Generate's Investment Specialist Greg Smith was back on ZB with Mike Hosking again this morning, discussing why net migration tailwinds are now barely a stiff breeze, but why there is better news for the tourism sector amid strong visitor arrivals numbers. Greg also addresses this week’s bigger talking point - the case for making KiwiSaver compulsory and lifting minimum contribution ratees substantially.
Listen to the 11 September 2025 recording from The Mike Hosking Breakfast on Newstalk ZB here:
Or read the transcript below:
From Generate Greg Smith, morning to you
Morning to you Mike
A bit over 13,000 so what do we make of that?
Yeah, those migration tail winds are fading, but there is a little bit of good news. But when you look at migrant arrivals for the July year, 140,000. That was down 20% – that's a world away from 234,000 in October, 2023.
Departures are up 14% – 127,400. So that's around peak levels. So yeah, that net migration gain of 13,000 that's a world away from the peak of 135,000 in October 2023 and we're actually running at less than half of the long-term average pre Covid. We gained 60,000 non-New Zealanders. That's down over 40% on 2024. But interestingly, it is actually it is up 30% above pre Covid. So an increasingly diverse population there.
But we lost 47,600 New Zealand citizens – that's a record, 3000 higher than a year ago. Double pre-Covid averages, and on a gross basis, 73,000 Kiwis departing these shores. So that rose slightly on June as a record. So, the brain drain continues. And interestingly, the average or median age of people leaving is 31 – those arriving is 21 – so there's net loss of skills abroad. If we want to look at a positive, July looks a little better. So net migration gain of 4100.
That's up 3000 on June, all those student visa arrivals a factor. But overall, just tells us that New Zealand is still not that attractive economically, and with subdued demand for labour, which we've talked about.
But let's look at the big positives on the tourism front, visitor arrivals were 236,000 in July. That's up 14,700 from a year ago. Almost 127,000 Aussies. That's a record for July. Annually. 3.4 million – that's up 170,000, near about and again, driven by Aussies. They make up around about 40% of those numbers.
So I guess the Australian dollar fetching $1.10 of our currency, might drive a few more over.
Now KiwiSaver is interesting. These numbers from the FMA. So for the first time, fewer people are contributing to KiwiSaver. So what does this tell us?
Oh, that's right. And then that's the issue. So you look at it, 40% are not contributing, and if you look at the age between 18 and 65 which are most likely to, 30% aren't contributing. So the good news is this, the investment pool’s getting larger. So it's up 10% according to the FMA over the past year. It’s up to 123 billion.
Obviously, it has been a great scheme since it was formed in 2007, it’s added to our economic strength and resilience and so on.
But we’re approaching the 20-year anniversary, obviously there has been a lot of talk about compulsory super in recent days, Mike, and lifting those contributions. And I think, look, it's worthy of a conversation. You know, cost of living is rising. People aren't contributing. Retirees living longer, more active lives. The Financial Services Council, they reckon only 44% of people feel prepared for retirement. You look at the average balance per the FMA, it's 36 grand. Massey University, they reckon a single homeowner needs 271,000 over super to live a comfortable retirement,183,000 for a no-frills one.
And then, lots of people aren't contributing, so 3.4 million or thereabouts enrolled in KiwiSaver. Making it compulsory would add over a million people more into the fold. So, we have contributed around about 7.8 billion over the past year. So that's improved the culture of saving. But I think more, more needs to be done.
So we look at the successful blueprint. Obviously, in Aussie, they've been going a lot longer since Keating brought in 92 but, 12% currently, 4 trillion pool there, fifth largest holder pension of assets, and it's done a lot for their economic resilience.
And then you look at other schemes, such as Sweden, Switzerland, Netherlands, that's boosted their wellbeing. And we did actually have a vote on compulsory super the referendum in 1997 with 92% against, but that was a bit flawed. And I think the proposal around tax cuts would be way better. It would avoid that boom, bust sort of cycle, and it will be net neutral for an inflation perspective, so much more productive.
Just interestingly, we've been running a social media poll, 80% are in favour of 10% minimum compulsory super. So lots to work out, including those billions of dollars of tax cuts, and how they'll be funded. But every process has a starting point, I guess. Mike.
Well done. What are the numbers?
So the numbers we have got, the Dow is down half percent, 47, 456, but the S&P500 is at a new record, up .3% to 6534, also wholesale inflation that eased a bit unexpectedly, as you talked about. Oracle that surged 40%, the AI-related revenues up 1500% last quarter. NASDAQ up .1%, Footsie down .2%, Nikkei up .9%, ASX 200 up .3% 8830. NZX 50 we had a good session, up .2% 13276.
Gold up 20 bucks, 3646 an ounce, that's near a record. Oil up $1.12, 63.75. Currencies against the US dollar, we're up .4% 59.5. We are now under 90 against the Australian 89.8 that was down .2%. British pound, 44 even, up .3% and the Japanese Yen .3% higher as well, 87.7.
You have a good one mate catch up soon. That is Greg Smith, of course, from Generate - Wealth and KiwiSaver specialists.