Digital nomads ‘bums on seats’, but value to NZ questioned

Tuesday, 28 January 2025

Should we welcome more working tourists? Have your say in the comments section.

New Zealand is joining the race to attract “digital nomads” as Kiwis continue to flee the country, but there are questions about how much of a dent it will make in the Government’s plan to drive growth.

Economic Growth Minister Nicola Willis stood with newly appointed Tourism Minister Louise Upston and Immigration Minister Erica Stanford at Wellington airport on Monday afternoon to announce changes to the visitor visa, allowing tourists and others staying for less than nine months to work remotely for overseas companies while in New Zealand.

“I’m looking forward to some extra GST coming through, because every time a visitor shops at a local shop or buys dinner at a local restaurant, New Zealanders receive GST off that spending, not to mention the jobs that support some local cafes and restaurants,” Willis said.

“We're still not at the tourism numbers we were able to have in 2019. We want those numbers higher, and we're sure that this new visa will attract a whole new group of people.”

While an economic growth plan has in itself been given a “thumbs up” by experts such as independent economist Cameron Bagrie, the first part of the plan ‒ fuelling tourism ‒ has been met with scepticism.

“It looks to be very much a people-based plan, ie just more bums on seats,” Bagrie said.

“But if you look at the real driver of wealth, or the standards of living across an economy, it comes back to productivity growth, and that remains the missing link.”

He said a positive net migration number would be positive for growth, but what needed to be considered was “the composition of what you're bringing in, versus what's leaving”.

“More bums on seats just means you get a bigger economic pie, but you get more people that want to take a piece of that pie.”

Net migration has slowed since a post-pandemic bump saw 130,000 more people enter New Zealand than leave in November 2023. In November 2024, net migration was at 30,592.

While the outflow of New Zealand citizens has typically been greater than the inflow across the past two decades ‒ the pandemic excluded ‒ this “brain drain” has in the past year been running at levels unseen since 2012.

Since October 2023, there have been 40,000 more Kiwis leaving than arriving in the country each quarter, nearing 50,000 in recent quarters.

“We've got a large number of people who are currently in the country leaving. Perhaps we should be a bit more focused on keeping them here,” said Labour leader Chris Hipkins.

“Maybe if Nicola Willis was more flexible with the working conditions of those who currently live in New Zealand, and not telling them that they all had to be back in the office … they might be more willing to stay.”

Hipkins said he had no problem with digital nomads, but the policy was not “suddenly going to turn around” the country’s economic fortunes.

“John Key thought that attracting a whole lot more tourists to New Zealand was going to be the silver bullet. It wasn't then, and it's not going to be now.”

Tourism numbers have already been increasing. Stats NZ provisional data for the four weeks to December 22 counted 383,710 overseas visitors to New Zealand. During this peak month for travellers in 2019, there were 528,219 visitors.

BNZ head of research Stephen Toplis said tourism was not only about the supply, or how much could be accommodated, but the demand.

“We're still only getting just over half a number of Chinese tourists that we got pre-Covid … Now, clearly, New Zealand has lost market share in that space a little bit, but equally the number of Chinese people leaving China as tourists is also well below pre-Covid levels.

“So we shouldn’t just say that everything associated with the lack of tourist numbers is something the we can fix.”

He said a growth plan was “a plus”, however the best growth was that which added value, not numbers.

“We've learned from a whole pile of things that just going for volume is not necessarily the best outcome … It’s trite, and people have said it a million times before, but it’s value-add that we should be primarily aiming for.”

Queenstown Mayor Glyn Lewers said higher tourism numbers would require more infrastructure which his ratepayer base of some 30,000 homes could not afford.

“There’s also the social licence issue, which is keenly, keenly at the forefront of this district … pre-Covid social licence came under pressure, and if we continue down the path of just volume, volume, volume, it’ll come up again ‒ then that undermines the whole industry.

“There comes a point where that small ratepayer base just cannot fund the tourism industry.”

He said a “bed tax”, allowing the council to levy tourists for staying in the district, would be requested in his district’s pitch for a “regional deal” with the Government.

The Government has given no indication it would allow the council to charge a bed tax.

Tourism Minister Louise Upston said dealing with high tourism numbers would be “a great problem to have” but would need to be looked at carefully.

“Queenstown, obviously, is an exception. They have a few additional challenges. But look, my goal, very simply, is to say to the world, New Zealand is open for business. We want visitors, so come on in.”

Willis has also spoken of wanting to grow international student numbers, which have similarly been increasing, but not reaching pre-pandemic levels. There were 73,535 international students in the year to August 2024, compared with 115,704 in 2019.

While numbers of international students attending universities have returned to pre-pandemic levels, its across private training establishments, English language schools, and vocational education that numbers remain lower.