NZ needs 10 million people to stay afloat, business group warns

Wednesday, 19 November 2025

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New Zealand’s population must double in size to 10 million by about 2060 to ensure the country can compete on the world stage, a new report from BusinessNZ says.

But to achieve that target will require bold, long-term planning, report author BusinessNZ advocacy director Catherine Beard said.

There was a stark warning that by 2045, New Zealand will face a labour shortage of at least 250,000 people, and Statistics NZ estimated a one in four chance that population growth could stagnate by 2050.

That would leave the country unable to pay for healthcare and pensions and unable to generate enough economic growth to sustain even a shrinking population, Beard said.

Without policy reform, the rising cost of pensions and healthcare would consume all income tax revenue, she said.

The country needed to plan for growth and do it in a predictable and consistent way. To achieve the 10 million population target required average net migration of about 125,000 a year, and a policy and infrastructure shift.

By comparison, Australia’s population of 27 million was expected to be between 32 million and 36 million by 2050.

The report calls for a cross-party agreement to raise the retirement age, boost KiwiSaver contributions, financial literacy education in schools and a well-planned immigration strategy that was “not subject to political whim, but calibrated to population and skills needs”.

“Demographic change is not just a challenge – it is an opportunity. We can either shrink into irrelevance or grow into a resilient, globally engaged society,” Beard said.

Managed population growth could underpin a larger talent pool, more competitive markets, scalable infrastructure investment, and stronger innovation.

Falling birth rates across the developed world meant by 2050 New Zealand would be competing with other countries for young immigrants, both skilled and unskilled.

A larger population would improve competition, productivity, infrastructure affordability and create large exporters, she said. It would also attract overseas investors and create more competition.

Beard said a series of key actions were needed to achieve the population growth target, including predictable and welcoming immigration system, supported by infrastructure investment in affordable housing, schools, roads, better planning laws and freeing up land and update the Overseas Investment Act to remove unnecessary barriers.

New Zealand could use its “X factors” to catapult growth, such as its bountiful renewable clean energy for industries, including green hydrogen production, data centres and digital infrastructure, steel, aluminium and energy-intensive food processing, she said.

“We also have enormous potential to build profitable niche clusters in specialty areas like food science and agri-tech, aerospace and autonomous systems, semiconductor materials and fusion science, digital exports, critical minerals and marine resources, and medical technology.”

But a level of bipartisan agreement would be needed on superannuation, immigration, infrastructure provision,and long-term investment issues, she said.

“It’s not a pipe dream. We’ve already seen areas where there is broad support, including trade and Kiwisaver.”

A recent survey of BusinessNZ members found their number one concern was reversal of government policies following elections, affecting business certainty.

Beard said business liked a settled regulatory environment created confidence to invest. But if the rules change with every change of government, particularly for long-lived investments such as the energy sector and new generation, “they need a clear road to the future to be able to do that”. And if the rules changed that could undermine investment.

“We need to have a long-term plan for success because political flip-flops and U-turns mean every time we have a change in government, New Zealand only goes sideways.”

She cited examples of the oil and gas ban under the previous Labour government, which was reversed by the coalition government, and Labour was again campaigning to reverse the policy if it came to power.

“That's incredibly unhelpful for people, and particularly internationals, thinking about investing in energy for New Zealand.”

It was a similar story with the Greens campaigning to cancel mining consents, she said.

The National-led coalition also had different infrastructure priorities when it came to office and which put that industry on pause while the Government figured out what the plan looked like.

In order for New Zealand to become an easy place to do business unnecessary red tape and regulation had to be cut, she said. It must also embrace the kind of bold, long-term planning seen in successful small economies like Singapore, Denmark, and Switzerland, she said.

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