Paul Glass argues New Zealand should target a desired rate of population so we can plan for the necessary infrastructure and housing required rather than trying to play catch up

By Paul Glass*

Following the surprise announcement by John Key that he is stepping down as Prime Minister, the National Party will appoint a new leader [Bill English] to fight the 2017 election. After enjoying many years of stable government under the able leadership of Helen Clark and then John Key, the political scene in New Zealand is likely to become more uncertain.

While there are few short term investment implications, the new leader will need to set out clear long term policies on growth, immigration and infrastructure.

One of the big issues that needs to be debated is what type of economic growth we want in New Zealand.

New Zealand is in a unique position globally in that we have a small population, a naturally stunning country and the opportunity to shape it how we’d like.

Much of the rest of the world faces very significant challenges including extreme poverty, high youth unemployment, pollution, terrorism, religious conflict, flat real wages (middle income earners in the US and UK have had flat real wages for three decades now), increasing inequality and limited or no access to things that we take for granted like clean water, beaches, parks and low cost but good quality health and education services.

While we definitely have some of these issues developing in New Zealand we’re still at an early stage compared with many other nations.

Many of the world’s challenges have been caused by the explosive, almost virus like, growth of the human population. Just over 200 years ago, which is the blink of an eye in evolutionary terms, there were fewer than 1 billion people on the earth. Today there are 7.4 billion and the United Nations estimates there will be over 11 billion by the year 2100.

Anyone travelling the world today can testify to the sheer volume of humanity which is changing the way we live and its effect on our planet. The increasing mass of humanity, combined with the falling cost of travel, is changing cultures at a basic level. It is also overwhelming many tourist attractions with access now being controlled or restricted.

From a New Zealand perspective, a low population is one of the factors that make us special and an attractive place to live and raise a family. However, New Zealand currently has one of the highest rates of immigration growth in the Western world and about three times that of the United States relative to the size of our population. Just to put this into context, in New Zealand our net immigration rate is running at 70,000p.a. against a population of 4.6m (1.5%) , whereas in the UK it is 330,000p.a. against a population of 64m (0.5%).  And yet in the United Kingdom the immigration rate was such an issue that it was a major factor behind the Brexit vote.

There is no doubt that this rapid rate is putting huge pressure on our infrastructure, particularly in Auckland, which is struggling to keep up with demands for more housing, transport, education, parks and healthcare. 

We have no real strategy in place for dealing with this rate of growth or spreading it to where it is needed in the regions.

The new Auckland Unitary Plan is a glaring example of our lack of long term planning – many more houses will be built but without any real policies for the infrastructure needed to support them. It is a blue print for a poorly designed city that will ultimately resemble Los Angles. In the not too distant future Auckland will be one large subdivision from Orewa in the North to the Bombay Hills in the South connected only by the parking lot we call State Highway One. Once farm land is torn up for housing, its natural beauty and productivity are lost to us forever.

So why are we wedded to this breakneck rate of immigration growth?

Politicians are addicted to it because it lifts the most commonly used measure of headline GDP growth. However, this headline figure doesn’t adjust for population growth and so simply gets boosted by immigration flows.

What we should really be interested in is how are we doing on a per capita (per head of population) basis and there the numbers aren’t anywhere as flash at the headline figures. For example in the year ended 31 March 2016 headline real GDP growth was a very impressive 3.1%, while at a per capita level it was a meagre 0.5%. If you think of GDP growth as a cake, then the basic measure just tells us what size the overall cake is. The per capita measure tells us how much cake we each get.

One of the arguments used in favour of strong immigration is the skills shortages we have in some sectors. We think this is a relatively weak argument. Let’s look at sectors like tourism and IT where we currently have issues around skill shortages. These sectors had the same issues over  a decade ago and rather than letting the market send the right signals to Universities, training institutes and companies that we need to train more people with skills (by  pushing wages in those sectors up materially) we have simply brought in more low cost labour. This helps company profitability in the short term but does little to help real wages grow, which is important for our economy in the long term. We also have around 130,000 unemployed people, which seems like an incredible economic and human waste when we are importing, often low wage, migrants to fill shortages.

One idea that has been floated, is that New Zealand should target a desired rate of population, deduct our natural growth rate and make up the shortfall with targeted immigration. That way we can plan for the necessary infrastructure and housing required rather than trying to play catch up.

Targeted immigration can be good for an economy. It can bring in new ideas, cultures and increased entrepreneurship. However as a nation we need to have a clear plan as to what rate of immigration we want and ultimately what we want our economy to look like. Do we want to be a higher wage economy with strong clean and green credentials, much like a Switzerland of the South Pacific or do we have some other aspiration? 

The problem with having no plan is that you’re not sure where you’re trying to go and won’t recognise it when you get there. Just growing our population so we look like the rest of the world seems like a really dumb plan.

In a troubled and unstable world New Zealand has something increasingly special to offer and New Zealand citizenship should command a premium.


*Paul Glass is the Executive Chairman and Principal of Devon Funds Management. This article is used with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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127 Comments

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19

A very sensible and well thought out article.

Exactly, very succinct.
Our leaders and media choose to focus on petty politics and distractions while topics like this are never debated. People show their distain by voting Brexit and Trump and they still don't want to get it.

I think John Key finally gets it, Thats why he's quit. Population growth is a failed recipe for increasing quality of life for NZ.
The huge deficit of infrastructure we now face is going to unfold into this countries biggest financial disaster.
Roads, bridges, sewerage systems, hospitals, storm water systems, hydro dams and public buildings are not the natural landscape, they are built and paid for by the people.
This country had an excellent infrastructure and we have been giving it away. Every immigrant that steps off the plane gets that infrastructure for free.
We need to value our infrastructure and not take it for granted, take a holiday in a third world country and you soon realize how wealthy NZ is. That wealth has been built up by generation after generation of NZers. It is our children's inheritance.

Exactly, everyone born in NZ is born rich, inheriting quite an impressive infrastructure and natural environment. I estimate its worth at around a million dollars or more. Libertarians would have you believe that this can be plundered at will by anyone from anywhere. Socialists believe it should be shared with the world because of social justice and it is sad that other people don't have nice things. Both of them don't see why a Kiwi should have more privileges than anyone else in the world, after all why should they, they have done nothing to deserve it except be born here, a happy accident of birth.

Funny you should say that. Over the week end I was wondering if his comment - "the tanks empty" meant that he resigned because he stopped believing what he was doing? That would support a more benign opinion of the man than I have held previously

New Zealanders blame investors, foreigners and net migration for the housing crisis, with only 11 per cent accepting the Government's view that lack of supply is the leading cause, according to a survey by the BNZ.

...
BNZ chief executive Anthony Healy said he was surprised by how low the number citing supply as the key issue was.

"I've got a very strong view that supply is the most critical issue," he said.

The results suggested the industry and government weren't doing a good enough job of explaining the issue, he said.
http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11764810

Next tobacco companies on why smoking....?
Tony Alexander - Nigel Latta

Gee I calculated the NZ Vs UK per capita immigrant rates
and saw the light long ago and got out
Auckland will only become more intolerable to live in
while everyone swallows the propaganda the govt
feeds
Article is just pure common sense. Something Mr Key ignores
Good luck you'll all need it

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23

Superb article; now why aren't we having this conversation on a national and international level? Look at that graph; the path we are on is leading to disaster. Cut population growth NOW.
https://www.theautomaticearth.com/2016/12/mass-extinction-and-mass-insan...
What we have in this country, this planet, is profoundly beautiful, unprecedented and unlikely; it's like winning lotto everyday just to be alive on this miracle.

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10

Because then people will tell you it's their right to breed like rabbits and you will be called "Hitler".

We should be doing everything in our power to stabilise or decrease population. Simple as that.

Our population is growing exponentially on the back of immigration, not people "breeding like rabbits" but other than that I agree, the human race has to face the fact that we do need to possibly halve our population. What will facilitate that is education, especially of women and their having absolute control over their ability to reproduce, we have a way to go convince a few cultures of that.

I meant that comment in regards to world wide population growth - apologies for the confusion.

Depopulation is upon us. China has peaked. Fretting about populations bombs is so 1960's. "If China follows the current trend, Prof. Yi adds, its population will fall from 1.35 billion today to 450 million at the turn of the next century.

By 2050, it’s estimated, China will have just 1.7 working citizens for every person over 65. That number was 7.6 in 2010."

Africa and the Middle East have very high populations of young people approaching child rearing age. Their populations are forecast to grow massively over the next couple of decades. Depopulation is not upon us yet.

It's over Zac. Peak baby was 1990, we've passed peak 18 year old and the global average age is 29. The population bomb is yet another sad doomster prediction clung onto by hand wringers.

Peak baby may be over but problems are just beginning. The migration from Africa and the Middle East is about to get out of control as their populations burgeon.

Population growth in Africa: grasping the scale of the challenge

The continent of Africa, however, is not following this pattern. Now home to 1.2 billion (up from just 477 million in 1980), Africa is projected by the United Nations Population Division to see a slight acceleration of annual population growth in the immediate future.

In the past year the population of the African continent grew by 30 million. By the year 2050, annual increases will exceed 42 million people per year and total population will have doubled to 2.4 billion, according to the UN. This comes to 3.5 million more people per month, or 80 additional people per minute. At that point, African population growth would be able to re-fill an empty London five times a year.

From any big-picture perspective, these population dynamics will have an influence on global demography in the 21st century. Of the 2.37 billion increase in population expected worldwide by 2050, Africa alone will contribute 54%. By 2100, Africa will contribute 82% of total growth: 3.2 billion of the overall increase of 3.8 billion people. Under some projections, Nigeria will add more people to the world’s population by 2050 than any other country.

Just think of it in global terms not local. The same population bomb that didn't happen in the rest of the world isn't going to happen in Africa no matter how much hand wringing the Guardian does.

"The peak was in 1962 and 1963 with an annual growth rate of 2.2%; since then world population growth was halved.

For the last half century we are living in a world in which population growth is declining. The UN projects this decline to continue for the next decades."

https://ourworldindata.org/wp-content/uploads/2013/05/Updated-World-Popu...

You're correct, Profile, and the Guardian knows this (if it reads its own articles, that is. This may be two years old, but still)
.
https://www.theguardian.com/commentisfree/2014/sep/02/limits-to-growth-w...

How can you possibly take any reassurance from those two links. Population growth as per that graph at a current rate of 1.2% gives a doubling time of 60 years - that is 15,000,000,000 people. The planet is under severe pressure now. The projections showing a nice steady decline to zero growth by 2100 are pure speculation. It will be far too late by then OR the decline will be likely due to the collapse of the environment/resources as indicated way back in the original "Limits to Growth" research.
The Guardian article ("Limits to Growth was right. New research shows we're nearing collapse") basically confirms the Limits to Growth scenario presented in the early 1970's so I don't know what you're on about.
Conclusion from the article:

"As Limits to Growth concluded in 1972:

If the present growth trends in world population, industrialisation, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.

So far, there’s little to indicate they got that wrong."

Quoting from 1972? Things didn't "continue unchanged". Food production is booming for example - innovation shows no sign of peaking. The key is the absolute number of children has peaked. It's all downhill from here. Globally we should be planning for that not some wide eyed doomster scenario.

As Hans Gosling puts it: "Fast population growth is coming to an end
It's a largely untold story - gradually, steadily the demographic forces that drove the global population growth in the 20th Century have shifted. Fifty years ago the world average fertility rate - the number of babies born per woman - was five. Since then, this most important number in demography has dropped to 2.5 - something unprecedented in human history - and fertility is still trending downwards. It's all thanks to a powerful combination of female education, access to contraceptives and abortion, and increased child survival.

The demographic consequences are amazing. In the last decade the global total number of children aged 0-14 has levelled off at around two billion, and UN population experts predict that it is going to stay that way throughout this century.

That's right: the amount of children in the world today is the most there will be! We have entered into the age of Peak Child! The population will continue to grow as the Peak Child generation grows up and grows old. So most probably three or four billion new adults will be added to the world population - but then in the second half of this century the fast growth of the world population will finally come to an end.

Peak child is here, and peak adult not far away."

http://www.bbc.com/news/magazine-24835822

Profile, so what you are saying is we don't need to worry about the population of the rest of the world? This is indeed good news and I shall crack open a tinnie to celebrate. We can now continue to discuss maintaining or even lowering of New Zealand's population. As world population growth is going to level off and then decline New Zealand is poised and ready to be a pioneer in managing this.

I do have some concerns and they are largely around globalisation which many here are concerned about too. Africa's population is set to quadruple by 2100 from over one billion to over four billion people. This may not be a problem as even that massive growth will only give it a population density of around what China has currently. Africa is big! The African continent should be able to sustain that population if managed well.

I am not all that confident about this to be honest. We are already seeing hundreds of thousands trying to get to Europe by crossing the Mediterranean. Will not a quadrupling of Africa's population exacerbate this trend? If the growth is poorly managed we could see wars develop on the continent. South Africa has fairly low population growth while countries to the North have massive growth still. If their populations head South there could be conflict.

This is all normal human behaviour but recent attempts to globalise the world and set up a new world order will no doubt impact New Zealand if they decide that Africa's problems are our problems too. This is why I want to see the continuation of nation states that are responsible for their own destinies. Africa may unnecessarily drag the whole world down with it. Hopefully they will be able to follow China's example and wrestle control of their own continent and people.

Profile, the population problem has long since moved on from being a prediction with no indication that the Earth and it's systems can continue to function with a "do nothing" approach to the issues. The human created collapse of the natural world; our life support mechanism is continuing to accelerate with a population so far beyond the sustainable level that we are now faced with truly horrific consequences.

"We killed 58% of all vertebrate wildlife just between 1970 and 2012, and at a rate of 2% per year we will have massacred close to 70% of it by 2020, just 4 years from now"

"The greatest miracle you will ever see, that you could ever hope to see, is so miraculous you can’t even recognize it for what it is. We don’t know what the word beautiful means anymore. Or the word valuable. We’ve lost all of that, and are well on our way, well over 70% of it, to losing the rest too."

https://www.theautomaticearth.com/2016/12/mass-extinction-and-mass-insan...

http://awsassets.panda.org/downloads/lpr_2016_summary_high_res.pdf

We don't "do nothing" though and population growth is decelerating. Check out the evil empire. This paper may broaden your mind.
"Contrary to the expectations of
many professors and preachers, America
began to spare more resources for the rest of
nature, first in relative and more recently in
absolute amounts. A series of decouplings
is occurring, so that our economy no longer
advances in tandem with exploitation of land,
forests, water, and minerals. American use of
almost everything except information seems
to be peaking, not because the resources are
exhausted, but because consumers changed
consumption and producers changed
production. Changes in behavior and
technology liberate the environment."

https://www.google.co.id/url?sa=t&source=web&rct=j&url=http://phe.rockef...

The environment may have been liberated, to some extent, in the US but the problem was simply outsourced together with the production. Manufacturing and mining, particularly the dirty and high labour sector, in the US has been in decline for forty years. Check out China.
Looks like that Rockefeller report had a pre decided agenda.

Simply outsourced? The place still pumps out 20% of global industrial output and is the world's biggest petroleum and natural gas producer.
"The U.S. manufacturing sector remains robust. Output is almost two and a half times its 1972 level in constant dollars, even though employment has dropped by 33 percent. Despite the recent wave of outsourcing to China, the value of U.S. manufacturing output increased by one-third, to $1.65 trillion, from 1997 to 2008—before the onset of the recession—thanks to the strongest productivity growth in the industrial world. Although China accounted for 19.8 percent of global manufacturing value added in 2010, the U.S. still accounted for 19.4 per-cent—a share that has declined only slightly over the past three decades."

And the data in the lefty Rockerfeller report? Or is data not your thing?

https://www.bcg.com/documents/file84471.pdf

china are givining it a crack. "China’s forest restoration efforts have been immense and impressive. Through six different tree planting programs the Chinese government has invested more than 500 billion RMB (US$70billion) in forest protection and restoration in the last ten years alone, resulting in more than eight million hectares of new forested land. Today, roughly 60 percent of China’s forests, on a land area basis, are newly established. Few countries can boast such gains - and fewer still that are undergoing rapid economic growth."

I think China is the most progressive country on the planet.
They have a leadership that makes a decision and the strength to carry it through.
They are the only country on the planet that has seriously tackled population growth by having a one baby policy.
They are reforesting huge desertified landscapes.
Unlike our American friends they secure resources from foreign countries by purchasing them, without destabilizing them politically and without invading them.
They have a huge military but do not export there politics by use of military force. (not much anyway).
I salute China and think they have come a long way in the last 40 yrs. They still have a long way to go and huge problems, but yeah, if their leadership wants to tackle pollution next, then they will.

It is surprising that the Chinese model isn't promoted more considering its stunning success.

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15

So many good points in this article i dont know where to start.. The disconnect between training and skills (shortages) needs fixing. That we allow private institutions to sell citizenship needs stopping. Immigration quotas need to be cut and the skills we import need to be calculated with an eye to the future.
The thought that Hundreds of thousands more people in such a short space of time makes NZ a better place for its citizens, is incredulous to me.

I think you have said it all and agree with it but nothing will be done till after the election no matter how clogged the roads,airports and hospitals get.

Yep from now until the election there will be another 30-40,000 cars on Auckland roads.

Auckland is already at a standstill at certain times of the day, coming through hamilton last week they need the motorway bypass badly, hearing from family Tauranga is getting bad
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1176...

Even Whangarei is getting traffic problems.
I'm guessing its just a matter of time that I will go to my favorite rock and find the mussels all gone.
Go to my favorite fishing spot and find someone else there.
But hey, My house has gone up in value so its all worth while, its a celebration.

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13

Brilliant article, I completely agree.

I like the idea of setting a target then adjusting the points to keep to it rather than holding the doors wide open.
Hmm strange that is a green policy (even though they wont say how many)
I like 25k per year of the best and brightest

"..the best and the brightest".

If we can select on the basis of the brightest then we could also have other criteria like the most aesthetically pleasing. I don't see why just one criteria is considered better than others. You could select on wealth or family genetic health, as in no hereditary diseases. It's thin ice but kind of interesting to think about.

Not your wet dream again with decidedly disturbing undertones.

You should be targeting your invective at sharetrader as he was the one proposing to select the best and the brightest for processing. I was just pointing out that you could choose other criteria as well, if you were going to go down that route, like choosing the single pretty ones too. Both are natural attributes.

Stop trying to take some moral high ground and trying to deflect criticism of views you have strongly hinted in this and other threads.

Well I do consider myself to be the Alt-Right representative here. The people need to get balanced commentary.
Is my argument not logical?
I believe I do have the moral high ground. We can't take another country's best and brightest without considering the morality of it. By the looks of it they really need their best and brightest to stay home and sort out their own problems.

Now you're just being disingenuous as usual. Logic has nothing to do with it. Your comment about morality I think lacks sincerity - morality is a point of view - and poor one at that - it makes an assumption that there is a "right" moral point of view.

Whereas moral relativism is a dead end. A moralist is at least much more sincere than someone who implies that there really is no right or wrong, only "points of view".

Morality is an artificial construct (like much of the social sciences) - why pretend it exists. I've said it before - man pretending to be something he isn't - intellectualizing and rationalizing things so they can justify anything to themselves. Reality is we are no different from the animals we are descend from.

This is just what I would expect from a bad robot. Don't you recall that all the heroes like Captain Kirk prevail because they are human and moral? Rather mechanically morality exists to keep you and others safe in a dangerous world to give you time to reproduce. A byproduct is that it makes us feel good about ourselves, lets us sleep well at night if we follow the moral code. Anyone with a conscience knows intuitively that morality exists. We would describe someone with no morals and no conscience as inhuman and would cage or kill them.
Anyway animals do have morals so your argument is nonsense. The hardwiring for morality comes directly from our ancestors.

So you use a fictional character, in a fictional universe to support the belief in a fictional morality - I think I rest my case.

So the animal that kills it's offspring if there isn't enough food is moral? Some distorted sense of morality.

Badrobot it does seem like you think it is wrong for an animal to kill (I suspect you mean eat) its offspring. I always got the impression that you found my views to be morally wrong, that insincerity is wrong, and disingenuousness is wrong, and that making assumptions is wrong. This seems like a bit of moral stance to me.

I suspect your real issue is you think that it would be wrong for someone else's notion of right and wrong to be imposed on you. Their morality is fictitious whilst yours is not. This is the root cause of a lot of political arguments.

A moral belief may be artificial in the sense that it is man made but could still be important and useful depending on the circumstances.

My point is no matter what morality you use it is wrong to someone. My point about your assumptions is that they could very well be wrong. Assumptions are a short cut by humans when they don't have the full information - as the saying goes assumptions are the mother of all f**kups.

I don't believe I have ever said I don't have a morality - only that morality is an artificial construct . The religious right (still) and psychology (until recently) considered homosexuality to be "wrong" - but things change. My point is that you have to challenge and check what is being said.

Politics is boring / useless specifically because of the morality that creeps in. Rather than set a national goal and work towards that it's all about interest groups / lobby groups and talk that goes nowhere. People confuse talk with action.

You say "important and useful depending on the circumstances" - who decides - you , me - who. In the end cut to the chase - cut out morality or appeals to common good - it's all about "me".

I don't believe I have ever said I don't have a morality..

But you wrote, "Morality...why pretend it exists?

Reality is we are no different from the animals we are descend from.

So assuming you do possess a personal morality you must have got it from the animals?

who decides - you , me - who

The survivors. Ultimately Nature decides.

Exactly why pretend it exits as a defined physical real objective substantive defined "set of rules" that aren't subject to change ( frequently at someone's whim - many years ago the Catholic Church decreed that Catholic's should only eat fish on Friday - it wasn't for any real idealogical reason only that fishermen of the time had no way of storing fish over the weekend).

Morality is handed down from generation to generation - it does not come from animals. Animals have no concept of morality - only survival of the fittest. If morality came from animals wouldn't everyone have the same set of morals? Our morals are based on 3000 year old Jewish philosophy - who says it is right (or wrong).

You say "the survivors" - until someone bigger comes along....

BadRobot is right, Zachary, you're love of eugenics/genetics has definite shades of fascism.
.
What do you think the Nazis were trying to to with their Aryan dream, anyway?
.
Alt-right is just a different name for white supremacism. A pc term for it, if you want to be ironic about it.

https://en.wikipedia.org/wiki/Alt-right

And it's disturbing you're happy to label yourself as such, and how not that many people on this site are calling you on it.

The Alt-Right is essentially a vast Internet Troll Army dedicated to pointing out that the emperor is wearing no clothes.
Brexit and Trump are outcomes of the activities of this movement. Soon Italy will leave the EU too.
The wars in the Middle East will be stopped. War with Russia will be averted and China's expansion will be curtailed.
It's pretty important work.

Zachary please ask Will Robinson for help with spelling

I can't see any spelling mistakes. I don't mind them being pointed out as I do that myself sometimes. Please identify them as I am interested in improvement.

FFS, Stephen Hawking might not make the grade using your eugenic metric, but his nurse would at have least made the cut (nothing wrong with nurses though).
Historically Ludwig Beethoven would have failed the immigration criteria too: deaf as a post, bipolar, and a piss-head with cirrhosis:
http://www.nejm.org/doi/full/10.1056/NEJMbkrev58635#t=article

There are interesting genetic inks between creativity and mental illness:
https://blogs.scientificamerican.com/beautiful-minds/the-real-link-betwe...
Also autism spectrum disorder and genius:
http://healthland.time.com/2012/07/10/what-child-prodigies-and-autistic-...

We have had several years of crap immigration policy based on "wealth" (or avarice) with the inevitable consequent property bubble. I suspect NZ might have had a better deal if we had taken a collection of dirt poor refugees, the mentally unwell and a selection of dope heads and heavy drinkers. At least the latter 2 groups would have felt right at home.

At least you agree we can have a crap immigration policy. People like Hawking and Beethoven are exceptions that prove the rule. Do you know what that means? It means that usually these types of people are a lot of trouble except for these two exceptionally rare individuals, like two people in the entire history of mankind that were exceptions to the rule.

I'm sure there are a lot more....

Zachary I'd be concerned if the Robinsons make it home
Military jail for you

but not the oldest,sickest and richest property speculators right?

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12

It is not that long ago it was thought about 5 million would be good for the country, now we are almost there, but there does not seem to be any sign of a slowing down. Thing is, if you constantly seek growth then you need a constantly increasing population, as that is the bottom line for growth.
What we do have to do is begin to address how we prosper WITHOUT growth.

Mass immigration is the only way to keep the house price bubble from bursting before the next election.

In a time of mass migration housing bubbles may be a godsend. High housing prices keep a suburb classy, they could keep an entire country classy too.

Yuk

I believe it is spelled, "yuck". Without any other control such as restrictive immigration policies or native hostility monetary barriers are the last defence. It is a standard that is well understood worldwide. If you travel to another country they usually want to be reassured that you can afford a place to stay and have a valid ticket home. That is, that you are wealthy enough to be a good tourist, otherwise they wont let you in.

and unlike NZ they won't sell you their land.

Latest Treasury forecast sees net immigration curtailing. "By 2021, annual net immigration is assumed to fall to 20,000 and is on a
path to reach Statistics New Zealand’s long-run median population migration
assumption of 15,000 in 2022."
http://www.treasury.govt.nz/budget/forecasts/hyefu2016

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2021 is too far for my liking. By then NZ population will have surpassed 5 million. A population debate needs to be front and centre next election!

Seems a rapid fall all the same. What info does Treasury have to predict this?

I think its about more than just pointing to a prediction and hoping it's right ( I know you were just pointing this out to people however ) We need to have a real conversation nationally and say where we want our population to be, when that is and why. Immigration just because or purely for financial reasons is very short sited and just not good enough.

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12

We don't need an immigration policy, we need population policy. Why play with the numbers that flow over the border, when we have not decided on how many people we want in New Zealand.
My vote would be for a steady population of 2 million or less. I would settle for 5 million, but absolutely no more.
Imagine what a great place the country would be with a much smaller stable population. No insane costs trying hopelessly to catch up on infrastructure build. Housing sited in only the most desirable places Maybe you could even drive up the Auckland motorway.

With just two million people we could just rely mostly on fisheries, minerals, forestry, tourism and agriculture. Use machines to do most of the work. Possibly consider guest workers for fruit picking. Everyone could have new cars, nice houses, a boat and a bach and an overseas holiday every 6 months.

Fisheries: oceans are pretty much depleted
.
Minerals: Not much gold in them there hills, left. What other minerals do we have that Australia don't, or don't have them much more easily accessible?
.
Forestry: yup, for as long as those rain clouds keep coming, but planting has fallen for the past 20 years.
.
Tourism: meh. Not that many people make a living off of that
.
Agriculture: the way we're depleting our natural environment to export milk powder and beef, we won't have anything left to lure the tourists here. Farmers are relying on free stuff to keep going. If Canterbury and Otago farmers had to start paying for the common good which is fresh water, they'd be out of business pretty damn quick. The truth is that we're selling our goods too cheaply, or are just too lazy or dumb to add value to them before we ship it. Most banana republics can whole-strip their countries and sell it off to the highest bidder for a limited amount of time. Our limit is fast approaching
.
With nothing left to export, how will we pay for those fancy imports like cars and boats and overseas holidays?
You're living in a dream world.

We earn nearly all our money from these basic exports plus tourism is a huge money earner making up 17.4 percent of New Zealand’s total exports of goods and services and employing 7.5% of our workforce.

Tourism Industry

If you add up all the earnings from tourism, dairy products, meat, wood, fruit, fish, wine,food products,wheat,casein, aluminium, precious metals, wool, wood pulp, iron & steel, oil and paper it comes to around 48 billion dollars.
This is more than enough to keep a population of two million living in the lap of luxury. Currently we support 4.5 million people on 70 billion in exports which is $15,500 each. However if we divide 48 billion up amongst 2 million we get $24,000. That's for every man, woman and child so it adds up to quite a lot of wealth. Of course GDP would be greater as these figures are just export earnings. I think we would be 50 to 100% better off with a population of only two million.

Here is the data:

Goods and Services Trade by Country: Year ended June 2016

Tourism - inbound and outbound

There are 3½ million inbound tourists per year and 2½ million outbound tourists each year

It has been discovered that locals, ie NZers wishing to take a holiday in NZ are unable to because all the accommodation facilities are either completely booked out all the time, or inadequate, so they are forced to look overseas for their relaxation

The benefit from tourism is a bit of a mirage - not as good as it appears - deduct the outbound expenditure

NB: statistics and data - when it comes to tourism we get fed the gross inbound figures and earnings but when it comes to immigration we are fed the net numbers not the gross

Noted and I wondered about that as it seems too good to be true. I think my case still stands though. We are largely a primary exports economy that doesn't need a lot of workers.

Tourism is also a low wage area, a lot of working holiday visa's,
we have tourists showing tourists around NZ

yes,plenty waiting on tables in Paihia and Russel and down the road plenty of able-bodied kiwis on benefits.

ahh but according to the spin all 128000 people on the dole do not want a job,
that's about the population of Dunedin, could you hear the out cry if we had all the unemployed in one place and told NZ that (Dunedin) has decided you will support them as they don't want to work
http://www.dunedin.govt.nz/your-council/long-term-plan-2015-2016/section...

Chinese speaking drivers are mushrooming.

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Why don''t we let the market increase NZ wages. It seems to me impossible to argue against building a higher income New Zealand. What Paul Glass says above is worth repeating.
"....... Let’s look at sectors like tourism and IT where we currently have issues around skill shortages. These sectors had the same issues over a decade ago and rather than letting the market send the right signals to Universities, training institutes and companies that we need to train more people with skills (by pushing wages in those sectors up materially) we have simply brought in more low cost labour. "'

I agree. I feel like we mostly fix things with bandages and knee jerk reactions. We need a long term plan and our leaders need to show some leadership and start these conversations now.

The market does dictate the wage and the market says that plenty of young tourists will work for a bed so the wage is near zero.

Small point everyone overlooks and that is neoliberal policy is just like socialism both are blind to culture and so the New Zealand economy is not for any specific person called a New Zealander or a specific culture it is for everyone who turns up.

People who live here and have been born here have no actual right to expect anything e.g no right to a job or house they have to compete with everyone else. We hand out the dole only to prevent crime that is all.

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5 mill max, that's it.
Where is the Politician with the guts to say it, and grab the votes?

Good on you for putting a number on it. I think about the same 5 - 6 million.

Could other readers please give their preferred targeted population of New Zealand?

2 million enabled NZ to be one of the wealthiest nations in the world, but since we can't go back in time I'd settle for whatever lowest option we can have. If our long term average Net migration was zero from here on in I suspect NZs population would stabilise around 6 million.

As above. My pick would be 2 million population for New Zealand.
. But happy to accept 5 million if that has to be to get the law through.

Good article.

This comment is my personal opinion and an attempt to write a comment that badrobot doesn't consider disingenuous. Let's see how it goes.

My feeling is that the absolute upper limit should be 5 million. However more important than sheer numbers is the national character of the country. I suspect that an ulterior motive for wishing a population cap is to maintain national character. This is not a bad thing. However a population cap is also the first step in stopping our rush to ecological disaster. Once capped we can then think of ways to slowly reduce our human population.

Mass immigration poses an existential threat to the national character, something that makes us what we are and something that we cherish. Also something that migrants are attracted to and want to be a part of. National character isn't necessarily endangered if migration is managed properly. Migrants shouldn't be selected on just 'best and brightest' or one's in greatest need. Ordinary people from highly compatible cultures should make up the bulk of migrants if people insist on accepting migration. A degree of diversity is permissible, possibly desirable, but ultimately the demographic character of the country should be maintained.

The most affluent and safest cities in the world that are similar to our own cities have populations of Europeans that exceed 70% with Asian populations in the 10 to 20% range and all other groups making up the remainder. It follows that if we maintain these ratios we are more likely to be able to continue on our mission of creating and developing a high trust, fair and equitable society that has a fully functioning social welfare system. European majority societies are almost the only societies that have these highly developed welfare systems. This would also ensure that we would be leaving a similarly healthy social environment for our descendants, something I believe we are duty bound to attempt to achieve.

Things may well change as time marches on and different societies develop better systems but it should be noted this is the current reality of the world situation. Other countries should also follow this path in order to maintain global human diversity. Different countries with different national characters can compete on the world stage to ensure a future where divergent ideas and ways of doing things continue to flourish.

I agree, we shouldn't have immigration levels that are so large from countries that can't assimilate into our culture.
When I travel, I like to experience the culture and flavor of the country I am in.
Globalization and high immigration loses a countries identity.
Maori and Pakeha and Pacifica have intermarried and created a distinctive culture that is NZ. That culture is valuable and you don't even realize it exists until you travel.
I remember coming home as a young man after being abroad for 7 months and realizing that NZ had its very own culture. Every public building you go into has Maori carvings, we have our own humor, our own heroes, our own history, our own accent and our own character.
Why do so many Kiwis want to loose this?
Zachery is so correct that If we were 2 million people we would be individually so much more wealthy and have less environmental concerns. we can't turn the clock back but we can say we have reached peak population and were not taking any more.

Hows this for an idea for future immigrants; they could purchase the citizenship of a kiwi who wants to sell.
The Kiwi would then have to move to the immigrants country but would have a wad of money to start their new life. We would find out what our citizenship is really worth. We might even get rid of some of our deadbeats.

Good article. We need to invest in our own. And allowing large migration flows risk killing off the very thing most migrants come here for. Things like space, social cohesion, low density and low pollution. People don't come here for the wages. We remain a still relatively poor corner of Australasia.

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we cant get rich selling houses to each other but we can get residency selling bakeries to each other.

Is this huge immigration growth in NZ really helping us long term? Health spending for example is apparently only going up by inflation, yet we have a lot of new people coming into the country, so the spending should be going up by more to cover the,. Maybe many are healthy at the moment, so not putting much of a demand on the health services, but that will change as they age. Other infrastructure has the same issues. Obviously the big issue though is the lack of housing to house them in, which has pushed up house prices significantly. I am wondering if we aren't heading for a bubble where we have let so many people into NZ, we are going to have to borrow significantly in the future to service them, or our standards of health and housing will have to go down.
Have NZers ever had a conversation with the government, that we want such huge immigration growth? National in the 70's and 80's campaigned against this .

I agree with you, but the real question should be: Why are we still trying to measure everything in just financial terms. We need to remember why we ever wanted to be be rich for in the first place.

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Auckland is full!

NZ doesn't need more people who have less money, less skills and less education than the large numbers of underemployed kiwis.

A complete rethink is needed including a plan to get rid of the thousands of poor unskilled workers that are here on student or other visas. They are of no value to NZ and are a plague on the future of our economy, driving down wages, but taking up health, education and other infrastructure costs for themselves and their future offspring.

But they offer "cultural enrichment", you cannot measure that in $$

We have our own culture!

We have our own culture!

Diversity

We are told we need to diversify "our culture" and make it culturally richer

Not sure if "get[ting] rid of the thousands of poor unskilled workers that are here on student or other visas." is a very PC way to state it. However, I certain believe that it will be very difficult to "get rid" of many of those who have come here on student or work visas. They will likely go "underground" and NZ will end up in a similar situation to the USA with many "illegal migrants". As a percentage we probably already have a similar number to the USA of so called "illegal migrants".

Put a bounty on every one of them. Their greedy employers currently selling them a "job" will soon turn against them.

As things stand, our government is colluding in serious organised crime which is destroying the New Zealand economy, and which victimises both New Zealanders and the desperate families in India who try to buy their way in but are misled and exploited. We know that a staggering proportion of immigration is fraudulent and arranged by corrupt criminal elements in India and Asia. All so our incompetent government can do the GDP equivalent of moving the balance from one credit card to another. There's no upside to any of this.

The rationale given, that we need those young taxpayers to support our oldies, doesn't stand up to even the most superficial scrutiny while a) we're allowing migrants to import their own oldies; b) in an age of automation and offshoring those jobs don't exist; and c) an enormous proportion of those young 'taxpayers' pay sod-all because of WFF.

I would question whether those families in India are desperate though.

They will likely go "underground"

They can try -
with big brother IT architecture data-matching IRD numbers and PAYE-tax-paid and customs departure cards
Soon identified
Guess 100% of international students from India apply for an IRD number so they can work
Just wait and see if they ever leave

That's the funny thing about the modern socialists. Socialism is not compatible with open borders and the divided society that some incompatible cultures bring about. If you want a strong socialist state then social homogeneity is a prerequisite. The givers need to feel like giving is worth it and the takers need to feel grateful for what they get and feel shame if they are taking too much. Neither of these happens today.

Good comment and I totally agree. Social homogeneity produces a general unwritten consensus of what is acceptable and what is not acceptable, a reflection of the national character. High trust societies have a lot of rules that people stick by intuitively. The solution would be more official rules and regulations, a lot more, impacting on every area of life, hence political correctness and odd laws that punish opinions.

Anything in extreme is bad so is immigration.

for more on this read
Michael Reddell
https://croakingcassandra.com
http://thepolicyobservatory.com/2016/05/think-big-auckland-immigration-a...

I think it is going to take a lot of lobbying of National Politicians from National Supporters to turn this around

A while ago, probably just after the war, we suffered from a complete lack of vision.It is hard to predict the future but in hindsight it is quite clear. In an age of increased mechanization it was obvious that fewer workers would be needed in the future. The Herringbone Dairy Shed was a portent of what was to come. Agriculture and other primary industries would need only a small fraction of the workforce to produce much more. New Zealand was a primary industries exporting country and would remain so. Fortunately primary products are always in demand.

A visionary government plan would take advantage of this and keep the population level stable. All Kiwis would have to work less, especially as new technology came online, and any high labour industries could have been easily manned by temporary guest workers. We actually still do this with fruit picking so it is not unprecedented or immoral.

In a way it would be following the Saudi model except with a better, renewable, resource. Instead of becoming the Switzerland of the Pacific we would become the Saudi Arabia of the Pacific except with better long term prospects.

Quite annoyed that I miss out on my luxury sports cars, race horses and gold plated taps because of this poor forward planning actually.

May be with change of leader, it will be easier for national to take U turn and change without loss of face.

Hi Paul - I see for Mar YE 2015 you have GDP rising 3.1% and GDP pp at 0.5%. I don't think that's right - 2.6% population growth is a bit strong. Population grew over that year by around 2% - suggesting GDP pp grew at a little over 1% - still not flash by very recent historical average for sure which is closer to 2% pa. Nevertheless I agree with the proposition that the evidence doesn't suggest that our current high migration is restoring our GDP pp growth average of 2.5% pa of the 1990's. Nats would argue it's saved us from a hard recession post GFC from the swoon in commodity prices. Maybe correct but that's not grounds to keep 'em coming in at the current rate - especially when the quality of migrant has slipped so markedly. Cheers Gareth

Hi Gareth

Will you be supporting a reduction in immigration levels?

Thanks

Because it's a very easy way to produce fake growth, and make it look like the government is doing a good job.
The great lover of deception, Key loved that kind of thing.
Never one to be interested in what was actually good for the country, his only focus was how popular he was or could be. He was exactly the wrong sort of person you want to be running your country.

And yet the media love him and the unwashed masses who are to busy going to work and raising their families trust the media to be their eyes and ears.

Things are changing now that people are realising that most of the mainstream media is "fake news" and highly manipulative. It's not working for them anymore. You will find more truth in the comments sections of many sites. More and more people are going to alternative news sources.

Fake NBC News Anchor Brian Williams Warns About 'Fake News'

Just because what is reported does not fit some alternate view does not make it fake, especially when verified, as most real news is. More likely, it jiust exposes the alternate views as pure fantasy. Fantasy is still fantasy, even when bullies shout it. The internet enables bullies, and that is a real issue for all of us.

The Internet is also keeping people honest as it is very difficult to get away with outright lies now. I would say on balance the Internet is more a force for good than bad when it comes to the truth and the pursuit of freedom.

You are the victim of this. In your own echo chamber, avoiding uncomfortable alternate views. Outright lies get perpetuated in echo chambers. In fact, that is where they get generated. History is full of whole countries getting side-tracked into disasters by avoiding uncomfortable realities, and that is what social-media silos are doing today across countries. Millions of people can only hear reinforcing views of their own distorted reality (even electing presidents) and believe their fantasy is real.

The antidote is verified news, evidence based reporting on confirmed sources.

What is disturbing is that millions now reject such standards, preferring made up 'news' pushing a distortion. 'Truth', 'good', 'freedom' are getting hijacked by Orwellian forces. It amazes me how many people fall for it. But Jenee's piece shows you why.

We are fighting the Orwellian forces of the media, corporations and government who have been revealed as working against the interests of the people. What could be more Orwellian and dishonest than political correctness? This is the "uncomfortable reality". It would be interesting to get other people's points of view on this. I don't think we will find many who have faith in the BBC, CNN, Fox News, NY Times, Washington Post, Hollywood et al.

What we are seeing is a weaponization of Poe's Law where satire is being used as a weapon of mass destruction against the forces of darkness. Exciting times really where everyone can get involved.

I feel that you are going to have to accommodate this somehow as this is where the political battles are now being fought.

You are truly in a strange place if you really think the " forces of the media, corporations and government" could ever work in some sort of grand co-ordinated secret conspiracy ! This is a group that can never seem to co-ordinate anything, let alone keep anything secret.  What would ever possess someone to construct such an unlikely conspiracy? Even totalitarian governments have been unable to do that for any length of time, but somehow you think the institutions of democracies can, institutions that have revolving doors of employees and policy makers and various comings and goings of different political persuasions. You need to be especially blinkered to believe that.

I never wrote that it was a conspiracy and that they were co-ordinated. I believe they think that they have good intentions.
It's more a case of "The Emperor's New Clothes".

The Internet is the Fifth Estate.

(Everyone who uses Wikipedia should chuck 25 bucks or so their way. I do this once a year.)

Not a conspiracy David. More closed inside the beltway mindset.

Yup to find out who was winning the US election race you were better off following the Dilbert blog than the NY Times or Washington Post.

DC says "History is full of whole countries getting side-tracked into disasters by avoiding uncomfortable realities"

Absolutely.

Right on our own door step that very characteristic was played out almost daily by "our leader" who would shout questionable unverified nonsense into the cameras and microphones of the media and waited for the echo to come back.

It's not a crisis
Foreign buyers only 3%
Panama Papers - piffle
Housing shortage is being addressed
Nick Smith is right on top of it
Dont have any homeless
We are lifting all the boats in the harbour
SHA's will solve the problem
FHB's can buy apartments
FHB's can commute from Hamilton

What I find odd is how "real news" gets framed to become "news".

The news regarding who/what entity is behind the DNC emails released by Wikileaks is an interesting case. That "news" has been framed as an international espionage story regarding who influenced the US election.

But surely, given the DNC are not claiming that the emails released are false, or "faked" - then it is the truth contained in those emails that influenced the US election, isn't it?

The facts are that it is the DNC who tried to influence/manipulate the US election - not whomever it was that exposed the truth of what they were up to.

Well that's how I see it anyway.

Dead right Zachary. MSM just got their a##e kicked in the States over Hillary. They are used to controlling the news, but alternative news sites made sure they got no free run this time. Its happening here, the back slapping MSM treatment of Key has been vomit inducing for many. MSM opinion/news pieces are becoming less and less relevant.