Professor Paul Spoonley identifies an ageing population, a hugely disproportionate growth of Auckland, a population decline in some regions, and the increasing importance of immigration as key elements in changes unfolding in our population. Each of these factors will help to shape the New Zealand of 2030.
Ticking past five million
Projections suggest that the New Zealand population – which recently topped 4,444,444 – will hit five million by 2031. That number should not be seen as a certainty, however. Spoonley points out that previous projections have consistently fallen short of the reality. “Every time there has been a projection about population size – when New Zealand would reach one million, two million, etcetera – they have under-estimated. The population has reached the target earlier than estimated.” He believes that the historical forecasts reflected a conservatism over the attractions of New Zealand for migrants. Today, immigration continues to loom large in any view of New Zealand’s future – and in population projections. We have been close to the top of OECD rankings of immigration rates and, unlike some countries, have continued to attract high flows of newcomers since the Global Financial Crisis.
New Zealand politicians have mostly chosen to take a softly-softly approach to population policy. Some business leaders, frustrated by the nation’s lack of scale, would like to see a major population increase. Most recently, the New Zealand Institute of Economic Research suggested that a population of 15 million by 2060 would be beneficial. That politicians haven’t typically been so gung ho probably reflects an ambivalence to the idea among voters. Our annual immigrant target of 45,000, attempting to meet certain skill shortages, effectively becomes our de facto population policy.
… we’re building a population but we’re building it particularly in Auckland and we’re diversifying it – and nobody is calling it a population policy.
Big Auckland
Of that projected five million, two million will live in Auckland. Spoonley believes that the city’s continued growth will dominate New Zealand’s population picture for the next quarter of a century. He says the proportion of New Zealanders living in our biggest city is already unusually high. “It is not simply a classic primate city,” he says. “Apart from Dublin, in the OECD no other city dominates its country to the extent that Auckland does.”
One-third of New Zealanders live in Auckland already. In the next 25 years the city will grow to account for 38 percent of the total population, surpassing even Dublin’s dominance in Ireland. Half of New Zealand’s regions will lose population in the same period.
‘Agglomeration effects’ mean a snowball effect for Auckland as demand for goods, services, schools and hospitals helps to drive growth. The reverse is also true. Spoonley: “In smaller centres, there is often a tipping point reached that means the loss of health services, or the contraction of such services, and so there is less reason for households and individuals to stay.”
Spoonley believes that we haven’t yet fully appreciated the demographic changes ahead. “What I think is a little disturbing is the lack of recognition of how significant the Auckland growth is going to be whereas, already, half of New Zealand’s regions are flat-lining and some of them are beginning to decline.”
Auckland’s rise, while sometimes resented in other parts of the country, can be seen as an important strength for New Zealand in the next two decades. The city will have the scale to be competitive internationally, and with other Pacific rim cities in particular. Spoonley: “City economies are actually really important to any nation.”
Spoonley notes that the city’s growth will lead to “pinch points” in its infrastructure, whether that be in housing, transportation, education or healthcare, but the creation of a ‘super city’ under the Auckland Council has brought at least the potential for a greater degree of co-ordination as the city expands. He says the council’s economic development plan “signals a very aggressive, forward-looking strategy to grow the Auckland economy”.
A bigger Auckland will act as a magnet for immigrants, who have overwhelmingly preferred it to other parts of the country. “The bulk of migrants will come to Auckland and stay in Auckland. They’re not interested in the rest of New Zealand.” Auckland’s character will increasingly differ from that of other parts of the country. Europeans are expected to be in the minority in Auckland within the next few years.
“The thing that interests me is that there’s an increasing two-nations effect,” says Spoonley. Already, 40 percent of Aucklanders are immigrants; including the children of immigrants lifts the figure to 56 percent.“That is seriously cosmopolitan.” The proportion of immigrants in Sydney, Australia’s most cosmopolitan city, is just 32 percent.
Mixing it up
Where New Zealand traditionally relied on migration from Europe (and specifically the UK), since 1987 the bulk of immigrants have come from non-traditional sources. That will continue. In Auckland, says Spoonley, Asian communities will be easily the fastest growing in the coming decades, rising to between 25 and 30 percent of the population.
Our ethnic mix will change in other ways: “Nationally, the age profiles of Ma-ori and Pasifika populations will mean that they contribute more to education and prime working-age populations.”
The long-predicted “browning” of New Zealand, now most apparent in the under-15 population profiles, will contribute to an increasing ethnic diversity, although it will be much more pronounced in those regions such as East Coast and Northland that already have major Ma-ori populations. Spoonley says the “two nations” division can be expanded to three by identifying those predominantly Ma-ori regions as quite different from other areas.
Formerly high Maori and Pasifika birth rates have begun tailing off, although the age of first birth remains much lower among Ma-ori than among Pakeha.
Historically, immigration has been a contentious issue, but it is all that prevents our population from shrinking; one estimate suggests that shutting our doors to immigrants would within a decade bring an 11 percent fall in GDP. Spoonley says that polling shows the public has become noticeably more positive towards immigrants and immigration since 2000 – and also more positive towards immigrants compared with Australians. Yes, there is still evidence of anti-immigrant feeling – it can easily be found online – but it is very much a minority. The one exception: Ma-ori, who have increased in their negative views about immigrants since 2000. “This is an issue,” says Spoonley. He identifies a number of dimensions to this sentiment: “Job competition; tension between biculturalism and multiculturalism; and probably the sense that migrants don’t understand the history of this country, nor the Treaty of Waitangi.” Projections suggest that the number of New Zealanders identifying as Asian will have risen to 800,000 by 2026 – not far short of a Ma-ori population of around 811,000.
It seems likely immigrants will continue to be primarily attracted by the quality of life here, but also by our education system, legal system , relative lack of corruption and the relative ease of doing business.
While there has always been a ‘brain drain’ effect, where some of the brightest and best-qualified New Zealanders are attracted overseas, our overall skills and qualifications base will continue to be enhanced by immigration. Spoonley: “The immigrants who come here are better qualified than the people who are already here, so we’re also topping up the human capital pool with immigration.”
New Zealand will also continue to benefit from expats returning home after spells working overseas. Typically they return for lifestyle reasons; starting a family is often cited as a big motivator for coming back to New Zealand. But Spoonley points out that there was also a spike of returns after the Bali bombings of 2002 – “international terrorism also sends New Zealanders home” – which suggests that international geopolitics and security will also play a major role in how attractive New Zealand is perceived to be in the next two decades.
The Australia factor
Most New Zealanders who leave for other countries go to Australia. 53,800 left for Australia last year. Currently, for every four who go to Australia, only one returns, although tougher economic times on the other side of the Tasman can lead to more Kiwis coming home. Our neighbour’s fortunes and the lure it has for New Zealanders will therefore have a major impact on our population changes in the coming decades. “We are transferring a very significant number of our population to Australia,” says Spoonley. “Migration will determine the shape of New Zealand in the future but emigration will also be a major factor and the movement between Australia and New Zealand is the most important emigration we have going on.”
Regional ageing
The ageing of our population will play out as a major policy and political issue in the next 20 years, especially as ‘dependency’ rates (the number of those in employment compared with those relying on benefits of some sort) adjust. The pace and impact of ageing will be partly determined by immigration and emigration, which both involve prime working age populations. “Already, elder care is a major growth industry in New Zealand, and there are a lot of implications for healthcare generally – and the cost of it,” says Spoonley.
The average age in many regions will rise markedly. “The centre of gravity will shift, both in terms of where the population will live and in terms of regional age profiles.” In some areas, an ageing population will mean that those exiting the workforce, as retirees, exceed the number entering the workforce.
‘Retirement belt’ areas such as the Kapiti Coast, Tauranga and Queenstown Lakes will grow – against the trend for many other regions – but have markedly older populations than elsewhere.
Spoonley also refers to a “kohanga reo vs grey power” population shift. “Younger age groups will increasingly involve Ma-ori and Pasifika as older age groups – those over both age 65 and 85 will be dominated by Pa-keha-.”
Labour pains
Technology will continue to transform the way we work – and the nature of what jobs are available. One estimate is that automation will replace more than two billion jobs globally by 2030 and a McKinsey Global Institute analysis has found that most job growth in mature economies “involves complex interactions, not routine production or transaction work”. That means that an increasing proportion of jobs require complex problem-solving skills, experience and an understanding of context. While jobs involving interactions have increased, those involving transactions have fallen and those in production – that is, the processing of physical materials into finished goods – have declined even further. It seems inevitable that anything that can be automated – think bank teller work and retail sales – increasingly will be. For now, the trend is also away from full-time, permanent jobs towards more part-time, casual and contract work.
The past two decades have brought a huge growth in post-secondary education and training, which has in turn led to a growth in over-educated employees. Spoonley says that “credential creep” means that employers are using higher qualifications as a sifting device to identify potential employees.
One thing to be particularly concerned about, Spoonley says, is that a high proportion of those without work in New Zealand today are young people. He identifies three main challenges ahead: identifying what encourages job creation; learning how to reverse youth non-participation rates; and deciding what the education and training sector should look like and focus on.
Quake questions
The Canterbury earthquakes have influenced demographic expectations, with some Cantabrians prompted to shift across the Tasman and between 30,000 and 40,000 workers required for the rebuild (and ancillary services) by the third quarter of 2013. While some of those workers will be recruited from elsewhere in New Zealand, there will also be a significant immigrant component. Workers from overseas – notably from Britain and Ireland – are already on the job, but it is unknown how many of those arriving for the rebuild will become long-term settlers.
The city currently lags behind the national immigrant population of about 24 percent, but Spoonley expects that to change and believes the influx might even mean that Christchurch becomes the second “super diverse” city of New Zealand.
While a sudden influx of immigrants might once have been expected to lead to some tensions, Christchurch appears relatively ready to welcome newcomers. Spoonley says the Asia New Zealand Foundation noted a spike in warmth towards Asian countries after the involvement of Japanese teams in the aftermath of the February 2011 earthquake. “The data tends to suggest that there has been a shift in the way in which immigrants, in particular visible immigrants, are seen in Christchurch.”
Climate issues
Climate change could be beginning to have an influence on global migration by 2030, if only marginally. For New Zealand, that could mean people from low-lying Pacific countries seeking to immigrate while Australians who fear that their country will face more droughts and calamitous weather events might also be looking to relocate here. “It may well be that the major weather-related events will have a much greater effect on Australia than New Zealand,” says Spoonley, though “if we’re going to see environmentally prompted migration, it’s some way away.”
