Paul Spoonley: Numbers that cause problems for NZ's future prosperity

Debate about population policy in New Zealand is well overdue. Graphic / Thinkstock

Opinion

An Institute of Economic Research report titled Scale Up or Die suggested almost in passing that a population of 15 million was part of the answer to New Zealand's problem of scale and economic performance.

Federated Farmers president Bruce Wills agreed, as long as it did not add to urban sprawl.

A debate about what a population policy might look like for New Zealand is long overdue. But do we really want to grow from 4.4 million to 15 million, even over 50 years? And is it even possible?

The answer? Probably not. The trouble is that we are going through something of a demographic transition that makes growth - much less managed growth - difficult to say the least. Here are some of the issues and dimensions that we would need to consider:

Ageing
Daniel Franklin, executive editor of the Economist, said this month at the new New Zealand Forum that over the next 30 years, the global population would age by nine years. In New Zealand, the increase of over 65s from 600,000 to almost double this number within just over a decade will be one of the most significant demographic changes we will have experienced as a country. This will be particularly profound in some regions, especially as it will be accompanied by declining fertility, almost certainly below replacement level.

A super-sized city
Auckland is home to a third of New Zealand's population, and the upper North Island contains half the country's population. All the projections suggest Auckland will continue to grow so that by 2031, about 38 per cent of New Zealanders will live in the city. In the OECD, only Ireland has such a high proportion of the total population living in one city. If nothing else it means ongoing challenges to provide the required infrastructure, but what are the implications for the country?

Not only will Auckland dominate future growth, it will also be much more diverse than the rest of New Zealand. By 2021, out of every 100 Aucklanders, 27 will be Asian, 17 Pasifika and 12 Maori.

Regional decline
Recent demographic research by my colleagues Natalie Jackson and Jacques Poot shows that a number of New Zealand regions are facing the "end of growth". These regions will either flatline or there will be population decline over coming' decades. Those leaving the workforce will outnumber those entering it in these areas.

Immigration
New Zealand continues to attract significant numbers of immigrants who not only contribute to the talent pool but help plug some of the population gaps. However, these numbers have recently begun to fall as a result of the global financial crises. In the future, there will be a lot more international competition for skilled migrants while talent pools such as India and China will be much less keen to see their populations leave. We cannot assume that we will always be able to attract immigrants quite so easily.

Emigration
It is hard to increase your population when so many are leaving - especially prime working-age people. This year, Statistics New Zealand noted that there had been almost 88,000 permanent and long-term departures in the previous 12 months - including 54,000 who went to Australia - leaving a net overall loss of 3200 migrants.

Since the beginning of the global financial crisis, the net population loss to Australia has been 143,000 - a loss that has had a significant effect on New Zealand's population and skills profile.

This list hardly exhausts what needs to be considered if we are to have an informed discussion about a population policy. Are there elements of family and child support that ought to be discussed?

Or as Plato noted in 470 BC: "A suitable total for the number of citizens cannot be fixed without considering the land". It is as much about housing or transport, or labour supply, or the distribution of the population, as it is about growth per se.

As we face demographic challenges, it is timely to discuss what we should be doing. But a figure like 15 million does not really add to the discussion, except perhaps to help promote debate.

- Professor Paul Spoonley is research director for the College of Humanities and Social Sciences at Massey University.