New Zealand’s population is ageing steadily—in 1970 our average age was 25, but by 2073 it will be 47. However, this is not a uniform trend. Māori and Pacific peoples in particular have a younger age profile. These changing demographics will change the fundamentals of society, work, and family life, and they raise a vital question:

What are the challenges and opportunities of New Zealand’s changing age structure?

This question raises a number of others, including:

• What does this mean for public services like healthcare, education, and superannuation?
• With relatively fewer people working and producing goods and services, how should we distribute the economic products and opportunities that are created?
• Different ethnic groups are ageing at different rates, so what opportunities and challenges does this uneven distribution present?
• How will these changes affect the relationship between generations, and what does one generation owe to the next? For example, is it unfair to the next generation to continue current retirement benefits?
• How will society have to adapt to a changing age structure? For example, will we see changes to family living arrangements, or new technologies? How should we choose what to change?
• Can we learn from other countries’ experience, or do we have the solutions here in New Zealand?

The Inkling was created to support better conversations about important issues like this. That’s why we host thought gatherings that bring leaders and experts together, including a discussion of this topic at the Auckland Art Gallery on 15 July 2022.

We also inspire discussion in families, communities, and workplaces, and we’ve used our experience with that event to create this backgrounder.

It’s designed to help anyone who’d like to have a conversation about this topic so in the next sections you’ll find some material to inform and inspire your discussion—key facts and figures, as well as relevant issues and arguments.

We’d love to hear from you if you’ve used this resource and have any feedback, or if you’ve got other ideas about supporting better public conversations.

We hope you find it helpful.

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KEY FACTS AND FIGURES

Population-level changes:¹

New Zealand’s population is ageing:

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There will be more very old New Zealanders amongst the over 65s:

• The proportion of those aged 85+ is projected to double over the next 25 or so years (from 1 in 9 over 65s, to 2 in 9).

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Changes in ethnic populations:²

Between 2018 and 2043:

• “all ethnic populations will gradually age, with more people aged 65 years and over”.
• “New Zealand will become more ethnically diverse … due to slower population growth for the 'European or Other' group and high levels of natural increase and/or net migration for” Māori, Pacific and Asian ethnic groups.
• “Māori, Asian, and Pacific populations have a much younger age structure than the 'European or Other' population, with relatively high proportions of children and young adults, and lower proportions at the older ages. These young age structures provide greater built-in momentum for future growth.”
• However, the proportion of the Māori, Asian, and Pacific populations aged over 65 will also grow faster than in the ‘European or Other’ population (100% growth vs. 42% growth).

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Workforce implications

There are approx. four workers per retiree now, reducing to approx. two workers per retiree in 2073:¹

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Almost as many people leave the workforce as enter it now:³

• For every 1 person of workforce-leaving age (55-64), there is 1.03 person of workforce-entering age (15-24).
• As recently as 1996, the ratio was 1.89 workforce entrant for every workforce leaver, so it has dropped sharply.

“New Zealand has one of the highest rates of people aged 65+ still working [at] 24%,” and this is expected to increase as the population ages.⁴

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Structural ageing

Declining fertility rates and increasing life expectancy both contribute to an older population on average:

• The fertility rate was 1.61 births per woman in 2020 and has been below replacement level (2.1) for most of the time since 1980.⁵
• Life expectancy continues to increase: 80 years for men and 83.5 years for women in 2019.⁶

“The 20th century experience of being a young-dominant [population] is being replaced by one which is old-dominant and the classic pyramid shape of a population – with a wide base – is being inverted.” ⁷

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ISSUES AND ARGUMENTS

Some people believe that government is mainly responsible for solving these issues, for example through taxpayer-funded healthcare, while others believe that communities and civil society need to play a larger role, for example through charities and volunteers delivering services.

Some say community development with an age- and dementia-friendly approach, along with valuing contributions from all age groups, will enable older people to flourish for longer contribute to the workforce, social capital and family cohesion. This may be particularly important for communities where the proportion of older people is growing at a faster rate, like the Māori, Pacific and Asian communities, as care arrangements are often family-based.

A lot of public debate about ageing focuses on superannuation policy, for example whether the age of eligibility should be raised from 65, but some argue that we’re focusing too much on superannuation and we need to look at the bigger picture.

All changes produce winners and losers, i.e. people who do well from the change and others who do worse. Who will benefit from effects of the changing age structure, and who will be worse off?

The fourth industrial revolution and the rise of the digital economy is changing the way we work and live. How do these changes interact with the changes to our age structure?

Some people argue that our changing demographics will make us rethink our national identity, especially our allegiance to New Zealand’s British inheritance as seen in our system of government and our status as a constitutional monarchy.

Some people say that social cohesion will be the key to navigating these changes well, while others agree but say we need to put more value on the kind of caring work that joins families and communities, and others point out that polarisation is undermining the cohesion we need.

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