a crowd of small figures against a green bakground, with a sign pointing to New Zealand
Image: Tina Tiller

OPINIONBusinessAugust 20, 2021

Bernard Hickey: We’re flying blind into our population future

a crowd of small figures against a green bakground, with a sign pointing to New Zealand
Image: Tina Tiller

How can we plan for the future without knowing how fast and where our population will grow? Bernard Hickey looks at whether Aotearoa needs an actual population policy, not just migrant settings.

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Singapore is an interesting place to explore when you’re thinking about how to design and run a functional society and economy. On the face of it, the city-state appears a perfectly normal and functional western democracy, but with cleaner streets and no chewing gum for sale. It plans and builds enough houses and public transport, and has a publicly peaceful and polite populace.

But scratching the surface uncovers just how different – uncomfortably so – it is from an apparently classless and truly democratic nation like New Zealand. We forget or don’t notice how much of the rest of the world carves up their population into effective classes with different sets of rights, such as the ability to buy property, or get married, or have children, or get state-funded education and healthcare. Or vote.

I found this out over a decade ago when I moved to Singapore for a couple of years with my family for one of those high-end corporate jobs with “expat” terms where the company pays for your flat, car, club membership (!) and one trip home each year. I was working for Reuters as an editor and we were guided into a nice apartment in a complex with a pool and a squash court and a little door in our kitchen wall to throw the rubbish down a chute straight into the bin. It felt too good to be true, and it sort of was.

It turned out the apartment came with a servant who had her own small bedroom attached to the kitchen. In Singapore they’re called maids and often come from the Philippines, Indonesia or China. They have very few rights, are often treated appallingly, barely get paid and are regularly thrown out of the country without much protection if there is any transgression of the laws or even the rules about having kids or putting down roots. Getting residency for these temporary “guest workers” is almost impossible. These maids are the definition of second class citizens. One of the higher causes of death in Singapore is homesick and abused maids dying by suicide in the high rise apartments of their masters.

Singapore (Photo by Zhu Hongzhi on Unsplash)

It was an uncomfortable realisation. We didn’t need a maid. We’d never had one and were perfectly comfortable doing our own cooking, cleaning and baby sitting. We had 10 year old and two year old daughters at the time. But it was made clear to us that if we said no, this lovely person Celina (name changed for obvious reasons) would be sent back to the Philippines and her family would not receive the income she regularly remitted. So we increased her pay and got to know her. She was wonderful and we had a lot of great times getting to know about her and her family, and the Indian boyfriend guest worker she wasn’t supposed to have, in case she got pregnant and was sent home. We made sure she kept her position when we passed on the apartment to the next “expat” family and have kept in touch.

But we never felt completely comfortable about employing a maid. It wasn’t something we could easily talk about with our family and friends back in New Zealand. It made us sound like lords of the manor with servants. It wasn’t part of our common experience. Remember, this was well after Upstairs, Downstairs (1971-75) on the telly, and well before Downton Abbey (2010-19), although the experience would have resonated today with anyone who had just watched The White Lotus (2021). Having hired help wasn’t part of our cultural experience. The closest examples I could remember at the time were the very few rich families I had heard about in Auckland who had live-in au pairs.

When we returned to New Zealand in 2003, I was glad we hadn’t developed our economy and society around the need for indentured labour or domestic servants, where a whole group of people had an inferior set of rights and were treated much worse than the privileged residents and citizens in the majority. It never occurred to me we’d ever be in that position.

In the last decade New Zealand has embraced the idea of bringing in temporary workers to solve our labour shortage problems, or at least to allow us to continue to grow without having to invest too much in equipment or structural change. Accidentally on purpose, a flood of people on temporary visas of one sort or another came into the country. The myriad of people with essential skills, skilled migrant, student or working holiday visas and the scale of the numbers who came into the country was stunning. Somehow, we convinced ourselves that temporary workers would not put strains on our infrastructure or would not put down roots to New Zealand that would or should give these people the same rights as everyone else.

Temporary visas were rolled time and again to the point that just before the onset of Covid-19 we were granting over 220,000 work visas and more than 80,000 student visas a year, let alone those on Registered Seasonal Employee visas or with work rights as backpackers. That’s over 300,000 or 6% of the population, and up from just over 85,000 work visas and 55,000 student visas in 2008. Even now, after many went home, we have over 230,000 people living and working on these temporary visas.

Migrant abuse is an acknowledged, unreported and barely policed problem and many of those who lost their jobs during the lockdowns in 2020 were not given any support by our social welfare systems. Many became homeless. One family had to live on a few cans of baked beans in a garage, as Dileepa Fonseka reported in May last year. They truly were second class citizens and we seemed comfortable with that.

The prime minister and cabinet took nine months to finally allow guest workers to apply for support, even though the law allowed an exception to be given. Alexandra District Court judge Jim Large described as “despicable” the lies told by unemployed Philippines tradie, Jeffrey Santos, to obtain food vouchers for his hungry family during last year’s lockdowns. The Immigration Tribunal subsequently decided to deport the man and his family. I covered that case in an earlier column and episode of my podcast, When the Facts Change.

Should we keep our two-tier society? 

Fast-forward to 2021, and we now have to decide whether we want to keep the two-tiered society we have developed over the last decade, and also whether we should plan our population growth to match any of the infrastructure planning we do, let alone the planning and investment to improve the wellbeing of everyone still here. There’s also the tricky areas of meeting our climate emissions commitments and our Treaty of Waitangi obligations.

The government has launched a review of migrant settings, using the Covid-19 border restrictions as a cold-turkey moment for a rethink of migrant worker numbers. There’s also a Productivity Commission review of the effects of temporary workers on the economy. But immigration minister Kris Faafoi has determinedly said he is not considering these settings as part of a broader population strategy.

Why not? That’s the question New Zealand’s most prominent population commentator, professor Paul Spoonley, asks in this week’s episode of When the Facts Change, and in his just-updated book The New New Zealand: Facing Demographic Disruption.

New Zealand has had an informal type of migration planning range for over a decade that was agreed by both main parties. It was focused on residency and simply ignored the real effects of bringing in so many temporary workers. It set a range of around 80,000 to 100,000 new residency visas every two years. That range was dragged slightly lower under the previous National government and has since been quietly dropped by the current government. It will be part of the review.

Spoonley thinks the residency range should be around 50,000, but has not suggested a number for temporary work visas.

I also talk to professors Tahu Kukutai and Francis Collins, who lead Waikato University’s National Institute of Demographic and Economic Analysis. They are less keen on a population policy that targets a particular number, but want to see planners in central and local government be much more focused on the nuances in the numbers, particularly as they impact the younger-than-average Māori and Pasifika communities and those living in the regions. Collins wants to see a greater acknowledgement of the social effects of so many temporary workers living here in limbo, disconnected and disinfranchised.

Population planning is not something central or local government has been comfortable with over the last 30 years, or planning and funding infrastructure in general. The creation of the Infrastructure Commission in 2019 was an acknowledgement of the failure of our planning and investment over the last two decades. It now estimates the infrastructure deficit at $75b and counting, with the potential for it to rise as we belatedly deal with the need to reduce climate emissions, often through public transport. New Zealand has invested much less than our developed nation peers, apart from one blip in 2011 when we were rebuilding Christcurch and laying down new “roads of national significance”.

That failure was driven by the post-1989 consensus that New Zealand had over-invested in infrastructure in the past and faced a flat to falling and ageing population where inefficient investment would be a bigger problem than under-investment. The accidentally-on-purpose explosion in population growth because of migration, mostly over the last decade, meant the population grew much faster than Statistics NZ estimated in its official projections. The fast migration was a sugar hit both major parties could not resist. It boosted economic growth, kept employers happy, kept wage growth and interest rates low, helped lift house prices and provided plenty of GST and income tax revenues to create budget surpluses.

The scale is off the charts. For example, New Zealand’s population growth of 11.4 per thousand in 2019 was almost double that seen in Australia that year, almost five times faster than Britain’s and more than three times faster than the US population growth rate, which helped spawn the Trump presidency. It meant our population is far above even the highest growth scenarios from the early 2000s.

Most government departments and councils use these projections at both a national and local level to build their long term plans. They have become ever-more woefully undercooked since the early 1990s, as can be seen in the chart below. Post 1989, Statistics NZ saw growth slowing in line with an ageing population and weak migration through the 1980s. That was convenient for councils and the government, who preferred to shut down the Ministry of Works and stop investment so they could deliver the tax cuts voters wanted. Ironically perhaps, the government was much better at planning and delivering infrastructure during the 1960s and 1970s when much faster growth was projected in the wake of the post-war baby boom and several waves of migration from Britain. Tax rates were also much higher then.

Somewhat worryingly, the current Statistics NZ forecasts are also projecting a slowing of population growth. Without a proper agreed plan for population growth from migration, the same mistakes could be made again. It’s hard to imagine a surge of migration when we’re in the middle of a lockdown, but our astonishing Covid success and governmental competence (in relative terms) makes us even more attractive for migrants.

I put those questions to Geoff Cooper, GM of strategy at the Infrastructure Commission in this week’s podcast. He was wary of a population plan.

He is not alone. In the halls of government, including in DIA, Treasury and MBIE, there are many who either think it’s not possible to plan the population, given that movements of residents here and overseas cannot be controlled, or fear such a policy would be seen as racist.

The trouble is the failures of the last 20 years allowed us to develop a two-tiered society of residents and non-residents, property owners and non-property owners, rich and poor, young and old, and European New Zealanders and the rest.

We have effectively avoided the tough discussions about the population elephant in the room. We can’t keep doing that anymore. Unless, of course, we’re fine with that?

Follow When the Facts Change, Bernard Hickey’s essential weekly guide to the intersection of economics, politics and business on Apple Podcasts, Spotify or your favourite podcast provider.

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