New Zealand's Coming Triple Demographic Crisis

Thursday, 16 November 2023, 4:05 pm
Article: Keith Rankin

The three components to the crisis are churn, aging, and the increasing predominance of births into disadvantaged households.

Churn

Yesterday the main release from Statistics New Zealand was Record net migration loss of New Zealand citizens. " There was a record net migration loss of 44,700 New Zealand citizens in the September 2023 year. This net migration loss was made up of 26,400 migrant arrivals and 71,200 migrant departures."

Today the main release was the National population estimates at 30 September 2023. Radio NZ reported at 1pm today that "New Zealand's population has grown by almost three percent in the last year. Stats NZ has released its most recent population figures showing there are now 5.27 million people living in Aotearoa. For the year ending September 2023 the population grew by 138,100 people. Of that, the natural increase, the number of births minus deaths was 19,300 people, with the rest being made up of net migration."

That gain of net migration was 118,800. A quick calculation tells us that the gain of non- New Zealand citizens was 163,500, in one 12-month period. 163,500 is 3.1% of Aotearoa New Zealand's entire population. (If that continues, New Zealand will have 10 million people before 2050, with Māori plus New Zealand born Pakeha – tangata whenua and tangata tiriti – being as few as one-third of the total.)

New Zealand is perhaps the world's most significant churn economy/nation, experiencing simultaneous record net emigration and record net immigration!! Multiculturalism will matter most. Though we have spent too much effort in recent years navel-gazing about biculturalism.

Aging

Here I will emphasise the role of historical births. In 2022 the age with the greatest number of deaths was 89. That's people born in 1933, when births were close to a low for the last 100 years. The lowest three years were 1933 to 1935, with a total of 81,574 people born. From 1943 to 1945 there were 114,255 births From 1952 to 1954 there were 157,789 births. From 1961 to 1963 there were 194,931 births, a 139% increase compared to 19331935. From 1970 to 1972 there were 189,725 births.

The number of people aged 87 to 89, will in fact be closer to three times higher in 2050 than it is in 2023, even if there is no further emigration or immigration. That's because, in addition to the abovementioned 139% increase in births, New Zealand's population grew substantially since the 1960s, with a significant amount of that net immigration being people born in that 1961 to 1963 period. (It's also because of much higher infant mortality in the Depression years of the 1930s.) This coming population peak are people now in their early sixties; people who are already boosting New Zealand's mortality statistics.

A significant number of the people reaching their late eighties in the 2030s and 2040s will be retired (ie no longer practicing) healthcare doctors, nurses, paramedics, and pharmacists.

It is most likely that there will not in fact be as many people in their late eighties in 2050 as my projections suggest. Many of the "late-boomers" will most likely died prematurely; I confidently predict that there will be a substantial fall in life expectancy over the next 25 years.

Births in disadvantaged households

It is not fashionable today to keep data about socio-economic disadvantage. Instead, we rely on two fashionable proxies for such disadvantage: Māori and Pasifika. A third useful proxy for disadvantage is ex-nuptial births.

Neither being Māori or Pasifika, nor giving birth ex-nuptially, are direct indicators of disadvantage; after all our Prime Minister last year gave birth ex-nuptially in 2018. Yet, all three of these birth measures correlate with disadvantage. And Aotearoa today has pockets of substantial disadvantage, much of it barely acknowledged.

I will note these statistics about 2022 births:

• 30,009 ex-nuptial births; highest since 2010 (31,236) and up by 1,461 since 2021
• 28,875 nuptial births; lowest since the 1930s, and down by 1,236 since 2021
• 12,948 births of Asian ethnicity; down from a peak of 13,188 in 2019
• 9,609 births of Pasifika ethnicity, highest since 2012 (9,897) and up by 645 since 2021
• 17,712 births of Māori ethnicity, highest since 2010 (18,459) and up by 570 since 2021

We should note that 2022 is the first year ever in Aotearoa New Zealand that ex-nuptial births exceeded nuptial births.

In 2050, those born in 2022 will be turning 28. Will they have the skills, education and training, and motivation to be providing high quality services to that huge cohort of people who will then be in their late eighties? Will it be acceptable if only the elite-elderly are able to afford an acceptable level of life-sustaining and life-enhancing services?

Maybe we will have 10 million people in 2050, mostly people themselves or with parents or grandparents born in Asia? And maybe those people will continue to provide the high-quality services to which our older people have become accustomed.

Or maybe not? Those young people from Asia, Africa and Latin America – too many of whom are dying these years as boat people or in Mexico, or stuck in immigration-visa-limbo – will be a precious international 'commodity' in 2050.

We can address these problems. But not with mainstream policies of dour fiscal probity.

One final matter to note. Thanks to New Zealand's universal pension system (New Zealand Superannuation), an exceptionally large number of people of 'retirement age' are still in employment or running businesses. Universal benefits enable employment. The worst thing any government could do in the next decade would be to create disincentives for older people to work, by moving towards means-tested retirement-income options.

-------------

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

© Scoop Media

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

Contact Keith Rankin

• Website - Kieth Rankin