, $9.5 billion, the biggest for five years, international dairy prices now falling, and Kiwis now returning from Australia. NZ dollar could lift further on rising interest rates if the bank forecast is on track, and this would soften effects of a likely good season for milk output.

    Trade with China the best ever increasing by billions every year; a deficit is turning into a surplus. Unemployment falling. Kiwis returning providing much needed skills and the likely demand for housing leaving house prices stable. ACC levies cut providing stimulus.

    I could go on. You find negatives, I find positives.

    The glass will always be half empty with you Jack.

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  25. mandk (815 comments) says:

    @ radvad,
    Did Cunliffe actually say anything of significance about the economy at the party conference?
    I didn’t read or hear his speech, and all I read was about a heap of fringe issues that are completely irrelevant to the average family on Struggle Street.

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  26. Jack5 (4,565 comments) says:

    Gassmaniac (11.28): I disagree with you so I’m a socialist? Don’t be a numbskull. The centre-left National Party is far more socialist than me.

    NK (11.32) posts:

    ..a deficit is turning into a surplus…

    Which deficit are you talking about NK? Not the current account deficit, I presume.

    AND NK posts:

    ..Kiwis returning providing much needed skills…

    Are you saying they are coming back to NZ attracted by the prospect of more wealth, rather than because unemployment is rising in Australia?

    And about the half-full glass metaphor: that’s okay so long as you don’t think the glass is half full merely because you are some political PR hack.

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  27. Yoza (1,513 comments) says:

    Manolo (11,115) Says: 10:31 am

    Only saboteurs can desire the weakening of NZ’s dairy industry, backbone of our economy.
    So, the Luddites who attack farming are plain terrorists and enemies of our nation.

    I like the idea of farmers owning their farms and working within the constraints imposed by the environment and society to produce a sustainable quality product. As a nation we cannot afford the corporate style farming factories that place a premium on producing short and medium term profit at the expense of the surrounding environs. The fruit growing industry can be as destructive with the various pesticides contaminating waterways – I wouldn’t place the entire blame on the dairy farming sector. With the myriad of industry supporting towns and cities and the waste created by those towns and cities participating in decimating waterways on which we are reliant.

    Ignoring the damage being wrought on the environment will not prevent that damage affecting our future prospects, regardless of the short term economic benefit. Using the clumsy analogy of the athletic drug cheat; those steroids may provide the athlete with the short term gratification of superiority and status, but their long term health prospects are pretty grim.

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  28. Morgy (169 comments) says:

    A post about a growing economy (one greater than expectations) and we have negative comments. Says a lot about the two types of Kiwi’s here….the positive do’ers and the acerbic. It’s getting boring (YOZA et al).

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  29. Jack5 (4,565 comments) says:

    Morgy (12.04)

    The questioning isn’t BECAUSE there is a growing economy, but ABOUT the growing economy.

    NZ can inflate its GDP with immigration or returning expatriates as much as it likes but if we don’t begin paying our way in the world, we are stuffed!

    You imply it is unpatriotic to question claims about our national economic health? Where do you think you are? Germany in 1937?

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  30. Morgy (169 comments) says:

    Jack5, some here would complain even if they were gifted this week’s lotto numbers. That’s my point. Nothing deeper than that so keep the dramatic response for someone who gives a shit.

    For many months we have heard from the opposition where is the growth. Well here it is. Now there’s a problem with that. BORING!

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  31. NK (1,060 comments) says:

    Which deficit are you talking about NK? Not the current account deficit, I presume.

    This one: http://www.kiwiblog.co.nz/2013/11/the_benefits_of_free_trade_agreements.html

    Are you saying they are coming back to NZ attracted by the prospect of more wealth, rather than because unemployment is rising in Australia?

    Both. But does it matter?

    And about the half-full glass metaphor: that’s okay so long as you don’t think the glass is half full merely because you are some political PR hack.

    Works both ways. Ever looked in a mirror?

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  32. Jack5 (4,565 comments) says:

    NK: 12.14:

    So when you said the “deficit is turning into a surplus” you were talking about trade with China, not about NZ’s current account deficit or over-all trade position. Big difference.

    I suggest it does matter whether NZers are coming back for opportunity, or for survival. If the latter, watch the unemployment statistics.

    We’re now into the final 12 months countdown to the next election. If National sells itself now on the state of the economy, what happens if the economy dives before the big vote? Things are still volatile internationally.

    If the political PRs are going to keep boosting the economic bonanza story, it’s lucky there are skeptics around, NK.

    Morgy: to shout “boring” in an argument contributes nothing. You’ve obviously got no points to make.

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  33. Simon (677 comments) says:

    Public & private sector debt is growing at a far faster rate than 4%. About 8% pa.

    Turn the debt creating off and the economy crashes, continue on the same debt creating and mathematically the economy will crash.

    At the moment NZ is enjoying high (relative) economic growth due to debt creation.

    Is is unsustainable just like it was in Ireland or Argentina.

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  34. Than (425 comments) says:

    Christchurch has paused in between demolish and build, and the rest of the economy is building up nicely as well.

    Just nitpicking, but I disagree Christchurch has paused. The demolish phase is not quite finished (almost but not quite), but the rebuild phase has already started. True it’s not at full speed yet, but if you go for a walk around the Christchurch CBD there are at least half a dozen mid-sized (4-6 level) buildings well along in construction.

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  35. Harriet (4,495 comments) says:

    “….True it’s not at full speed yet, but if you go for a walk around the Christchurch CBD there are at least half a dozen mid-sized (4-6 level) buildings well along in construction…..”

    I agree Than…….but that is the understatement of the year.

    They knocked down over 900 buildings.

    Full speed……will be about election time…….with only about 300 on the go……after the election another 600 to be rebuilt……National will win the election after that too! All’s good.

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  36. Yoza (1,513 comments) says:

    Jack5 (3,567) Says: 11:55 am

    And about the half-full glass metaphor: that’s okay so long as you don’t think the glass is half full merely because you are some political PR hack.

    Kind of. Half a glass of water is half a glass of water, qualifiers like ‘full’ and ‘empty’ are completely redundant.

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  37. Jack5 (4,565 comments) says:

    Simon at 12.34 makes sound comment in his post, but he won’t get any traction in this thread today. It’s under siege by a bunch from Pollyannaism Unanonymous, a self-help group for those suffering from the political-Pollyana bias, or political-positivity bias.

    Yoza, you and I seldom agree, but you are mostly correct today.

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  38. Jack5 (4,565 comments) says:

    Further to my 12.58 post…

    Here’s a Wikipedia explanation of the Pollyanna principle….

    In 1978 researchers Margaret Matlin and David Stang provided substantial evidence of the Pollyanna Principle. They found that people expose themselves to positive stimuli and avoid negative stimuli, they take longer to recognize what is unpleasant or threatening than what is pleasant and safe, and they report that they encounter positive stimuli more frequently than they actually do.

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  39. Sir Cullen's Sidekick (779 comments) says:

    Markets are reacting well due to the certainty of the incoming Labour-Green-NZ First-Mana government….

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  40. hj (6,321 comments) says:

    Remember the Savings Working Group said immigration had shot us in the foot, as we have to pour money into infrastructure rather than capital deepening. The Australian Productivity Commision callef it a “sugar rush”.

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  41. hj (6,321 comments) says:

    Labour/ Green wont attack Nationals Ratbags of Realestate thanks to Darling Multiculturalism.

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  42. thedavincimode (6,512 comments) says:

    New Zealand’s economic growth is unsustainable as it is founded on turning our rivers into toxic drains to support dairy farming and allowing foreign mining corporations to loot our natural resources while financial corporations bribe the population with temporarily cheap loans.

    Jesus wept.

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  43. Jack5 (4,565 comments) says:

    Re thedavincimode at 3.28:

    That statement you note (I think by Yoza) is fairly extreme, but so is this one from Manolo at 10.31:

    …the Luddites who attack farming are plain terrorists….

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  44. wikiriwhis business (3,883 comments) says:

    We still don’t what what the covert anti democratic TPP has in store for us and as usual the media across the board are ignoring this clandestine contract 9 nations are keeping secert until it’s signed.

    Once Key has it in place he won’t care if he wins in 2014 or not. His treacherous damage will be done.

    A direct product of the fascist Bilderberger meeting which is also top secret and anti democratic and definitely no conspiracy theory. Very real conspiracy which we will find to our detriment around 2014

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  45. wikiriwhis business (3,883 comments) says:

    The 20% home mortgage reserve does not promote a buyers or sellers market. It completely stifles home ownership. No wonder apartments are now the narrative.

    Direct from UN agenda 21 to have us all contained in boxes . Len Brown is a promoter of UN 21 which is why he is still mayor of Auckland. He is part of the UN agenda.

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  46. gazzmaniac (2,317 comments) says:

    The CIA shot JFK and 9/11 was a US government conspiracy too.

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  47. adze (1,855 comments) says:

    And the Jews. Don’t forget the Jews! /sarc

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  48. hj (6,321 comments) says:

    What Growth Look’s Like:

    Dizzying Pics of Hong Kong’s Massive High-Rise Neighborhoods

    10 Meter Visability In Chinese City

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  49. hj (6,321 comments) says:

    “Grow Baby Grow”:

    Professor Al Bartletts sustainability Laws

    Sixth Law: (The lesson of “The Tragedy of the Commons”) (Hardin 1968): The benefits of population growth and of growth in the rates of consumption of resources accrue to a few; the costs of population growth and growth in the rates of consumption of resources are borne by all of society.

    A) Individuals who benefit from growth will continue to exert strong pressures supporting and encouraging both population growth and growth in rates of consumption of resources.

    B) The individuals who promote growth are motivated by the recognition that growth is good for them. In order to gain public support for their goals, they must convince people that population growth and growth in the rates of consumption of resources, are also good for society. [ This is the Charles Wilson argument: if it is good for General Motors, it is good for the United States.] (Yates 1983)

    http://www.albartlett.org/articles/art_reflections_part_5.html

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  50. hj (6,321 comments) says:

    Growing Pains Dr Greg Clydesdale
    (a call to get back to basics)

    The irony is, as these sectors grow, they have incurred
    skills shortages which in turn has increased demand for skilled immigrants. The Department
    of Statistics ‘Long Term Skill Shortage List’ of 28/3/2006 includes carpenter/joiner, plumber,
    electricians, fitter and turners, fitter welders; all indicative of a nation building its
    construction/property sector.

    There is a danger that a sector of the economy is being augmented that is totally reliant on a
    small domestic economy. Not only do these industries have limited potential for per-capita
    growth but ‘deriving growth via factor inputs such as labour places pressure on infrastructure
    such as transport and land supply, and ultimately have a further negative impact on growth
    (ARC 2005). Finally, as the sector gets larger, it gains in lobbying/political strength and can
    lobby for immigration regardless if it is the best interests of the economy as a whole. This
    could be seen in Canada where the development industry has lobbied hard for high sustained
    immigration levels (Ley and Tutchener 2001).

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