Some weeks back I wrote that New Zealand needs a population policy. However, I purposely did not say what that policy should be. Instead, I focused on identifying the unplanned population bulges we are currently creating, focusing particularly on the current bulge of 30-35-year-olds who will eventually make the current cohort of retired boomers look small.
I particularly wanted to dispel the false notion that we have declining cohorts of working-age people. It is simply not true.
Accordingly, in this article I want to focus on what a sensible population policy might look like. Inevitably that means introducing some value judgements as to what is the right thing for New Zealand to do.
My starting point is to recognise that future per capita prosperity will be very much determined by growth in exports.
New Zealand is never going to be internationally competitive in the manufacture of computers, cars, heavy machinery, or pharmaceuticals. Instead, New Zealand’s comparative advantage lies in the production of pastoral products, lumber, some specific horticultural products, some specific types of wine, perhaps tourism, and not a great deal more.
New Zealand has never even had a comparative advantage in growing cereals such as wheat and maize, nor in production of rice. Hence, we also have no comparative advantage in pig meat and chicken production which rely on these products as inputs.
Nor does New Zealand have a comparative advantage in producing canned peaches, canned apricots and many other canned products. If you have these on your kitchen shelves, have a look as to where they come from.
We also import all bananas and most citrus fruit.
All of this is linked to New Zealand being a mountainous country at the end of the world that has a lack of cultivable land, plus a temperate maritime climate that produces good but unpredictable rainfall.
Every six months, the Ministry of Primary Industries produces a report on the state of primary industries, referred to as SOPI. Each report lays out how primary products comprise at least 80% of exports. The trend has been upwards.
However, there are many challenges to further increases in primary-product production. There is no more land to be developed. Some of the existing land needs to be retired.
I have spent the last 50 years working in agricultural science and agricultural economics. Almost all of the projects have contained an element of increased production linked to new technology. Marketing has also been important.
What I can say with great confidence is that the next fifty years are going to be a lot more difficult than the last fifty years for those who follow me and my colleagues. There are limits and we are already hitting many of those limits.
If New Zealand’s population keeps increasing, then it is going to be a big challenge to maintain let alone increase per capita exports and hence living standards.
Having more people means more demand for imports which in turn means a need for more exports.
In New Zealand, we have to come to terms with the reality that the nation’s current account with the rest of the world is in chronic deficit, currently at about $25 billion per year. At some time there has to be a reckoning, and we will then have to live within our means.
None of this is to say that there will be no further increases in our mainstream exports. Indeed, I see opportunities which I will write about at another time. But I am saying that these increases will be limited and will require hard work. The future is going to be harder than the past.
Further, most of the pipeline projects that I am aware of in our primary industries are about replacing labour with capital. These projects do not need new migrants.
The issues laid out above provide the context in which I say that a rapidly increasing population is a big risk for New Zealand lifestyles.
I also say that there is considerable misunderstanding about the components of current population trends. For example, New Zealand births in 2024 were approximately 58,000, which aligns closely with long-term levels, which have fluctuated for the last 35 years between 55,000 and 65,000.
Birth rates among child-bearing cohorts have indeed decreased below replacement rate, but this is countered by the current big bulge in those of child-bearing age. There is no shortage of babies.
Also, recent inward migration has been lifting post-birth cohorts of children. For example, in 2024 there were 70,030 resident children aged 12 years, whereas this same cohort, when it was a birth cohort aged less than one year, only totalled 61,270. These post-birth increases in child cohorts apply to all of the cohorts as they climb the ladder of youth to adults, and this is totally a consequence of immigration.
It is also important to remember that births currently exceed deaths by approximately 20,000 people per annum. This means that the population will continue to grow prior to any consideration of inward and outward migration.
Another feature of population that needs to be considered is the ratio of superannuitants to workers. This is often put forward as a key reason why New Zealand needs more migrants.
However, what also needs to be considered is that inward migration simply delays the increase in this ratio. It makes the long-term solution even more problematic.
In fact, historical inward migration has been keeping this ratio at unsustainably low levels. With life expectancy at birth now approaching 85 years, and employment ceasing at age 65, it is inevitable that this leads to a ratio of retirees to workers that approaches 1:2.
The other key aspect of a population policy that needs to be factored into calculations is the level of outward migration. Somewhat remarkably, we don’t know what is actually happening with those numbers. The reason is that in recent years people leaving New Zealand have not been asked whether they are departing short term or long term.
The latest statistics for migrant departures are officially estimated at 124,900 for the year ending May 2025, with more than half of these people being on non-citizens on resident visas. Only time will tell how many were short-term or long-term departees.
Citizen departees for the May 2025 year are officially estimated at 71,200 while citizens returning after a long-term absence of more than one year are estimated at 24,900. This gives an estimated net loss of New Zealand citizens of 46,300.
Oh for a decent set of up-to-date statistics rather than estimates based on guesswork!
Outward migration has been with us for a long time. When I look at my own high-school cohort from more than 50 years ago, a considerable number sought greener pastures and laid down roots overseas. But the current apparent level of departees is indeed staggering.
The key reasons for outward migration are easy to understand. Quite simply, Australia in particular beckons for those who see no pathway to home ownership in New Zealand, together with those who simply are looking for a new challenge.
I myself was one of the ‘seeking a challenge’ category who spent some 20 years offshore, but eventually was excited to come back home to New Zealand with a job offer that appealed.
I acknowledge that in New Zealand we have to make pathways for those who do not have family to help them onto the home-ownership platform. But that is a separate issue to population policy. Providing that pathway is another topic that I plan to address in a future article.
Bringing together all of the above issues tells me that we do not need more immigrants per se. What we do need, however, is more people in specific categories. The key category is healthcare.
I am also strongly in favour of the Recognised Seasonal Employer (RSE) scheme which focuses on providing seasonal labour for horticulture and viticulture sourced from nine Pacific Nations (Fiji, Kiribati, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu).
I have worked in four of those nations, including investigations for the Australian Government back in the 1990s of aid delivery to small and vulnerable countries.
I have no doubt that the RSE scheme, first implemented here in New Zealand in 2007, is a powerful tool for improving livelihoods in those nations, as well as benefitting New Zealand’s own economy. However, the RSE scheme is not a migration scheme as all of the RSE workers return to their Pacific homes at the end of the season.
Similarly, there are big advantages in offering work visas in the hospitality and tourism sectors to young people from overseas. Once again, these can be offered to people who speak English at a high standard with no automatic expectation of permanent residence. On occasions, people with specific language skills relevant to major tours groups might also be sought, with associated residency options.
There may at times also be a need for migrants to be sought in other specific sectors such as education. However, if shortages exist, why is New Zealand not educating its own citizens for these careers?
Deciding how many resident visas should be offered in total, with linkage to a points system as the selection criterion, is always likely to be contentious. My own contention is that starting with an aim of inward migrants balancing resident departees would be a good place to start. That would still leave New Zealand’s resident population increasing at close to 20,000 per annum for the foreseeable future.
For those who think this is too low a number of immigrants, my challenge to them is to provide justification for higher immigration in terms of the impact on per capita living standards.
*Keith Woodford was Professor of Farm Management and Agribusiness at Lincoln University for 15 years through to 2015. He is now Principal Consultant at AgriFood Systems Ltd. You can contact him directly here.