Economist Brad Olsen says current labour shortages to continue as population growth hits 36-year low

The current shortage of workers around New Zealand will continue as the country faces three-decade low population growth, an economist says.

Provisional Stats NZ data released last week covering the June 2021 to 2022 year showed the population had increased to 5.12 million - up by 12,700 people (0.2 percent) - the lowest growth since 1986.

These latest figures come after data released earlier this month by Stats NZ showed net migration had plummeted to its lowest levels since the 1990s. 

Infometrics principal economist Brad Olsen told AM on Wednesday New Zealand's current worker shortages are a glimpse into the future. 

"Importantly, if we dig into it, what we see is the current workforce, your 15-64 age group, is smaller than it was a year ago, our up and comers, the under fifteens are also smaller than they were a year ago, but our older population, 65-plus, has expanded by a whole 2.8 percent," he told AM Early host Bernadine Oliver-Kerby. 

"So what we are seeing is not only a continuation in that ageing, but really I think with the current trends that New Zealand's population is experiencing, we're getting a bit of a look into our future when we are going to have that older population and we're going to continue to struggle to find enough people to do all the work that the country might want to achieve."

To show the extent of New Zealand's aging population, Olsen had some alarming stats.

"The number of additional people that might be coming into the retirement age is a real challenge. By 2068, we expect there could be over a million additional New Zealanders in that over 65 retired bracket," Olsen said. 

"At the same time, there will only be an extra 600,000 New Zealanders in the working age population, so effectively we're going to have to be supporting a lot more older people in this country with fewer people in the workforce on a relative basis. 

"That's going to be really challenging for delivering on various services."

Olsen said a big focus in the future needs to be continued investment in digital technology.  

"The numbers are fairly clear, we're going to have not as many people in the workforce to cater for a larger population, that's not an easily turned around number," he said. 

"Demographics don't shift all that quickly, so we are going to have to continue to work on that productivity shift, making sure that we're working as smart rather than as hard as we can so that we can deliver more services."

Olsen also called for the Government to review the current age of superannuation.

"We've also got to consider some of our broader economic settings. We know politicians on both sides have been unwilling to change New Zealand's superannuation rules for a number of years - we last changed them in the 90s and things have moved on quite a bit since then," he told AM Early. 

"We do need to get serious about whether or not we need to, in my opinion, increase the age of super. Those other settings though, around workforce planning and getting the skills to the right people, means we will be able to continue on at a time when the population is shifting quite considerably as we move into future decades."

Watch the full interview with Brad Olsen above.