Conclusion
The population trends outlined in the report are not new or unique to New Zealand. They are largely the result of slow-changing factors set in train last century. There is little that can be done to influence the current population level and trend. While population trends are forces that influence outcomes, they do not pre-determine any particular outcome. Throughout history, societies have shown they can respond to potential doomsday scenarios, including those thrown up by population change. Nevertheless there remains a need to look forward in order to respond effectively.
A sustainable development approach to population issues focuses on the long term. A sustainable development approach reflects good policy development, which involves identifying the problem, assessing options for addressing the problem, considering interconnected issues, and taking account of long-term pros and cons.
A sustainable development approach also enables different perspectives to be drawn out from situations that may at first appear problematic. For example, slow growth in population size could be regarded as an opportunity to use resources that would otherwise be diverted to developing new suburbs or addressing associated social problems, and using them to improve education and training services, address environmental concerns and raise the general quality of life of all New Zealanders.
Population Trends
The size of the resident population depends on the number of children that are born to different cohorts, the size of different cohorts, how long those children live, whether they choose to live here or emigrate, and whether overseas migrants stay here permanently or decide to move on. Temporary visitors impact on the total number of people in the country at any one time.
Population trends are ultimately the result of individuals' personal decisions. But these decisions are themselves the result of complex interactions. New Zealand's economic, social and environmental conditions will strongly influence the future population by affecting choices around women's participation in the workforce, choices to have children, life expectations, migration decisions, where to live, and the type of education and training to invest in. In addition, industries and regions have a major impact on immigration policy, the type of migrants who are attracted to New Zealand, and rates of emigration from New Zealand. The relative success of some regions also creates internal population movements that will have profound impacts on both growing and shrinking communities. Between 1900 and the 1970s the most significant factor in New Zealand's population growth was numbers of births. Permanent net migration made a small but generally positive contribution.
In recent decades, population growth has primarily been the result of people living longer and positive net migration. In coming decades, the population is projected to grow modestly as a larger cohort reaches childbearing age, people's longevity continues to increase and net migration remains positive. Beyond 2035 the population is projected to decline. Deaths will outnumber births. We cannot assume that net migration will make up the difference.
The shift from a population with a relatively high birth rate and a short life expectancy to one with fewer births but longer life expectancy will change the issues faced by New Zealand. These population issues are complicated by factors like the changing nature of work, changes in family formation and participation in paid employment, increased population mobility, the varying age structures across different groups, and growing population diversity.
These changes mean that our children are less likely to:
- grow up in the same house with both their natural parents
- work full-time in one job over their working life
- have children and large families early in life
- experience their grandchildren and live near them
- retire in their 60s.
Our children are more likely to:
- have multiple ethnicity
- live outside New Zealand
- have a tertiary qualification
- access life-long learning
- make a significant contribution to their own education, health and retirement.
The Role of Government
At periods in our history, governments have pursued active population policies by, for example, providing incentives to increase fertility and encouraging immigration from some countries but not others. However, it is debatable how effective the outcomes of these policies were in determining population outcomes.
Governments are not in a position to influence birth rates directly. However government policies, such as the welfare state, have had demographic impacts. Education, health and housing policies have also significantly improved the wellbeing of young families during periods of high fertility and rapid urban growth, and thus had impacts on people's fertility choices.
In recent years, the direct role of government on population has been to encourage inflows of skilled permanent migrants through immigration policy. However, managing inward flows of permanent migrants is just one aspect of influencing the size and composition of a nation's population. Other influences include outward migration trends, family formation trends and trends in mortality and longevity - all of which are difficult to control.
Therefore, the government's role in population issues can be seen as wider but less directive than in the past. The government's role includes considering public policy influences on:
- skill development
- health outcomes
- incentives to participate in the labour market
- the efficiency of the labour market in matching workers' skills to employment opportunities
- regional development
- transport
- how people interact with the environment
- our ability to absorb a growing or shrinking population
- what we consume and what we produce
- the access that different groups have to policy interventions
- the diverse needs of different groups over their lifetimes
- the creation of a climate that enables a rich mix of ethnic diversity that is also inclusive
- characteristics that are unique to New Zealand's population.
With the international demand for skilled people likely to expand, New Zealand's success will be influenced by international developments as well as domestic policy. Population developments are likely to become increasingly sensitive to how conducive the New Zealand policy environment is, relative to other countries. Such an increase in sensitivity raises risks of increasing gross flows of people in and out of New Zealand. Such flows would represent a costly way of adjusting to changing conditions.
In a period of low fertility and an ageing population, the importance of improving the potential of people to contribute to the economy and society increases. Governments in New Zealand have tended to address problems as they arise on an issue-by-issue basis, rather than taking a future orientated focus demanded by sustainable development.
Analysis can give early signals of future pressures created by demographic trends. Forward planning by central government, in conjunction with local government, business, and community groups, can be effective. It is the whole package that matters.
Population developments have implications for the government's fiscal position. Emerging issues include our current reliance on income tax and additional costs of care of the disabled and elderly as smaller and more dispersed families become more common.
The Intergenerational Report recently published by the Australian Government suggests that the impact of an ageing population on government expenditure may be less than expected. This optimistic conclusion arises because of a reduced need for spending on unemployment as a result of labour shortages and reduced payments for family benefits as a result of a falling birth rate. These two factors offset, to some degree, increased spending on superannuation. In addition, the report finds that 80 percent of the projected increase in health expenditure in Australia is expected to be the result of the cost of new technology, increased use of services and consumer expectations, rather than the ageing population per se.
We Have a Window of Opportunity
A birth rate that is relatively high compared with other OECD countries and an increase in births around 1990 (the "baby blip") mean that New Zealand has a window of opportunity to address potential future problems arising from the population trends identified in this report. The key issues facing New Zealand are discussed below.
A large cohort will soon begin retiring from the workforce. It will be replaced by a smaller cohort. This puts a focus on the children who are the labour market entrants of the 2010s and 2020s. The priorities for these children should be raising the quality of their education and addressing health and social barriers, so that they can meet the challenges of the future.
An older workforce needs a focused policy response, including finding ways to enable older people to remain in paid employment if they choose.
The "baby blip" will reach late adolescence around 2005- 2010, and put pressure on the tertiary sector, including apprenticeship training. The universities, in particular, could be facing a wave of staff retirements around that time. New Zealand's ability to attract, regain and retain the skills and talent needed for sustainable development will depend on getting three things right:
- ensuring that migrants can utilise their skills. The changing composition of source countries and the high levels of international competition for skilled migrants stress a need for smooth pathways for immigrants into sustainable employment opportunities and social participation
- offsetting potential negative impacts of the increased population turnover by building community participation and social cohesion
- putting in place conditions that encourage migrants to stay and expatriates to return. Family reasons will be one factor, but others include providing an attractive lifestyle, addressing infrastructure problems, and enabling access to opportunities.
Infrastructure and other issues have arisen from changing patterns of settlement, especially in Auckland.
Access to sustainable paid employment is increasingly important. Ensuring sustainable employment for all groups raises issues of life-long learning, work and family policies, the interface between the tax and benefit systems, regional and industry development, and co-ordination of government policies in general.
Growing ethnic diversity is a result of migrants arriving from an increasing range of countries, the faster-growing Māori and Pacific populations, and the rapidly increasing multiethnic population. The richer ethnic mix highlights the need for the development and maintenance of social capital. A richer ethnic mix has implications for social institutions, community cohesion and the development of ethno-cultural and national identity.
While societies do adapt to major change, governments can smooth transitions by having a vision for the future, identifying priority issues, and removing the barriers of tomorrow, today. This requires a long-term perspective, often at variance with the political pressures associated with a three-year electoral cycle.
Governments can build a consensus about broad directions, short-term and long-term goals, and the way those goals will be achieved. A consensus will be increasingly important as New Zealand's population becomes more ethnically diverse and international trade and business links expand. Building a consensus not only plays a role in achieving political and social stability, but leads to an "ownership" of policies and institutions by society that enhances the likelihood of success.
Governments therefore have a key leadership role in influencing attitudes towards diversity, education and social capital, with the goal of raising society's capacity to adapt.
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