Daniel Lynch

Daniel Lynch is a digital business reporter for nzherald.co.nz

More migrants increase our incomes: NZIER

An extra 40,000 migrants entering NZ each year increases GDP per capita by $410 a year, according to NZIER. Photo / Doug Sherring
An extra 40,000 migrants entering NZ each year increases GDP per capita by $410 a year, according to NZIER. Photo / Doug Sherring

Enticing more migrants into the country could dramatically increase the income of New Zealand, new research has found.

Attracting an additional 40,000 people a year for 10 years would increase GDP per capita by $410 a year, the findings from the New Zealand Institute of Economic Research show.

"New Zealand's point-based immigration framework gets the mix of migrants required about right. But we need to do more to keep lifting the number of migrants that come," Dr Kirdan Lees, senior economist at NZIER said.

"A more ambitious population policy is needed to increase New Zealand's population."

Almost one-in-four New Zealanders are born overseas but the current policy of 45,000 to 50,000 migrants a year was too low and "very arbitrary", said Lees.

In the past 12 months New Zealand has gained a net 22,500 new migrants - the biggest inflow since 2003, when the country gained a net 34,900 migrants.

An extra 40,000 people entering the country each year lifted incomes for not just migrants but the local population too, the NZIER research found.

"The benefits migrants bring to New Zealand outweigh any drag on the economy from funding additional infrastructure... so fears of immigration overburdening the economy appear overstated," Lees said.

Last month, Gallup's Potential Net Migration Index found that New Zealand was seen as a dream migration destination internationally. The country's 4,242,048 population would swell to 9,926,393 if everyone who wanted to move here made the shift.

Professor Paul Spoonley, a Massey University sociologist said New Zealand's limited infrastructure would make it "near impossible" to support a population of 10 million.


How immigration might boost NZ's income (Source NZIER):


- Providing firms with new skills: Immigrants offer skills that are different but complementary to native workers, boosting the possibilities of what domestic firms can produce. Immigrants also deepen the labour pool, which helps firms expand and enables a better match between workers and firms.

- Increasing innovation and entrepreneurship: International evidence suggests immigrants lift entrepreneurship through their networks and access to new markets and products.

- Lifting scale: New Zealand is both small and distant from the global stage. Growing the population through immigration can help New Zealand firms scale up.

- Increasing competition: Larger domestic markets increase competitive pressures that force successful firms to innovate to survive and then grow.

- Increasing returns to investment: Immigration lowers average per capita costs of high fixed cost physical infrastructure (such as motorways) and institutional infrastructure.

- NZ Herald

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