The Treasury

Global Navigation

Personal tools

Treasury
Publication

Challenges and Choices: Modelling New Zealand’s Long-term Fiscal Position

Annex 1: Changes in demographic projections

The 2006 Statement used the 2004-base-year official demographic projections for the long-term fiscal position. The 2009 Statement uses specially commissioned projections from Statistics New Zealand to bring the projection base up to 30 June 2008 and to reflect recent rises in fertility. These were delivered in March 2009.

On 27 October, two days before the publication of the 2009 Statement, Statistics New Zealand released its new population projections with the provisional population estimate as at 30 June 2009 as the base.

This annex examines how changes in these projections (the mid-range Series 5) have affected the fiscal position out to 2050, using the 2009 LTFM.

Table A1.1 - Assumptions and outputs -  Series 5
Base year 2010 2030 2050 2010 2030 2050
  Total fertility rate Net migration
2004 1.94 1.85 1.85 10,000 10,000 10,000
2006 2.08 1.90 1.90 10,000 10,000 10,000
2008 2.16 1.90 1.90 10,000 10,000 10,000
2009 2.11 1.90 1.90 10,000 10,000 10,000
Table A1.1 - Assumptions and outputs -  Series 5 (continued)
Base year 2010 2030 2050 2010 2030 2050
  Life expectancy - males Life expectancy - females
2004 78.5 82.0 83.5 83.0 85.8 87.0
2006 78.8 82.4 84.2 82.7 86.0 87.7
2008 78.8 82.4 84.2 82.7 86.0 87.7
2009 78.8 82.0 84.4 82.5 85.2 87.5
Table A1.1 - Assumptions and outputs - Series 5 (continued)
Base year 2010 2030 2050 2010 2030 2050
  Total fertility rate Net migration
2004 4.3 4.8 5.0 19.9 35.8 45.0
2006 4.4 5.1 5.5 19.6 34.6 41.9
2008 4.4 5.1 5.5 19.6 34.3 41.7
2009 4.4 5.1 5.6 19.5 33.4 39.1

Source: The Treasury

The old age dependency ratio has fallen in the 2009-base projections, implying that NZS will be a smaller share of GDP by 2050. These ratios show little change between the 2006-base projections and those based on 2008.

Flowing the 2009-base projections through the LTFM produces lower net debt, from 223% to 189% of GDP in 2050.

Figure A1.1 - Changes in old age dependency ratio for medium projections
Figure A1.1 - Changes in old age dependency ratio for medium projections.
Source: Statistics New Zealand
Figure A1.2 - 2009-base year projection has lower NZS than 2008-base
Figure A1.2 - 2009-base year projection has lower NZS than 2008-base.
Source: The Treasury
Figure A1.3 - 2009-base year projection has lower net debt than the 2008-base
Figure A1.3 - 2009-base year projection has lower net debt than the 2008-base.
Source: The Treasury
Page top