At midnight tonight New Zealand’s strict lockdown of 33 days will be slightly eased.

As you can imagine, I cannot wait. We will be able to get a few takeout coffees, the children will be able to see their grandparents again and, most importantly, some people can head back to work and some businesses can start to open up again.

The measures taken here seem to have worked so far; there have been very few deaths in New Zealand, and the number of active cases is now below 500. However, I do wonder if there is a bit of post hoc, ergo propter hoc reasoning in my last sentence. The daily number of new cases was already going down when the lockdown was implemented (due to our border controls finally being stiffened up).

Comparable results across the Tasman with fewer restrictions suggest that a lot of the benefits we’ve seen is due to our small population, low population density and the fact that we are in an island at the bottom of the world far from everywhere else.

One of the things that people will have to start thinking about in the medium term is the higher level of debt that our government, and governments around the world will be straddled with.

In New Zealand the government has taken on a large amount of debt to pay for 12 weeks of subsidised pay for employees in companies which have suffered significant revenue declines. The idea is that the employees will be kept in a job for three months when otherwise the companies might have had to make them redundant. About two-thirds of New Zealand’s workers are now subsidised by the government in some way. Whether this will prevent a wave of lay-offs once the wage subsidy ends is another story…

Whether successful or not, the wage subsidy scheme will leave New Zealand with an awful lot of debt on the government’s books. New Zealand, though, is in a relatively sound state compared to other countries: it is expected that the current measures will increase our debt to GDP ratio to around 50 per cent. (Thankfully, the last couple of governments were good at getting debt levels low, despite the global financial crisis and the Christchurch earthquakes.)

However, like all other countries, New Zealand will have to pay the debt off at some stage. And eventually, that means that taxpayers will have to pay that debt off. This is where demographics comes in. Like many other Western countries, the New Zealand population is not reproducing itself. For the last decade the total fertility rate has been below replacement of 2.1 children per woman and currently sits at about 1.75.

As the population gets older we will soon see negative natural population growth here, as in other countries in Europe and East Asia. After that we will be relying on immigration to ensure that there are enough future taxpayers to pay off the debt that we are currently taking on. But for the medium term we are unlikely to have large numbers of migrants (or perhaps any).

This piece in Independent Australia predicts that for the next couple of years, Australia’s net migration will be close to zero. Furthermore, the piece makes the point that, historically, migration numbers take years to recover after an economic recession or depression. We may have a decade or more in which countries like New Zealand see their populations age more rapidly than predicted and see their population growth decline more quickly than anticipated.

And then the governmental debt that we are racking up phenomenally quickly today will become even more burdensome on the remaining taxpayers of tomorrow.