Image: Getty
Image: Getty

OPINIONSocietySeptember 7, 2020

When the great New Zealand immigration tap suddenly went dry

Image: Getty
Image: Getty

Covid-19 brought to an abrupt end to an extraordinary period of migration-fuelled population growth for New Zealand. Did we fully understand what was happening – and what comes next, asks Paul Spoonley.

See also
Duncan Grieve: The ‘staggering’ potential of New Zealand’s returning diaspora
Toni Truslove: Returning New Zealanders deserve a softer landing – and a warmer welcome 
Alex Braae: Returning New Zealanders will profoundly change this country. But how? 

In March 2020, the immigration tap was all but turned off as New Zealand, and many other countries, closed their borders. But few countries have experienced quite the immigration arrival and net gain story that New Zealand has over the last two decades.

At this point, the drop in arrivals, apart from returning New Zealanders, is of such a magnitude it raises some fundamental questions: when will international mobility, both temporary and permanent migration, restart? And what will – or should – the new normal look like?

How did we get here?

There have been three very distinct periods of population growth and migration since 2000.

Lianne Dalziel, as minister of immigration, oversaw a significant period of immigration policy reform in the early 2000s, after the rather disastrous 1990s. What we gave points for, and what sort of work an immigrant could do after arrival, were not aligned through the prior decade. The politicisation of Asian immigration in the 1996 election did not help.

After 2000 the numbers grew but were then curtailed by the global financial crisis, when the numbers departing New Zealand increased significantly. From 2000 to 2008, the population grew by 407,200 with net migration gains contributing 45.5% to this growth.

Then the GFC years happened. Between 2008 and 2013, population growth was modest (+191,200) and net migration made up less than 5% of this growth. (Remember, there were years in this period when the net loss was nearly 16,000 per year.) But this was then followed by another period of major population growth (480,000, from 2014 to 2019) and net migration gains now made up 65% of population growth.

Fewer babies but many more immigrants

As fertility rates continued to decline, and reached sub-replacement levels in 2017, New Zealand was more than making up for it with migration numbers. The country was adding more than 60,000 people each year as a result of immigration.

The numbers did dip in 2019 but the latest figures for the year to June 2020 are quite staggering. There were 153,900 arrivals (up 8.7%), 74,500 departures (down 16.6%) with a net gain of 79,400 – and that included four months of lockdown migration rates.

The monthly arrivals for June are down 86.8% compared to June a year earlier, while departures are down 87.6%. And we still managed an all time high for the 12 months.

Our annual population growth since 2013 has been high (1.9-2.1%) and the key driver was now immigration, not natural increase. New Zealand stood out in terms of the relative size of these migration flows. Last year, New Zealand had 11.4 migrants (net) per 1000 people. Australia’s rate was 6.2, the US was 3.8 and the UK 2.4.

But there is more

This story is missing one other key ingredient : the size and role of temporary migration.

The MBIE migration data website provides a fascinating picture of the size of the temporary work and study population in New Zealand. Just before the first lockdown at the end of February, the site was showing 220,887 here on temporary work visas with another 82,857 on a study visa (remembering that these students can work up to 20 hours per week on these visas). Even by the end of July, the total number in both categories had only dropped by 23,828.

This might not be the full story. In May 2020, a statement from the then minister of immigration, Iain Lees-Galloway, suggested that there were 350,000 temporary visa holders which included a big chunk of visitors and the skilled migrant resident visa holders.

To say that these numbers are significant is an understatement.

What next?

The government has extended the current stay for the temporary worker and student visa populations under the Covid-19 Public Health response Act and with changes to the Employer Assisted Work Visa. Essentially, the visas have been extended to September 25. (Thai chefs and Japanese interpreters get their own special category of work visas provisions.) This is essentially a hold and wait approach.

In the meantime, migrant arrivals are now dominated by diaspora returnees – New Zealanders are cutting short their OE and returning home in numbers. Over the last year, 45,481 New Zealanders arrived in the country, and the net gain is 16,945. This is in sharp contrast to the major net losses during the GFC and much smaller losses from 2013 through to 2019. Over half of these returnees are coming from Australia.

The Stats NZ figures divide these returning New Zealanders in terms of whether they intend to stay or not. We will see. Covid-19 keeps changing the rules. A key influencer will be a combination of managing, or not, the virus, whether there are jobs and where is it easiest to get support from the state or family/friends. Australia is not a welcoming place for New Zealanders, as the pandemic has underscored.

One thing is certain: population growth over the next year or two will slow dramatically as migration slows. The saving grace will be returning New Zealanders but the numbers involved are still far from clear. They are exempt from meeting the labour market thresholds and the requirement to have a job offer of non-New Zealand citizen arrivals.

There is considerable pressure to open the borders – for short term workers, students or tourists, and for permanent migrants. But when? That depends on the management of Covid-19 within countries, along with a willingness to accept the risks that international arrivals bring, and international agreements about the protocols required of countries, carriers and travellers. The airline industry is suggesting that it might be 2024 before numbers are back to anything like the levels of recent years.

Demographic disruption

The dial has literally gone back to zero in terms of immigration, in sharp contrast to the previous year when the overall numbers and net gain were New Zealand’s highest ever. What is unclear is what the country’s immigration management system or migrant flows will look like as we emerge from a pandemic. Will there be a major reset or will the old normal return?

There is also the demographic future to consider. The fertility rate is in ongoing decline, aided by the delayed fertility that will result from the uncertainty associated with Covid-19. Ageing will mean that almost a quarter of all New Zealanders will be over 65 years of age by the 2030s. And we are seeing population stagnation – and decline – in many regions.

An inverted population pyramid and a smaller prime working age population are going to provide us with significant challenges. Immigration is one of the options to address these major demographic shifts. It will be interesting to see whether our politicians and policy communities see it this way and construct an appropriate immigration model for a future New Zealand.

Keep going!