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The BulletinFebruary 18, 2025

What the youth exodus means for New Zealand

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Almost 40% of those departing NZ long-term are aged 18 to 30. What sort of country will they leave behind, asks Catherine McGregor in today’s extract from The Bulletin.

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Young people leading the charge out the door

Last year saw the highest net loss of New Zealanders in a calendar year, according to provisional figures released by Stats NZ. The trend is especially pronounced among young people, reports the Herald’s Liam Dann (paywalled), with those aged 18 to 30 making up 38% of long-term departures. The age group with the highest loss was 25-year-olds, with nearly 2,900 citizens that age (out of a total 72,000) leaving the country long-term.

Overall, net migration fell sharply in 2024, with fewer arrivals and record-high departures. While better numbers in December suggest the dropoff may be stabilising, Westpac senior economist Michael Gordon cautions against reading too much into the recent change. “Many migrants return home to visit their families at this time of year, and it’s harder than usual to distinguish between short-term and permanent movements.”

Why the young brain drain is such a worry

In discussions about how the youth exodus will affect New Zealand’s future, the most common talking point is its impact on our tax base. The loss of so many people at the start of their working lives is only going to exacerbate the issues posed by our aging population, notes RNZ’s Susan Edmunds in an article from October last year. According to Dominick Stephens, chief economic adviser at Treasury, in the 1960s there were seven people aged 15 to 64 for every person aged 65 and over. Now, there are four and in 50 years there will be about two.

That’s a recipe for demographic and economic disaster, economist Shamubeel Eaqub tells Edmunds. “Because of the aging population, declining fertility, the current setup is a Ponzi scheme relying entirely on people aged 30 to 60 to pay tax to pay for all the promises made to everyone.”

The problem is so large that simply tinkering with the immigration settings – or encouraging young people to stay in New Zealand – won’t be enough to fix it. Still, we have to try, and not just for the sake of our tax take, Eaqub says. Having younger people around is what drives the energy of a place, in society as well as the economy. “You’ve got to have a decent portion of people who are young and active and doing things, living life.”

Fertility rates on the slide too

As concerning as falls in net migration is the long-term decline in fertility rates. New Zealand’s crude birth rate fell to a record low of 11 births per 1,000 population in the year to March 2024, writes Nick Brundson at Infometrics. For comparison, the rate per thousand was 27 at its peak in 1962 and 15 in 2009. The trend line is clear.

Brundson’s entire article exploring the trends in NZ fertility and what’s driving them is well worth a read, but this section sums up the problem pretty well: “A more nuanced measure is the total fertility rate – the average number of children that a woman of childbearing age (15-44 years) can expect to have through their reproductive years. A total fertility rate of 2.1 is regarded as the minimum replacement level for a developed country – 2.0 to replace the parents, and 0.1 to offset mortality before childbearing age.

“New Zealand’s total fertility rate was last above 2.1 in 2011, falling sharply since to a record low of just 1.52 in the year to March 2024. Putting this rate into perspective, it is well below Stats NZ’s median projection for total fertility of 1.65 for the 2024 to 2028 period. In other words, we expected fertility to ease, but it’s worse than expected.”

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Recent health leader resignations: from left, Nicholas Jones, Diana Sarfati and Fepulea’i Margie Apa.
Recent health leader resignations: from left, Nicholas Jones, Diana Sarfati and Fepulea’i Margie Apa.

The BulletinFebruary 17, 2025

New Zealand’s top health officials are dropping like flies

Recent health leader resignations: from left, Nicholas Jones, Diana Sarfati and Fepulea’i Margie Apa.
Recent health leader resignations: from left, Nicholas Jones, Diana Sarfati and Fepulea’i Margie Apa.

The resignation of the director general of health is the latest departure in what Labour is calling a ‘purge’ of health leadership, writes Catherine McGregor in today’s extract from The Bulletin.

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Another day, another health resignation

It’s a dangerous time to be a top health executive. On Friday, Dr Diana Sarfati announced her resignation as director general of health and chief executive of the Ministry of Health, just two years into her five-year term (her predecessor, Sir Ashley Bloomfield, lasted four years). Sarfati’s is the latest in a spate of high profile health resignations and firings, starting with the sacking of the entire Health NZ board in July 2024. Earlier this month Health New Zealand’s embattled chief executive Fepulea’i Margie Apa resigned, four months ahead of her scheduled contract end date, followed by Dr Nicholas Jones stepping down as director of public health three days later.

While all three departures were presented to the public as resignations, that’s not the whole picture. Apa stepped down in “mutual agreement” with health commissioner Lester Levy, while Sarfati’s resignation came after health minister Simeon Brown refused to express confidence in her abilities.

Who will be the next domino to fall?

Prior to her departure, Sarfati had been “the only health system leader left standing since the coalition Government began”, according to The Post. However the government’s “purge” of health leadership may have yet another victim: Lester Levy himself. Levy was brought in to lead Health NZ following the sacking of its board in July, with a mandate to rein in its overspending and “bloat”. His reputation took a hit when The Post’s Rachel Thomas reported that he was continuing to work two days a week as an AUT lecturer, and again when Labour’s Ayesha Verrall accused him of “cooking the books” to make Health NZ’s deficits look better under his leadership.

Labour accused Levy of treating Apa as a scapegoat for Health NZ’s failings, both publicly and privately. Now it seems it’s Levy’s turn in the firing line. Asked repeatedly whether Levy had his full confidence, Brown was noncommittal. He’d “work with whoever’s there to make sure that they’re focused on delivering”, he said, and the government would “be making decisions around next steps in the coming weeks and months”.

Health sector pays tribute to Sarfati

The director general’s resignation has provided more grist for Labour’s attacks on the government’s health reforms. Acting health spokesman Peeni Henare said it seemed “as if Christopher Luxon is getting rid of everyone who disagrees with him” but was “fast running out of other people to blame for his Government’s failures”. Brown countered that Labour needed to “look in the mirror”, having “[torn] apart the entire health infrastructure by restructuring the health system during a pandemic”.

Sarfati was widely respected within the health community, especially around her work on cancer prevention. A “senior leader in the health sector” told The Post that New Zealand had lost a “world class leader” who would be “snapped up by some place somewhere in the international health system”. Her stepping aside “sent a very unsettling message” about the state of NZ’s health system, the anonymous source said.