New population projections from the accountancy firm Ernst & Young show a radically different future to Statistics NZ’s anticipated level of growth, raising vital questions about the pace of infrastructure rollout.
March 2020 was a milestone for New Zealand not just because of the pandemic plunging the country into years of uncertainty and social upheaval, it was also when the population crossed the five million mark.
Taking just 17 years to go from four million to five million was the fastest million in New Zealand’s history.
At present, the rate of population increase looks to be slowly increasing, but Stats NZ’s own projections suggest the foot will ease on the gas.
Population projections from Stats NZ suggest we’re likely to break six million between 2043 and 2048, according to its 50th percentile of probability distributions.
That’s been the north star for private and public sectors as they make plans for the future. Whether it’s building houses or investing in water or transport, there’s thought to be a whole generation’s worth of years before we meet that next big milestone.
But EY partner Chris Money is not so sure, with its own research showing the population could increase at a much quicker rate.
Projections that follow the annual net migration before Covid lockdowns paint a picture of faster growth, with the population hitting six million in 2038, about a decade earlier than Stats NZ projections.
And the gulf between the two potential populations only widens – while Stats NZ projections expect 6.6 million New Zealanders by 2073, the EY projections predict a population of 8.2 million by then.
Money said the difference was due to the statutory obligation of Stats NZ to reflect current immigration settings.
“They are more or less tasked with faithfully going and reflecting government policy,” he said. “Government policy when they were undertaking their forecast was for an immigration stance that was a lot tighter than what we are suggesting.”
So with an expectation of higher immigration – and net migration increases of 50,000 people a year – there’s a different story around the country’s need for infrastructure.
Money said New Zealand needs to increase the urgency in dialogue around infrastructure projects.
“It’s not about ‘build it and they will come’,” he said. “We need to build it because they’re already coming.”
Over the past 18 months, a surge in migrant arrivals has brought negative net migration to the highest year-end totals ever.
Money suggested this was “a bit of a reset” after the period of travel restrictions. But even if the numbers relax a little in coming years, he said they were still likely to grow more than Stats NZ has suggested.
“Even if we arrive at a midpoint between the currently aggressive population growth and what Stats NZ are working on, the criticality of investing in that growth now is really pushing itself to the forefront,” he said.
Money’s hope is that a view of a potential future where there are more Kiwis more quickly will get decision-makers moving on work that needs to be done.
“It never gets cheaper, it never gets easier,” he said. “The cost of inaction and delay is substantial. A lot of the projects we are seeing come online were developed with demonstrably more conservative population projections.”
He pointed to the years of debate about Transmission Gully. “It took 30 years to do something we were always going to end up doing. In New Zealand we do take quite a lot of time to get to yes or no. We spend a lot of time on maybes.”
Stats NZ projections when the population was four million in 2003 suggested it would take a number of decades before we hit five million. And so the big long-term projects of the time were developed with a different view of what the country would actually end up being like 20 years later.
“When you look at the kind of infrastructure we were we thinking about using those projections, it was projects like the City Rail Link or Transmission Gully, plus a lot of major hospital developments – and we quite substantially underestimated what our population was going to be.”
A report from the Ministry of Social Development in 2003 suggests only 500,000 people would be added to the population by 2021.
What was never foreseen was the increased role high immigration would play for the country, especially during the last 10 years.
“We need this population growth – we need more teachers, more doctors, more nurses to fill the labour shortage,” Money said. “However, we also need the infrastructure to support it.”
no one seems to have done any cost – benefit analysis on the value of continued population growth. It seems to me that there is an inverse relationship between what we produce and the number of people across which the benefits of that production are to be spread – the more mouth to feed the less there is for each of us – no where on the planet has a larger population made for a wealthier society
And using the word “investment” for future infrastructure costs is a misnomer if ever there was one (self serving of course given the source of the commentary) but the “build it and they will come” bit sums it up – you pay for it they benefit from it. The character from EY is basically telling us we should be subsidising population growth. The same neoliberal circus some decades ago pilloried Muldoon for subsidising farm production and investing in “uneconomic” energy infrastructure – the single difference between these subsidies is that Muldoon’s focused on increasing export production and reducing import reliance (a philosophy followed by the Chinese government with great success) whereas the current lot do nothing but increase consumption and costs but do nice things for the profits of the middlemen – and we wonder why we have so many issues – basically we have a society built to service a population of about 1.5million now having to service twice that.
I disagree with the statement “we need this population growth”.
The “cargo cult” expectation that what (or who) floats in from off-shore will provide for our needs is as empty and dangerous as the free-market myth that, “… the invisible hand of the market will provide”. The result of falling for that line is the current mess we have found ourselves in.
The high immigration numbers seem to be presented as an inevitability, but I see little evidence that there is careful selection or control in the immigration “settings”, and suspect another “crisis” being engineered from which a few will profit but most will suffer.
If we can’t organise our economy to look after ourselves, how do we expect to be able organise for mass migration to fix our problems for us?
It is worth noting that as climate change impacts accelerate we will have less and less choice about how fast our population grows. There are plenty of people currently eligible to become NZers and we shall see them on our shores way sooner than anyone imagines.
The statement below on statutory obligations on the Government Statistician re population projections by Mr Money from EY is just rubbish (He said the difference was due to the statutory obligation of Stats NZ to reflect current immigration settings. ——
“They are more or less tasked with faithfully going and reflecting government policy,” he said. “Government policy when they were undertaking their forecast was for an immigration stance that was a lot tighter than what we are suggesting.”
EY are wrong. It is up to Statistics NZ to present a credible range of options. They must do more when these options are presented how to select the best migration option, given huge shift over the past 30 years in its scale and variability . (Len Cook – former Government Statistician of NZ and United Kingdom)
No-one explains the cultural and ‘value’ of this immigration tidal wave. Is it dominated by more Punjab Uber drivers who add nothing or Swedish doctors? Is the cultural mix such that it will further destroy the current culture so we become a mini-America [ie mix-mash].
There is no point in migration today except to drive fake growth to save government stats to avoid making hard choices to increase productivity and individual wealth, not based on counter-productive residential property. Immigration is the foot on the accelerator towards an ugly cultural wall.