What Happens If New Zealand Does Nothing About AI? A 2030 Stress Test

It’s easy to picture a future where artificial intelligence upends everything with a bang—mass layoffs, widespread unrest, a spectacular crash. But the more likely danger for Aotearoa is quieter. It’s not an explosion, it’s slow erosion.

As I hope to get Parliament to consider my policy proposal, The Prosperity Deal, I think we urgently need to ask, what happens if we don’t implement it (or at least a version of it)?

This is the scenario so few are modelling. What does New Zealand look like in 2030 (just five years away) without UBI, without automation taxes, without adjusted education approaches, without structural reform?

I’ve run a national stress test using current trends in AI uptake, labour displacement, fiscal data, and social indicators, to map the moderate path we may sleepwalk into.

2030 Stress Test: New Zealand Without The Prosperity Deal

Assumptions:

• No Universal Basic Income (UBI) or automation-linked contributions

• Status quo tax and welfare system

• Moderate to high AI adoption in logistics, services, professional sectors

• Continued offshoring and platform growth by global tech firms.

  
  

Here are the outcomes from all my modelling:

1. Labour Market Shock Absorption: Overwhelmed

• Displacement: 14–18% of full-time jobs automated or restructured (~350,000–450,000 workers)

• Youth unemployment: 18–22%

• Underemployment and gigification: Surge in part-time, low-protection jobs

  
  

Result:

• Entry-level roles vanish, mid-career roles hollow out

• Employers complain of “skills mismatch”; workers report no jobs available.

  
  

2. Economic Security: Fractured

• Median household income: down 5–8% (inflation-adjusted)

• Top 10% incomes: up 15–20% due to capital and AI capture

• Emergency welfare spending: up 20–25% due to undercoverage.

  
  

Result:

• Shrinking middle class

• Demand slows outside wealthy brackets

• Economic vulnerability becomes normalised.

  
  

3. Mental Health & Social Cohesion: Eroded

• Youth anxiety and depression: ↑ 30–50%

• Male workforce detachment: ↑ social withdrawal and online radicalisation

• Social disconnection feeds distrust, especially in young men.

  
  

Result:

• Mental health waitlists double

• Growing appeal of ideological extremism.

  
  

4. Tax Base: Hollowed Out

• Labour tax revenue: shrinks 12–18%

• AI boosts profits, but firms don’t pay more—many offshore

• Gig platforms and contractors pay less, reducing GST and PAYE capture.

  
  

Result:

• Budget shortfalls mount despite “low unemployment” optics

• Politicians cut public services while blaming individuals.

  
  

5. Political Trust & Stability: Volatile

• Polarisation intensifies: youth vs boomers, renters vs landlords

• Business sector resists surprise taxation or forced levies

• Voters disengage: or swing toward populist “anti-tech” parties.

  
  

Result:

• Democracy strained by low-trust governance

• Crisis-response policy replaces long-term vision.

  
  

So... is that the worst case?

No. That’s the moderate-case scenario.

In this modelling, I assumed a stable global environment, no external shocks, and partial private-sector retraining. It is what happens if we muddle through with patches, hoping that existing welfare, retraining schemes, and corporate ethics will absorb a tech revolution.

The worst-case looks like cascading job loss, sudden tax evaporation, housing crises, and political realignment. But that’s not what should scare us most.

What should scare us is this quiet middle. An economy that looks stable on paper but where millions are stuck in low-agency lives, trust in democracy slips, and the next generation opts out.

This is why I wrote The Prosperity Deal

It’s a policy that offers a different future where:

• Automation contributions fund a Universal Basic Income

• Contribution is defined beyond paid work (care, creativity, culture)

• AI is licensed and taxed based on its displacement power

• Trust, dignity, and purpose are built into the economy—not left behind.

It's not utopia. It's not “free money.” It’s a national floor for human dignity and a clear, enforceable plan to fund it.

We Have a Choice

2030 isn’t a fixed point. It’s a fork. We can pretend the future will bend toward fairness on its own. Or we can bend it ourselves—before extraction becomes exclusion.