The Government should consider introducing a population-demographic policy to broaden debate out from record net migration to one of population size and composition, says BNZ head of research Stephen Toplis.
Toplis floats this idea in an Economy Watch report entitled Housing in New Zealand. New Zealand recorded a net population gain 69,090 in the June year continuing a strong run over the past couple of years of record inward migration. This is helping push up house prices, especially in Auckland, where the average house value reached $992,207 in July, according to Quotable Value.
"New Zealand may need to address the idea of having a population/demographic policy. In this manner we could deflect the discussion from simply migration to a more general discussion on population size and composition," says Toplis.
"To start with, does New Zealand want GDP [Gross Domestic Product] growth or per capita GDP growth? Are the benefits of population growth more beneficial than the externalities that come with it - such as congestion, pollution and greater stress on our natural resources?"
"[And] is there an optimal population size for New Zealand? And what is the optimal growth rate both in terms of quantum and timing?"
Toplis says that if we want to attempt to control net migration we can’t impose policy that impacts the net flows of Australians and New Zealanders and, yet, this is currently having a significant impact on total flows. He also says if we want to address who we let into the country as migrants, we need to remember that controls that are too strict may curb the supply of needed labour.
"This could be counterproductive if that labour is coming to New Zealand to build houses or to provide skills that are lacking," says Toplis.
Meanwhile, he says, a reduction in education migrants could negatively impact GDP on services exports.
"We can’t really restrict migrant flows by race for fear of accusation of racism or a trade backlash from those impacted. More generally, xenophobics should pause to ponder whether they themselves are of migrant stock? After all, all Anglo-Saxon New Zealanders were migrants not that many generations ago," says Toplis.
"Arguments for and against migration would best be focused around 'economic' and, potentially, 'cultural' grounds."
99 Comments
Really. We could shift half the population of Africa here and have a huge increase in the GDP. Perhaps great if you are one of the top 0.1% but disastrous for the other 99.9% of the population who would experience their GDP per capita share of the wealth decimated at best and have to fight for a patch of land to throw together a shanty for a dwelling. I think the only thing that concerns the bulk of the population is that their personal wealth increases, i.e. GDP/capita.
Interestingly, the countries around the world with low growth or decreasing population have amongst the highest GDP/capita. Similarly, analysis of most countries in the world reveals that there is a mildly negative correlation between the population growth rate and GDP/capita growth rate. Certainly not a positive correlation or an argument to justify immigration for the economic benefit of a country.
Yes, because they would have been so much better off without the knowledge, technology, and common law that the English brought.
Maybe that is why PNG is the socially and economically advanced nation, that it is.
What a stupid statement to say that it didn't work out well for them. The Maori got the best end of the deal.
Actually Maori welcomed contact, exchange and trade. Then European (well, British, mainly English) settler perfidy meant Maori were rapidly shafted, isolated and impoverished. Best end of the deal? What a stupid racist statement. Editor, what's your stance on this?
Nymad,
I assume that like me, you or your forebears were immigrants,so perhaps we need to be a little circumspect in our opinions on this issue.As Westerners did to so many other indigenous civilisations, we brought guns,germs and steel, as so vividly documented by Jared Diamond.
How very imperialist of you to say with such certitude that Maori "got the best end of the deal". Your arrogance is almost endearing.
Well Australia grew by the total population of New Zealand in just the last 13 years. The problem is that most of the migration to New Zealand doesn't spread out equally.
More should be done to encourage more Aucklanders & Migrants to the regions.
The NZ population is too concentrated in Auckland. Ghost towns appearing in the regions.
(33.4%) of the NZ population lives in Auckland compared to only (20%) the Australian population lives in Sydney.
40,000-50,000 Kiwis were moving to Australia annually over the last 15 years.
Slightly bigger? Wrong. 76% of the NZ population lives in the North Island & just 24% live in the South Island.
The South Island has a population density similar to Tasmania.
Australia the 6th largest country in the World & New Zealand is the 75th largest.
NZ has a population the size of Ireland in a landmass the size of the UK.
Australia is a continent.
I think you and everyone else is wasting their time, Stephen Toplis.
No one is listening in Wellington, they enjoy, in fact need, the fruits of the current let it run / do nothing policy to keep GDP ticking along. There is an election to win next year you know, no one gives a fig about the long term issues.
Assuming both those statements are true (which I would question, but leave that aside) - So what, as far as a potential immigrant - let's call him Bob - is concerned? Assume also that Bob is reasonably well qualified, in good health and able to earn his living, for if he weren't he wouldn't qualify to immigrate.
Bob is not likely to become either an impoverished young person or an imprisoned Maori himself as a result of immigrating to New Zealand.
Perhaps you think Bob will be made unhappy by the existence of all those poverty stricken youth and imprisoned Maori, even though he is not himself part of either group.
But if Bob is unhappy about that, then he has that problem anyway. There are still youths in poverty and Maori in prison, whether Bob moves to New Zealand or stays where he is.
Enjoy the GDP, I think NZ needs 6 million population, so we don't need or less rely on export. House price inflation is due to Global economy, nothing to do with migrants. Also we need to stop foreign buyers who sit in there own countries and not contributing to NZ economy.
Used to be a decade or so back, it was said, NZ needed about 5 million people. Well,we are nearly there, and guess what, it's not enough. The way we run things, we seem to need an ever growing number of people to keep it all going, look at Japan.
I think what we need is to figure ourselves out a whole another way to prosper, with probably a falling population, because that is what this planet needs, and us, is for there to be less of us. We can either slow down on the breeding or we can wait till the pressure gets too much and we do something catastrophic, again. Aren't we getting mature enough yet to figure out how not to do the latter?
Nobody is denying a steady population growth is needed to complement a growing economy. However, the migration influx is concentrated in certain cities where the infrastructural facilities are insufficient. Economists have been asking the government to bring migration down to levels where construction and job growths can catch up with the rising population.
The government is in denial of the existence of a crisis in any form though recent reports from Newshub suggest 81% of Aucklanders (which means nearly 30% of NZ residents) feel that the country is in a state of housing crisis.
the government has shown their mantra, they are willing to sell citizenship for dollars.
if they are just coming for the education as the minister states why are they now unhappy to leave once they have finished theircourses
Immigration Minister Michael Woodhouse said the system had been "beefed up".
"We have a very good international education product. It earns about $3 billion of export earnings for New Zealand and the purpose of coming here is to get a good education."
International education is a $3.3 billion industry but the integrity of the system is under doubt.
The question is this: Have these students been buying an education or a chance to work and pathway to residency
http://www.newshub.co.nz/politics/we-didnt-do-anything-wrong---indian-s…
Those that are complaining BM might also be those with children unable to buy their own house, might also be those stuck in traffic jams all day, those that are in queues for hospital treatment, those who have children in crowded schools, those who are now strangers in their old suburb, rising crime especially drug related, the list goes on, its not just about making money from housing old boy.
I think also you have missed part of the spiel above. The graph shows we are no longer getting the usual GDP bang for our per capita buck from immigration suggesting we might be saturated with too many $2 shops and ethnic takeaways with fully trained 17 year old immigrant chefs running the joints.
"Arguments for and against migration would best be focused around 'economic' and, potentially, 'cultural' grounds." --> that's nice. I wonder what he means by "culture".
""[And] is there an optimal population size for New Zealand? And what is the optimal growth rate both in terms of quantum and timing?"" --> look at NZ's size, then look at the population. There is still some way to go.
"The Government should consider introducing a population-demographic policy to broaden debate out from record net migration to one of population size and composition, says BNZ head of research Stephen Toplis."
Too....funny, I love how even bank economists now like to put their 2 cents in on economically everything. Smells of desperation to me. My my times are a changing
The fact of the matter is simple. Born and bred everywhere take a JUSTIFIED dislike of 'non residents' coming in, buying up their homes and land, and making everything more expensive for anyone earning a local wage/salary.
Not just NZ, Aus, Canada, Hawaii (where that's being going on for decades) etc etc.
It's what breeds and IS breeding "nationalism" and "protectionism around the globe. It's the very thing that made Hitler popular. (yes .....him)
If you were familiar with my posts you would not make such an uninformed comment :-) My prediction based on my rework on the Quantity Theory of Money is that interest rates will trend down over time. (M.V)+i=P.Q. The right side of the equation is GDP. GDP can be Price, or Production in this calculation, you can't tell which unless you collect the data. However GDP is running at 2.4%, while the money supply is growing at 7%, something is awry.
This site has caused me to think, and think a lot. Some numbers I have not verified, but give food for thought. It is claimed in some quarters that we use 18 calories of crude oil (non sustainable) to produce every calorie of food we produce worldwide. New Zealand produces enough food for 54 million people. Without oil the natural carrying capacity of our land is 3 million. What exactly do we produce that we could trade for food that would sustain a larger population?
New Zealand imports 50% of its energy needs, and 100% of its transport energy. Good luck driving that car in 10-20 years, let alone eating.
The one thing Third World countries all have in common? Too many people.
If you double your population and you don't double your exports then your country is not as wealthy.
I don't believe we can raise our export productivity to match our population growth and your exports have to pay for your imports.
if your exports don't go up then the amount of cars and computers you import can't go up.
Borrowing money to build infrastructure for our enlarged population does create work, but it doesn't create wealth.
Borrowing money to build infrastructure for our new enlarged population is going to be a tax burden for the next 30 yrs.
Welcome to higher Rates, higher Taxes and Road Tolls.
Welcome to a lower standard of living and a lower quality of life.
So near and yet so fart..to coin a phrase
The three big issues for our society are health,education and housing, in my opinion.
Living in NZ is now internationally desirable and we should manipulate immigration numbers to mantain an agreed demand and affordability for the measures I mention. You may add GDP to taste.
Do we understand?
I can't believe the immigration figures will fall to 12k per annum in 3 years time as is expected.
https://www.theguardian.com/commentisfree/2016/aug/05/trump-brexit-is-n…
A poor article. Arguments about immigration should center on what policy can actually influence, and also on the state of the domestic labour market. What is the capacity to absorb new labour, where are the shortages- in higher skilled (hard to fill) or lower skilled (readily retrainable) people? What is the current ue rate and participation rate?. These basics are largely ignored . Governments control only part of the flows, but they still need to work the tap they can operate, i.e., inflows of non-resident workers. The overall flows have been traditionally 0-20k per annum depending on the state of the economy. Net inflows of resident kiwis (which we cant control) are high and local unemployment is not particularly low. This implies the need to strongly restrict non-resident inflows -even before you factor in our severe housing issues. Very specific hard-to-fill roles where there are skill shortages and skill gaps are the obvious exception. Instead, our laissez faire approach has led to a blowout to net inflows of 60k plus. An epic fail in my opinion.
Perfect markets require perfect information and understanding. A lot of people move here for many years only to realise it's kind of crap in NZ. One taxi driver I talked to was planning on moving back to Fiji to be a builder. The grass is greener until you end up with being a taxi driver as your only option to make a living and you realise you would have been better off staying at home after many years.
Perhaps if we were more honest and told people NZ is a terrible place to work unless you have highly specialised and sought after skills.
Perfect Government intervention also requires perfect information and understanding.
What makes you think the Government's decision as to who would and who would not do well to move to and stay in New Zealand, is going to be better than that of individuals?
Do you think the Government is better able to make a decision as to whether you and your family should stay in NZ or move to Australia, than you are?
New Zealand has a long history of luring immigrants with lies and propaganda. Even in the 1840s the spruikers herding up people to pay their life savings for a long sea voyage were pretending it was warm and tropical. Even now they're pushing all that Fiordland scenery and Lord of the Rings bollocks while quietly ignoring all the depressed half-dead small towns, poverty, crime, unemployment, and the pervasive run-downness and scruffiness of the place.
The opening sequence to Once Were Warriors was a perfect representation of the bait-and-switch.
In my view the so called need for immigration is, in reality, designed to keep wages lower. When there are people being paid $8.00ph with next to no inspectors to check on exploitation how can it be anything different? Look at what happened on the West Coast when the mine inspectorate was reduced to an impossible level. All those deaths and all we did was wring our hands.
The effect of opening our borders to manufactured products and a flow of labour is to lower their costs, no doubt.
Both tend to supress wages but why do we then discriminate and say we want one but not the other?
Our goverment has been slipshod in managing immigration but it could be tightly managed to our advantage, not used to drive one parameter, our relationship with the international bankers.
I see a advantage of immigration as encouraging redevelopment of the cities, a painful affair for Aucklanders but quite good for the rest.
number 8 wire solution to every kiwi problem. Patch it up.
Bring in more people to keep gdp growth up
- no interest in GDP per capita improving
- treasury questioned the immigration benefits and was ignored by the government.
- The fact is that we have the 4th highest immigration rate in the world and not the infrastructure to support it.
Allow foreign students and temp workers to purchase approx. 12-13 billion worth of property in the last 12 months.
- don't worry about the effect on society of ever increasing house prices
- household debt exploding at 8.8% a year and at 216Billion
- and eventually mortgage repayments which will persist for the next 30 years
The sooner we start thinking more strategically with strategic solutions and drop the number 8 wire short term solutions the better... Lets hope John Key gets voted out.....
We just need Labour or Greens to announce the same 15% stamp duty as Canada have and I am sure their new support will get a collation government over the line. As homeownership rates slip those in favour of this policy will only increase.
Really the opposition political parties should be able to run with recent events and in particular what has been happening with Vancouver housing market and the impact of the new tax on foreign investor buyers.
Just looking at this report from the BBC: Foreign home buyers face new tax in Vancouver area
http://www.bbc.com/news/world-us-canada-36956034
This highlights just how rapid their price growth (Reference to the graph in the news article) has been. Vancouver average property price has increased rapidly from the mid $600k in 2010 to over a million in 2016.
Hasn't Auckland been following a similar trend over the last few years to warrant a similar tax to Vancouver? I'm sure if Labour or the Greens were to propose a similar Foreign Property Buyers tax we would certainly see a slow down in our housing market.
Don't forget how Auckland dropped -8% in the three months from last October when Foreign Investors were locked out temporarily from our housing market whilst they registered for IRD numbers. So we very much know that they hold a huge influence on our Auckland property bubble, best to burst it now then leave it to cause a much bigger economic explosion later on down the track.
More street protest in future. This is just a start
http://www.newstalkzb.co.nz/news/national/protests-underway-at-the-bloc…
A fully economic analysis of the pros and cons of immigration would have to consider some things that I never hear about in any discussion on the matter. The argument needs to be something like:-
1 The net present worth of total incremental capital that we must employ to support each immigrant including
Housing
Roading cars buses trains
Education schools universities
Health care Hospital
Etc
2 The present value of the whole of life cost of every other service or thing that they consume in the course of living
3 The present value of the whole of life value of their economic contribution
If 3 minus 1 minus 2 is greater than zero then the proposition is worthwhile.
I suspect that 1 will be a very large number and 3 minus 2 will be marginally positive for most of the immigrants that we are taking. I.e. it probably only makes sense for small hand full.
I suspect that the game that the government is playing has no consideration such as this and all they are interested in is the one off boost that immigrants give in the construction of the assets that we must provide for them and of course keeping the housing ponzie bubbling along.
I am a migrant Came here in 1995. Why ? For a better lifestyle, to escape from corruption, nepotism, overcrowding, low wages, social injustice , dog eat dog style competition, a society of have and have nots
Environmental degradation etc
If I wanted the same conditions then why would I migrate and pay the price of living away from family?
Unfortunately I have observed that current Govt is creating similar conditions in NZ
IMHO this is to benefit the big business and other vested interests
I have first hand experience of corruption and unfair society and it is sad to see nz embracing such evil practices
Obviously I am not against migration as I am a migrant myself and got migration on the basis of skills the current situation is out of control , the student schemes are just a racket and way of making money
It is not too late as yet to control the rot but I doubt if the current lot in Govt want to change the situation
Look at the board of directors members for Chinese banks and other businesses , you will find prominent NZers
NZ public need to wake up and do what is best for NZ ,
Voting this Govt out is imperative to send a message to Politicians, public apathy will lead to irreversible damage. Time to act by voting next year and letting opposition parties know of public concerns
Hi Nomad, just because your an immigrant doesn't mean you can't be against immigration. I know lots of immigrants who echo your post that we are losing the very qualities that attracted you to NZ. If you like what you found here help us try to preserve this lifestyle. Don't be shy to say what you said. great post thankyou.
Problem is no party, apart from NZ first whose position is only relevant if a kingmaker is needed, is interested in carrying out a deep review of NZs immigration policy. So voting the nats out probably wouldn't change much. Labour might tinker with eligibility criteria but seems to have bought into the mantra that NZrs should just accept the tide of people arriving on our shores who will irrevocably change much of what we love about our country and society. We, the peasants, are being arrogantly told by politicians to lump it, there will be no debate.
I totally agree middleman which is why we need Winston to be kingmaker. He is the only politician willing to challenge our immigration policies. Labor and greens will be glad to have their hand forced on immigration and secretly National probably recognize the damage there doing and would like an excuse to change policy as well.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.