Immigration: Getting Beyond the Number 8 Wire
Long-term thinking is not something we do much of in New Zealand. We once built a bridge over the Waitematā Harbour that was too small before it was completed and had to be extended within ten years. We once eased up on our building code’s requirements to make it easier to build houses. We have been known to demolish perfectly good new buildings in the midst of a city rebuild.
This short-termism is even embodied in our national myth—our “number 8 wire mentality” might be a strength, but it also suggests that long-term planning is unnecessary because any problems can be solved or managed. After all, she’ll be right!
One area in which the coalition government is attempting to introduce some long-term thinking is in its proposed housing growth policy. This policy would force councils to “immediately” zone enough land for 30 years of housing demand.
According to Stats NZ latest population projection, there is a 90 per cent probability that our population will lie somewhere between 5.3 and 5.85 million in 2033.
Of course, to do so, councils will need to figure out how much demand there will be over 30 years. This, in turn, will require some estimates about how much population growth there will be until the middle of the century.
Unfortunately for councils, this is very difficult to forecast. According to Stats NZ latest population projection, published in 2022, there is a 90 per cent probability that our population will lie somewhere between 5.3 and 5.85 million in 2033. Even taken at face value, this population projection is very broad. Further out, the 90 per cent probability encompasses anything between 5.5 and 6.6 million in 2048.
This wide variation is largely driven by where our population growth is coming from. As our birth rate falls and our death rate rises, immigration is becoming a much more influential factor in how our population will grow in the decades ahead.
The last government relaxed the immigration settings to encourage immigration. This led to the highest levels of immigration and net migration we’ve ever seen.
And, unlike natural growth, our immigration numbers are subject to wild swings. And, unlike councils, central governments can change our immigration settings at the drop of a hat.
After isolating New Zealand from the world for two years during COVID, the last government relaxed the immigration settings to encourage immigration. This led to the highest levels of immigration and net migration we’ve ever seen. After less than two years, the immigration brakes are now being applied—according to the Minister of Immigration, Erica Stanford, the current levels of net migration were “unsustainable” and more rigorous requirements have been introduced.
The fact that these changes could come into effect immediately shows how quickly our immigration stance can change.
At the moment, we don’t seem to have a plan. We just hope that she’ll be right.
But it also shows how reactive we are. Too much immigration and we worry about inflation and infrastructure shortfalls. Too little immigration and we worry about labour shortages.
Immigration figures come out periodically, the government might react to them and change the settings. But we have no discussion or debate about the broader question: what size should New Zealand be?
Do we want to stay sparsely populated? Or do we want to become more bustling and densely populated – a team of ten million perhaps?
At the moment, we don’t seem to have a plan. We just hope that she’ll be right.
Listen to the podcast
Director of Research and Development Marcus Roberts explains the thinking behind his column.