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By Distinguished Professor Paul Soonley
The latest Statistics New Zealand figures tell an interesting story. It won’t surprise anyone to learn we are in a period of population growth, but the composition of New Zealand’s population is also changing rapidly.
There are three key contributors to this: structural ageing, fertility rates and immigration. In New Zealand, the number of people aged over 65 is set to double, while fertility rates are declining. Statistics New Zealand recently reported there were 1608 fewer births in 2016 compared to 2015, and the total fertility rate is now below replacement levels at 1.87 births per woman.
This means New Zealand has joined many other OECD countries in the sub-replacement fertility club – that is the numbers being born are not sufficient to replace the existing population. Trends like this can have significant economic impacts. In Japan, the first modern country to see a decline in its total population, more than one quarter of people are now aged over 65. There are significant labour market shortages as the prime working age population declines and 40 per cent of the country’s cities have lost population since 2012.
In recent years New Zealand’s population growth has been high in comparison with most OECD countries. Last year, our population grew by 2.1 per cent, which is vastly different to the countries at the other end of the spectrum like Germany and Japan.
Against this backdrop, immigration is an increasingly important contributor to population growth, both nationally and in major cities like Auckland. Depending on what figures are used, Auckland’s growth is a product of both fertility and net immigration, with the latter playing an increasingly significant role.
The number of permanent immigrants arriving has been very high, with the net gain equivalent to 1.5 per cent of the New Zealand population. Most OECD countries do not see anything like this figure, and even Australia and Canada do not exceed one per cent. We have seen net immigration gains since the end of the Global Financial Crisis, as both permanent and temporary inflows have increased while emigration rates have fallen.
These demographic shifts, and immigration in particular, have drawn a lot of attention. Immigration is always cyclical and it is more important to ask about the long-term impacts on population growth or stagnation – and the implications for employment, housing, education and the environment.
The default position is to blame someone or something, notably immigrants, for one problem or another. Challenges around housing availability or affordability, access to employment, pressure on infrastructure and the ownership of the country’s resources are often seen as a consequence of immigrants and immigration.
So, it’s no wonder that immigration has become a key issue this election year. New Zealand First, Labour and the Greens are all looking to significantly reduce the number of immigrants arriving, with particular attention to certain visa categories. Labour has voiced concerns about a number of elements, including migrants entering New Zealand for semi-skilled jobs. The Greens have argued for a cap equivalent to one per cent, while New Zealand First wants much tighter management of immigration – and major reductions.
Meanwhile, the Government announced changes to immigration late last year – the increase in points required from 140 to 160, the suspicion of the Parent’s Category and further changes announced in early 2017, which will see additional restrictions introduced.
But there are some elements missing from public debate. The first is that immigration is – or should be – just one component in a discussion about New Zealand’s population, especially whether we want growth and what that growth rate should be.
The second is to be clear about the benefits or costs of immigration. The reality is that arrivals, whether they are tourists, short-term workers or students, or as permanent arrivals, are all now significant contributors to New Zealand’s economy.
The third concerns the regional implications of population growth or stagnation. It’s been predicted that 60 per cent of New Zealand’s population growth over the next two decades will be in Auckland. Two-thirds of New Zealand’s Territorial Authorities will experience population stagnation or decline in the same period.
This year’s election should be an opportunity to have a proper debate about all the factors that affect our population so voters understand their options. Already, in some regions, the over 65 population now outnumbers the zero to 14 age group. This has implications for maintaining the local health and education services and for the supply and availability of labour.
The public debate shouldn’t be narrowed to just immigration; it needs to focus on the bigger picture. This means an honest discussion about whether we really want the “end of growth” in some regions, and whether there are ways to entice people to those regions that really need them.
Distinguished Professor Paul Spoonley is the Pro Vice-Chancellor of Massey University’s College of Humanities and Social Sciences.
Created: 24/05/2017 | Last updated: 27/06/2017
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