Is New Zealand Shrinking?
If you read the headline and were wondering if the actual country of New Zealand was getting smaller, I apologise - what I was really referring to was our population growth (or rather lack thereof), which seems to be a bit of a recurring topic amongst mainstream media outlets. To be fair they are right, in that New Zealand’s population, which was already pretty small to begin with, has been plagued by declining growth, compounded by the number of Kiwis heading offshore.
So whilst we aren’t (yet) shrinking, our rates of growth are slowing and that is cause for concern for any Government, particularly this one, trying to tackle persistent economic headwinds. Of course you can only really do that tackling, through growth and to grow you of course need people. Considering that in 2024 our growth rates sat at a very modest 2.4%, which fell to 1.7% in 2023 and have finally landed at 0.7% in the year to June 2025…anyone watching how this countries populations statistics stack up, might be reaching for the warning sirens.
This decline in population follows a steady and gradual decline in migration numbers, from almost 110,000 in 2023, 70,000 in 2024 and then 13,000 in 2025. The variance in these numbers is of course slightly skewed by the post-Covid rush of people in to the country, having had borders closed for over two years, but the trend does signal fewer people coming in and a growing number of people leaving. For any migrant considering the move, these headlines make for interesting reading, although perhaps they need a bit more investigation - hence this weeks article.
Population Changes
Given our proximity to Australia and the fact that as a New Zealand citizen you don’t need to apply for a specific visa to live and work there, our population swings are very cyclical and based largely on how well our economy is performing, particularly in the mid to lower skilled labour markets. When things here are good and labour market opportunities are strong, across the board, we generally see less people heading offshore - inversely when conditions tighten, and with easy access to work in Australia, some people decide to make that switch - particularly when they are earning lower salaries here in lower skilled roles, that might attract a higher hourly rate through our trans-Tasman neighbours.
Comings & Goings
New Zealand’s population numbers have always been very susceptible to economic cycles - however current trends are perhaps a little more concerning.
Of course that cycle works the other way as well and when things are stronger here in terms of work opportunities and general economic conditions, a lot of the same people who left, will return. Equally when conditions in other parts of the world (Australia included) deteriorate, those Kiwi’s who found their wings will tend to gravitate towards home. We saw that during the Covid era, when a significant number of offshore New Zealanders decided that it was actually better to ride out the pandemic here, than anywhere else.
So people coming and going is pretty normal and something we have had to deal with, pretty much throughout New Zealand’s history - however the current situation is slightly more challenging because where we might usually offset the outflow, with a steady number of new arrivals in to the country, those new arrivals have slowed as well. It is telling that if we file an application for residence for a skilled migrant, INZ picks it up and begins working on it within days, not months and decisions come back very quickly. Clearly the numbers are low and so there is plenty of resource to process these quicky.
The challenge that the Government now has is an enormous one, because it involves balancing both the growth of opportunities for locals whilst also ensuring that growth is being driven by new people entering the system. The obvious issue there, is that one of the main drivers for people leaving, is the same thing that potential migrants need to overcome - the labour market. However we aren’t necessarily swapping like for like. Those who leave are often lower skilled or younger skilled applicants with less experience. One issue we have is a lack of data of that supports the mix of these folk departing our shores, and perhaps that is something we need to give more focus to.
However the perception that follows is that if everyone is leaving, there can’t be many jobs available, which of course has a flow-on effect to reduce migrant numbers as people think that the challenge of securing work here, to then qualify is too great. Our experience is that while the labour market has certainly been a much harder nut to crack for migrants over the last 18 months, those with the right skills, and experience are still securing work and in effect replacing those who leave.
Balancing The Numbers
One thing that has always been problematic with our current skilled migrant system (SMC), where we get the bulk of our residence approvals from, is the fact that to qualify you need to secure a job offer. While many countries adopt something similar, which works when you are in growth mode, as your economy slows and labour markets tighten, you actually end up with a net-negative. Our economy needs people to grow and to grow more jobs, however to get those people in to the country to create that growth, those migrants need jobs to qualify - chicken, egg etc.
Does Our Current Policy Work?
One challenge with our current SMC system is the reliance on having a job to qualify - when those with skills and experience are often the creators of those jobs.
Having been in this industry for over two decades, I have experienced our SMC system when job offers weren’t required and having sufficient points, based on meeting certain skill and experience thresholds (along with other settlement related factors) was enough to give you golden ticket to live here.
That system gradually died out, as successive administrations decided that the best proof of whether a migrant was the right fit was in them securing a job offer first. There is a lot of merit in that, because it avoids the rocket scientists driving Uber’s problem that can occur when even highly qualified and experienced applicants fail to adapt to our way of life and working. However what it also does is make our ability to bring skilled people in, dependent on the cycles of that labour market and of course we end up the problem that was opening to this section - we need the skills to grow, but we need the growth to secure the skills.
I will give credit to the current Government for pushing out some very attractive visa policies recently, all aimed at driving more people in to the system, including a very successful investor visa scheme, a five-year parent visitor visa and of course changes to the current SMC scheme due to roll out in October which will increase the flow of trades, technicians and other skilled folks in to the economy.
However none of these changes provide a solution to the existing problem - boosting our population numbers to drive that growth and to create more jobs and opportunities, that would potentially reduce the outflow whilst balancing the overall population numbers - or at least prevent us from going backwards. Perhaps it is time to consider whether certain applicants of a certain calibre can secure residence without that job offer. Bring them in, let them do what they do best and create opportunities. Good, skilled migrants not only fill jobs, but they create them. They bring connections, experience and skills that our local businesses can utilise to expand and then eventually employ more people. I have often suggested that if you are on the Green List and have some additional attributes (e.g. higher levels of experience and/or skill) that you can aim for residence without having to secure a job offer.
Given there are plenty of issues happening in plenty of other countries, there are also plenty of people looking to move somewhere else, and given the chance a good number of these individuals might decide that they can do something very positive in New Zealand. Potentially wishful thinking of course, but perhaps that is what we need right now - to deviate from the status quo and look at how we might attract the best and the brightest, who will be able to create jobs, rather than making them find a job first.
What This Means For You
One thing I would add to the above, and despite the stories of people leaving and lower numbers arriving is the simple fact that for those migrants that do the work (to find the work), their are still plenty of opportunities to make this work. Just this week, we have had several US nationals approved, on the basis of having jobs in NZ, and I am speaking to several employers looking to bring people in from the UK, South Africa and China.
This morning I was listening to a story on the radio, where the NZ Dental Council is pushing to have more graduates through the system (currently only 60 per year come through) because we have a chronic shortage in that area. Schools are still looking for teachers, healthcare professionals are still securing work and a whole host of other industries are short on staff.
As a potential migrant it pays to read the headlines of course, but to also understand that they tend to provide a very general view when it comes to how the economy is functioning, and nothing drives a headline more than doom and gloom. Yes things are tougher for the average, job seeking migrant, however they are definitely not impossible. Planning, research and loads of effort are required to make this work, but the key point is that it can.
Of course the increasing number of locals heading offshore, also opens up opportunities for those coming in. Not all of those departing locals are leaving because of a lack of jobs and many are simply going because of lifestyle choices or potentially being able to earn more abroad (they eventually find out they have to pay more as well). This creates gaps in the labour market here, that need to be filled and certainly as the economic pace picks up in NZ, those gaps will become larger. A well prepared migrant will be poised and ready to fill those gaps.
If you are considering to New Zealand and perhaps a little confused by recent headlines, get in touch with the team today - 09 486 2169 or email immigration@turnerhopkins.co.nz.
Until next week.
