5. What about the strains big migration puts on infrastructure?

5. What about the strains big migration puts on infrastructure?

Answer

Given the inherent volatility of net migration flows it’s pretty difficult to predict when population pressures will strain infrastructural capacity. The only time you restrict or choke off these inflows is when infrastructural bottlenecks from high population can’t be cleared, so it makes sense to throttle back until they can. Right now for instance NZ population growth has lifted from 1-1.5% pa to 2% which is one of highest in developed world and which our own history tells us causes supply bottlenecks. The main reason is a surge in the number of returning Kiwis and fewer Kiwis leaving.

Population growth in the OECD averages 1% and amongst the wealthier nations is less than that. So at 2% pa New Zealand is an outlier for similar countries. That does suggest we need to be sure that at these rates New Zealanders are benefitting. That assurance is difficult to give.

Ideally we should cut back on our discretionary categories in response until the bottlenecks are cleared. But given there’s significant investment made in attracting immigrants, particularly the high value ones, such a response is difficult to manage.