BNZ's Stephen Toplis says the Government may need to consider introducing a population-demographic policy to broaden the debate on record inward migration

BNZ's Stephen Toplis says the Government may need to consider introducing a population-demographic policy to broaden the debate on record inward migration

The Government should consider introducing a population-demographic policy to broaden debate out from record net migration to one of population size and composition, says BNZ head of research Stephen Toplis.

Toplis floats this idea in an Economy Watch report entitled Housing in New Zealand. New Zealand recorded a net population gain 69,090 in the June year continuing a strong run over the past couple of years of record inward migration. This is helping push up house prices, especially in Auckland, where the average house value reached $992,207 in July, according to Quotable Value.

"New Zealand may need to address the idea of having a population/demographic policy. In this manner we could deflect the discussion from simply migration to a more general discussion on population size and composition," says Toplis.

"To start with, does New Zealand want GDP [Gross Domestic Product] growth or per capita GDP growth? Are the benefits of population growth more beneficial than the externalities that come with it - such as congestion, pollution and greater stress on our natural resources?" 

"[And] is there an optimal population size for New Zealand? And what is the optimal growth rate both in terms of quantum and timing?"

Toplis says that if we want to attempt to control net migration we can’t impose policy that impacts the net flows of Australians and New Zealanders and, yet, this is currently having a significant impact on total flows. He also says if we want to address who we let into the country as migrants, we need to remember that controls that are too strict may curb the supply of needed labour.

"This could be counterproductive if that labour is coming to New Zealand to build houses or to provide skills that are lacking," says Toplis.

Meanwhile, he says, a reduction in education migrants could negatively impact GDP on services exports.

"We can’t really restrict migrant flows by race for fear of accusation of racism or a trade backlash from those impacted. More generally, xenophobics should pause to ponder whether they themselves are of migrant stock? After all, all Anglo-Saxon New Zealanders were migrants not that many generations ago," says Toplis.

"Arguments for and against migration would best be focused around 'economic' and, potentially, 'cultural' grounds."

 

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99 Comments

Of course we want economic (GDP) growth, which immigration provides instantly and in abundance , but the way we are going about things is a quick-fix , and we know how quick fixes come with unintended consequences

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Really. We could shift half the population of Africa here and have a huge increase in the GDP. Perhaps great if you are one of the top 0.1% but disastrous for the other 99.9% of the population who would experience their GDP per capita share of the wealth decimated at best and have to fight for a patch of land to throw together a shanty for a dwelling. I think the only thing that concerns the bulk of the population is that their personal wealth increases, i.e. GDP/capita.
Interestingly, the countries around the world with low growth or decreasing population have amongst the highest GDP/capita. Similarly, analysis of most countries in the world reveals that there is a mildly negative correlation between the population growth rate and GDP/capita growth rate. Certainly not a positive correlation or an argument to justify immigration for the economic benefit of a country.

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Life is not just about economics. Social and culture aspects need to be included as well. Perhaps, New Zealanders actually like their culture and the social environment the way it is.

What about migrants from the UK? Do they pollute the culture here?

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Maybe you should ask Maori what they think of British migration here? Didn't work out too well for them.

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Yes, because they would have been so much better off without the knowledge, technology, and common law that the English brought.
Maybe that is why PNG is the socially and economically advanced nation, that it is.

What a stupid statement to say that it didn't work out well for them. The Maori got the best end of the deal.

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Of course the cost of that immigration was the lost of their land, culture, and language. I guess there was no other way to acquire knowledge and technology without the total destruction of their culture. But I am not Maori so perhaps I best not to speculate.

Actually Maori welcomed contact, exchange and trade. Then European (well, British, mainly English) settler perfidy meant Maori were rapidly shafted, isolated and impoverished. Best end of the deal? What a stupid racist statement. Editor, what's your stance on this?

Yes but didn't they encourage the British because they realised that they were going to be colonised by one of the European cultures and decided that the British were far better than the alternatives, e.g. the French or the Dutch etc

Ahhhh no. Back-think that.

I don't think so. I heard it first in a radio interview of Michael King; one of the most notable NZ historians.

How is my statement any more racist than your implication that the English were the ones that prospered?
A prime example of the quick to call racism generation, on your part.

@nymad: Take your comment and switch the word 'English' with 'Immigrants' and the word 'Maori' with 'Kiwis' and keep the sarcasm. You have just answered this debate.

Nymad,

I assume that like me, you or your forebears were immigrants,so perhaps we need to be a little circumspect in our opinions on this issue.As Westerners did to so many other indigenous civilisations, we brought guns,germs and steel, as so vividly documented by Jared Diamond.
How very imperialist of you to say with such certitude that Maori "got the best end of the deal". Your arrogance is almost endearing.

It was a wonderful deal for Maori - speaking as somebody whose ancestors have been shooting English people for centuries.

I have Maori ancestry. I think it worked out reasonably well.

Who used the word "pollute"?

They used to be called the winging Poms.

The culture that many New Zealanders enjoy may be simply living in a free and easy un-crowded country. So immigrants from any where are undesirable.

Yeah that's why 650,000 New Zealanders live in Australia & 1 million+ New Zealanders in total live overseas which is the second highest nationality live overseas per capita just behind the Irish.

New Zealand needs much more immigrants.

Absolutely!
If anyone wants to do the 'Zamba', they can go to Zambia, and take Mr. Don Key with them!

Well Australia grew by the total population of New Zealand in just the last 13 years. The problem is that most of the migration to New Zealand doesn't spread out equally.

More should be done to encourage more Aucklanders & Migrants to the regions.

The NZ population is too concentrated in Auckland. Ghost towns appearing in the regions.

(33.4%) of the NZ population lives in Auckland compared to only (20%) the Australian population lives in Sydney.

40,000-50,000 Kiwis were moving to Australia annually over the last 15 years.

Well, their island is slightly bigger!

Slightly bigger? Wrong. 76% of the NZ population lives in the North Island & just 24% live in the South Island.

The South Island has a population density similar to Tasmania.

Australia the 6th largest country in the World & New Zealand is the 75th largest.

NZ has a population the size of Ireland in a landmass the size of the UK.

Australia is a continent.

75% of the south island is rock and ice called the Southern Alps.

Good stuff, I was just about to point this out. He should have a look at a satellite map sometime.

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I think you and everyone else is wasting their time, Stephen Toplis.
No one is listening in Wellington, they enjoy, in fact need, the fruits of the current let it run / do nothing policy to keep GDP ticking along. There is an election to win next year you know, no one gives a fig about the long term issues.

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No debate or logc will work as long JK our PM as is sold out to overseas money as that is the only growth in our ecenomy. Anything and everything for foreigners and who cares about Kiwi who voted as are dumb and near election will be manipulated.

A very politically correct statement.... that sort of maybe perhaps implies... our immigration settings are wrong, we need quality not quantity.

Completely agree. Now, the tricky thing is: what do you mean by "quality"?

What does NZ have to offer to the brightest or smartest (leaving aside the richest)? High wages?

The best nation on earth, that's what we have to offer. And frankly, I don't want to!

If NZ was the best nation on earth it wouldn't have nearly 1 in 3 of its youth living in poverty & its total prison population being over 50% Maori.

Assuming both those statements are true (which I would question, but leave that aside) - So what, as far as a potential immigrant - let's call him Bob - is concerned? Assume also that Bob is reasonably well qualified, in good health and able to earn his living, for if he weren't he wouldn't qualify to immigrate.

Bob is not likely to become either an impoverished young person or an imprisoned Maori himself as a result of immigrating to New Zealand.

Perhaps you think Bob will be made unhappy by the existence of all those poverty stricken youth and imprisoned Maori, even though he is not himself part of either group.

But if Bob is unhappy about that, then he has that problem anyway. There are still youths in poverty and Maori in prison, whether Bob moves to New Zealand or stays where he is.

Enjoy the GDP, I think NZ needs 6 million population, so we don't need or less rely on export. House price inflation is due to Global economy, nothing to do with migrants. Also we need to stop foreign buyers who sit in there own countries and not contributing to NZ economy.

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Used to be a decade or so back, it was said, NZ needed about 5 million people. Well,we are nearly there, and guess what, it's not enough. The way we run things, we seem to need an ever growing number of people to keep it all going, look at Japan.
I think what we need is to figure ourselves out a whole another way to prosper, with probably a falling population, because that is what this planet needs, and us, is for there to be less of us. We can either slow down on the breeding or we can wait till the pressure gets too much and we do something catastrophic, again. Aren't we getting mature enough yet to figure out how not to do the latter?

It's never enough and never will be.

Bingo!
Like doing drugs: Too much is not enough, all I want is more!!

The way we run things, it's not.

It's the only way the ponzie scheme can be kept going. And the ponzie scheme is our lazy politicians and their advisers best effort of an economic plan.

Migrants who say NZ needs more people should go and live somewhere where there is already more people.

Nobody is denying a steady population growth is needed to complement a growing economy. However, the migration influx is concentrated in certain cities where the infrastructural facilities are insufficient. Economists have been asking the government to bring migration down to levels where construction and job growths can catch up with the rising population.
The government is in denial of the existence of a crisis in any form though recent reports from Newshub suggest 81% of Aucklanders (which means nearly 30% of NZ residents) feel that the country is in a state of housing crisis.

the government has shown their mantra, they are willing to sell citizenship for dollars.
if they are just coming for the education as the minister states why are they now unhappy to leave once they have finished theircourses
Immigration Minister Michael Woodhouse said the system had been "beefed up".

"We have a very good international education product. It earns about $3 billion of export earnings for New Zealand and the purpose of coming here is to get a good education."

International education is a $3.3 billion industry but the integrity of the system is under doubt.

The question is this: Have these students been buying an education or a chance to work and pathway to residency
http://www.newshub.co.nz/politics/we-didnt-do-anything-wrong---indian-st...

@ Advisor. Don't claim that nobody disagrees with you. Plenty see that an economy can grow well with a stable population. You could say that meant the individuals become wealthier.

I think Stephen Toplis makes a very valid argument. There needs to be more educated, non-xenophobic discussion around immigration. We have to do what's best for NZ

Immigration is good and worked well for NZ ,Australia,Canada, US economy . I came before 15 years when GDP was $40 Billion. Within 15 years it is $200 billion. Lot off Kiwis made millions in this housing boom. Who didn't, they are complaining.

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Are you saying immigration is good because it creates boom and bust cycles and some people can take advantage of it?

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Those that are complaining BM might also be those with children unable to buy their own house, might also be those stuck in traffic jams all day, those that are in queues for hospital treatment, those who have children in crowded schools, those who are now strangers in their old suburb, rising crime especially drug related, the list goes on, its not just about making money from housing old boy.

I think also you have missed part of the spiel above. The graph shows we are no longer getting the usual GDP bang for our per capita buck from immigration suggesting we might be saturated with too many $2 shops and ethnic takeaways with fully trained 17 year old immigrant chefs running the joints.

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A whole generation of kiwis have been robbed blind by this stupidity. Worked well for them?

"Meanwhile, he says, a reduction in educated migrants could negatively impact GDP on services exports."

Do you think he's trying to say that New Zealanders are so thick as to be un-trainable or ineducable.

No, he is stating a logical short to medium term truism.

The phrase used was education migrants - I think he is referring to students coming here for study. Complete scam of course but I guess someone is making some money off the rort.

Hard to argue when you look what the average Kiwi lets the Govt get away with.

I love that GDP graph.
It tells a great story.

"Arguments for and against migration would best be focused around 'economic' and, potentially, 'cultural' grounds." --> that's nice. I wonder what he means by "culture".

""[And] is there an optimal population size for New Zealand? And what is the optimal growth rate both in terms of quantum and timing?"" --> look at NZ's size, then look at the population. There is still some way to go.

If what you say is true, why are so many people leaving their over populated country and coming to New Zealand?

"The Government should consider introducing a population-demographic policy to broaden debate out from record net migration to one of population size and composition, says BNZ head of research Stephen Toplis."

Too....funny, I love how even bank economists now like to put their 2 cents in on economically everything. Smells of desperation to me. My my times are a changing

The fact of the matter is simple. Born and bred everywhere take a JUSTIFIED dislike of 'non residents' coming in, buying up their homes and land, and making everything more expensive for anyone earning a local wage/salary.

Not just NZ, Aus, Canada, Hawaii (where that's being going on for decades) etc etc.

It's what breeds and IS breeding "nationalism" and "protectionism around the globe. It's the very thing that made Hitler popular. (yes .....him)

Gee that GDP graph is looking like the same 30 year downward trend that interest rates are in, funny that.

Correlation does not imply causation

If you were familiar with my posts you would not make such an uninformed comment :-) My prediction based on my rework on the Quantity Theory of Money is that interest rates will trend down over time. (M.V)+i=P.Q. The right side of the equation is GDP. GDP can be Price, or Production in this calculation, you can't tell which unless you collect the data. However GDP is running at 2.4%, while the money supply is growing at 7%, something is awry.

Brilliant comment Scarfie, but if I may, GDP today is nearly 2/3 consumption...

Doesn't that just strengthen his point?

So is that figure referring to the price of our consumption? Or the quantity of it? Or more to the point, what is the rate of change of consumption (which the graph shows is falling), and how would you know?

mmm, not quite enough of an explanation there to justify your position..
I think you are on the right track with quantity theory, however an argument for a liquidity trap stemming from the housing market might also be plausible?

This site has caused me to think, and think a lot. Some numbers I have not verified, but give food for thought. It is claimed in some quarters that we use 18 calories of crude oil (non sustainable) to produce every calorie of food we produce worldwide. New Zealand produces enough food for 54 million people. Without oil the natural carrying capacity of our land is 3 million. What exactly do we produce that we could trade for food that would sustain a larger population?

New Zealand imports 50% of its energy needs, and 100% of its transport energy. Good luck driving that car in 10-20 years, let alone eating.

Is it too early to have resorted to cannibalism?

burp.

That brings to mind the comment in the book "The Paths of Taranaki", but one man to another as they ablute the morning after a feast. "Good in, bad out eh?"

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The one thing Third World countries all have in common? Too many people.
If you double your population and you don't double your exports then your country is not as wealthy.
I don't believe we can raise our export productivity to match our population growth and your exports have to pay for your imports.
if your exports don't go up then the amount of cars and computers you import can't go up.
Borrowing money to build infrastructure for our enlarged population does create work, but it doesn't create wealth.
Borrowing money to build infrastructure for our new enlarged population is going to be a tax burden for the next 30 yrs.
Welcome to higher Rates, higher Taxes and Road Tolls.
Welcome to a lower standard of living and a lower quality of life.

A simple explanation, that hits the nail on the head.

So near and yet so fart..to coin a phrase
The three big issues for our society are health,education and housing, in my opinion.
Living in NZ is now internationally desirable and we should manipulate immigration numbers to mantain an agreed demand and affordability for the measures I mention. You may add GDP to taste.
Do we understand?

I can't believe the immigration figures will fall to 12k per annum in 3 years time as is expected.

https://www.theguardian.com/commentisfree/2016/aug/05/trump-brexit-is-ne...

That is just our civil servants behaving like victims as usual
Could they not manipulate arriving students to flatten that off?
Or promote the residency bribe to compensate?

A poor article. Arguments about immigration should center on what policy can actually influence, and also on the state of the domestic labour market. What is the capacity to absorb new labour, where are the shortages- in higher skilled (hard to fill) or lower skilled (readily retrainable) people? What is the current ue rate and participation rate?. These basics are largely ignored . Governments control only part of the flows, but they still need to work the tap they can operate, i.e., inflows of non-resident workers. The overall flows have been traditionally 0-20k per annum depending on the state of the economy. Net inflows of resident kiwis (which we cant control) are high and local unemployment is not particularly low. This implies the need to strongly restrict non-resident inflows -even before you factor in our severe housing issues. Very specific hard-to-fill roles where there are skill shortages and skill gaps are the obvious exception. Instead, our laissez faire approach has led to a blowout to net inflows of 60k plus. An epic fail in my opinion.

What exactly do you mean by a "laissez-faire" approach? I've been through the NZ immigration process and it was hard work, didn't feel at all like a wide open door that anybody could easily get through

Lack of tuning to the systems to slow down immigration in times of under-employemnt and stagnant wages == "laissez-faire" approach

Why would people want to immigrate when there are no jobs on offer and wages are poor?

Why wouldn't immigration slow itself down in such circumstances?

Perfect markets require perfect information and understanding. A lot of people move here for many years only to realise it's kind of crap in NZ. One taxi driver I talked to was planning on moving back to Fiji to be a builder. The grass is greener until you end up with being a taxi driver as your only option to make a living and you realise you would have been better off staying at home after many years.

Perhaps if we were more honest and told people NZ is a terrible place to work unless you have highly specialised and sought after skills.

Perfect Government intervention also requires perfect information and understanding.

What makes you think the Government's decision as to who would and who would not do well to move to and stay in New Zealand, is going to be better than that of individuals?

Do you think the Government is better able to make a decision as to whether you and your family should stay in NZ or move to Australia, than you are?

Why do you think I'm talking about the Government?

New Zealand has a long history of luring immigrants with lies and propaganda. Even in the 1840s the spruikers herding up people to pay their life savings for a long sea voyage were pretending it was warm and tropical. Even now they're pushing all that Fiordland scenery and Lord of the Rings bollocks while quietly ignoring all the depressed half-dead small towns, poverty, crime, unemployment, and the pervasive run-downness and scruffiness of the place.

The opening sequence to Once Were Warriors was a perfect representation of the bait-and-switch.

We need to stop lying to people about what NZ is like, it's not helping us. I'll have to watch Once Were Warriors again.

My feeling is the current goverment only considered one desireable outcome to manage which is gdp and ignored the other variables such as housing and health resources
They have todobetter than that

In my view the so called need for immigration is, in reality, designed to keep wages lower. When there are people being paid $8.00ph with next to no inspectors to check on exploitation how can it be anything different? Look at what happened on the West Coast when the mine inspectorate was reduced to an impossible level. All those deaths and all we did was wring our hands.

The effect of opening our borders to manufactured products and a flow of labour is to lower their costs, no doubt.
Both tend to supress wages but why do we then discriminate and say we want one but not the other?
Our goverment has been slipshod in managing immigration but it could be tightly managed to our advantage, not used to drive one parameter, our relationship with the international bankers.
I see a advantage of immigration as encouraging redevelopment of the cities, a painful affair for Aucklanders but quite good for the rest.

Then cite examples as that appears to be below the legal minimum wage.

The mining inspectorate is a totally different argument as that is skilled v the minimum wage which is un-skilled.

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number 8 wire solution to every kiwi problem. Patch it up.

Bring in more people to keep gdp growth up
- no interest in GDP per capita improving
- treasury questioned the immigration benefits and was ignored by the government.
- The fact is that we have the 4th highest immigration rate in the world and not the infrastructure to support it.

Allow foreign students and temp workers to purchase approx. 12-13 billion worth of property in the last 12 months.
- don't worry about the effect on society of ever increasing house prices
- household debt exploding at 8.8% a year and at 216Billion
- and eventually mortgage repayments which will persist for the next 30 years

The sooner we start thinking more strategically with strategic solutions and drop the number 8 wire short term solutions the better... Lets hope John Key gets voted out.....

We just need Labour or Greens to announce the same 15% stamp duty as Canada have and I am sure their new support will get a collation government over the line. As homeownership rates slip those in favour of this policy will only increase.

In Short national govt has ....................please read all swear words that one can possible think.

In short that's why the others are not in gov.

Really the opposition political parties should be able to run with recent events and in particular what has been happening with Vancouver housing market and the impact of the new tax on foreign investor buyers.

Just looking at this report from the BBC: Foreign home buyers face new tax in Vancouver area
http://www.bbc.com/news/world-us-canada-36956034

This highlights just how rapid their price growth (Reference to the graph in the news article) has been. Vancouver average property price has increased rapidly from the mid $600k in 2010 to over a million in 2016.

Hasn't Auckland been following a similar trend over the last few years to warrant a similar tax to Vancouver? I'm sure if Labour or the Greens were to propose a similar Foreign Property Buyers tax we would certainly see a slow down in our housing market.

Don't forget how Auckland dropped -8% in the three months from last October when Foreign Investors were locked out temporarily from our housing market whilst they registered for IRD numbers. So we very much know that they hold a huge influence on our Auckland property bubble, best to burst it now then leave it to cause a much bigger economic explosion later on down the track.

NZ too will have tax on foreign buyer. JK and his psrty are only trying to delay it tò help their chinese friends but for how long.

More street protest in future. This is just a start

http://www.newstalkzb.co.nz/news/national/protests-underway-at-the-block...

I counted a total of 15 protesters...and how many property obsessed junkies passed through the houses?

A fully economic analysis of the pros and cons of immigration would have to consider some things that I never hear about in any discussion on the matter. The argument needs to be something like:-

1 The net present worth of total incremental capital that we must employ to support each immigrant including
Housing
Roading cars buses trains
Education schools universities
Health care Hospital
Etc

2 The present value of the whole of life cost of every other service or thing that they consume in the course of living

3 The present value of the whole of life value of their economic contribution

If 3 minus 1 minus 2 is greater than zero then the proposition is worthwhile.

I suspect that 1 will be a very large number and 3 minus 2 will be marginally positive for most of the immigrants that we are taking. I.e. it probably only makes sense for small hand full.
I suspect that the game that the government is playing has no consideration such as this and all they are interested in is the one off boost that immigrants give in the construction of the assets that we must provide for them and of course keeping the housing ponzie bubbling along.

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I am a migrant Came here in 1995. Why ? For a better lifestyle, to escape from corruption, nepotism, overcrowding, low wages, social injustice , dog eat dog style competition, a society of have and have nots
Environmental degradation etc
If I wanted the same conditions then why would I migrate and pay the price of living away from family?
Unfortunately I have observed that current Govt is creating similar conditions in NZ
IMHO this is to benefit the big business and other vested interests
I have first hand experience of corruption and unfair society and it is sad to see nz embracing such evil practices
Obviously I am not against migration as I am a migrant myself and got migration on the basis of skills the current situation is out of control , the student schemes are just a racket and way of making money
It is not too late as yet to control the rot but I doubt if the current lot in Govt want to change the situation
Look at the board of directors members for Chinese banks and other businesses , you will find prominent NZers
NZ public need to wake up and do what is best for NZ ,
Voting this Govt out is imperative to send a message to Politicians, public apathy will lead to irreversible damage. Time to act by voting next year and letting opposition parties know of public concerns

I second what NH said

Exactly. If our Chinese immigrants wanted to live in matchbox apartments, in a crowded dog eat dog society, why would they have left China.

Chinese likely to be living in proper houses, no? They will become part of new upper-class. Toilet cleaners, road workers, retail assistants living in crowded apartment complexes with poor young people and embarrassed yet-to-be-millionaires.

Hi Nomad, just because your an immigrant doesn't mean you can't be against immigration. I know lots of immigrants who echo your post that we are losing the very qualities that attracted you to NZ. If you like what you found here help us try to preserve this lifestyle. Don't be shy to say what you said. great post thankyou.

Problem is no party, apart from NZ first whose position is only relevant if a kingmaker is needed, is interested in carrying out a deep review of NZs immigration policy. So voting the nats out probably wouldn't change much. Labour might tinker with eligibility criteria but seems to have bought into the mantra that NZrs should just accept the tide of people arriving on our shores who will irrevocably change much of what we love about our country and society. We, the peasants, are being arrogantly told by politicians to lump it, there will be no debate.

I totally agree middleman which is why we need Winston to be kingmaker. He is the only politician willing to challenge our immigration policies. Labor and greens will be glad to have their hand forced on immigration and secretly National probably recognize the damage there doing and would like an excuse to change policy as well.