Auckland

The majority of New Zealand migrants (50 percent) resided in the Auckland region. Almost 40 percent of Auckland's residents in 2006 were born overseas (418,000). Auckland enjoyed the fastest rate of population growth (8.0 percent) of the five regions since the 2001 census, growing from an estimated 1,012,000 in 2001 to 1,093,000 in 2006. The overseas-born population increased more quickly (20 percent) between 2001 and 2006 than the New Zealand-born population (1.5 percent).

Over one third (35 percent) of the overseas-born population in the Auckland region were recent migrants. This percentage remains the same as reported in the 2001 census. It was slightly higher than the national average of 32 percent of the total overseas-born population in New Zealand. While there was no substantial change in the population structure of overseas-born residents in the Auckland region, the rest of New Zealand has been catching up, becoming more popular among recent migrants. The percentage of earlier migrants in Auckland continued its decline since 2001, meaning that migrants tended to move to other regions in New Zealand after staying in Auckland for around 5 to 15 years.

Table 8-1 shows the distribution of the overseas-born population by region of birth according to their length of staying. The Auckland region and the Christchurch region had a higher percentage of recent migrants, whereas the Wellington and Rest of North Island regions had more earlier migrants in their overseas-born populations. This may reflect the effects of New Zealand's regional age structure where, generally speaking, the further south, the older the population.

Figure 8-1 shows the age composition of migrants in each region. In the Auckland region, 35 percent of the total population were between the ages of 41 and 64; 27 percent were between 26 and 40; and 22 percent were between 12 and 25. The percentages of the 12 to 25 and 26 to 40 year old age groups are higher than those of national average at 20 percent and 24 percent, respectively. This is consistent with the high percentage of recent and intermediate migrants in its population.

Figure 8.1 Age composition of migrants in each New Zealand region 2006 (n=846,972)

Long description of figure 8.1

* The Net Impact refers to the revenue and expenditure categories explicitly identified in the table only.

As listed in Table 8.2, the total overseas-born population in the Auckland region made a positive net fiscal contribution of $1,448m.^[28] This is an impressive increase from the $930.4m recorded in the 2001 census. The net impact comprised $3,755m in revenue and $2,307m in expenditure. The New Zealand-born Auckland residents contributed $1,079m, which comprised $6,147m in revenue and $5,068m on expenditure. The earlier migrants contributed $1,018m of income tax, which was significantly higher than that from recent and intermediate migrants, $517m and $653m respectively. The earlier migrants ($504m) also added more in terms of GST, comparing to the recent ($382m) and intermediate ($413m) groups. The recent migrants bought slightly less petrol, alcohol and tobacco and thus the excises tax they paid were about 36 percent and 26 percent less than those paid by the intermediate migrants and earlier migrants, respectively. In total, the government gained revenue of $3,755m from migrants during 2005/06.

On the government expenditure side, recent and intermediate migrants drew more heavily on primary and secondary education than earlier migrants. But apart from early childhood, primary and secondary education, earlier migrants received more government expenditure. Overall, in the Auckland region, the government expenditure on the earlier migrants was significantly higher than that on the other two categories. This expenditure occurred in the context of a higher contribution to government revenue by earlier migrants.

The detailed per capita estimates for migrants in Auckland are listed in Appendix Table 35 and Appendix Table 36. Although each duration category had the same proportion of the population in the Auckland region (1/3 each), the fiscal impacts differed significantly among the three categories. The per capita income tax of earlier migrants was significantly higher than the other two.

In Auckland, overseas-born migrants had lower incomes per capita compared to the New Zealand-born population, paying tax of $5,238 and $5,918 per capita, respectively. However, the earlier migrants enjoyed a higher income than the New Zealand-born, paying $7,346 per capita income tax.

Table 8-3 shows the per capita impacts of migrants across the country. On average, the GST and excise duties levels were similar across the nation at approximately $3,000 to $4,000 per head. Overseas-born Aucklanders had a similar impact on government expenditure as migrants in the rest of the country. On the government revenue side, migrants from Auckland and Christchurch contributed similar per capita amounts.

Wellington

The Wellington region had a total of 87,263 resident migrants in 2006. The net fiscal impact for migrants resident in Wellington was $502m, up from that of the 2001 census ($390m). The total government revenue from the overseas-born population in Wellington was $965m and the total government expenditure was $463m.

The features identified from the 2001 census data can still be seen in the 2006 census data. Among these features were the higher average incomes in this region, the relatively lower proportion of recent and intermediate migrants in Wellington population (28 and 22 percent respectively compared with 32 and 26 percent New Zealand-wide), as well as the higher level of consumption of earlier migrants (GST of $155m), compared to the other two categories in the same region ($64m and $59m respectively).

Table 8-3 shows that the per capita fiscal impact for migrants resident in Wellington was similar to that for Auckland except for the income tax revenue component. The per capita contribution from migrants in Wellington was larger than those from any other region.

Per capita income tax revenue from migrants resident in Wellington was estimated at $7,210. The age and migrant group compositions of the overseas-born residents in Wellington were similar to those of Christchurch. However, as discussed in section 6.3 below, the per capita contribution to income tax revenues from migrants residing in Christchurch was notably less than for overseas-born resident in Wellington. This observation implies that the more important determinant of the higher figure attributable to migrants residing in Wellington was the higher average income in Wellington, as opposed to the difference in migrant population composition.

Also of interest in the Wellington analysis is the relatively similar net fiscal impact, in per capita terms, between the three migrant groups. In particular, the net fiscal impact for all migrants residing in Wellington was $5,750 per head. The per capita net fiscal impact for the recent migrant group was $4,250 for the intermediate migrant group it was $4,580 and for the earlier migrant group it was $7,150. This comparison suggests that the fiscal impact of migrants resident in Wellington was unevenly-spread across the three migrant groups. The higher contribution to tax revenues from the earlier group was balanced somewhat by the higher impact on New Zealand Superannuation payments and health expenditure.

Christchurch

The Christchurch region had a total of 70,931 migrants residing in this region. The total net fiscal impact of migrants resident in Christchurch was $246m. ^[29]The government revenue from this region was calculated as $609m and the government expenditure was $363m.

The income per capita of migrants in this region ($4,880) was the lowest among the three largest cities in New Zealand. Therefore, the migrants in Christchurch contributed the least in terms of income tax towards the government revenue at $346m in total.

With regard to overseas-born population structure, over 34 percent were recent migrants, 25 percent were intermediate migrants and 40 percent were earlier migrants in this region. Christchurch had approximately the same percentage of recent migrants in its population as in Auckland. The percentage of earlier migrants in this region was slightly lower than the national average and these migrants contributed $186m of fiscal revenue.

On the expenditure side, the characteristic amongst migrants resident in Christchurch was the relatively larger impact (compared to Auckland and Wellington) on New Zealand Superannuation payments. This was a result of the slightly older age-profile of this group. This facet also showed through, to a lesser degree, in the health spending component. The impact of overseas-born migrants on health and New Zealand Superannuation expenditure was second to that of Auckland.

Rest of New Zealand

There are similar features across the other two regions investigated in this research, i.e. Rest of North Island and Rest of South Island.^[30] The migrants in Rest of North Island had a net impact of $813m, which was significantly higher than that of the Rest of South Island at $280m. The Rest of North Island had a larger overseas-born population and thus, contributed a larger amount towards the government revenue.

However, the per capita tables tell a different story of these two regions due to the relatively smaller population in the Rest of South Island region. The per capita contribution in revenue of the rest of South Island ($7,980) was greater than the rest of North Island ($7,870).

In terms of age composition, the majority of the overseas-born population were 41 years and above in both of the regions. The rest of North Island had 38 percent in the 41-64 year old category and the Rest of South Island had 37 percent in the same category, compared to the national average of 36 percent. In the 65+ age category, Rest of North Island had over 20 percent and the Rest of South Island had over 17 percent of their overseas-born population, compared to the national average of 14 percent.

Summary

Generally speaking, the impact of migrants in the Auckland region dominated the overall fiscal impact due to its larger overseas-born population, accounting for 45 percent of New Zealand's migrant population.

Within the Auckland region, almost 40 percent of the population were born overseas. Moreover, a relatively large proportion of the overseas-born residents in the Auckland region were recent migrants (35 percent). Those features made the Auckland region an important feature of the impact of all overseas-born migrants, especially in the short run.

The net fiscal impact was positive across all five New Zealand regions and across all three categories of recent, intermediate and earlier migrants. Although regional differences still exist, the gap has narrowed in the last five years with more recent or intermediate migrants in the South Island. Christchurch, as the largest city in the South Island, accommodated more recent migrants since the 2001 census.

The largest component in the fiscal impact across this regional dimension was the contribution to income tax revenue, which is similar to the 2001 census. This level is twice as high as the GST revenue or excise tax revenue across the country. Furthermore, the positive fiscal impact of migrants across all five New Zealand regions reflected the feature that the differing behavioural characteristics of each sub-group within the population is somewhat balanced by other characteristics in other sub-groups.

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