Fiscal impacts of immigration 2005/06
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Introduction
The Department of Labour commissioned Business and Economic Research Limited (BERL) to investigate the fiscal impact of migrants to New Zealand. This report estimates central government fiscal revenues and expenditure for the resident migrant population of New Zealand, along with comparisons for the New Zealand-born population. The 'fiscal' impact of migrants is defined as the contribution of migrants to central government revenue less government expenditure attributable to the migrant population. The study does not cover all components of the government accounts. It focuses on a subset of components that respond to changes in the population size and that can be sensibly related to such changes.
Census and government administrative data were used to identify the characteristics of overseas-born New Zealand residents and determine their contribution to components of government receipts and government spending.
This study calculated the fiscal impact for the year to 30 June 2006. It updates similar exercises undertaken in 1999 and 2003 (BERL references #3452 and #4195), which estimated the fiscal impact for the years ended June 1998 and June 2002, respectively.
Structure of report
The remainder of the report is divided into eight main sections, a summary, and appendices.
Section 3 sets out the data sources, definitions and methods BERL used for this study.
Section 4 contains a demographic analysis of the migrant population in New Zealand.
Section 5 discusses aspects of migrants' participation in post-compulsory education, and Section 6 examines the occupational characteristics of immigrants.
Section 7 and Section 8 contain the main estimates of the study. Section 7 presents the principal findings of the study, including analyses of the fiscal impacts of migrants by migrants' length of residence in New Zealand as well as by region of birth. Section 8 disaggregates the fiscal impacts of migrants according to their region of residence in New Zealand.
Section 9 extends the core study to look at the potential long term impacts of migrants.
Section 10 summarises the study and provides some concluding comments. Summary and detailed tables are appended in sections 11 and12.
Summary tables
Section 11 aims to provide quick reference tables on the fiscal impact of migrants.
Each table has a set of three summary impacts. The upper-left-hand figure shows the total contribution to government revenue; the upper-right-hand figure shows the contribution to government expenditure; and finally, the bolded figure shows the net fiscal impact (i.e. the impact on government revenue less that on government expenditure).
The six summary tables comprise two sets of three different measures. The first set (i.e. Summary Table 1 to Summary Table 3) summarises the figures relating to migrants (by duration of residence in New Zealand) and the New Zealand-born population. The second set (i.e. Summary Table 4 to Summary Table 6) summarises the fiscal impact for migrants by their region of residence in New Zealand.
Each set of tables provides the following measures:
- the absolute $m calculation of the fiscal impact;
- the per capita fiscal impact; and,
- the working age population per capita fiscal impact.
Section 3.2 defines these measures.
Appendix tables
Selected tables are included in the body of this report. For ease of reference, a full set of tables is provided in the Appendix.
Each set of appendix tables contains the three measures as for the summary tables. Each appendix table contains the following elements:
- the impact on government revenue (in the upper part);
- the impact on government expenditure (in the lower part);
- the net fiscal impact (at the bottom), along with data on the number of persons in the relevant population group where relevant;
- figures for the comparable New Zealand-born group (at the left-hand side);
- figures for the relevant overseas-born group overall (in the centre); and,
- figures dividing up the impact of the migrant population, either by length of residence in New Zealand or by region of birth (at the right-hand side).