Business New Zealand’s proposal to increase the population to 10 million by 2050 would seem dead on arrival at the Beehive yesterday.
The Prime Minister simply brushed it off.
“I’m not sure about that,” was his response when asked about it as he entered Parliament for Question Time yesterday.
But the proposal threatens one of the central fracture points in the coalition.
There is no way New Zealand First will agree to any increased immigration programme.
The friendship between NZ First Leader Winston Peters and British Reform Party leader and ardent immigration opponent Nigel Farage should be enough to confirm that.
Nevertheless, Business New Zealand’s proposal addresses a real problem.
The lobby group has commissioned a report from Wellington consultancy Sense Partners, which forecasts that by 2045, we will face a labour shortage of at least 250,000 people.
Most commentators agree that our natural population growth is not even high enough to sustain the population at the current level.
Dr Michael Johnson, a senior fellow at the New Zealand Initiative, says our current fertility rate is about 1.6, down from 2.1 in 2013.
“That means we will need to rely on immigration to maintain or grow our population,” he says.
A senior Treasury official, Adrian Katz, has recently published a paper arguing that we can be relatively confident that population growth will slow.
“If trends continue, growth will continue to slow over the second half of the 21st century,” he says.
“Treasury modelling indicates that the population will converge to a steady state of 7.5 million by 2100.”
Sense Partners has in the past advised Treasury on population and migration trends, but Business NZ has not explained the reasoning behind the 250,000 shortfall they are forecasting.
Instead, they have presented the argument for a larger population as being an economic boost.
“An immigration plan should allow for population growth,” their proposal says.
“Many of our challenges (competition, productivity, infrastructure affordability, lack of large exporters) would be made easier with a larger population.
“Larger cities are dynamos of growth and innovation and allow companies to grow bigger and investment to be attracted.”
Business NZ says that to grow to a 10 million population by around 2060, NZ would need an average net migration of around 125,000 per year, which would require a policy and infrastructure shift.
Current Treasury forecasting has net immigration out to 2060 at up to 45,000 a year and a total population in 2060 of 7.2 million.
Based on current immigration trends, if the net rate were to be nearly tripled – which is what Business NZ are advocating — then the ethnic makeup of New Zealand would alter dramatically.
Already, Stats NZ are forecasting that by 2048, the percentage of Indian-born people in New Zealand will have almost doubled to 12 per cent. (In comparison, Maori and Chinese will have barely moved; Maori from 18 to 20 per cent of the population and Chinese from six per cent to eight per cent.)
Given that 11 per cent of all immigrants gave India as their last country of residence for the year ended September 30, 2025, it is easy to see that the Indian percentage of the overall population would increase beyond the 12 per cent already forecast.
It is this forecast that is motivating New Zealand First to prepare a campaign arguing for a population policy which would aim to restrict migration.
NZ First Leader, Winston Peters, has already said the party would require all new migrants to sign up to a “Kiwi Values” document.
“New Zealand First is a nationalist party, while other parties are self-confessed globalists,” he told his annual conference in September.
“Kiwis are becoming increasingly worried about immigration issues.
“People around the world are fearful as to where their countries are going – just look at some States in America, the UK, Ireland, Germany, and recently in Australia – and New Zealanders are no different.”
Peters says people overseas have seen “the international circumstances of careless immigration policies transforming cities, changing cultures, changing centuries of development and social life, and people feel at risk because of it.”
“No, we are not xenophobic, we are nationalists and we are ‘patriots,” he told the conference.
Peters’ views are well known within the coalition, and he appears to be already having some impact.
Trade Minister Todd McClay is currently in India negotiating a free trade agreement with India.
In the early stages of those negotiations, there was speculation that India would seek enhanced immigration pathways to New Zealand as part of the deal.
POLITIK understands that NZ First made it very clear it would not vote for any deal that conceded that.
Yesterday, Peters confirmed that the immigration proposals would not be in the agreement.
“That’s not part of the deal,” he said.
“Ask McClay when he gets back, but that’s not part of the agreed formulaic criteria of the discussions.”
Peters told journalists he was not happy with the current overall level of immigration.
So, what should the government do?
“Put me in charge and I’ll fix it,” he replied.
The simple fact is that as long as NZ First is part of a government, it will not agree to increased levels of immigration.
That is a view the party has held since it was founded in 1993.
Business NZ is whistling in the wind with the proposal it floated yesterday (which explains the Prime Minister’s lack of enthusiasm to talk about it).
