Via Financial Times

A surge in returning citizens and New Zealanders’ reluctance to move overseas because of the Covid-19 pandemic has pushed the Pacific’s nation’s population above 5m people for the first time.

New Zealand’s resident population passed the milestone in March following a decade of rapid immigration driven by strong economic growth and a boom in employment. It took 17 years for the population to increase from 4m to 5m — the fastest rate of net migration in New Zealand’s history.

Annual migrant arrivals of New Zealand citizens hit a record 42,800 for the year ended March 2020, with almost half arriving between December 2019 and March 2020, said Stats NZ on Monday.

“Net migration has been boosted by more New Zealand citizens returning home after living overseas” said Brooke Theyers, population insights senior manager. “At the same time, New Zealand citizens may have been unable or reluctant to head offshore.”

Net migration of New Zealand citizens by month

New Zealand was one of the first nations to close its borders in March as Covid-19 began to spread around the world. Its speedy action and strict lockdown successfully suppressed the virus, with just a handful of new cases reported over the past week.

But demographers said the surge in net migration was unlikely to last. Migrants were expected to head back to their home countries when international travel resumed and there would be fewer arrivals as the influx of returning Kiwis fizzled out. Border restrictions in New Zealand and higher unemployment would also deter new international migrants from arriving, they said.

“A lot of migrants on visas work in hospitality or tourism, which are sectors that have suffered during the pandemic. They could start to leave when air travel resumes,” said Francis Collins, director of the National Institute of Demographic and Economic Analysis at University of Waikato.

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“Government policy on migration will also play a role, so it is hard to tell what will happen.”

Australia, which has experienced one of the highest net migration rates in the OECD over the past decade, is forecasting a 30 per cent fall in annual net migration in 2020-21, when compared to the 2019-20 financial year.

For 2020-21 the government forecasts an 85 per cent fall in net migration, compared to 2018-19 when Australia’s population grew by 239,600 from net overseas migration.

“Australia is likely to see a net intake of around 36,000 people in the coming financial year. Australia hasn’t seen a level of net overseas migration that low for nearly half a century,” said Liz Allen, a demographer at Australian National University and author of The Future of Us.

“While the coronavirus crisis continues it will be difficult to say what the future in immigration will be. The economic implications could be significant. While border closure is important for health during Covid-19, the budget will take an enormous hit.” 

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Richard Yetsenga, chief economist at ANZ Bank, said the drop in migration would lower potential gross domestic product growth to just above zero over the next year or so. “How much does it come back, and how quickly, will of course depend on Covid-19, and is also a matter of policy,” he said.

Immigration has become a contentious issue in New Zealand and Australia in recent years, with both governments promising to slow population growth owing to concerns about pressures on housing and infrastructure.

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