Covid-19 abruptly ended an exceptional period of migratory population growth for New Zealand. Do we fully understand what happened – and what's next? Asks Paul Spoonley.

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IIn March 2020, the immigration faucet was all but shut off when New Zealand and many other countries closed their borders. But few countries have seen the immigration and net profit history of New Zealand in the past two decades.

At this point, the drop in arrivals, apart from the return of New Zealanders, is so great that some fundamental questions are raised: When will international mobility, both temporary and permanent, resume? And what will – or should – the new normal look like?

How did we get here?

Since 2000 there have been three very different periods of population growth and migration.

Lianne Dalziel, as Minister of Immigration, led a significant phase of immigration reform in the early 2000s after the rather disastrous 1990s. What we gave points for and what kind of work an immigrant could do after arriving had not been coordinated for the past decade. The politicization of Asian immigration in the 1996 election did not help.

After 2000 the numbers grew but were then slowed down by the global financial crisis when the numbers leaving New Zealand increased significantly. From 2000 to 2008, the population grew by 407,200, with net immigration gains adding 45.5% to that growth.

Then the GFC years happened. Between 2008 and 2013, population growth was modest (+191,200) and net migration accounted for less than 5% of that growth. (Remember, there were years during this period when the net loss was nearly 16,000 per year.) Then came another period of strong population growth (480,000 from 2014 to 2019) and net immigration gains now made 65% of population growth.

Fewer babies, but a lot more immigrants

As birth rates continued to decline and hit sub-replacement levels in 2017, New Zealand more than made up for this with migration figures. As a result of immigration, more than 60,000 people were added each year.

The numbers may have gone down in 2019, but the latest numbers for the year through June 2020 are amazing. There were 153,900 arrivals (up 8.7%), 74,500 departures (down 16.6%) with a net income of 79,400 – and that included four months of lockdown migration rates.

Monthly arrivals in June are down 86.8% compared to June last year, while departures are down 87.6%. And we've still hit an all-time high in the 12 months.

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

But there is more

Another important ingredient is missing from this story: the size and role of temporary migration.

The MBIE Migration Data website provides a fascinating picture of the size of the temporary work and student population in New Zealand. Just before the first lockdown in late February, the website showed 220,887 visas for temporary work and another 82,857 for study visas (note that these students can work on these visas up to 20 hours per week). Even by the end of July, the total in both categories had only fallen by 23,828.

This may not be the whole story. In May 2020, a statement from then Immigration Minister Iain Lees-Galloway stated that there were 350,000 temporary visa holders, including a large proportion of the visitors and qualified holders of visas with an immigrant background.

To say these numbers are significant is an understatement.

What next?

The government has extended the current stay for the population of temporary work and student visas under the Covid-19 Public Health Response Act and with changes to the Employer Assisted Work Visa. In essence, the visas were extended until September 25th. (Thai chefs and Japanese interpreters have their own special category of work visa requirements.) This is essentially a hold-and-wait approach.

In the meantime, the arrival of migrants is dominated by diaspora returnees – New Zealanders are cutting their OU and returning home in large numbers. Last year 45,481 New Zealanders came to the country and the net income is 16,945. This is in stark contrast to the large net losses during the GFC and the much smaller losses from 2013 to 2019. Over half of these returnees are from Australia.

The numbers from Stats NZ break down these returning New Zealanders according to whether they want to stay or not. We will see. Covid-19 is constantly changing the rules. A major influencing factor is a combination of managing the virus or not, whether there are jobs and where it is easiest to get support from the state or family / friends. Australia is not a welcoming place for New Zealanders, as the pandemic has highlighted.

One thing is certain: population growth will slow dramatically in the next year or two as migration slows. The rescue will bring the New Zealanders back, but the numbers are far from clear. You are exempt from meeting labor market thresholds and the requirement to have a job offer for non-New Zealand citizens.

There is considerable pressure to open the borders – for short-term workers, students or tourists, as well as permanent migrants. But if? It depends on the management of Covid-19 within countries, willingness to accept the risks associated with international arrivals and international agreements on the protocols required by countries, airlines and travelers. The aviation industry suggests it could be 2024 before the numbers return to the levels of previous years.

Demographic disorder

The dial has literally gone back to zero in terms of immigration, unlike last year when New Zealand's totals and net income were the highest ever. It is unclear what the country's immigration management system or migrant flows will be like when we emerge from a pandemic. Will there be a major reset or will the old normal return?

The demographic future must also be taken into account. The fertility rate is steadily declining, aided by the delayed fertility that arises from the uncertainty associated with Covid-19. Aging means that almost a quarter of all New Zealanders will be over 65 by 2030. In many regions the population is stagnating and falling.

An inverted population pyramid and a smaller prime working age population will pose major challenges. Immigration is one of the options to address these major demographic changes. It will be interesting to see if our politicians and political communities see it that way, and to construct an appropriate immigration model for a future New Zealand.

Spinoff Weekly brings together the best stories of the week – an essential guide to modern New Zealand life, sent out by email on Monday evening.

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