Tightening the migration taps
Virus could mean fewer NZers leaving home, and fewer foreigners moving in
When the world emerges from its current ordeal, it is clear things are not going to snap back to normality — as that has been understood in recent years.
One respect, among many, in which this will be true is migration, as unemployment soars around the world and abates only gradually.
While a crisis like this is in full spate, the focus is inevitably on the short-term disruptions, for example to the 100,000 or so New Zealand residents Statistics NZ estimates were travelling overseas in mid-March and could find themselves on the wrong side of border closures, along with around twice as many overseas visitors in New Zealand.
But the longer-term implications of an economic shock of this magnitude to migration — affecting as it does the labour market and housing demand, as well as the public health implications of people crossing borders — warrant attention too.
Ours is an economy in which both migration flows and stocks are large relative to the size of the population.
For each of the past five years, the increase in gross domestic product is explained more by a rise in the population than by higher output per capita.
And just under two-thirds of the increase in the population in the same period has come from net migration rather than natural increase (births minus deaths). That is unusual. Since 1900 it has been rare for natural increase not to provide most of the population growth.
It is particularly unusual because, as a recent report from Statistics NZ points out, the past five years have seen historically low net losses of people to Australia.
In the year to June 2019, net migration to Australia was just 3600, compared with a peak of 43,500 in 2012.
While 31,300 people migrated from New Zealand to Australia in the year to last June (half the rate seven years earlier), 27,600 came the other way. About four out of five migrant departures to Australia, and two of every three arrivals from Australia, were New Zealand citizens.
The net outflow to Australia has been there or thereabouts for the past five years.
Even so, the 2016 Australian census found 528,000 people living there who were born in New Zealand. This would not include those who are New Zealand citizens by virtue of parentage, for example.
Net immigration has been declining from its hump in 2016, when it hit an annual rate of 62,400; by the middle of last year that number had fallen to an estimated 49,400, or about 1 per cent of the population.
Overall, it turns out that the size of the global Kiwi diaspora is an elusive number.
The United Nations’ global migration database estimates it, as of 2017, at 834,000, the vast majority of them in Australia. The Kiwi
Expatriates Association (Kea) reckons it is more like 1.5 million.
Meanwhile, the 2018 New Zealand census found that 1.27 million of the normally resident population, or 27.4 per cent, were born overseas, an increase from 25.2 per cent in the 2013 census.
These are high proportions by international standards.
It is plausible to speculate that the net outflow of people to Australia will decline further and may even reverse.
Australia has a consistently higher unemployment rate than New Zealand, even with a lower labour force participation rate. Its latest read is 5.1 per cent, compared with 4 per cent here, and economists at Westpac and National Australia Bank, for example, are picking it to rise to double digits.
Double-digit unemployment, something we have not seen for 30 years, is also within the range of possible outcomes the Treasury is contemplating here.
While it is welcome that Prime Minster Scott Morrison has announced this week that the Australian wage subsidy scheme will apply to New Zealand employees, that is not much use to those who lose their jobs and who under longstanding rules are ineligible for the unemployment benefit.
As for the rest of the Kiwi diaspora, the greener pastures abroad must be looking distinctly drought-stricken these days.
Not only that. Attitudes towards immigration in many places have been hardening for some time. It was by all accounts a factor in the Brexit vote and the election of Donald Trump in 2016; xenophobia is hardly unknown in continental Europe either.
If that was true then, it will be more so as unemployment soars and incomes shrink.
The net effect of all this is likely to be not only that fewer New Zealanders leave the country, but also that more expatriates return.
That is a change that policymakers — and especially those responsible for public health — will just have to accommodate.
Where they do have some control is on arrivals of people who are not New Zealand citizens or permanent residents.
So another marked feature of recent years is liable to change, even after the border reopens, namely the doubling since 2012 of the number of people in the country on temporary work visas.
They numbered around 170,000, or more than 6 per cent of the labour force, officials reckoned in a Cabinet paper presented in December 2018.
Such numbers might be acceptable in the context of a tight labour market. That is not what we are looking at now.
Some changes to the rules around temporary work visas are already in the pipeline, intended to reduce the potential for exploitation of migrant workers on the one hand, and the risk of crowding out local labour on the other, while allowing genuine skill shortages to be met.
The changes will apply to employer-assisted temporary visas, which account for only about a quarter of the total. The rest consist mainly of working holidaymakers, family members and former international students. Pasifika horticulture workers represent only a small proportion, about 10,000.
As for the rest of the Kiwi diaspora, the greener pastures abroad must be looking distinctly drought-stricken these days.