Spoonley: Record immigration will put pressure on NZ’s population infrastructure and productivity – where’s the election debate?

2023/10/07 Leave a comment

Same question applies to Canada. Have argued before that immigration need not be a third rail of Canadian politics:

The concerns of various pundits and politicians earlier this year that New Zealand might struggle to attract immigrants turned out to be premature. In fact, the country’s population has been boosted to the extent it should be a bigger election issue than it is.

In the 12 months to July, total permanent migrant arrivals were 208,400 – exceeding previous levels by quite a margin. Accounting for permanent departures, the net population gain from immigrants has been 96,200.

That breaks all previous records, and even accounts for a return to the consistent pattern of a net loss of New Zealand citizens (39,500 in the same period). There is every indication the country will hit an annual net gain of 100,000 people.

At this rate, inward migration will provide a net annual population gain of 2% for 2023. Once natural increase is added (births over deaths being more than 20,000 a year), the overall rate will be around 2.3% to 2.4%. By contrast, the OECD average is less than 0.5%.

Auckland is beginning another period of rapid population growth, reversing the decline seen in 2021. The city’s growth accounts for around half of the country’s total net migration gain. Combined with a natural increase of around 7,000 to 8,000, it means the city will have significant population growth, even allowing for a net migration loss to other regions.

Some of this surge can be explained by the return to relative normal after pandemic restrictions were lifted. But there’s a range of other factors pushing people to New Zealand, including anti-immigrant politics and general disenchantment in other countries.

New Zealand is seen as a desirable destination. In a recent US survey Americans ranked New Zealand second on their list of “best countries” – ahead of the US itself

Immigration and productivity

In 2021, at the request of the finance minister, the Productivity Commission examined the ways immigration settings would contribute to the “long-term prosperity and wellbeing” of the country.

The Immigration – Fit for the Future report released in 2022 provided a very complete review of the data and issues. While it indicated that immigration and immigrants have positive effects and outcomes for New Zealand, it also pointed to a lack of consistency and strategy, and little public accountability.

Key findings included what the commission referred to as “an infrastructure deficit” as investment failed to keep up with population growth. It also described a “reliance risk” on migrant labour that had “negative consequences on innovation and productivity”.

In the trade-off between a reliance on migrant labour or investing in new technologies, the concern is that migrant labour presents an easy win, with little incentive for employers to innovate.

Yet the significant implications of the current immigration surge for planning and productivity are noticeably absent from this election campaign

The missing election issue

Mostly, the main parties are positive about the role and contribution of immigrants (unlike some countries where anti-migrant sentiment has been rising). But the parties are also mainly concerned with policy detail, not the bigger picture.

Labour, National, ACT and the Greens all propose family and parent visas. This is to be welcomed, as migration works best when extended families are involved. And there is a general recognition that talent recruitment needs more attention.

Specifically, Labour wants Pasifika and other migrants who have been in New Zealand for ten years or more to gain residency. The Greens propose a review of refugee and asylum-seeker policy. National wants a new visa category for highly educated migrants. And ACT would require a regulatory impact analysis for all immigration policy.

For its part, New Zealand First refers back to its policies from the 2020 election. This includes statements about the negative impact of “cheap labour undermining New Zealand’s pay and conditions”, something the Productivity Commission found little evidence of.

But the party also suggested greater attention should be given to a more regionally dispersed population and the establishment of a 30-year population plan. Somewhat by default, then, New Zealand First highlights the gaps in other parties’ policy recommendations.

Where is the population strategy?

A more robust and constructive election debate would have addressed those big gaps more directly.

What should be New Zealand’s annual target for migrants, both permanent and temporary? How do we meet the challenges created by the current high volume, including the processing of applications, potential for migrant exploitation, and the stress on services and infrastructure?

More broadly, shouldn’t we be looking at immigration policy in the context of all the elements in play? This would mean factoring in the rapid ageing of the population, declining fertility and very different regional demographic trajectories (with some places experiencing population stagnation or decline).

Asked in a recent radio interview about the housing and infrastructure challenges of immigration and record population growth, National leader (and potentially next prime minister) Christopher Luxon argued the numbers were a “catch-up” from the COVID years:

We’ve got to make sure immigration is always strongly linked to our economic agenda and where we have worker shortages.

This only emphasises the lack of a genuine national plan. Now that the workers kept out by COVID are flowing into the country in large numbers, the Productivity Commission’s observations and suggestions are more relevant than ever.

Otherwise, New Zealand risks allowing immigration to be the default answer to much harder questions about innovation, productivity and the development of a long-term population strategy.

Source: Record immigration will put pressure on NZ’s population … – The Conversation

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When the great New Zealand immigration tap suddenly went dry

2020/09/08 Leave a comment

Good overview by Paul Spoonley, with some COVID similarities to Canada:

In March 2020, the immigration tap was all but turned off as New Zealand, and many other countries, closed their borders. But few countries have experienced quite the immigration arrival and net gain story that New Zealand has over the last two decades.

At this point, the drop in arrivals, apart from returning New Zealanders, is of such a magnitude it raises some fundamental questions: when will international mobility, both temporary and permanent migration, restart? And what will – or should – the new normal look like?

How did we get here?

There have been three very distinct periods of population growth and migration since 2000.

Lianne Dalziel, as minister of immigration, oversaw a significant period of immigration policy reform in the early 2000s, after the rather disastrous 1990s. What we gave points for, and what sort of work an immigrant could do after arrival, were not aligned through the prior decade. The politicisation of Asian immigration in the 1996 election did not help.

After 2000 the numbers grew but were then curtailed by the global financial crisis, when the numbers departing New Zealand increased significantly. From 2000 to 2008, the population grew by 407,200 with net migration gains contributing 45.5% to this growth.

Then the GFC years happened. Between 2008 and 2013, population growth was modest (+191,200) and net migration made up less than 5% of this growth. (Remember, there were years in this period when the net loss was nearly 16,000 per year.) But this was then followed by another period of major population growth (480,000, from 2014 to 2019) and net migration gains now made up 65% of population growth.

Fewer babies but many more immigrants

As fertility rates continued to decline, and reached sub-replacement levels in 2017, New Zealand was more than making up for it with migration numbers. The country was adding more than 60,000 people each year as a result of immigration.

The numbers did dip in 2019 but the latest figures for the year to June 2020 are quite staggering. There were 153,900 arrivals (up 8.7%), 74,500 departures (down 16.6%) with a net gain of 79,400 – and that included four months of lockdown migration rates.

The monthly arrivals for June are down 86.8% compared to June a year earlier, while departures are down 87.6%. And we still managed an all time high for the 12 months.

Our annual population growth since 2013 has been high (1.9-2.1%) and the key driver was now immigration, not natural increase. New Zealand stood out in terms of the relative size of these migration flows. Last year, New Zealand had 11.4 migrants (net) per 1000 people. Australia’s rate was 6.2, the US was 3.8 and the UK 2.4.

But there is more

This story is missing one other key ingredient : the size and role of temporary migration.

The MBIE migration data website provides a fascinating picture of the size of the temporary work and study population in New Zealand. Just before the first lockdown at the end of February, the site was showing 220,887 here on temporary work visas with another 82,857 on a study visa (remembering that these students can work up to 20 hours per week on these visas). Even by the end of July, the total number in both categories had only dropped by 23,828.

This might not be the full story. In May 2020, a statement from the then minister of immigration, Iain Lees-Galloway, suggested that there were 350,000 temporary visa holders which included a big chunk of visitors and the skilled migrant resident visa holders.

To say that these numbers are significant is an understatement.

What next?

The government has extended the current stay for the temporary worker and student visa populations under the Covid-19 Public Health response Act and with changes to the Employer Assisted Work Visa. Essentially, the visas have been extended to September 25. (Thai chefs and Japanese interpreters get their own special category of work visas provisions.) This is essentially a hold and wait approach.

In the meantime, migrant arrivals are now dominated by diaspora returnees – New Zealanders are cutting short their OE and returning home in numbers. Over the last year, 45,481 New Zealanders arrived in the country, and the net gain is 16,945. This is in sharp contrast to the major net losses during the GFC and much smaller losses from 2013 through to 2019. Over half of these returnees are coming from Australia.

The Stats NZ figures divide these returning New Zealanders in terms of whether they intend to stay or not. We will see. Covid-19 keeps changing the rules. A key influencer will be a combination of managing, or not, the virus, whether there are jobs and where is it easiest to get support from the state or family/friends. Australia is not a welcoming place for New Zealanders, as the pandemic has underscored.

One thing is certain: population growth over the next year or two will slow dramatically as migration slows. The saving grace will be returning New Zealanders but the numbers involved are still far from clear. They are exempt from meeting the labour market thresholds and the requirement to have a job offer of non-New Zealand citizen arrivals.

There is considerable pressure to open the borders – for short term workers, students or tourists, and for permanent migrants. But when? That depends on the management of Covid-19 within countries, along with a willingness to accept the risks that international arrivals bring, and international agreements about the protocols required of countries, carriers and travellers. The airline industry is suggesting that it might be 2024 before numbers are back to anything like the levels of recent years.

Demographic disruption

The dial has literally gone back to zero in terms of immigration, in sharp contrast to the previous year when the overall numbers and net gain were New Zealand’s highest ever. What is unclear is what the country’s immigration management system or migrant flows will look like as we emerge from a pandemic. Will there be a major reset or will the old normal return?

There is also the demographic future to consider. The fertility rate is in ongoing decline, aided by the delayed fertility that will result from the uncertainty associated with Covid-19. Ageing will mean that almost a quarter of all New Zealanders will be over 65 years of age by the 2030s. And we are seeing population stagnation – and decline – in many regions.

An inverted population pyramid and a smaller prime working age population are going to provide us with significant challenges. Immigration is one of the options to address these major demographic shifts. It will be interesting to see whether our politicians and policy communities see it this way and construct an appropriate immigration model for a future New Zealand.

Source: When the great New Zealand immigration tap suddenly went dry

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