It is very common to hear population ageing discussed in terms of those aged 65+ years (currently just over 15 per cent of New Zealanders) and its projected rise to around 23 per cent within two decades.

This "structural ageing" of the population conjures up a picture of greater numbers of older people and relatively fewer younger people.

Clearly there is work to be done around infrastructure, resources, services and facilities. One overlooked issue is that population ageing differs markedly across the country.

Already over 41 per cent of towns and 29 per cent of rural centres have more than 20 per cent of their population aged 65-plus. It is at this level that "readings" need to be taken and responses, especially community responses, developed, and resource allocation determined.

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However, given that local needs are often dependent on the ability of territorial authorities to gather enough rates revenue, focusing on them provides a useful starting point.

The oldest territorial authority area, Thames-Coromandel, already has almost double the national proportion of people aged 65+ years, while one-third of New Zealand's 67 territorial authorities have 20 per cent or more.

Looking ahead just 10 years, 55 territorial authorities are projected to have more than 20 per cent of their population aged 65 and above. Look out two decades and only Hamilton, Auckland and Wellington will have fewer than 20 per cent.

From the international literature we know that once a population passes the 20 per cent milestone, it will typically lose its "natural increase" - where births exceed deaths - within about a decade.

As the population ages, deaths will slowly exceed births, and the natural decrease that takes its place will cause many populations to shrink.

Ultimately, this shrinkage might be a good thing, but shrinking populations will also have to deal with their increasing numbers at older ages, and our greater proportion of people living on fixed incomes will play havoc with current reliance on rates to fund local services and facilities, and replace infrastructure.

It is actually the relative lack of young people in the population that drives structural ageing, not simply the absolute increase in the numbers at older ages. Increasing longevity means more older people living longer, but they would not also be a greater proportion of the population if it were not for the declining birth rates of their children.

Already we are facing labour and skill shortages - especially in areas where the population is older than average, and more people are leaving the labour market to retirement than entering it at the younger ages.

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In just 10 years' time, New Zealand's prime working age population is projected to be 11 per cent larger overall, but for 52 territorial authorities it will be smaller than at present - both numerically and as a proportion.

People of all ages will be in increasing demand in our local labour markets.

Yes, some jobs will disappear, but many that will service the older population will be created. And you can't, on a daily basis, move an excess of young/working-age people from say, Auckland, to Whanganui where they are sorely needed.

A recent World Economic Forum report proposes there will be little unemployment over the next few decades. ■Dr Natalie Jackson is a research associate, NIDEA (University of Waikato). This article was commissioned by the Office for Seniors, Ministry of Social Development