David Chaston updates our latest population data at September 2020 and looks at the forces behind our stable median age, a trend that helps keep our social contract affordable

David Chaston updates our latest population data at September 2020 and looks at the forces behind our stable median age, a trend that helps keep our social contract affordable

The latest update of our population data to September 2020 pegs the New Zealand population at 5,101,400. This is a 1.9% rise from the same period a year ago and up from the 1.75% rise a year ago.

The ageing of our population is tracked in this data, and it has become ingrained in general conversation that, like most other countries, "we are getting older".

In fact, the number of people 65 years and older is rising. But the general understanding and debate around this issue is clouded by the facts.

There are now 800,000 people who are 65 years and older, a record high. But then, so is the population generally.

The proportion of people 65 years and older of the overall population is still under 16%. A generation ago it was 11.5% and has been boosted over the intervening years by a steadily rising life expectancy.

But despite this rise, our median age has been generally stable since 2013. Of course, that is also when inbound migration rose in earnest and proportionately more young people moved to New Zealand.

That policy of opening the borders to more young migrants has seen the track of the median age taper off significantly. At the rate of increase in the 1991-2001 period we would have expected the median age to be 42 years by now. After the slower track in the 2003-2013 period, the median age would have risen to 40 years by now. But in fact, it is still hovering just over 37 years.

Such an achievement has considerable benefits, and especially to the over 65s themselves. Essentially, a younger workforce is the engine that can afford to pay the benefits the older citizens have voted for themselves, not only in terms of National Superannuation ($16.3 billion in 2020 alone and the largest single item in the Government's budget), but in terms of aged care support (and a significant part of the $20.3 billion 2020 Budget for health care).

If any group should be voting for increased immigration as a way to keep the median age at a sustainable level, it is the over 65s.

But that demographic bubble is about to fade. Those left paying the bills are on the rise and may have other ideas about this defacto migration policy. Their problem is that to change tack now will see the median age start to rise quite quickly and leave them with even higher per capita liabilities over the transitional generation. (The ageing continues without the commensurate rise in the working aged population.) It's a tough choice because it foretells higher total costs and lower total incomes, ugly arguments about social benefit distribution, lower national productivity, and eventually lower per capita incomes.

Essentially, New Zealand will get poorer if we let our median age rise too quickly.

A prosperous future may depend on keeping the median age under 40. And in turn that can only be done by continuing to welcome new younger workers from overseas.

And a final observation from Tuesday's population data. While there are now 34,800 more females in New Zealand than males, there is a change coming. In the 0 to 30 age group there are in fact 55,200 more males than females. It is only when you get above 45 years of age when our population becomes female dominant.

All data in this article is from the Statistics NZ Infoshare database.

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70 Comments

Interesting, thank you. It will be intriguing to see how many under 40s, or 30s, leave the country once the Covid situation calms down. Although those could be replaced, and then some, by fresh immigrants with the open borders.

The government could start with targeting immigration policy towards national interest from the current businesses welfare agenda.

A few government agencies have collaborated this year to recruit and train tertiary students majoring in quant/data when in the past, the go-to fix was to hire temporary workers on fixed-term contracts for analytical roles.

You're right, NZ is in an interesting spot where we simultaneously:

1) heavily encourage our educated young to leave by having the most powerful passport in the world, fantastic international reputation, the most expensive housing to income in the world and the lowest education premium in the world.

and

2) open borders to highly populated low wage economies, most of which have partial democracy at best, weak property rights and weak corrupt legal institutions.

Ceteris Parabus, I would not be surprised if European Kiwis were highly scarce in Auckland under 60 within the next 20 years, but is this what we want?

Looks like it took 11 year (1991 to 2002) to go from 3.5 to 4.0M, another 11 to go to 4.5M (2002 to 2013) and then just 7 years to go from 4.5M to 5M.

Young ladies are going to have the pick of the litter assuming boys are their thing;)

When don't they anyway! Man it must suck being a relatively attractive female on Tinder lol

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Or, hear me out: we could make it easier for young people to afford to stay and live in NZ and earn competitive wages? How many decades of people putting off families until they can get a stable roof over their head will it take before NZ realises there is an alternative to importing people?

Make NZ an affordable place to live and start a family and people might actually start doing that and having more kids. I'd have loved to have more than I'll end up with, but that was me being a responsible adult and assuming our politicians would be equally as responsible and not just keep piling in people regardless of whether our housing supply or infrastructure could keep up. I'd have about 30 by now if I'd taken the same approach as recent successive governments have to population strategy.

Reforming market regulation and limiting immigration to high-wage earners should be steps in the right direction to boost wages & productivity in NZ. Employers in oligopolistic markets are able to succeed financially without investing in their people, customers and productive capital.

ComCom's study into supermarkets and Costco's plans to expand into Wellington and Christchurch may have a little something to do with Countdown's sudden interest in protecting the environment, extending its ecommerce reach, expanding its reward system and paying a living wage to all its employees and contractors.

http://business.scoop.co.nz/2020/11/17/supermarkets-announced-as-governm...

I agree, the statement from the article: "A prosperous future may depend on keeping the median age under 40. And in turn that can only be done by continuing to welcome new younger workers from overseas." is false. We can encourage those already here to stay here and have more children (and earlier), but it seems we've given up on that.

"We can encourage those already here to stay here and have more children (and earlier)"
- how ? And give us an example where / when similar policies have actually worked .

By reducing pressure on incomes to cover basics like housing to the extent where you need two working partners to cover a mortgage? Actual answer: things like 20 hours fees free childcare, extending PPL, etc.

It sounds OK in theory - but no country that tried it managed to increase the birth rate - this is the kind of answer I was expecting when I asked for an example of a place where it actually worked. Can you give one ?

Birth rate is largely dictated by culture , not economics.

France would be a decent place to look, they've managed to maintain a total fertility rate of 1.9 where the Europe as a whole is around 1.5, it's not cheap though, they spend around 4% of GDP on families.
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.un.org/...

NZs fertility rate is currently around 1.9 too, but even if you hit the replacement rate to keep population steady, the median age will trend up to around half your life expectancy.

Anecdotally, many of my peers have put off having kids until later because they want the security of home ownership first, which in general means smaller families and more people struggling with fertility which naturally declines as you get older.

Birth rates among the highly educated are dictated by economics. I've seen it first hand time and time again among all my friends who put off having children until their late 30's early 40s.

funny and true -> https://youtu.be/sP2tUW0HDHA

Educated women, with choice and control of their own lives will never go down the path of multiple births in any great number. This is how we save this planet and reduce our numbers, as we must. This thinking is head in the sand stuff

Funny, I would have thought educated women with control of their own lives would get the choice? How many would say that due to financial circumstances, they have the level of choice you want to ascribe to them? I think you are trying to diagnose the symptoms instead of the disease here. I know plenty of people who wish they'd had one more, very few who ever wish they had one less. I don't think you can say well-educated women are choosing to have fewer women without exploring the huge explosion in living costs in first world countries.

Yes, I can, women don't all enjoy being stuck at home with a tribe of children, of that I am 100% certain.

So why have children in the first place? Doesn't seem the decision was in the best interests of the child?

And more and more are making that choice without the constraints of the past that virtually forced women into child rearing as their only real option.
People realise know there is a huge investment to make in children if they are to be successful, so it is obvious that fewer make that task easier. You can question this all you like, but as soon as women were able to take control of their fertility (contraception etc) then the birth rate started dropping.
My parents came from families of 9 and 11 children, I don't have enough fingers and toes to count my cousins, I have two adult daughters, who, between them have given me 5 grandchildren. They did not start reproducing till they were around 30, delaying reproduction contributes also to falling birthrate.
My grandparents did not have the same choices, finances had little to do with my decision to have only two children, we did not want more, my grandchildren have much invested in them by their parents.
Mine is not an unusual story.
If you want a high birth rate, I'm sorry, but you have to restrict the rights of women to choose, it IS that simple.

Nope. Do some research. The more educated a woman is, the less children she has. Fact.

Hi David

interesting stats. Would be really useful to see how much, in % terms, the brackets have altered since 2011 census. MY basis for examining housing market is what age groups are expanding, esp in Auckland. peak of 40-47s in Auckland was in 2018. This brackets identified by Harry Dent as the one spending most money and it also peaked, in USA in 2007. Growth depends on them. Bringing in more young people means lower average incomes and less ability to buy house. House sales in Auckland are roughly 25% lower than in 2013-14.

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“lower national productivity, and eventually lower per capita incomes“

I would argue the obsession with running one of the most aggressive population policies in the developed world, is exacerbating these problems, not ameliorating them.

Take a look at the Stats NZ population pyramid over time. Between 2010 and 2010 we developed a big bulge of people aged between 20 and 30. All very fine and dandy now, but around 2055 they're all going to retire at the same time. Unless the plan is to keep bringing in more... and more... and more.

http://infoshare.stats.govt.nz/populationpyramid2/NZPopulationPyramid.html

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Precisely. It’s the sort of population Ponzi scheme media darling Paul Spoonley keeps advocating. I guess productivity is just too darn hard.

NZ... doing less with more for 20+ years.

So then you import more younger people to look after the oldies. And when they get older you import even more younger people, then when they get older...

Total ponzi scheme. Surprised David Chaston can't see this.

Wish I could give this comment a hundred thumbs ups...

Looks like no attempt has been made by the older generation to keep under 40s in New Zealand. It would be good if the attitude changed towards the younger generation and the importance they hold towards the future of New Zealand. Not to mention the importance to maintain the older generations pension.

They DGAF about young NZers though.

Voting is an unapologetic exercise in "how much can I personally get for me and mine".

That first graph is quite intriguing. Where are the so called "Boomers"?

Historically there has been a clear bulge in these sorts of graphs around the boomer age group. Now it seems to just be fairly even.

True, but boomers still run the show unfortunately.

Bascially we have too many Passive income claims .... or too many people on the tit of output
Would i be more prosperous if

A) I owned all the farms in the South Island
B) I owned a 1/4 acre

theres your answer

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Compare the costs of population growth to the cost of oldies.
Look at Auckland. The place can't afford itself.
Population growth is the real cost problem.

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Depending on young imports to manipulate the demographic profile already does not work short term (we can't afford infrastructure and basic housing already)
And long term - really nasty result.

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At some point we have to have demographic decline a la Japan, unless you believe the nation/planet really can support an infinitely growing number of people, forever. The question is how to manage it... and I'd suggest Japan is doing it much more elegantly than we will.

At some point - yes ; however NZ is not Japan so that point is far enough away . We may CHOOSE to address this early - but we do not have to.

I do 't understand your necessity to wait paashaas.
1. The disaster is now ( recently of Hawkes Bay accommodation - half was being rented by MSD as emergency accommodation)
2. It's good. So lets do it starting now.

There is no "need" (maybe a desire) to control population in NZ like there is in Japan because of extremely different population density,
NZ 15 people/km2
Japan 347 people/km2

You miss the point.
Of course we can fit more people. But there is a logically necessary limit somewhere in the future, which we will hit if we have a deliberate policy of paying for pensions by continually adding more young people. Why wait until we hit that limit before deciding to manage the transition? It's like peak oil -- better to start a transition away from it with time to adapt than go full speed ahead until you hit the cliff of resource depletion.

This might come as a surprise to you, but the WORLD is over populated, and NZ is part of the world.

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Less people, more houses please.

If someone in their late 40s is a truck driver who wants to retrain in I.T are you saying David they are to old?

I view your comment slightly offensive considering you pull people up on racism and xenophobia. There is no place for ageism and it's a difficult time for many made redundant in there 50s who can retrain and offer lots. Why should they be shunted.

Agreed. We're bad enough at retraining for young people, let alone the middle-aged. It's a real bug-bear of mine: NZ employers *hate* training or educating people themselves. I also blame HR departments run by specialists who have no idea how difficult (or easy) the tasks they're hiring for are, or what kind of skills make good prerequisites for those when candidates don't have exactly the right formal qualifications.

Scrapping apprenticeship subsidies in the 90s worsened the skill mismatch problem facing our economy.

Not a silver bullet but much of our existing socioeconomic woes (low productivity, lack of export complexity, high dependence on low-value sectors, low-wage workforce, housing shortages, youth NEET, etc.) would've been less severe had previous governments not taken away incentives to train workers.

Age 25-30 is not on the bracket diagram.

I'd rather the government put more incentives in place to encourage people to have kids younger and to bring them up without having to lock them up in kiddie farms (daycare). Child development research clearly shows that our obsession with throwing kids into daycare as soon as maternity leave is over is creating a society of kids with poor resilience and mental health issues. We need more parents to stay at home for as long as possible. Income splitting, improving rental housing standards and providing greater security of tenure, creating a fund for multi-unit development to deliver the intensification NZ needs to supply affordable housing close to amenities (since banks are too risk averse to support these outside of Auckland), increased funding for public transport and providing universal working for families payments would all make it easier. Having kids smashes you financially. Especially when you're paying a big mortgage. I don't want my country invaded by immigrants to pay for boomer pensions.

I witnessed a tragic case where a couple were both earning high salaries. The wife had a baby and returned to work as early as she could. ie A month or so after the birth.
The husbands salary could have easily paid their mortgage.
A year or so later she passed away from quick onset cancer.
Over this period the child would not have had more than a couple of hours while awake with her mother each day.
All for career/ money.

As a mid 30s scientist born and lived in NZ my whole life - I can say with a 100% certainty that I will be leaving NZ first chance I get. Good riddance.
Most of my educated friends are the same - this will drag a lot of the young out of the graph in the next few years only to be replaced by overseas people. Only way for boomers to protect their assets is to sell them off to overseas interests (by immigration and then assets) as they have ensured an inequitable future for their own younger generations. Well done guys, within one generation mostly too. Eudaimonia also takes into account your post death legacies, how you are remembered - are these people even aware of how other people (including their own children) view their behaviour?
Yes it is rational to act in your own interests for money but if those interests are not in your family's interests then you are in reality self-inclined and shitting on your family as a whole

May I ask - why have you not left already ? ( genuine question - you seem in no doubt it is better for you to leave - but you are here still ).

To spend time with family.
No doubt in my mind

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From the standpoint of infrastructure and ecology I question if New Zealand does actually benefit on net from immigration. Also OECD countries that have higher incomes and faster rising incomes have lower growth or declining populations than New Zealand. I think the premise of this argument that immigration financially benefits New Zealand actually warrants closer scrutiny.

Our major 'growth' sectors over the last decade have been hooked on to migrant labour to profit off low-value domestic consumption and/or exports (real estate, tourism, education, dairy, horticultural goods, etc.).

In 2019, our net import of high-tech goods and ICT services made up 10% of our total trade.

We not only lag behind the OECD average on GDP per hour worked, but also stood at 73rd in the world for GDP generated per unit of energy consumed.

Hasn't worked so far

Yes it has, GDP has gone up every year in the last decade. And this is the ONLY measure. The environment, traffic, housing shortage and so on are nice problems to have. They show lots of people want to come here and are reflective of what a great place we are creating.

I am of course joking.

The instant solution is change age of super - this is the solution for many other ountries so we would only be following the trend. Isn't it obvious that the average 70 yar old Kiwi is far fitter and less demented than they were 50 years ago. There is a problem for manual workers but drain layers and builders are past it at 50 let alone 65 - that is a problem that is not impossible to solve.

Sounds great - but of course if they do that they will have to phase it in. So what it will mean in practice is it will be another 'not a boomer' tax. Say it gets raised to 67 - what that means is I (and everyone else younger than a boomer) loses 40k at the end of my working life, which would have gone to paying off the massive mortgage I will still have by then, because a student loan (30k loss at the start of my working life) delayed my buying a house long enough that it cost 7x my salary rather than the 4x (or less) that the boomers paid (300+interest loss during the middle of my working life).
Oddly enough, that adds up to just about the amount I would need over super to have a no frills retirement in the provinces - so I guess it will be a 'bones of my ass' retirement then.

Presumably fairness could be re-instituted by giving the new over 67 pensioners more pension and those like me who have had super since m 65th birthday less.

The retirement age in NZ will not change until Maori life expectancy increases.

Young successful people want to live in cities; even those who prefer a quiet small town life now cannot find work or even a sports team in our dying zombie towns. If you are English speaking and planning to move to the big city why chose any of the Kiwi cities - even Auckland is too small. So to keep these valuable people in NZ our cities must be better than the alternatives - the biggest factor is cost of housing and that is solvable if there was a will. If the average Auckland house was 500k instead of 1m then the attractions of Sydney and London would be less. It is also worth noting the things we have right such as our clean safe schools and swimmable beaches and rivers - easy to lose and greatly undervalued.

Swimmable beaches? In Auckland, some are, some aren't. Especially after heavy rains.

A total reform of the benefit system. My daughter had a second child in Feb this year. She has taken 9 months maternity leave. Her partner earns little (student trying to start a business) - because she declared her partner on he birth certificate the WINZ gives her a generous accommodation allowance and $6pw benefit. She survives because her parents give her by $600pw. If she had $8k saved she would not even get accommodation allowance. No wonder my social worker friend say her pregnant female clients are told not to declare the father.
This is insanity - the best single investment any govt can make is in children. The govt spends a fortune on education from 5 to 20 but before school it is a means tested nightmare. Please please bring back a generous UNIVERSAL child benefit.

The boomers have really done one over us.

I mean, you almost have to admire the ruthless disregard.

And when the current immigrants get old we need to bring in even more young people and the ponzi population scheme continues until the economy starts to resemble bangladesh. Mass immigration is not the solution - it is the cause of our housing, traffic, schooling and hospital problems.

So basically, what you are suggesting is that we need to keep growing the population.
Can we have some NEW thinking please, for the sake of our already overpopulated planet.
This is nuts.

"Essentially, a younger workforce is the engine that can afford to pay the benefits the older citizens have voted for themselves, not only in terms of National Superannuation ($16.3 billion in 2020 alone and the largest single item in the Government's budget), but in terms of aged care support (and a significant part of the $20.3 billion 2020 Budget for health care)." Is this a burden, or is this money recycled through the system, including to working younger people?

Oh noes. Kiwis aren't having enough kids. Whatever could be the cause!

No worries. Mass immigration will fix it.

To be fair, Countdown have been on an environmental track for a few years now, only in the last couple it has been much more publicly communicated, so there is definitely a PR benefit there. They are leading their counterparts by quite a long way though.

Wow, David Chaston, I think this is the least insightful piece of yours I've read. We simply can't keep growing the population endlessly. We need to find ways of growing our economies without growing our populations.

I'd suggest for anyone interested in this to read something like David Attenborough's "A life on our Planet". The human population has quadrupled in his lifetime.

How about considering shifting towards sustainability instead of growth?

While Mr Chaston has done a good job detailing population figures but he has zero understanding of how NZ pays for our welfare system including super. To believe we need more migrants or Kiwis to pay for superannuation shows he has absolutely no understanding of how we pay for welfare in NZ or create wealth. %40 of taxpayers in NZ ( note that is people paying tax) are either tax neutral or tax negative because of clawbacks. People and income tax has NEVER paid for NZ's welfare system. NZ's population is now 5.1 million people and if you look at data from the retirement commission super is totally unaffordable BECAUSE of our large population. Until Kiwis realise that NZ's population should be no larger than 1 million people we will continue to destroy our environment ( which is our economy) and our welfare system. Like the current PM Jacinda Ardern perhaps Mr Chaston does not understand the difference between population growth and economic growth. ( most Kiwis are a net cost to our economy)